Page 1 of 87
Index to Exhibits on Page 16
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Annual Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the fiscal year ended August 31,1998 Commission file number 1-3208
NATIONAL SERVICE INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 58-0364900
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
1420 Peachtree Street, N.E., Atlanta, Georgia 30309-3002
(Address of Principal Executive Offices) (Zip Code)
(404) 853-1000
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
Common Stock ($1.00 Par Value) New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Based upon the closing price as quoted on the New York Stock Exchange October
31, 1998 the aggregate market value of the voting stock held by nonaffiliates of
the registrant was $ 1,483,569,010.
The number of shares outstanding of the registrant's common stock, $1.00 par
value, was 41,426,705 shares as of October 31, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
Location in Form 10-K Incorporated Document
Part I, Item 1 1998 Annual Report
Part II, Items 5, 6, 7, and 8 1998 Annual Report
Part III, Items 10, 11, 12, and 13 1998 Proxy Statement
Part IV, Item 14 1998 Annual Report
Page 2
NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES
Table of Contents
Page No.
Part I
Item 1. Business 3-4
Item 2. Properties 5
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of Security Holders 5
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholders Matters 6
Item 6. Selected Financial Data 6
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
Item 8. Financial Statements and Supplementary Data 6
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 6
Part III
Item 10. Directors and Executive Officers of the Registrant 7
Item 11. Executive Compensation 7
Item 12. Security Ownership of Certain Beneficial Owners and Management 7
Item 13. Certain Relationships and Related Transactions 7
Part IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K 8-12
Signatures 13
Financial Statement Schedules 14-15
Index to Exhibits 16
Page 3
PART I
ITEM 1. BUSINESS
The registrant, incorporated in Delaware in 1928, provides a wide variety of
products and services through its operating segments, as follows:
Divisions Principal Products or Services Marketing Area
Products and services for industrial,
commercial, institutional, and healthcare
customers
TEXTILE RENTAL
National Linen Service Rented napkins and table Principally the southern,
National Healthcare Linen Service linens, bed linens, bath southwestern, and central
National Facility Services towels, bar and shop towels, United States.
National Direct Source sterilized products, mats,
and mops
CHEMICAL
Zep Manufacturing Company Chemical cleaners Throughout the United
Zep Manufacturing Company of Canada including sanitizers, States, Canada,
Zep Europe disinfectants, polishes, floor Puerto Rico, Western
Selig Chemical Industries finishes, degreasers, water Europe, and Australia.
National Chemical treatments, pesticides,
insecticides, and herbicides
ENVELOPE
Atlantic Envelope Company Custom business envelopes and South, Southwest, and Northeast.
Allen Envelope Corporation courier packages and specialty
ATENCO Filing Systems filing products.
Lyon Folder Company
Techno-Aide/Stumb Metal Products Company
Products for the construction industry
LIGHTING EQUIPMENT
Lithonia Lighting Fluorescent fixtures for Throughout the United
commercial, industrial, and States, Canada,
institutional applications; Mexico and overseas.
high-intensity discharge
fixtures for industrial and
commercial use; architectural
outdoor lighting; downlighting;
sportslighting; track lighting;
vandal-resistant fixtures;
emergency lighting; lighting
and dimming controls; and
manufactured wiring systems
Page 4
Divisions Principal Products or Services Marketing Area
Products and services for the consumer
CHEMICAL
Enforcer Products, Inc. Pesticides, insecticides, rodenticides, Throughout the United States.
herbicides, cleaners, plumbing
pipe and sewer drain cleaners
and clog removers.
LIGHTING EQUIPMENT
Lithonia Lighting Residential fluorescent, recessed Throughout North America.
Home-Vue Lighting and track lighting, and
Light Concepts decorative fluorescent fixtures.
Competition
While each of the registrant's businesses is highly competitive, the competitive
conditions and the registrant's relative position and market share vary widely
from business to business. A limited number of the competitors of each division
are large diversified companies, but most of the competitors of the divisions
are smaller companies than the registrant. Such smaller companies frequently
specialize in one industry or one geographic area, which in many instances
increases the intensity of competition. Management believes that its Lighting
Equipment segment is the largest manufacturer of lighting fixtures in the world
and its Textile Rental segment is one of the largest such companies in the
United States.
Research and Development
Company-sponsored research and development expenses related to present and
future products are expensed as incurred. Research and development expenses were
$13.6 million, $8.6 million, and $8.7 million in 1998, 1997, and 1996,
respectively.
Raw Materials
There were no significant shortages of materials or components during the years
ended August 31, 1998, 1997, and 1996. No one commodity or supplier provided a
significant portion of the company's material requirements.
Total Employment
The registrant employs approximately 16,700 people.
Financial Information about Industry Segments
The financial information required by this item is included on page 40 of the
company's annual report for the year ended August 31, 1998, under the caption
"Business Segment Information" and is incorporated herein by reference.
Page 5
ITEM 2. PROPERTIES
The general offices of the company are located in Atlanta, Georgia. Because of
the diverse nature of the operations and the large number of individual
locations, it is neither practical nor significant to describe all of the
operating facilities owned or leased by the company. The following listing
summarizes the significant facility categories by business:
Number of Facilities
Division Owned Leased Nature of Facilities
Lighting Equipment 7 5 Manufacturing plants
1 7 Distribution centers
- 10 Field warehouses
Textile Rental 33 8 Linen plants
- 23 Linen service centers
- 1 Distribution centers
Chemical 10 2 Manufacturing plants
20 51 Distribution centers
- 3 Sales offices
Envelope 7 5 Manufacturing plants
- 2 Warehouses
Corporate Office 1 - Corporate headquarters
ITEM 3. LEGAL PROCEEDINGS
The registrant is neither a party to nor is its property subject to any material
pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the three months
ended August 31, 1998.
Page 6
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this item is included on the inside back cover of
the company's annual report for the year ended August 31, 1998, under the
captions "Listing," "Shareholders of Record," and "Common Share Prices and
Dividends per Share" and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is included on pages 46 and 47 of the
company's annual report for the year ended August 31, 1998, under the caption
"Ten-Year Financial Summary" and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is included on pages 42 through 45 of the
company's annual report for the year ended August 31, 1998, under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and is incorporated herein by reference.
From time to time, the company may publish forward-looking statements relating
to such matters as anticipated financial performance, business prospects,
capital expenditures, technological developments, new products, research and
development activities, and similar matters. The Private Securities Litigation
Reform Act of 1995 provides a safe harbor for forward-looking statements. In
order to comply with the terms of the safe harbor, the company notes that a
variety of factors could cause the company's actual results and experience to
differ materially from the anticipated results or other expectations expressed
in the company's forward-looking statements. The risks and uncertainties that
may affect the operations, performance, development, and results of the
company's business include without limitation the following: (a) the uncertainty
of general business and economic conditions, particularly the potential for a
slow down in non-residential construction awards; and (b) the ability to achieve
strategic initiatives, including but not limited to the ability to achieve sales
growth across the business segments through a combination of increased pricing,
enhanced sales force, new products, and improved customer service, as well as
share repurchases and acquisitions.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is included on pages 26 through 41 of the
company's annual report for the year ended August 31, 1998, under the captions
"Consolidated Balance Sheets," "Consolidated Statements of Income," Consolidated
Statements of Stockholders' Equity," "Consolidated Statements of Cash Flows,"
"Notes to Consolidated Financial Statements," and "Report of Independent Public
Accountants" and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
Page 7
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item, with respect to directors, is included on
pages 2 through 4 under the caption "Information Concerning Nominees" of the
company's proxy statement for the annual meeting of stockholders to be held
January 6, 1999, filed with the Commission pursuant to Regulation 14A, and is
incorporated herein by reference.
EXECUTIVE OFFICERS OF THE REGISTRANT
Executive officers of the company are elected at the organization meeting of the
Board of Directors in January.
Name and age of each executive officer Business experience of executive officers during the five years
and positions held with the company ended August 31, 1998 and term in office.
James S. Balloun, age 60 Mr. Balloun was elected Chairman and Chief Executive Officer
Chairman, President, and effective February, 1996 and assumed the role of President in
Chief Executive Officer October, 1996. Previously, he served McKinsey & Company as a
and Director Director.
David Levy, age 61 Mr. Levy was elected Executive Vice President, Administration in
Executive Vice President, October, 1992. He served as Senior Vice President, Secretary and
Administration and Counsel Counsel from 1982 through September, 1992.
and Director
Brock A. Hattox, age 50 Mr. Hattox was elected Executive Vice President and Chief Financial
Executive Vice President and Officer effective September, 1996. Previously, he served McDermott
Chief Financial Officer International, Inc., as Chief Financial Officer since 1991 and
President of the Engineering and Construction Group since 1995.
Stewart A. Searle III, age 47 Mr. Searle was elected Senior Vice President, Planning and
Senior Vice President, Development effective June, 1996. Previously, he served four years
Planning and Development with Equifax as Senior Vice President of Development.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is included on pages 4 through 13 under
the captions "Compensation of Directors," "Other Information Concerning the
Board and its Committees," "Compensation Committee Interlocks and Insider
Participation," "Summary Compensation Table," "Aggregated Option Exercises and
Fiscal Year-End Option Values," "Option Grants in Last Fiscal Year," "Long-Term
Incentive Plans - Awards in Last Fiscal Year," "Employment Contracts, Severance
Arrangements, and Other Agreements," and "Pension and Supplemental Retirement
Benefits" of the company's proxy statement for the annual meeting of
stockholders to be held January 6, 1999, filed with the Commission pursuant to
Regulation 14A, and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is included on page 6 under the caption
"Beneficial Ownership of the Corporation's Securities" of the company's proxy
statement for the annual meeting of stockholders to be held January 6, 1999,
filed with the Commission pursuant to Regulation 14A, and is incorporated herein
by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is included on page 5 under the caption
"Certain Relationships and Transactions" of the company's proxy statement for
the annual meeting of stockholders to be held January 6, 1999, filed with the
Commission pursuant to Regulation 14A, and is incorporated herein by reference.
Page 8
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
(1) Financial Statements
The company's 1998 Annual Report contains the consolidated
balance sheets as of August 31, 1998 and 1997, the related
consolidated statements of income, stockholders' equity, and cash
flows for each of the three years in the period ended August 31,
1998, and the related report of Arthur Andersen LLP. The
financial statements, incorporated herein by reference, include
the following:
Consolidated Balance Sheets - August 31, 1998 and 1997
Consolidated Statements of Income for the years ended August 31,
1998, 1997, and 1996
Consolidated Statements of Stockholders' Equity for the years
ended August 31, 1998, 1997, and 1996
Consolidated Statements of Cash Flows for the years ended August
31, 1998, 1997, and 1996
Notes to Consolidated Financial Statements
(2) Financial Statement Schedules:
Report of Independent Public Accountants on Schedule
Schedule Number
II Valuation and Qualifying Accounts
Any of schedules I through V not listed above have been omitted
because they are not applicable or the required information is
included in the consolidated financial statements or notes
thereto.
(3) Exhibits filed with this report
Reference No. from
Reg. 229.601
Item 601 Description of Exhibit
3 Amended and Restated Certificate of Incorporation and
By-Laws
4 Amended and Restated Rights Agreement dated as of
December 17, 1997 between National Service Industries, Inc.
and Wachovia Bank, N.A. and Amendment (replacing
Wachovia Bank, N.A. with First Chicago Trust Company)
10(i)A US$250,000,000 Credit Agreement dated as of July 23, 1996
among National Service Industries, Inc., Certain of its
Subsidiaries, Certain Listed Banks, Wachovia Bank of
Georgia, N.A., as Agent, and Nationsbank, N.A. (South)
and Suntrust Bank, Atlanta, as Co-Agents
10(iii)A Management Contracts and Compensatory Arrangements:
(1) Executives' Deferred Compensation Plan and Amendments
Page 9
ITEM 14. (Continued)
Reference No. from
Reg. 229.601
Item 601 Description of Exhibit
(2) Restated and Amended Supplemental Retirement Plan for
Executives of National Service Industries, Inc. ,
Amendments and Appendices
(3) The National Service Industries, Inc. Senior Management
Benefit Plan and Amendments
(4) Severance Protection Agreement between National Service
Industries, Inc. and David Levy and Amendment
(5) Severance Protection Agreements between National
Service Industries, Inc. and
(a) James S. Balloun
(b) Stewart A. Searle III
(c) Brock A. Hattox
and Amendments
(6) Bonus Letter Agreements between National Service
Industries, Inc. and
(a) James S. Balloun
(b) David Levy
(c) Stewart A. Searle III
(d) Brock A. Hattox
and Supplemental Letter Agreement
(7) Long-Term Incentive Program and Amendment
(8) Incentive Stock Option Agreements between National
Service Industries, Inc. and
(a) David Levy
(b) Stewart A. Searle III
(c) Brock A. Hattox
(9) Nonqualified Stock Option Agreement for Corporate
Officers between National Service Industries, Inc. and
(a) David Levy
(b) Brock A. Hattox
(10) Nonqualified Stock Option Agreement for Corporate
Officers Effective Beginning September 21, 1994 between
National Service Industries, Inc. and David Levy
(11) Benefits Protection Trust Agreement and Amendments
(12) Executive Benefits Trust Agreement and Amendments
(13) 1992 Nonemployee Directors' Stock Option Plan Effective
September 16, 1992 and Amendment
Page 10
ITEM 14. (Continued)
Reference No. from
Reg. 229.601
Item 601 Description of Exhibit
(14) Nonemployee Directors' Stock Option Agreement between
National Service Industries, Inc. and
(a) John L.Clendenin
(b) Robert M. Holder, Jr.
(c) F. Ross Johnson
(d) James C. Kennedy
(e) Donald R. Keough
(f) Bryan D. Langton
(g) Bernard Marcus
(h) John G. Medlin, Jr.
(i) Dr. Betty L. Siegel
(j) Barrie A. Wigmore
(15) National Service Industries, Inc. Executive Savings
Plan Effective September 1, 1994 and Amendment
(16) Split-Dollar Agreement among National Service
Industries, Inc., D. Raymond Riddle, and Wachovia Bank
of Georgia, N.A. Dated January 4, 1993 and Amendment
(17) Consulting Agreement between National Service
Industries, Inc. and D. Raymond Riddle
(18) Nonqualified Stock Option Agreement Effective January
3, 1996 between National Service Industries, Inc. and
James S. Balloun
(19) National Service Industries, Inc. Nonemployee Director
Deferred Stock Unit Plan, Effective June 1, 1996 and
Amendments
(20) Employment Letter Agreement between National Service
Industries, Inc. and Brock A. Hattox, Dated August 26,
1996
(21) Incentive Stock Option Agreement Effective Beginning
September 17, 1996 between National Service Industries,
Inc. and
(a) James S. Balloun
(b) David Levy
(c) Stewart A. Searle III
(22) Nonqualified Stock Option Agreement for Executive
Officers Effective Beginning September 17, 1996 between
National Service Industries, Inc. and
(a) James S. Balloun
(b) David Levy
(c) Stewart A. Searle III
(d) Brock A. Hattox
(23) National Service Industries, Inc. Long-Term Achievement
Incentive Plan Effective September 17, 1996
Page 11
ITEM 14. (Continued)
Reference No. from
Reg. 229.601
Item 601 Description of Exhibit
(24) Aspiration Achievement Incentive Award Agreements
between National Service Industries, Inc. and
(a) James S. Balloun
(b) Brock A. Hattox
(c) David Levy
(d) Stewart A. Searle III
[a confidential portion of which has been omitted and
filed separately with the Securities and Exchange
Commission]
(25) National Service Industries, Inc. Supplemental Deferred
Savings Plan Effective September 18, 1996
(26) Stock Option Agreement for Nonemployee Directors Dated
March 19, 1997 between National Service Industries,
Inc. and
(a) John L. Clendenin
(b) Samuel A. Nunn
(27) Employment Letter Agreement between National Service
Industries, Inc. and James S. Balloun, Dated
February 1, 1996
[refiled to disclose confidential information
previously omitted and filed separately with the
Securities and Exchange Commission]
(28) Incentive Stock Option Agreement Effective Beginning
September 23, 1997 between National Service Industries,
Inc. and
(a) James S. Balloun
(b) Brock A. Hattox
(c) David Levy
(d) Stewart A. Searle III
(29) Nonqualified Stock Option Agreement For Executive
Officers Effective Beginning September 23, 1997 between
National Service Industries, Inc. and
(a) James S.Balloun
(b) Brock A. Hattox
(c) David Levy
(d) Stewart A. Searle III
(30) Aspiration Achievement Incentive Award Agreements
between National Service Industries, Inc. and
(a) James S. Balloun
(b) Brock A. Hattox
(c) David Levy
(d) Stewart A. Searle III
[a confidential portion of which has been omitted and
filed separately with the Securities and Exchange
Commission]
(31) National Service Industries, Inc. Management
Compensation and Incentive Plan as Amended and
Restated, Effective as of September 1, 1998, Subject to
Approval by Shareholders at the Annual Meeting to be
held on January 6, 1999
Page 12
ITEM 14. (Continued)
Reference No. from
Reg. 229.601
Item 601 Description of Exhibit
13 Information Incorporated by Reference from Annual Report for the
Year Ended August 31, 1998
21 List of Subsidiaries
23 Consent of Independent Public Accountants
24 Powers of Attorney
27 Financial Data Schedule for the Year Ended August 31, 1998
(b) No reports on Form 8-K were filed for the three months ended August 31,
1998.
(c) Exhibits 2, 9, 11, 12, 18, 22, and 28 have been omitted because they are
not applicable.
(d) Not applicable.
Page 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NATIONAL SERVICE INDUSTRIES, INC.
Date: November 18, 1998 By: /s/ Helen D. Haines
Helen D. Haines
Vice President and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title
James S. Balloun* Chairman, President, and
Chief Executive Officer and Director
Brock Hattox* Executive Vice President and
Chief Financial Officer
Mark R. Bachmann* Vice President and Controller
John L. Clendenin* Director
Thomas C. Gallagher* Director
Robert M. Holder, Jr.* Director
James C. Kennedy* Director
November 18, 1998
David Levy* Director
Bernard Marcus* Director
Charles W. McCall Director
John G. Medlin, Jr.* Director
Samuel A. Nunn* Director
Herman J. Russell* Director
Betty L. Siegel* Director
Barrie A. Wigmore* Director
*By /s/ David Levy Attorney-in-Fact
David Levy
Page 14
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
To National Service Industries, Inc.:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements included in NATIONAL SERVICE INDUSTRIES, INC.
and subsidiaries' annual report to stockholders incorporated by reference in
this Form 10-K, and have issued our report thereon dated October 9,1998. Our
audit was made for the purpose of forming an opinion on those statements taken
as a whole. The schedule listed in Item 14 in this Form 10-K is the
responsibility of the company's management and is presented for the purpose of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
October 9, 1998
Page 15
SCHEDULE II
NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED AUGUST 31, 1998, 1997, AND 1996
(In thousands)
Balance at Additions Charged to Balance at
Beginning Costs and Other End
Description of Period Expenses Accounts (1) Deductions (2) of Period
YEAR ENDED AUGUST 31, 1998:
Deducted in the balance sheet
from the asset to which it applies-
Reserve for doubtful accounts $ 4,302 $ 3,558 $ 214 $ 3,443 $ 4,631
YEAR ENDED AUGUST 31, 1997:
Deducted in the balance sheet
from the asset to which it applies-
Reserve for doubtful accounts $ 5,807 $ 2,276 $ (745) $ 3,036 $ 4,302
YEAR ENDED AUGUST 31, 1996:
Deducted in the balance sheet
from the asset to which it applies-
Reserve for doubtful accounts $ 6,467 $ 2,708 $ (964) $ 2,404 $ 5,807
(1) Recoveries credited to reserve, reserves recorded in acquisitions, and
reserves removed in sale of businesses.
(2) Uncollectible accounts written off.
Page 16
INDEX TO EXHIBITS
Page No.
EXHIBIT 3 (a)Amended and Restated Certificate of Reference is made to Exhibit 3 of
Incorporation registrant's Form 10-Q for the quarter
ended February 28, 1998, which is
incorporated herein by reference.
(b)By-Laws as Amended and Restated June 21, 1989 25
and Amended March 24, 1998
EXHIBIT 4 (a) Amended and Restated Rights Agreement dated Reference is made to Exhibit 4.1 of
as of December 17, 1997 between National Service registrant's Form 8-A/A as filed with the
Industries, Inc. and Wachovia Bank, N.A. Commission on December 17, 1997, which is
(replacing Wachovia Bank, N.A. with First Chicago incorporated herein by reference.
Trust Company)
(b) First Amendment dated as of April 30, 1998 Reference is made to Exhibit 1 of
between National Service Industries, Inc. and registrant's Form 8-A/A-3 as filed
First Chicago Trust Company of New York, to the with the Commission on June 22, 1998,
Amended and Restated Rights Agreement, dated as which is incorporated herein by reference.
of December 17, 1997 between National Service
Industries, Inc. and Wachovia Bank, N.A
EXHIBIT 10(i)A US$250,000,000 Credit Agreement dated as of July Reference is made to Exhibit 10(i)A of
23, 1996 among National Service Industries, Inc., registrant's Form 10-Q for the quarter
Certain of its Subsidiaries, Certain Listed ended May 31, 1998, which is incorporated
Banks, Wachovia Bank of Georgia, N.A., as Agent, herein by reference.
and Nationsbank, N.A. (South) and Suntrust Bank,
Atlanta, as Co-Agents
EXHIBIT 10(iii)A Management Contracts and Compensatory
Arrangements:
(1) (a)Executives' Deferred Compensation Plan Reference is made to Exhibit 19 of
registrant's Form 10-K for the fiscal
year ended August 31, 1982, which is
incorporated herein by reference.
(b)First Amendment To Executives' Deferred Reference is made to Exhibit
Compensation Plan, Dated September 21, 1989 10(iii)A(b)-(ii) of registrant's Form
10-K for the fiscal year ended August
31, 1989, which is incorporated herein
by reference.
(c)Second Amendment to Executives' Reference is made to Exhibit
Deferred Compensation Plan, Effective as 10(iii)A(a) of registrant's Form 10-Q
of September 1, 1994. for the quarter ended November 30,
1994, which is incorporated herein by
reference.
(d)Amendment No. 3 to Executives' Deferred Reference is made to Exhibit
Compensation Plan, Dated August 31, 1996 10(iii)A(2)(d) of registrant's Form
10-K for the fiscal year ended August
31, 1996, which is incorporated herein
by reference.
Page 17
INDEX TO EXHIBITS
Page No.
(2) (a)Restated and Amended Supplemental Reference is made to Exhibit
Retirement Plan for Executives of National 10(iii)A(c)-(i) of registrant's Form
Service Industries, Inc. 10-K for the fiscal year ended August
31, 1993, which is incorporated herein
by reference.
(b)Amendment to Restated and Amended Reference is made to Exhibit
Supplemental Retirement Plan for 10(iii)A(a) of registrant's Form 10-Q
Executives of National Service Industries, for the quarter ended February 28,
Inc. 1994, which is incorporated herein by
reference.
(c)Appendix B to Restated and Amended Reference is made to Exhibit
Supplemental Retirement Plan for 10(iii)A(e) of registrant's Form 10-Q
Executives of National Service Industries, for the quarter ended February 29,
Inc., Effective February 1, 1996 1996, which is incorporated herein by
reference.
(d)Appendix C to Restated and Amended Reference is made to Exhibit
Supplemental Retirement Plan for 10(iii)A(d) of registrant's Form 10-Q
Executives of National Service Industries, for the quarter ended May 31, 1996,
Inc., Effective May 31, 1996 which is incorporated herein by
reference.
(e)Amendment No. 2 to Restated and Amended Reference is made to Exhibit
Supplemental Retirement Plan for 10(iii)A(3)(e) of registrant's Form
Executives of National Service Industries, 10-K for the fiscal year ended August
Inc., Dated August 31, 1996 31, 1996, which is incorporated herein
by reference.
(3) (a)The National Service Industries, Inc. Reference is made to Exhibit
Senior Management Benefit Plan, Dated 10(iii)A(f) of registrant's Form 10-K
August 15, 1985 for the fiscal year ended August 31,
1985, which is incorporated herein by
reference.
(b)First Amendment to National Service Reference is made to Exhibit
Industries, Inc. Senior Management Benefit 10(iii)A(e)-(ii) of registrant's Form
Plan, Dated September 21, 1989 10-K for the fiscal year ended August
31, 1989, which is incorporated herein
by reference.
(c)Amendment No. 2 to National Service Reference is made to Exhibit
Industries, Inc. Senior Management Benefit 10(iii)A(d)(iii) of registrant's Form
Plan, Dated September 16, 1994 10-K for the fiscal year ended August
31, 1994, which is incorporated herein
by reference.
(d)Amendment No. 3 to National Service Reference is made to Exhibit
Industries, Inc. Senior Management 10(iii)A(4)(d) of registrant's Form
Benefit Plan, Dated August 31, 1996 10-K for the fiscal year ended August
31, 1996, which is incorporated herein
by reference.
Page 18
INDEX TO EXHIBITS
Page No.
(4) (a)Severance Protection Agreement between Reference is made to Exhibit
National Service Industries, Inc. and 10(iii)A(h) of registrant's Form 10-K
David Levy for the fiscal year ended August 31,
1989, which is incorporated herein by
reference.
(b)Amendment to Severance Protection Reference is made to Exhibit
Agreement between National Service 10(iii)A(5)(b) of registrant's Form
Industries, Inc. and David Levy, Dated 10-K for the fiscal year ended August
August 31, 1996 31, 1996, which is incorporated herein
by reference.
(5) (a)Severance Protection Agreements between Reference is made to Exhibit
National Service Industries, Inc. and 10(iii)A(c) of registrant's Form 10-Q
(i) James S. Balloun (February 1, 1996) for the quarter ended February 29,
(ii) Stewart A. Searle III (June 19, 1996, which is incorporated herein by
1996) reference.
(iii) Brock A. Hattox (September 9, 1996)
(b)Amendment to Severance Protection Reference is made to Exhibit
Agreements, Dated August 31, 1996 10(iii)A(6)(b) of registrant's Form
10-K for the fiscal year ended August
31, 1996, which is incorporated herein
by reference.
(6) (a)Bonus Letter Agreements between Reference is made to Exhibit
National Service Industries, Inc. and 10(iii)A(j) of registrant's Form 10-K
(i) James S. Balloun (February 1, 1996) for the fiscal year ended August 31,
(ii) David Levy (October 1, 1989) 1989, and to Exhibit 10(iii)A(d) of the
(iii) Stewart A. Searle III (June 19, 1996) registrant's Form 10-Q for the quarter
(iv) Brock A. Hattox (September 9, 1996) ended February 29, 1996, which are
incorporated herein by reference.
(b)Supplemental Letter Agreement, Dated Reference is made to Exhibit
August 31 1996 10(iii)A(7) (b) of registrant's Form
10-K for the fiscal year ended August
31, 1996, which is incorporated herein
by reference.
(7) (a)Long-Term Incentive Program, Dated Reference is made to Exhibit
September 20, 1989 10(iii)A(k) of registrant's Form 10-K
for the fiscal year ended August 31,
1989, which is incorporated herein by
reference.
(b)Amendment No. 1 to Long-Term Incentive Reference is made to Exhibit
Program, Dated September 21, 1994 10(iii)A(h)(ii) of registrant's Form
10-K for the fiscal year ended August
31, 1994, which is incorporated herein
by reference.
Page 19
INDEX TO EXHIBITS
Page No.
(8) Incentive Stock Option Agreements between Reference is made to Exhibit
National Service Industries, Inc. and 10(iii)A(1) of registrant's Form 10-K
(a) David Levy for the fiscal year ended August 31,
(b) Stewart A. Searle III 1989, which is incorporated herein by
(c) Brock A. Hattox reference.
(9) Nonqualified Stock Option Agreement for Reference is made to Exhibit
Corporate Officers between National 10(iii)A(j) of registrant's Form 10-K
Service Industries, Inc. and for the fiscal year ended August 31,
(a) David Levy 1992, which is incorporated herein by
(b) Brock A. Hattox reference.
(10) Nonqualified Stock Option agreement for Reference is made to Exhibit
Corporate Officers Effective Beginning 10(iii)A(k) of registrant's Form 10-K
September 21, 1994 between National for the fiscal year ended August 31,
Service Industries, Inc. and David Levy 1994, which is incorporated herein by
reference.
(11) (a)Benefits Protection Trust Agreement Reference is made to Exhibit
Dated July 5, 1990, between National 10(iii)A(n) of registrant's Form 10-K
Service Industries, Inc. and Wachovia Bank for the fiscal year ended August 31,
and Trust Company 1990, which is incorporated herein by
reference.
(b)Amendment to Benefits Protection Trust Reference is made to Exhibit
Agreement between National Service 10(iii)A(12)(c) of registrant's Form
Industries, Inc. and Wachovia Bank and 10-K for the fiscal year ended August
Trust Company and Adoption, Dated August 31, 1996, which is incorporated herein
31, 1996 by reference.
(c)Amendment No. 2 to Benefits Protection Reference is made to Exhibit
Trust Agreement between National Service 10(iii)A(3) of registrant's Form 10-Q
Industries, Inc. and Wachovia Bank and for the quarter ended November 30,
Trust Company, Dated September 23, 1997 1997, which is incorporated herein by
reference.
(d)Amended Schedule 1 of Benefits Reference is made to Exhibit
Protection Trust Agreement between 10(iii)A(4) of registrant's Form 10-Q
National Service Industries, Inc. and for the quarter ended November 30,
Wachovia Bank and Trust Company, Dated 1997, which is incorporated herein by
September 23, 1997 reference.
(12) (a)Executive Benefits Trust Agreement Reference is made to Exhibit
Dated July 5, 1990, between National 10(iii)A(o) of registrant's Form 10-K
Service Industries, Inc. and Wachovia Bank for the fiscal year ended August 31,
and Trust Company 1990, which is incorporated herein by
reference.
Page 20
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Page No.
(b)Amendment to Executive Benefits Trust Reference is made to Exhibit
Agreement between National Service 10(iii)A(13) of registrant's Form 10-K
Industries, Inc. and Wachovia Bank and for the fiscal year ended August 31,
Trust Company and Adoption, Dated August 1996, which is incorporated herein by
31, 1996 reference.
(c)Amended Schedule 1 of Executive Reference is made to Exhibit
Benefits Trust Agreement between National 10(iii)A(5) of registrant's Form 10-Q
Service Industries, Inc. and Wachovia for the quarter ended November 30,
Bank, N.A. (formerly Wachovia Bank and 1997, which is incorporated herein by
Trust Company), Dated September 23, 1997 reference.
(13) (a)National Service Industries, Inc. 1992 Reference is made to Exhibit
Nonemployee Directors' Stock Option Plan, 10(iii)A(o) of registrant's Form 10-K
Effective September 16, 1992 for the fiscal year ended August 31,
1992, which is incorporated herein by
reference.
(b)First Amendment to the National Service 41
Industries, Inc. 1992 Nonemployee
Directors' Stock Option Plan, Dated March
24, 1998
(14) Nonemployee Directors' Stock Option Reference is made to Exhibit
Agreement between National Service 10(iii)A(q) of registrant's Form 10-K
Industries, Inc. and for the fiscal year ended August 31,
(a) John L. Clendenin 1994, which is incorporated herein by
(b) Robert M. Holder, Jr. reference.
(c) F. Ross Johnson
(d) James C. Kennedy
(e) Donald R. Keough
(f) Bryan D. Langton
(g) Bernard Marcus
(h) John G. Medlin, Jr.
(i) Dr. Betty L. Siegel
(j) Barrie A. Wigmore
(15) (a)National Service Industries, Inc. Reference is made to Exhibit
Executive Savings Plan, Effective 10(iii)A(s) of registrant's Form 10-K
September 1, 1994 for the fiscal year ended August 31,
1994, which is incorporated herein by
reference.
(b)Amendment No. 1 to National Service Reference is made to Exhibit
Industries, Inc. Executive Savings Plan, 10(iii)A(17)(b) of registrant's Form
Dated August 31, 1996 10-K for the fiscal year ended August
31, 1996, which is incorporated herein
by reference.
Page 21
INDEX TO EXHIBITS
Page No.
(16) (a)Split-Dollar Agreement among National Reference is made to Exhibit
Service Industries, Inc., D. Raymond 10(iii)A(a)(i) of registrant's Form
Riddle, and Wachovia Bank of Georgia, 10-Q for the quarter ended February 28,
N.A., Dated January 4, 1993 1995, which is incorporated herein by
reference.
(b)First Amendment to Split-Dollar Reference is made to Exhibit
Agreement among National Service 10(iii)A(a)(ii) of registrant's Form
Industries, Inc., D. Raymond Riddle, and 10-Q for the quarter ended February 28,
Wachovia Bank of Georgia, N.A., Effective 1995, which is incorporated herein by
March 30, 1995 reference.
(17) Consulting Agreement between National Reference is made to Exhibit
Service Industries, Inc. and D. Raymond 10(iii)A(c) of registrant's Form 10-Q
Riddle, Dated March 30, 1995 for the quarter ended February 28,
1995, which is incorporated herein by
reference.
(18) Nonqualified Stock Option Agreement Reference is made to Exhibit
Effective January 3, 1996 between National 10(iii)A(b) of registrant's Form 10-Q
Service Industries, Inc. and James S. for the quarter ended February 28,
Balloun 1996, which is incorporated herein by
reference.
(19) (a)National Service Industries, Inc. Reference is made to Exhibit
Nonemployee Director Deferred Stock Unit 10(iii)A(26) of registrant's Form 10-K
Plan, Effective June 1, 1996 for the fiscal year ended August 31,
1996, which is incorporated herein by
reference.
(b)Amendment No. 1 to National Service Reference is made to Exhibit
Industries, Inc. Nonemployee Director 10(iii)A(6) of registrant's Form 10-Q
Deferred Stock Unit Plan, Effective for the quarter ended November 30,
December 1, 1997 1997, which is incorporated herein by
reference.
(c)Amendment No. 2 to National Service 43
Industries, Inc. Nonemployee Director
Deferred Stock Unit Plan, Effective
December 31, 1997
(20) Employment Letter Agreement between Reference is made to Exhibit
National Service Industries, Inc. and 10(iii)A(28) of registrant's Form 10-K
Brock A. Hattox, Dated August 26, 1996 for the fiscal year ended August 31,
1996, which is incorporated herein by
reference.
Page 22
INDEX TO EXHIBITS
Page No.
(21) Incentive Stock Option Agreement Effective Reference is made to Exhibit
Beginning September 17, 1996 between 10(iii)A(5) of registrant's Form 10-Q
National Service Industries, Inc. and for the quarter ended November 30,
(a) James S. Balloun 1996, which is incorporated herein by
(b) David Levy reference.
(c) Stewart A. Searle III
(22) Nonqualified Stock Option Agreement for Reference is made to Exhibit
Executive Officers Effective Beginning 10(iii)A(6) of registrant's Form 10-Q
September 17, 1996 between National for the quarter ended November 30,
Service Industries, Inc. and 1996, which is incorporated herein by
(a) James S. Balloun reference.
(b) David Levy
(c) Stewart A. Searle III
(d) Brock A. Hattox
(23) National Service Industries, Inc. Reference is made to Exhibit
Long-Term Achievement Incentive Plan, 10(iii)A(7) of registran's Form 10-Q
Effective September 17, 1996 for the quarter ended November 30,
1996, which is incorporated herein by
reference.
(24) Aspiration Achievement Incentive Award Reference is made to Exhibit
Agreements between National Service 10(iii)A(8) of registrant's Form 10-Q
Industries, Inc. and for the quarter ended November 30,
(a) James S. Balloun 1996, which is incorporated herein by
(b) Brock A. Hattox reference.
(c) David Levy
(d) Stewart A. Searle III
[a confidential portion of which has been
omitted and filed separately with the
Securities and Exchange Commission]
(25) National Service Industries, Inc. Reference is made to Exhibit
Supplemental Deferred Savings Plan, 10(iii)A(9) of registrant's Form 10-Q
Effective September 18, 1996 for the quarter ended November 30,
1996, which is incorporated herein by
reference.
(26) Stock Option Agreement for Nonemployee Reference is made to Exhibit 10(iii)A
Directors Dated March 19, 1997 between of registrant's Form 10-Q for the
National Service Industries, Inc. and quarter ended May 31, 1997, which is
(a) John L. Clendenin incorporated herein by reference.
(b) Samuel A. Nunn
Page 23
INDEX TO EXHIBITS
Page No.
(27) Employment Letter Agreement between Reference is made to Exhibit
National Service Industries, Inc. and 10(iii)A(2) of registrant's Form 10-Q
James S. Balloun, Dated February 1, 1996 for the quarter ended November 30,
1997, which is incorporated herein by
[refiled to disclose confidential reference.
information previously omitted and filed
separately with the Securities and
Exchange Commission]
(28) Incentive Stock Option Agreement Effective Reference is made to Exhibit
Beginning September 23, 1997 between 10(iii)A(7) of registrant's Form 10-Q
National Service Industries, Inc. and for the quarter ended November 30,
(a) James S. Balloun 1997, which is incorporated herein by
(b) Brock A. Hattox reference.
(c) David Levy
(d) Stewart A. Searle III
(29) Nonqualified Stock Option Agreement For Reference is made to Exhibit
Executive Officers Effective Beginning 10(iii)A(8) of registrant's Form 10-Q
September 23, 1997 between National for the quarter ended November 30,
Service Industries, Inc. and 1997, which is incorporated herein by
(a) James S. Balloun reference.
(b) Brock A. Hattox
(c) David Levy
(d) Stewart A. Searle III
(30) Aspiration Achievement Incentive Award Reference is made to Exhibit
Agreements between National Service 10(iii)A(9) of registrant's Form 10-Q
Industries, Inc. and for the quarter ended November 30,
(a) James S. Balloun 1997, which is incorporated herein by
(b) Brock A. Hattox reference.
(c) David Levy
(d) Stewart A. Searle III
[a confidential portion of which has been
omitted and filed separately with the
Securities and Exchange Commission]
(31) National Service Industries, Inc. 44
Management Compensation and Incentive Plan
as Amended and Restated, Effective as of
September 1, 1998, Subject to Approval by
Shareholders at the Annual Meeting to be
held on January 6, 1999
EXHIBIT 13 Information Incorporated by Reference from 51
Annual Report for the Year Ended August
31, 1998
EXHIBIT 21 List of Subsidiaries 73
EXHIBIT 23 Consent of Independent Public Accountants 74
Page 24
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Page No.
EXHIBIT 24 Powers of Attorney 75
EXHIBIT 27 Financial Data Schedule for the Year Ended 87
August 31, 1998