Page 57
Exhibit 10(iii)A(4)
AMENDMENT NO. 3
TO
NATIONAL SERVICE INDUSTRIES, INC.
BENEFITS PROTECTION TRUST
This Amendment made and entered into as of this 6th day of January,
1999, by and between National Service Industries, Inc., a Delaware Corporation
(the "Company"), and Wachovia Bank, N.A. (formerly Wachovia Bank and Trust
Company), as Trustee (the "Trustee");
W - I - T - N - E - S - S - E - T - H:
WHEREAS, the Company previously established a trust arrangement known
as the National Service Industries, Inc. Benefits Protection Trust (the "Trust")
in order to ensure that, in the event of Change in Control of the Company,
designated participants and their beneficiaries receive the benefits which the
Company and its Affiliates are obligated to provide pursuant to various
executive compensation arrangements (collectively, the "Plans"); and
WHEREAS, the Company now desires to amend the Trust in a number of
respects;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1.
Section 3.4 is hereby amended by deleting the present provision in its
entirety and substituting the following in lieu thereof:
"3.4 Upon the occurrence of a Threatened Change in Control or
a Change in Control, the Company shall contribute to the Trustee
Expense Account sufficient cash (i) to provide for the Litigation (as
defined in Section 9.3 of Article 9) expenses of all Plaintiffs as
determined by the Trustee, and (ii) to pay the expenses of operating
this Trust for twelve (12) months. If the Company fails to deposit the
amount in the Trust required by this Section 3.4 within five (5) days
of the occurrence of a Threatened Change in Control or a Change in
Control, the Trustee shall commence legal action as provided in Section
9.5."
2.
Section 4.2 is hereby amended by designating the first paragraph of the
present section as subparagraph (a), by deleting the second paragraph of the
present section in its entirety, and by adding the following new subparagraph
(b) in Section 4.2:
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Exhibit 10(iii)A(4)
"(b) Immediately upon the occurrence of a Threatened Change in
Control or a Change in Control, the Company shall contribute sufficient
cash to the Benefit Account (i) to pay all payments and benefits to
which Participants would be entitled (whether payable currently or on a
deferred basis) pursuant to the terms of the Plans as of the date of
the Threatened Change in Control or Change in Control and (ii) to pay
the additional payments and benefits that would be due Participants
under the Plans assuming the Participants' employment was terminated
involuntarily by the Company without cause immediately following the
date on which the Threatened Change in Control or Change in Control
occurred. The amount the Company shall contribute to the Trust pursuant
to this subparagraph (b) shall be determined by the Trustee in its
discretion. If the Company fails to contribute the amount to the Trust
required by this subparagraph (b) within five (5) days of the
occurrence of the Threatened Change in Control or Change in Control,
the Trustee shall commence legal action as provided in Section 9.5.
During a Threatened Change in Control Period or after
the occurrence of a Change in Control, if the Trustee determines that
the funds in the Benefit Account are insufficient to fully pay all
payments and benefits in (b)(i) and (ii) above under the Plans, the
Trustee shall make written demand on the Company to provide funds in an
amount determined by the Trustee in its discretion. If the Company
fails to contribute this additional amount to the Trust within five (5)
days of receipt of the Trustee's written demand, the Trustee shall
commence legal action as provided in Section 9.5."
3.
Section 4.3 is hereby amended by deleting the present section in its
entirety and substituting the following in lieu thereof:
"4.3(a) In addition to the cash and/or other property
delivered to, and deposited with, the Trustee pursuant to Article 3 and
Sections 4.1 and 4.2, the Company may deliver to the Trustee one or
more letters of credit (referred to hereinafter as the "Letter(s) of
Credit") which shall (i) be irrevocable for a period of at least 364
days, (ii) be renewable by the Company on substantially the same terms
and conditions at the end of such period unless the issuer provides to
the Company and the Trustee not less than 90 calendar days' written
notice prior to the expiration date that any Letter(s) of Credit will
not be renewed, and (iii) name the Trustee as beneficiary. A Letter of
Credit shall enable the Trustee to draw directly from the issuer of
such Letter of Credit, immediately upon notice and without any other
requirement, an amount equal to the excess of 100% of the amount the
Trustee has demanded the Company contribute to the Trust pursuant to
Article 3 and Sections 4.1 and 4.2, as determined by the Trustee, over
the value of all other assets of the Trust, subject, however, to the
maximum amount of the Letters of Credit.
(b) The Trustee shall draw on each Letter of Credit held by it
to the full extent thereof no later than three (3) business days
following the failure by the Company to contribute to the Trust the
amounts demanded by the Trustee pursuant to Article 3 and Sections 4.1
and 4.2.
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Exhibit 10(iii)A(4)
(c) If the Trustee receives written notice from an issuer
referencing a Letter of Credit by number which is signed by an officer
of the issuer of such Letter of Credit, that such Letter of Credit will
not be renewed on substantially the same terms and conditions, then the
Trustee shall notify the Company in writing that it has received such
notice.
(d) Notwithstanding (a) above, the Trustee shall not draw on
any Letter of Credit pursuant to subparagraph (a), to the extent that
the Company has deposited in the Trust 100% of the amount the Trustee
has demanded the Company to contribute to the Trust pursuant to Article
3 and Sections 4.1 and 4.2, as determined by the Trustee."
4.
Article 7 is hereby amended by redesignating the current Section 7.5 as
Section 7.6 and adding the following new Section 7.5:
"7.5 To draw upon any Letter of Credit provided pursuant
to Section 4.3 and to make demand upon the issuer of any Letter of
Credit to pay amounts directly to the Trust."
5.
Section 9.4 is hereby amended by deleting the present section in its
entirety and substituting the following in lieu thereof:
"9.4 After a Change in Control, the Trustee shall bill the
Company directly, on a monthly basis, for all fees and expenses
described in Section 10.2. The Trustee may commence legal action
against the Company to recover any amount not paid within thirty (30)
days of the billing date. If the Company's failure to pay causes a
reduction in the assets of the Trustee Expense Account contributed
pursuant to Article 3 such that the Trustee Expense Account is
insufficient to pay for all expenses that may be incurred in connection
with the Litigation, the Trustee shall commence legal action as
provided in Section 9.5."
6.
Section 9.5 is hereby amended by deleting the present section in its
entirety and substituting the following in lieu thereof:
"9.5 Upon the occurrence of a Threatened Change in Control or
after a Change in Control, if the Company fails to transfer to, and
deposit in, the Trust the amounts required by Sections 3.4, 4.2 and
9.4, (i) within five (5) days of the demand by the Trustee, the Trustee
shall commence legal action to compel the Company to pay such amounts
to the Trust and (ii) the Company shall be required to contribute
within 10 days of commencement of such action an additional amount to
the Trust to pay for the costs and expenses, including legal fees, of
such action. The Trustee shall have the power and authority to hire
legal counsel of its choice to pursue such legal action against the
Company and the costs of such legal counsel shall be paid from the
Trust."
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Exhibit 10(iii)A(4)
7.
Article 12 is hereby amended by adding the following new Section 12.3.
"12.3 Nothing in this Article 12 shall require the Company to
indemnify the Trustee with respect to any Letter of Credit (as
described in Section 4.3) which the Trustee or any affiliate may issue
in its commercial capacity, nor may any assets of the Trust be used to
repay the Trustee or any affiliate for amounts the Trustee or any
affiliate may pay pursuant to any Letter of Credit."
8.
Article 13 is hereby amended by adding the following sentence to the
end of the present Article:
"The provisions of this Article 13 shall not limit in any way
the obligations and responsibilities of the Trustee or any affiliate
pursuant to a Letter of Credit (as described in Section 4.3) and the
rights of the Trustee to draw upon any Letter of Credit issued by the
Trustee or any affiliate shall be as provided in such Letter of
Credit."
9.
Section 15.4 is hereby amended by deleting the present provision in its
entirety and substituting the following in lieu thereof:
"15.4 Until written notice is given to the contrary,
communications to the Trustee shall be sent to it at its office at 301
N. Main Street, P.O. Box 3099, Winston-Salem, North Carolina 27150,
Attention: Mr. John N. Smith, facsimile 336-770-4059, copy to Mr. Joe
Long, Trust Counsel (or such other individuals as delegated in writing
by Messrs. Smith or Long); communications to the Company shall be sent
to it at its office at 1420 Peachtree Street, N.E., Atlanta, Georgia,
Attention: David Levy, facsimile 404-853-1015, with a copy to William
J. Vesely, Jr., Kilpatrick Stockton LLP, facsimile 404-815-6555."
10.
Section 17.3 is hereby amended by adding the following after the word
"thereto" in the fourth line of the present section:
", including all rights under any Letters of Credit,"
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Exhibit 10(iii)A(4)
11.
Schedule 1 is hereby amended by substituting a revised Schedule 1,
dated January 6, 1999, which is attached hereto and made a part hereof.
12.
The within and foregoing amendments to the Trust shall be effective as
of January 6, 1999. Except as hereby modified, the Trust shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
3 as of the day and year first written above.
NATIONAL SERVICE INDUSTRIES, INC.
By/s/ James S. Balloun
James S. Balloun
Chairman, President and
Chief Executive Officer
WACHOVIA BANK N.A., AS TRUSTEE
By /s/Jane B. Fisher
Name: Jane B. Fisher
Title: Senior Vice President
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Exhibit 10(iii)A(4)
The undersigned Affiliates of the Corporation hereby consent to, and
agree to be bound by, this Amendment No. 3 to the Trust.
This the 6th day of January, 1999.
NATIONAL SERVICE INDUSTRIES, INC.
(Georgia)
By /s/ James S. Balloun
James S. Balloun, President
NSI ENTERPRISES, INC.
By /s/ James S. Balloun
James S. Balloun, President
ZEP MANUFACTURING COMPANY
By /s/ Glen D. Reed
Glen D. Reed, President
NSI SERVICES, L.P.
By /s/ James S. Balloun
James S. Balloun, President