Page 63
Exhibit 10(iii)A(5)
AMENDMENT NO. 2
TO
NATIONAL SERVICE INDUSTRIES, INC.
EXECUTIVE BENEFITS 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. Executive Benefits 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 2.4 is hereby amended by adding the following after the word
"securities" in the third line of the present section:
", and all rights under any Letters of Credit,"
2.
Section 3.2 is hereby amended by adding the following to the end of the
present section:
"If the Company fails to deposit the amount in the Trust
required by this Section 3.2 within fifteen (15) days of the Trustee's
written demand, the Trustee shall commence legal action as provided in
Section 9.4."
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Exhibit 10(iii)A(5)
3.
Section 4.1 is hereby amended by deleting the present section in its
entirety, and by substituting the following in lieu thereof:
"4.1 Immediately upon the occurrence of a Change in Control,
the Company shall contribute sufficient cash or marketable securities
to the Benefit Account in an amount equal to the difference between the
assets transferred to this Trust pursuant to the Transfer and the
amount necessary (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 Transferred Plans as of
the date of the Change in Control and (ii) to pay the additional
payments and benefits that would be due Participants under the
Transferred Plans assuming the Participants' employment were terminated
involuntarily by the Company without cause immediately following the
date on which the Change in Control occurred. The amount the Company
shall contribute to the Trust pursuant to this Section 4.1 shall be
determined by the Trustee in its discretion. If the Company fails to
contribute the amount to the Trust required by this Section 4.1 within
five (5) days of the occurrence of the Change in Control, the Trustee
shall commence legal action as provided in Section 9.4. Upon a Change
in Control, this Trustee will have possession and control of the assets
transferred (together with any other assets) of this Trust and all of
the income therefrom to hold, administer and dispose of the same on the
terms and conditions set forth herein on behalf of the Participants and
their beneficiaries."
4.
Section 4.3 is hereby amended by deleting the present section in its
entirety and substituting the following in lieu thereof:
"4.3 After the occurrence of a Change in Control, if the
Trustee determines that the funds in the Benefit Account (including any
Sub-Account) are insufficient to fully pay all benefits under the
Transferred Plans as described in Section 4.1 and any taxes imposed or
levied with respect to the assets and/or income of this Trust, as
provided under Section 10.1 of Article 10, the Trustee with respect to
the Benefit Account shall, and with respect to any Sub-Account may,
make a written demand on the Company to provide funds in an amount
determined at least quarterly by the Trustee in its discretion. The
Company shall transfer such funds within fifteen (15) days from the
time the written demand is mailed. If the Trustee fails to deposit the
amounts in the Trust required by this Section 4.3 within fifteen (15)
days of the Trustee's written demand, the Trustee shall commence legal
action as provided in Section 9.4."
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Exhibit 10(iii)A(5)
5.
Article 4 is hereby amended by adding the following new Section 4.4 to
the present Article:
"4.4(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, 4.2 and 4.3, 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, 4.2 and 4.3, 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,
4.2 and 4.3.
(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, 4.2 and 4.3, as determined by the Trustee."
6.
Article 7 is hereby amended by redesignating the current Section 7.8
as Section 7.9 and adding the following new Section 7.8:
"7.8 To draw upon any Letter of Credit provided pursuant
to Section 4.4 and to make demand upon the issuer of any Letter of Credit to pay
amounts directly to the Trust."
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Exhibit 10(iii)A(5)
7.
Section 9.3 is hereby amended by deleting the present section in its
entirety and substituting the following in lieu thereof:
"9.3 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. If the Company fails to pay such amounts
within thirty (30) days, the Trustee shall commence legal action as
provided in Section 9.4."
8.
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, if the Company fails to
transfer to, and deposit in, the Trust the amounts required by Articles
3 and 4, and Sections 9.3 and 10.1, within the time period demanded 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."
9.
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 4.4) 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."
10.
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 4.4) 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."
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Exhibit 10(iii)A(5)
11.
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, III, 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."
12.
Schedule 1 is hereby amended by substituting a revised Schedule 1,
dated January 6, 1999, which is attached hereto and made a part hereof. 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.
2 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(5)
The undersigned Affiliates of the Corporation hereby consent to, and
agree to be bound by, this Amendment No. 2 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