Exhibit 10(iii)A (3)
NATIONAL SERVICE INDUSTRIES, INC.
2001 NONEMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN
1. PURPOSE
(a) The purpose of this Plan is to provide a means by which
nonemployee directors of National Service Industries, Inc. (the "Company") may
be given an opportunity to receive or purchase stock of the Company.
(b) The Company, by means of the Plan, seeks to secure and retain
the services of persons best qualified to serve as directors of the Company and
to provide incentives for such persons to exert maximum efforts for the success
of the Company.
(c) The Company intends that the options issued under the Plan
shall be options which do not qualify as incentive stock options for purposes
of Section 422 of the Code.
2. DEFINITIONS
For purposes of the Plan:
2.1 "Adjusted Fair Market Value" means, in the event of a Change
in Control, the greater of (i) the highest price per Share paid to holders of
the Shares in any transaction (or series of transactions) constituting or
resulting in a Change in Control or (ii) the highest Fair Market Value of a
Share during the ninety (90) day period ending on the date of a Change in
Control.
2.2 "Agreement" means the written agreement between the Company
and an Optionee or Grantee evidencing the grant of an Option or Award and
setting forth the terms and conditions thereof.
2.3 "Award" means a grant of Restricted Stock or Stock.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means the commission of an act of fraud or
intentional misrepresentation or an act of embezzlement, misappropriation, or
conversion of assets or opportunities of the Company or any Subsidiary.
2.6 "Change in Capitalization" means any increase or reduction in
the number of Shares, or any change (including, but not limited to, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, spin-off, split-up,
issuance of warrants or rights or debentures, stock dividend, stock split or
reverse stock split, cash dividend, property dividend, combination or exchange
of shares, repurchase of shares, change in corporate structure, or otherwise.
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2.7 A "Change in Control" means any of the following events:
(a) The acquisition (other than from the Company) by any "Person"
(as the term is used for purposes of Sections 13(d) or 14(d) of the Exchange
Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty percent (20%) or more of the combined voting
power of the Company's then outstanding voting securities; or
(b) The individuals who, as of the Effective Date were members of
the Board (the "Incumbent Board"), cease for any reason to constitute at least
two-thirds of the Board; provided, however, that if the election, or nomination
for election by the Company's stockholders, of any new director was approved by
a vote of at least two-thirds of the Incumbent Board, such new director shall,
for purposes of this Plan, be considered as a member of the Incumbent Board; or
(c) A merger or consolidation involving the Company if the
stockholders of the Company immediately before such merger or consolidation do
not, as a result of such merger or consolidation, own, directly or indirectly,
more than seventy percent (70%) of the combined voting power of the then
outstanding voting securities of the corporation resulting from such merger or
consolidation in substantially the same proportion as their ownership of the
combined voting power of the voting securities of the Company outstanding
immediately before such merger or consolidation; or
(d) A complete liquidation or dissolution of the Company or an
agreement for the sale or other disposition of all or substantially all of the
assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur pursuant to Section 2.7(a), solely because twenty percent (20%) or
more of the combined voting power of the Company's then outstanding securities
is acquired by (i) a trustee or other fiduciary holding securities under one or
more employee benefit plans maintained by the Company or any of its
subsidiaries or (ii) any corporation which, immediately prior to such
acquisition, is owned directly or indirectly by the stockholders of the Company
in the same proportion as their ownership of stock in the Company immediately
prior to such acquisition.
2.8 "Code" means the Internal Revenue Code of 1986, as amended.
2.9 "Company" means National Service Industries, Inc.
2.10 "Director" means a director of the Company.
2.11 "Disability" means a physical or mental infirmity which
impairs the Optionee's or Grantee's ability to perform substantially his or her
duties for a period of one hundred eighty (180) consecutive days, as determined
by the Board.
2.12 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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2.13 "Fair Market Value" on any date means (A) if the Shares are
admitted to trading on a national securities exchange, the last sale price
reported for the Shares on such exchange on such date or, if no sale was
reported on such date, on the last date preceding such date on which a sale was
reported, (B) if the Shares are admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or
other comparable quotation system and have been designated as a National Market
System ("NMS") security, the last sale price reported for the Shares on such
system on such date or on the last day preceding such date on which a sale was
reported, (C) if the Shares are admitted to quotation on NASDAQ and have not
been designated a NMS security, the average of the highest bid and lowest asked
prices of the Shares on such system on such date, or (D) if there have been no
published bid or asked quotations with respect to Shares on such date, the
value established by the Board in good faith and in accordance with Section 422
of the Code.
2.14 "Grantee" means a person to whom an Award has been granted
under the Plan.
2.15 "Nonemployee Director" means a Director who is not an officer
or employee of the Company or any subsidiary.
2.16 "Option" means an option granted under this Plan to purchase
Shares.
2.17 "Optionee" means a person to whom an Option has been granted
under the Plan.
2.18 "Parent" means any corporation which is a parent corporation
(within the meaning of Section 424(e) of the Code) with respect to the Company.
2.19 "Plan" means the National Service Industries, Inc. 2001
Nonemployee Directors' Stock Incentive Plan.
2.20 "Restricted Stock" means Shares issued or transferred to a
Nonemployee Director which are subject to restrictions.
2.21 "Shares" means the common stock, par value $1.00 per share,
of the Company.
2.22 "Stock Award" means a grant of Shares that is not generally
subject to restrictions and pursuant to which a certificate for the Shares is
transferred to the Nonemployee Director.
2.23 "Subsidiary" means any corporation in an unbroken chain of
corporations, beginning with the Company, if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. The term "Subsidiary" shall also include a
partnership in which the Company or a Subsidiary owns 50% or more of the
profits interest or capital interest in the partnership.
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3. ADMINISTRATION
3.1 The Plan shall be administered by the Board.
3.2 The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(a) to determine those Nonemployee Directors to whom Options
shall be granted under the Plan and the number of Options to be granted to each
Nonemployee Director and to prescribe the terms and conditions of each Option,
including the purchase price per Share subject to each Option, and to make any
amendment or modification to any Agreement consistent with the terms of the
Plan;
(b) to select those Nonemployee Directors to whom Awards shall be
granted under the Plan and to determine the number of Shares and/or shares of
Restricted Stock to be granted pursuant to each Award, the terms and conditions
of each Award, including the restrictions or performance criteria relating to
such Award, the maximum value of each Award, and to make any amendment or
modification to any Agreement consistent with the terms of the Plan;
(c) to exercise its discretion with respect to the powers and
rights granted to it as set forth in the Plan;
(d) to construe and interpret the Plan and the Options and Awards
granted hereunder and any condition or restrictions imposed on Shares acquired
pursuant to the exercise of an Option, to define the terms used herein and to
establish, amend, and revoke rules and regulations for administration of the
Plan. The Board in the exercise of this power, may correct any defect,
omission, or inconsistency in the Plan or in any Agreement, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective. All decisions and determinations by the Board in the exercise of
this power shall be final, binding and conclusive upon the Company and the
Optionees and Grantees, as the case may be;
(e) to amend, modify, suspend, or terminate the Plan in
accordance with Section 10; and
(f) generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company in connection with the Plan.
4. STOCK SUBJECT TO THE PLAN
4.1 The maximum number of Shares that may be issued or
transferred pursuant to Options and Awards under the Plan is 300,000 Shares (or
the number and kind of shares of stock or other securities to which such Shares
are adjusted upon a Change in Capitalization pursuant to Section 8) and the
Company shall reserve for the purposes of the Plan, out of its
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authorized but unissued Shares or out of Shares held in the Company's treasury,
or partly out of each, such number of Shares as shall be determined by the
Board.
4.2 Whenever any outstanding Option or Award or portion thereof
expires, is forfeited, is cancelled or is otherwise terminated for any reason
(other than upon the exercise of the Option or upon the surrender of the Option
pursuant to Section 7), the Shares allocable to the cancelled or otherwise
terminated Option or Award or portion thereof may again be the subject of
Options and Awards granted hereunder.
5. OPTION GRANTS FOR NONEMPLOYEE DIRECTORS
5.1 Discretionary Grant. The Board may grant Options in
accordance with the Plan and the terms and conditions of each Option shall be
set forth in an Agreement. The Board shall have sole discretion in determining
the number of Shares underlying each Option to grant a Nonemployee Director.
5.2 Purchase Price. The purchase price for Shares under each
Option shall be equal to 100% of the Fair Market Value of a Share on the date
the Option is granted.
5.3 Duration. Unless otherwise provided in the Agreement, Options
shall be for a term of ten (10) years, except an Option may terminate earlier
as follows:
(a) if an Optionee's service as a Director terminates for Cause,
the Options granted to the Optionee hereunder shall immediately terminate in
full and no rights thereunder may be exercised;
(b) if an Optionee's service as a Director terminates for any
reason other than Cause, the Optionee (or any guardian, legal representative,
heir or successor of the Optionee) may for a period of three (3) years after
such termination exercise his or her Options to the extent, and only to the
extent, that such Options or portions thereof were vested and exercisable as of
the date the Optionee's service as a Director terminated, after which time the
Options shall automatically terminate in full.
This Section 5.3 shall not be construed to extend the term of any
Option or to permit anyone to exercise any Option after expiration of its term,
nor shall it be construed to increase the number of Shares as to which any
Option is exercisable from the amount exercisable on the date of termination of
the Optionee's service as a Director.
5.4 Vesting. Unless provided otherwise in the Agreement, and
subject to Section 7, each Option shall be exercisable in whole or in part at
any time after one (1) year from the date of grant of the Option.
5.5 Non-transferability. No Option granted hereunder shall be
transferable by the Optionee to whom granted otherwise than (i) by will or the
laws of descent and distribution and (ii) upon such terms and conditions as the
Company may establish, to immediate family members of the Optionee or to a
trust, partnership or similar vehicle for the benefit of such immediate family
members (collectively, the "Permitted Transferees"). For purposes of this
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Section 5.5, "immediate family" means an Optionee's spouse, parents, children,
grandchildren and spouse of children and grandchildren (including adopted
children and grandchildren, as the case may be). A Permitted Transferee may not
further transfer the Option. An Option transferred pursuant to this Section 5.5
shall remain subject to all of the provisions of the Plan and any Agreement
with respect to such Option and may not be exercised by a Permitted Transferee
unless and until all legal or regulatory approvals, listings, registrations,
qualifications or other clearances as determined by the Company to be required
or appropriate have been obtained. An Option may be exercised during the
lifetime of such Optionee only by the Optionee or his beneficiary or guardian
or legal representative or, if applicable, by Permitted Transferees. The terms
of such Option shall be final, binding and conclusive upon the beneficiaries,
executors, administrators, heirs, successors, and Permitted Transferees of the
Optionee.
5.6 Method of Exercise. The exercise of an Option shall be made
only by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number of
Shares to be purchased and accompanied by payment therefor and otherwise in
accordance with the Agreement pursuant to which the Option was granted. The
purchase price for any Shares purchased pursuant to the exercise of an Option
shall be paid in full upon such exercise in cash, by check or by transferring
Shares to the Company upon such terms and conditions as determined by the
Board. The written notice pursuant to this Section 5.6 may also provide
instructions from the Optionee to the Company that upon receipt of the purchase
price in cash from the Optionee's broker or dealer, designated as such on the
written notice, in payment for any Shares purchased pursuant to the exercise of
an Option, the Company shall issue such Shares directly to the designated
broker or dealer. Any Shares transferred to the Company as payment of the
purchase price under an Option shall be valued at their Fair Market Value on
the day preceding the date of exercise of such Option. If requested by the
Board, the Optionee shall deliver the Agreement evidencing the Option to the
Secretary of the Company who shall endorse thereon a notation of such exercise
and return such Agreement to the Optionee. No fractional Shares (or cash in
lieu thereof) shall be issued upon exercise of an Option and the number of
Shares that may be purchased upon exercise shall be rounded to the nearest
number of whole Shares.
5.7 Rights of Optionees. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Option unless and until
(i) the Option shall have been exercised pursuant to the terms thereof, (ii)
the Company shall have issued and delivered the Shares to the Optionee, and
(iii) the Optionee's name shall have been entered as a stockholder of record on
the books of the Company. Thereupon, the Optionee shall have full voting,
dividend, and other ownership rights with respect to such Shares.
6. RESTRICTED STOCK; STOCK AWARDS
6.1 Grants. The Board may from time to time in its discretion
grant Restricted Stock and Stock Awards to Nonemployee Directors and may
determine the number of Shares of Restricted Stock or Stock Awards to be
granted. The Board shall determine the terms and
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conditions of, and the amount of payment, if any, to be made by the Nonemployee
Director for such Shares or Restricted Stock. A grant of Restricted Stock may,
in addition to other conditions, require the Nonemployee Director to pay for
such Shares of Restricted Stock, but the Board may establish a price below Fair
Market Value at which the Nonemployee Director can purchase the Shares of
Restricted Stock. Each grant of Restricted Stock shall be evidenced by an
Agreement containing terms and conditions not inconsistent with the Plan as the
Board shall determine to be appropriate in its sole discretion.
6.2 Restricted Period; Lapse of Restrictions. At the time a grant
of Restricted Stock is made, the Board shall establish a period or periods of
time applicable to such grant over which the Restricted Stock will vest or may
establish performance requirements for the vesting of the Restricted Stock.
Subject to the other provisions of this Article 6, when the restrictions lapse,
the Restricted Stock shall vest in the Nonemployee Director. At the time a
grant is made, the Board may, in its discretion, prescribe conditions for the
incremental lapse of restrictions during the restricted period and for the
lapse or termination of restrictions upon the occurrence of other conditions in
addition to or other than the expiration of the restricted period or
satisfaction of performance measures with respect to all or any portion of the
Restricted Stock. Such conditions may, but need not, include the following:
(a) The death or Disability of the Nonemployee Director to whom
Restricted Stock is granted, or
(b) The occurrence of a Change in Control.
The Board may also, in its discretion, shorten or terminate the
restricted period, or waive any conditions for the lapse or termination of
restrictions with respect to all or any portion of the Restricted Stock at any
time after the date the grant is made.
6.3 Rights of Holder; Limitations Thereon. Upon a grant of
Restricted Stock, a stock certificate (or certificates) representing the number
of Shares of Restricted Stock granted to the Nonemployee Director shall be
registered in the Nonemployee Director's name and shall be held in custody by
the Company or a bank selected by the Board for the Nonemployee Director's
account. Unless provided otherwise in the Agreement, following such
registration, the Nonemployee Director shall have the rights and privileges of
a shareholder as to such Restricted Stock, including the right to vote such
Restricted Stock, except that the Nonemployee Director shall not have the right
to dividends and except further that, the following restrictions shall apply:
(a) The Nonemployee Director shall not be entitled to delivery of
a certificate until the expiration or termination of the restricted period for
the Shares represented by such certificate and the satisfaction of any and all
other conditions prescribed by the Board;
(b) None of the Shares of Restricted Stock may be sold,
transferred, assigned, pledged, or otherwise encumbered or disposed of during
the restricted period and until the satisfaction of any and all other
conditions prescribed by the Board; and
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(c) Unless provided otherwise in the Agreement, all of the Shares
of Restricted Stock that have not vested shall be forfeited and all rights of
the Nonemployee Director to such Shares of Restricted Stock shall terminate
without further obligation on the part of the Company, unless the Nonemployee
Director has remained a Nonemployee Director of the Company or any of its
Subsidiaries, until the expiration or termination of the restricted period and
the satisfaction of any and all other conditions prescribed by the Board
applicable to such Shares of Restricted Stock. Upon the forfeiture of any
Shares of Restricted Stock, such forfeited Shares shall be transferred to the
Company without further action by the Nonemployee Director and shall, in
accordance with Section 4.2, again be available for grant under the Plan. If
the Nonemployee Director paid any amount for the Shares of Restricted Stock
that are forfeited, the Company shall pay the Nonemployee Director the lesser
of the Fair Market Value of the Shares on the date they are forfeited or the
amount paid by the Nonemployee Director.
With respect to any Shares received as a result of adjustments under
Section 8 or 9 hereof and any Shares received with respect to cash dividends
declared on Restricted Stock, the Nonemployee Director shall have the same
rights and privileges, and be subject to the same restrictions, as are set
forth in this Article 6.
6.4 Delivery of Unrestricted Shares. Upon the expiration or
termination of the restricted period for any Shares of Restricted Stock and the
satisfaction of any and all other conditions prescribed by the Board, the
restrictions applicable to such Shares of Restricted Stock shall lapse and a
stock certificate for the number of Shares of Restricted Stock with respect to
which the restrictions have lapsed shall be delivered, free of all such
restrictions except any that may be imposed by law, to the holder of the
Restricted Stock. The Company shall not be required to deliver any fractional
Share but will pay, in lieu thereof, the Fair Market Value (determined as of
the date the restrictions lapse) of such fractional Share to the holder
thereof.
6.5 Nonassignability of Restricted Stock. Unless the Board
provides otherwise in the Agreement, the Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered prior to the date
Grantee becomes vested in the Restricted Stock, and following such date, shall
be sold, assigned, transferred, pledged or otherwise encumbered only in
accordance with any Shareholders Agreement in effect from time to time.
7. EFFECT OF CHANGE IN CONTROL
Unless the Agreement provides otherwise, in the event of a Change in
Control, (i) all conditions and restrictions on Shares of Restricted Stock
shall immediately lapse on the date of such Change in Control, (ii) all Options
outstanding on the date of such Change in Control shall become immediately and
fully exercisable; (iii) an Optionee will be permitted to surrender for
cancellation within sixty (60) days after such Change in Control, any Option or
portion of an Option to the extent not yet exercised and the Optionee will be
entitled to receive a cash payment in an amount equal to the excess, if any, of
(x) the greater of (1) the Fair Market Value, on the date preceding the date of
surrender, of the Shares subject to the
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Option or portion thereof surrendered or (2) the Adjusted Fair Market Value of
the Shares subject to the Option or portion thereof surrendered, over (y) the
aggregate purchase price for such Shares under the Option or portion thereof
surrendered; provided, however, that in the case of an Option granted within
six (6) months prior to the Change in Control, the Optionee shall be entitled
to surrender for cancellation his or her Option during the sixty (60) day
period commencing upon the expiration of six (6) months from the date of grant
of any such Option.
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
8.1 Subject to Section 9, in the event of a Change in
Capitalization, the Board shall conclusively determine the appropriate
adjustments, if any, to the (i) maximum number and class of Shares or other
stock or securities with respect to which Options and Awards may be granted
under the Plan, (ii) the number and class of Shares or other stock or
securities which are to be subject to Options and Awards to be granted under
Sections 5 and 6; and (iii) the number and class of Shares or other stock or
securities which are subject to outstanding Options and Awards granted under
the Plan, and the purchase price therefor, if applicable; provided, however,
that any stock adjustment in the Shares or other stock or securities subject to
an outstanding Award or Option (including any adjustments in the purchase
price) shall be made only to the extent necessary to maintain the proportionate
interest of the Optionee or Grantee and preserve, without exceeding, the value
of such Option or Award.
8.2 If, by reason of a Change in Capitalization, an Optionee
shall be entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were
applicable to the Shares subject to the Option, as the case may be, prior to
such Change in Capitalization.
9. EFFECT OF CERTAIN TRANSACTIONS
Subject to Section 7, in the event of (i) the liquidation or
dissolution of the Company or (ii) a merger or consolidation of the Company (a
"Transaction"), the Plan and the Options and Awards issued hereunder shall
continue in effect in accordance with their respective terms and each Optionee
or Grantee shall be entitled to receive in respect of each Share subject to any
outstanding Option or Award, upon exercise of such Option or lapse or
restrictions on such Award, the same number and kind of stock, securities,
cash, property, or other consideration that each holder of a Share was entitled
to receive in the Transaction in respect of a Share. In the event that, after a
Transaction, there occurs any change of a type described in Section 2.6 with
respect to the shares of the surviving or resulting corporation, then
adjustments similar to, and subject to the same conditions as, those in Section
8 shall be made by the Board.
10. TERMINATION AND AMENDMENT OF THE PLAN
The Plan shall terminate on the day prior to the tenth anniversary of
the effective date of the Plan, and no Option may be granted thereafter. The
Board may sooner terminate the
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Plan and the Board may from time to time amend, modify, or suspend the Plan;
provided, however that:
(a) Except as provided in Sections 7 and 8, no such amendment,
modification, suspension, or termination shall impair or adversely alter any
Options, Awards, or rights theretofore granted under the Plan, except with the
consent of the Optionee or Grantee, nor shall any amendment, modification,
suspension, or termination deprive any Optionee or Grantee of any Shares which
he or she may have acquired through or as a result of the Plan;
(b) To the extent required by applicable law, regulation or rule,
no amendment shall be effective unless approved by the stockholders of the
Company in accordance with applicable law and regulations at an annual or
special meeting held within twelve (12) months before or after the date of
adoption of such amendment.
11. NON-EXCLUSIVITY OF THE PLAN
(a) The adoption of the Plan by the Board shall not be construed
as amending, modifying or rescinding any previously approved compensation
arrangement or as creating any limitations on the power of the Board to adopt
such other compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.
(b) Nothing contained in this Plan prohibits a Nonemployee
Director from being appointed as an officer or employee of the Company at any
time; nor does anything contained in this Plan specifically require a
Nonemployee Director to surrender or forfeit an Option solely because he or she
accepts an appointment as an officer or employee of the Company at any time
after election or appointment to the Board. However, during such time as a
Nonemployee Director serves an an officer or employee, he or she shall not be
eligible to receive any additional awards under this Plan.
12. LIMITATION OF LIABILITY
As illustrative of the limitations of liability of the Company, but
not intended to be exhaustive thereof, nothing in the Plan shall be construed
to:
(i) give any person any right to be granted an Option or
Award other than as specifically provided by the
Plan;
(ii) give any person any rights whatsoever with respect
to Shares except as specifically provided in the
Plan;
(iii) limit in any way the right of the Company to
terminate the service of any person as a Director
pursuant to the Company's bylaws and articles of
incorporation; or nominate or appoint any person as
a Director.
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13. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW
13.1 This Plan and the rights of all persons claiming hereunder
shall be construed and determined in accordance with the laws of the State of
Delaware without giving effect to the conflicts of laws principles thereof,
except to the extent that such law is preempted by federal law.
13.2 The obligation of the Company to sell or deliver Shares with
respect to Options or Awards granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.
13.3 The Plan is intended to comply with Rule 16b-3 promulgated
under the Exchange Act and the Board shall interpret and administer the
provisions of the Plan or any Agreement in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and shall not
affect the validity of the Plan.
13.4 Each Option and Award is subject to the requirement that, if
at any time the Board determines, in its discretion, that the listing,
registration, or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent, or approval has been effected or obtained
free of any conditions as acceptable to the Board.
13.5 Notwithstanding anything contained in the Plan to the
contrary, in the event that the disposition of Shares acquired pursuant to the
Plan is not covered by a then-current registration statement under the
Securities Act of 1933, as amended, and is not otherwise exempt from such
registration, such Shares shall be restricted against transfer to the extent
required by the Securities Act of 1933, as amended, and Rule 144 or other
regulations thereunder. The Board may require any individual receiving Shares
pursuant to the Plan, as a condition precedent to receipt of such Shares upon
exercise of an Option, to represent and warrant to the Company in writing that
the Shares acquired by such individual are acquired without a view to any
distribution thereof and will not be sold or transferred other than pursuant to
an effective registration thereof under said Act or pursuant to an exemption
applicable under the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder. The certificates evidencing any of such
Shares shall be appropriately inscribed with a legend reflecting their status
as restricted securities as aforesaid.
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14. DESIGNATION OF BENEFICIARY
Each Optionee and Grantee may designate a person or persons to receive
in the event of his or her death, any Option or Award or any amount payable
pursuant thereto, to which he or she would then be entitled. Such designation
will be made upon forms supplied by and delivered to the Company and may be
revoked in writing. If an Optionee or Grantee fails effectively to designate a
beneficiary, then his or her estate will be deemed to be the beneficiary.
15. EFFECTIVE DATE
The Plan is effective as of November 27, 2001, the date the Plan was
approved by the Company's Board of Directors, subject to approval by the
Company's stockholders.
IN WITNESS WHEREOF, the Plan has been executed by the Company on this
28th day of November, 2001, to be effective on the Effective Date.
NATIONAL SERVICE INDUSTRIES, INC.
By: /s/ Brock A. Hattox
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