Exhibit 10(iii)A50(a)
NATIONAL SERVICE INDUSTRIES, INC.
1992 NONEMPLOYEE DIRECTORS' STOCK OPTION 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 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) This Plan is intended to be an ongoing formula award plan (as
described in Rule 16b-3(c)(2)(ii) under the Exchange Act) such that the awards
granted hereunder shall not affect the recipients' disinterested status for
purposes of administering any stock-related plans of the Company established
pursuant to Rule 16b-3 under the Exchange Act.
(d) 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 evidencing the grant of an Option and setting forth the terms
and conditions thereof.
2.3 "Board" means the Board of Directors of the Company.
2.4 "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 of the Company.
2.5 "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.
2.6 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 l3(d) or l4(d)
of the Exchange Act) of beneficial ownership (within the meaning of
Rule l3d-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 September 21, 1989 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) Approval by stockholders of the Company of (i) 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 (ii) 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 2.6(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.
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2.7 "Code" means the Internal Revenue Code of 1986, as amended.
2.8 "Company" means National Service Industries, Inc.
2.9 "Director" means a Director of the Company.
2.10 "Disability" means a physical or mental infirmity which
impairs the Optionee's ability to perform substantially his or her duties for a
period of one hundred eighty (180) consecutive days.
2.11 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.12 "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.
2.13 "Nonemployee Director" means a Director who is not an officer
or employee of the Company or any subsidiary.
2.14 "Option" means an option granted under this Plan to purchase
Shares.
2.15 "Optionee" means a person to whom an Option has been granted
under the Plan.
2.16 "Parent" means any corporation which is a parent corporation
(within the meaning of Section 424(e) of the Code) with respect to the Company.
2.17 "Plan" means the National Service Industries, Inc. 1992
Nonemployee Directors' Stock Option Plan.
2.18 "Shares" means the common stock, par value $1.00 per share, of
the Company.
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3. ADMINISTRATION.
3.1 The Plan shall be administered by the Board. The Board shall
have no authority, discretion or power to select the individuals who are or will
be eligible to receive Options under this Plan (other than as a consequence of
exercising its power to nominate individuals for election to the Board and/or
appoint individuals to fill vacancies on the Board). The Board shall not have
any discretion to determine the amount, price or timing of any Options granted
or to be granted hereunder, except in the sense of administering the Plan
pursuant to its express terms.
3.2 The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(a) To construe and interpret the Plan and any Option, to
construe and interpret 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 rule 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.
(b) To amend, modify, suspend, or terminate the Plan in
accordance with Section 9.
(c) 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 made the subject of
Options granted under the Plan is l00,000 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 7) and the Company shall reserve
for the purposes of the Plan, out of its 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 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 6), the Shares allocable to the cancelled or otherwise terminated Option
or portion thereof may again be the subject of Options granted hereunder.
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5. OPTION GRANTS FOR NONEMPLOYEE DIRECTORS.
5.1 Grant. An Option shall be granted to each Nonemployee Director
on (i) the first business day after the date of the first annual meeting of the
stockholders of the Company following adoption of the Plan by the Board, and
(ii) the third (3rd) Wednesday occurring in September of each year that the Plan
remains in effect pursuant to its terms. The number of Shares and the purchase
price therefor of each Option shall be as provided in this Section 5 and such
Options shall be evidenced by an Agreement containing such other terms and
conditions not inconsistent with the provisions of this Plan as determined by
the Board.
5.2 Number of Shares. Each Option granted shall be in respect of a
number of Shares equal to 1,000, subject to adjustment as provided in Section 7.
5.3 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.
5.4 Duration. Options shall be for a term of ten (10) years,
unless terminated 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 5.4 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.
5.5 Vesting. Subject to Section 6, 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.
5.6 Non-transferability. No Option granted hereunder shall be
transferable by the Optionee to whom granted otherwise than by will or the laws
of descent and distribution, and an Option may be exercised during the lifetime
of such Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such Option
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shall be final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
5.7 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 5.7 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.
5.8 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. EFFECT OF CHANGE IN CONTROL.
Notwithstanding anything contained in the Plan or an Agreement to the
contrary, in the event of a Change in Control, (i) all Options outstanding on
the date of such Change in Control shall become immediately and fully
exercisable and (ii) 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 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
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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.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
7.1 Subject to Section 8, 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 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 to be granted under Section 5; and (iii) the number and class
of Shares or other stock or securities which are subject to outstanding Options
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 Option (including any adjustments in the
purchase price) shall be made only to the extent necessary to maintain the
proportionate interest of the Optionee and preserve, without exceeding, the
value of such Option.
7.2 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.
8. EFFECT OF CERTAIN TRANSACTIONS.
Subject to Section 6, 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 issued hereunder shall continue in
effect in accordance with their respective terms and each Optionee shall be
entitled to receive in respect of each Share subject to any outstanding Option,
upon exercise of such Option, 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 2.5 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
7 shall be made by the Board.
9. TERMINATION AND AMENDMENT OF THE PLAN.
The Plan shall terminate on the date that the National Service
Industries, Inc. Long-Term Incentive Plan terminates pursuant to its terms
(September 19, 1999) and no Option may be granted thereafter. The Board may
sooner terminate the Plan and the
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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 or rights theretofore granted under the
Plan, except with the consent of the Optionee, nor shall any amendment,
modification, suspension, or termination deprive any Optionee of any
Shares which he or she may have acquired through or as a result of the
Plan;
(b) to the extent necessary under Section 16(b) of the
Exchange Act and the rules and regulations promulgated thereunder, 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.
(c) The provisions of the Plan governing
(i) the number of Options to be awarded to
Nonemployee Director;
(ii) the number of Shares to be covered by each
Option;
(iii) the exercise price per Share under each
Option;
(iv) when and under what circumstances each
Option will be granted; and
(v) the period within which each Option may be
exercised shall not be amended more often
than once every six (6) months, other than
to comport with changes in the Code, the
Employee Retirement Income Security Act of
1974, as amended, or the rules and
regulations promulgated thereunder.
10. 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.
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(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 as an officer or employee, he or she shall not be
eligible to receive any additional awards under this Plan.
11. 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
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
(iv) be evidence of any agreement or understanding,
expressed or implied, that the Company will nominate or appoint any
person as a Director.
12. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.
12.1 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.
12.2 The obligation of the Company to sell or deliver Shares with
respect to Options 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.
12.3 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.
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12.4 Each Option 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 the issuance of
Shares, no Options 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.
12.5 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.
13. DESIGNATION OF BENEFICIARY.
Each Optionee may designate a person or persons to receive in the event
of his or her death, any Option 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 fails effectively to designate a beneficiary, then his or her estate
will be deemed to be the beneficiary.
14. EFFECTIVE DATE.
The effective date of the Plan shall be the date of its adoption by the
Board, subject only to the approval by the affirmative votes of the holders of a
majority of the securities of the Company present, or represented, and entitled
to vote at a meeting of stockholders duly held in accordance with the applicable
laws of the State of Delaware within twelve (12) months of such adoption.
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