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Exhibit 10(iii)A(3)
NONQUALIFIED STOCK OPTION AGREEMENT
(SURRENDERED ASPIRATION AWARD)
THIS AGREEMENT, made as of the Day day of Month, Year (the "Grant
Date"), between National Service Industries, Inc., a Delaware corporation (the
"Company"), and Name (the "Optionee").
WHEREAS, the Company has adopted the National Service Industries, Inc.
Long-Term Achievement Incentive Plan (the "Plan") in order to provide additional
incentive to certain officers and key employees of the Company and its
Subsidiaries; and
WHEREAS, the Optionee performs services for the Company and/or one of
its Subsidiaries; and
WHEREAS, the Committee responsible for administration of the Plan has
determined to grant the Option to the Optionee as provided herein, in accordance
with the election previously made by the Optionee to surrender all or a portion
of Optionee's Aspiration Achievement Incentive Award in exchange for Options.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option.
1.1 The Company hereby grants to the Optionee the right and
option (the "Option") to purchase all or any part of an aggregate of Amount
whole Shares subject to, and in accordance with, the terms and conditions set
forth in this Agreement.
1.2 The Option is not intended to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Code.
1.3 This Agreement shall be construed in accordance and
consistent with, and subject to, the provisions of the Plan (the provisions of
which are incorporated herein by reference) and, except as otherwise expressly
set forth herein, the capitalized terms used in this Agreement shall have the
same definitions as set forth in the Plan.
2. Purchase Price.
The price at which the Optionee shall be entitled to purchase
Shares upon the exercise of the Option shall be $27.6875 per Share.
3. Duration of Option.
The Option shall be exercisable to the extent and in the
manner provided herein for a period of ten (10) years from the Grant Date (the
"Exercise Term"); provided, however, that the Option may be earlier terminated
as provided in Section 6 hereof.
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Exhibit 10(iii)A(3)
4. Exercisability of Option.
The Option is, immediately upon grant, fully vested and
exercisable, subject to expiration and termination as provided herein.
5. Manner of Exercise and Payment.
5.1 Subject to the terms and conditions of this Agreement and
the Plan, the Option may be exercised by delivery of written notice to the
Company, at its principal executive office. Such notice shall state that the
Optionee is electing to exercise the Option and the number of Shares in respect
of which the Option is being exercised and shall be signed by the person or
persons exercising the Option. If requested by the Committee, such person or
persons shall (i) deliver this Agreement to the Secretary of the Company who
shall endorse thereon a notation of such exercise and (ii) provide satisfactory
proof as to the right of such person or persons to exercise the Option.
5.2 The notice of exercise described in Section 5.1 shall be
accompanied by the full purchase price for the Shares in respect of which the
Option is being exercised, in cash, by check, or by transferring Shares to the
Company having a Fair Market Value on the day preceding the date of exercise
equal to the cash amount for which such Shares are substituted.
5.3 Upon receipt of notice of exercise and full payment for
the Shares in respect of which the Option is being exercised, the Company shall,
subject to Section 17 of the Plan, take such action as may be necessary to
effect the transfer to the Optionee of the number of Shares as to which such
exercise was effective.
5.4 The Optionee shall not be deemed to be the holder of, or
to have any of the rights of a holder with respect to any Shares subject to the
Option until (i) the Option shall have been exercised pursuant to the terms of
this Agreement and the Optionee shall have paid the full purchase price for the
number of Shares in respect of which the Option was exercised, (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, whereupon the Optionee shall have full voting and other
ownership rights with respect to such Shares.
6. Termination of Employment.
6.1 In General.
If the employment of the Optionee with the Company and
its Subsidiaries shall terminate for any reason, other than for the reasons
set forth in Sections 6.2 and 7.2 below, the Option shall terminate on the
date of the Optionee's termination of employment.
6.2 Termination of Employment Due to Specified Reasons.
If the Optionee's termination of employment is due to
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Exhibit 10(iii)A(3)
death, Disability, Retirement (termination on or after age 65), termination
by the Company other than for cause, termination after attaining age 55, or
voluntary termination, the following shall apply:
(a) Termination Due To Death. In the event the Optionee
dies while actively employed, the Option shall remain
exercisable until seven (7) years after the date of
grant or one (1) year after the date of termination,
whichever is later (but in any event not beyond the
Exercise Term), by (A) a Permitted Transferee (as
defined in Section 8 below), if any, or such
person(s) that have acquired the Optionee's rights
under such Option by will or by the laws of descent
and distribution, or (B) if no such person described
in (A) exists, the Optionee's estate or
representative of the Optionee's estate.
(b) Termination by Disability. In the event the
employment of the Optionee is terminated by reason of
Disability, the Option shall remain exercisable until
seven (7) years after the date of grant or one (1)
year after the date the Committee determines the
Optionee terminated for Disability, whichever is
later (but in any event not beyond the Exercise
Term). In the event of the Optionee's death after
such termination, the Option shall continue to be
exercisable in accordance with this subsection (b) as
if the Optionee had lived and the Options shall be
exercisable by the persons described in (a) above.
(c) Termination by Retirement or by the Company Without
Cause. In the event the employment of the Optionee is
terminated by reason of Retirement (at or after age
65) or by the Company for any reason other than for
cause, the Option shall remain exercisable until
seven (7) years after the date of grant or five (5)
years after the date of termination, whichever is
later (but in any event not beyond the Exercise
Term). In the event of the Optionee's death after
such Retirement or termination, the Option shall
continue to be exercisable in accordance with this
subsection (c) as if the Optionee had lived and the
Options shall be exercisable by the persons described
in (a) above.
(d) Termination After Attaining Age 55. In the event the
Optionee terminates employment (other than as a
result of death or Disability) after attaining age 55
but prior to age 65, unless the Committee determines
otherwise at the time of such termination, the Option
shall remain exercisable until five (5) years after
the date of grant (but not beyond the Exercise Term).
In the event of the Optionee's death after such
termination, the Option shall continue to be
exercisable in accordance with this subsection (d) as
if the Optionee had lived and the Options shall be
exercisable by the persons described in (a) above.
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Exhibit 10(iii)A(3)
(e) Voluntary Termination. In the event Optionee
voluntarily terminates employment, the Options shall
remain exercisable until ninety (90) days after the
date of termination (but not beyond the Exercise
Term).
7. Effect of Change in Control.
7.1 Notwithstanding anything contained to the contrary in this
Agreement, in the event of a Change in Control, the Optionee shall be permitted
to surrender for cancellation within sixty (60) days after such Change in
Control, the Option or any portion of the Option to the extent not yet
exercised, and the Optionee shall be entitled to receive immediately a cash
payment in an amount equal to the excess, if any, of (A) the greater of (x) the
Fair Market Value on the date preceding the date of surrender, of the shares
subject to the Option or portion of the Option surrendered, or (y) the Adjusted
Fair Market Value of the Shares subject to the Option or portion thereof
surrendered, over (B) the aggregate purchase price for such Shares under the
Option; provided, however, that if the Option was granted within six (6) months
prior to the Change in Control and the Optionee may be subject to liability
under Section 16(b) of the Exchange Act, the Optionee shall be entitled to
surrender the Option, or any portion of the Option, for cancellation during the
sixty (60) day period following the expiration of six (6) months from the Grant
Date and to receive the amount described above with respect to such surrender
for cancellation.
7.2 If the employment of the Optionee is terminated within two
(2) years following a Change in Control, the Option shall continue to be
exercisable at any time until seven (7) years after the date of grant or three
(3) years after the date of such termination of employment, whichever is later,
but in no event after expiration of the Exercise Term.
8. Nontransferability.
The Option shall not be transferable other than by will or by
the laws of descent and distribution. Notwithstanding the foregoing, the Option
may be transferred, in whole or in part, without consideration, by written
instrument signed by the Optionee, to any members of the immediate family of the
Optionee (i.e., spouse, children, and grandchildren), any trusts for the benefit
of such family members or any partnerships whose only partners are such family
members (the "Permitted Transferees"). Appropriate evidence of any such transfer
to the Permitted Transferees shall be delivered to the Company at its principal
executive office. If all or part of the Option is transferred to a Permitted
Transferee, the Permitted Transferee's rights hereunder shall be subject to the
same restrictions and limitations with respect to the Option as the Optionee.
During the lifetime of the Optionee, the Option shall be exercisable only by the
Optionee, or if applicable, by the Permitted Transferees.
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Exhibit 10(iii)A(3)
9. No Right to Continued Employment.
Nothing in this Agreement or the Plan shall be interpreted or
construed to confer upon the Optionee any right with respect to continuance of
employment by the Company or a Subsidiary, nor shall this Agreement or the Plan
interfere in any way with the right of the Company or a Subsidiary to terminate
the Optionee's employment at any time.
10. Adjustments.
In the event of a Change in Capitalization, the Committee may
make appropriate adjustments to the number and class of Shares or other stock or
securities subject to the Option and the purchase price for such Shares or other
stock or securities. The Committee's adjustment shall be made in accordance with
the provisions of Section 11 of the Plan and shall be effective and final,
binding, and conclusive for all purposes of the Plan and this Agreement.
11. Terminating Events.
Subject to Section 7 hereof, upon the effective date of (i)
the liquidation or dissolution of the Company or (ii) a merger or consolidation
of the Company (a "Transaction"), the Option shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of all Shares subject to the Option, upon exercise of the Option, the
same number and kind of stock, securities, cash, property, or other
consideration that each holder of Shares was entitled to receive in the
Transaction.
12. Withholding of Taxes.
The Company shall have the right to deduct from any
distribution of cash to the Optionee an amount equal to the federal, state, and
local income taxes and other amounts as may be required by law to be withheld
(the "Withholding Taxes") with respect to the Option. If the Optionee is
entitled to receive Shares upon exercise of the Option, the Optionee shall pay
the Withholding Taxes to the Company in cash prior to the issuance of such
Shares. In satisfaction of the Withholding Taxes, the Optionee may make a
written election (the "Tax Election"), which may be accepted or rejected in the
discretion of the Committee, to have withheld a portion of the Shares issuable
to him or her upon exercise of the Option, having an aggregate Fair Market Value
equal to the withholding Taxes, provided that, if the Optionee may be subject to
liability under Section 16(b) of the Exchange Act, the election must comply with
the requirements applicable to Share transactions by such Optionees.
13. Employee Bound by the Plan.
The Optionee hereby acknowledges receipt of a copy of the Plan
and agrees to be bound by all the terms and provisions thereof.
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Exhibit 10(iii)A(3)
14. Modification of Agreement.
This Agreement may be modified, amended, suspended, or
terminated, and any terms or conditions may be waived, but only by a written
instrument executed by the parties hereto.
15. Severability.
Should any provision of this Agreement be held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such holding and
shall continue in full force in accordance with their terms.
16. Governing Law.
The validity, interpretation, construction, and performance of
this Agreement shall be governed by the laws of the State of Delaware without
giving effect to the conflicts of laws principles thereof.
17. Successors in Interest.
This Agreement shall inure to the benefit of and be binding
upon each successor corporation. This Agreement shall inure to the benefit of
the Optionee's legal representatives. All obligations imposed upon the Optionee
and all rights granted to the Company under this Agreement shall be final,
binding, and conclusive upon the Optionee's heirs, executors, Permitted
Transferees, administrators, and successors.
18. Resolution of Disputes.
Any dispute or disagreement which may arise under, or as a
result of, or in any way relate to, the interpretation, construction, or
application of this Agreement shall be determined by the Committee. Any
determination made hereunder shall be final, binding, and conclusive on the
Optionee and the Company for all purposes.
ATTEST: NATIONAL SERVICE INDUSTRIES, INC.
____________________________________ By:________________________________
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman, President, and
Chief Executive Officer
________________________________
Name of Optionee
