EXHIBIT 10(iii)(A)(101)
SEVERANCE PROTECTION AGREEMENT
THIS AGREEMENT is made as of the 26th day of June, 2002, by and between
National Service Industries, Inc., a Delaware corporation (the "Company") and
___________________________________________________ (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change in Control (as hereinafter defined) exists and
that the occurrence of a Change in Control can result in significant
distractions of its key management personnel because of the uncertainties
inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in the best
interest of the Company and its stockholders to retain the services of the
Executive in the event of the occurrence of a Change in Control and to ensure
the Executive's continued dedication and efforts in such event without undue
concern for the Executive's personal financial and employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Company, particularly in the event of the occurrence of a Change in Control,
the Company desires to enter into this Agreement with the Executive to provide
the Executive with severance payments and benefits in the event the Executive's
employment is terminated under certain circumstances after a Change in Control
and to provide the Executive with the Gross-Up Payment (as hereinafter defined)
and certain other benefits.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. Term of Agreement.
(a) This Agreement shall commence as of April 1, 2002 and
shall continue in effect until April 1, 2004; provided, however, that commencing
on April 1, 2003 and on each April 1 thereafter, the term of this Agreement
shall automatically be extended for one (1) additional year such that the
remaining term of the Agreement will be two (2) years, unless either the Company
or the Executive shall have given written notice to the other at least ninety
(90) days prior to such April 1 that the term of this Agreement shall not be so
extended.
(b) Notwithstanding the foregoing, (1) the term of this
Agreement shall not expire prior to the expiration of twenty-four (24) months
after the occurrence of a Change in Control and (2) prior to a Change in
Control, the term of this Agreement shall expire on the date the Executive
ceases to serve in the capacity the Executive is
serving on the effective date of this Agreement, or in another capacity as an
executive officer (as defined in Rule 3b-7 under the 1934 Act).
(c) Each place in this Agreement where a reference to the
"Company" appears that relates to the Executive's employment, termination of
employment, or performing services, including the definitions of "Cause" and
"Good Reason", shall mean and include any subsidiary of the Company which is the
primary employer of the Executive. Further, in each place where this Agreement
refers to a benefit plan or program, payment of compensation, compensation
arrangement, or other similar plan or program maintained by the Company, such
reference shall include any plan, program, or arrangement maintained or
established by a subsidiary of the Company. "Subsidiary" also includes any
business unit of the subsidiary ("Business Unit"). Notwithstanding the
foregoing, the references in the definition of "Change in Control" and similar
references to changes in ownership and control of the Company shall mean and
refer only to National Service Industries, Inc., a Delaware corporation.
2. Definitions.
2.1 Cause. For purposes of this Agreement, a termination for
"Cause" is a termination evidenced by a resolution adopted in good faith by
two-thirds of the Board that the Executive (a) intentionally and continually
failed to substantially perform the Executive's duties with the Company (other
than a failure resulting from the Executive's incapacity due to physical or
mental illness) which failure continued for a period of at least thirty (30)
days after a written notice of demand for substantial performance has been
delivered to the Executive specifying the manner in which the Executive has
failed to substantially perform, or (b) intentionally engaged in conduct which
is demonstrably and materially injurious to the Company, monetarily or
otherwise; provided, however, that no termination of the Executive's employment
shall be for Cause as set forth in clause (b) above until (x) there shall have
been delivered to the Executive a copy of a written notice setting forth that
the Executive was guilty of the conduct set forth in clause (b) and specifying
the particulars thereof in detail, and (y) the Executive shall have been
provided an opportunity to be heard by the Board (with the assistance of the
Executive's counsel if the Executive so desires). No act, nor failure to act, on
the Executive's part, shall be considered "intentional" unless he has acted, or
failed to act, with an absence of good faith and without a reasonable belief
that the Executive's action or failure to act was in the best interest of the
Company. Notwithstanding anything contained in this Agreement to the contrary,
no failure to perform by the Executive after a Notice of Termination is given by
the Executive shall constitute Cause for purposes of this Agreement.
2.2 Change in Control. For purposes of this Agreement, a
"Change in Control" shall mean any of the following events:
(a) The acquisition (other than from the Company) by
any "Person" (as the term person is used for purposes of Sections 13(d) or 14(d)
of the
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Securities Exchange Act of 1934, as amended (the "1934 Act") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the 0000 Xxx) 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 April 1, 2002 are
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 Agreement, 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 fifty percent (50%) 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 2.2(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
(hereinafter referred to as "Related Persons").
2.3 Confidential Information. For purpose of this Agreement,
"Confidential Information" shall mean all technical, business, and other
information relating to the business of the Company or its subsidiaries or
affiliates, including, without limitation, technical or nontechnical data,
formulae, compilations, programs, devices, methods, techniques, processes,
financial data, financial plans, product plans, and lists of actual or potential
customers or suppliers, which (i) derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper
means by, other persons, and (ii) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy or confidentiality. Such
information and compilations of information shall be subject to protection under
this Agreement whether or not such information constitutes a trade secret and is
separately protectable at law or in equity as a trade secret.
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2.4 Disability. For purposes of this Agreement, "Disability"
shall mean a physical or mental infirmity which impairs the Executive's ability
to substantially perform the Executive's duties under this Agreement for a
period of one hundred eighty (180) consecutive days.
2.5 Good Reason. (a)For purposes of this Agreement, "Good
Reason" shall mean the occurrence after a Change in Control of any of the events
or conditions described in Subsections (1) through (9) hereof:
(1) a change in the Executive's status,
title, position, or responsibilities (excluding a change solely in reporting
responsibilities) which, in the Executive's reasonable judgment, represents an
adverse change from the Executive's status, title, position, or responsibilities
as in effect immediately prior thereto; the assignment to the Executive of any
duties or responsibilities which, in the Executive's reasonable judgment, are
inconsistent with the Executive's status, title, position, or responsibilities;
or any removal of the Executive from or failure to reappoint or reelect the
Executive to any of such offices or positions, except in connection with the
termination of the Executive's employment for Disability, Cause, as a result of
the Executive's death or by the Executive other than for Good Reason;
(2) a reduction in the Executive's base
salary or any failure to pay the Executive any compensation or benefits to which
the Executive is entitled within five (5) days of the date due;
(3) the Company's requiring the Executive to
be based at any place outside a 00-xxxx xxxxxx xxxx Xxxxxxx, Xxxxxxx, except for
reasonably required travel on the Company's business which is not greater than
such travel requirements prior to the Change in Control;
(4) the failure by the Company (A) to
continue in effect (without reduction in benefit level, and/or reward
opportunities) any compensation or employee benefit plan in which the Executive
was participating immediately prior to the Change in Control, including, but not
limited to, the applicable plans listed on Appendix A, unless a substitute or
replacement plan has been implemented which provides substantially identical
compensation or benefits to the Executive, or (B) to provide the Executive with
compensation and benefits, in the aggregate, at least equal (in terms of benefit
levels and/or reward opportunities) to those provided for under each other
compensation or employee benefit plan, program, and practice as in effect
immediately prior to the Change in Control (or as in effect following the Change
in Control, if greater);
(5) the insolvency or the filing (by any
party, including the Company) of a petition for bankruptcy of the Company;
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(6) any material breach by the Company of
any provision of this Agreement;
(7) any purported termination of the
Executive's employment for Cause by the Company which does not comply with the
terms of Section 2.1; or
(8) the failure of the Company to obtain an
agreement, satisfactory to the Executive, from any successor or assign of the
Company to assume and agree to perform this Agreement, as contemplated in
Section 9 hereof.
(b) The Executive's right to terminate the
Executive's employment pursuant to this Section 2.5 shall not be affected by the
Executive's incapacity due to physical or mental illness.
2.6 1934 Act. The Securities Exchange Act of 1934, as amended.
3. Termination of Employment.
3.1 If, during the term of this Agreement, the Executive's
employment with the Company shall be terminated within twenty-four (24) months
following a Change in Control, the Executive shall be entitled to the following
compensation and benefits depending upon the circumstances of such termination
(in addition to any compensation and benefits provided for under any of the
Company's employee benefit plans, policies, and practices):
(a) If the Executive's employment with the Company
shall be terminated during such 24-month period (1) by the Company for Cause or
Disability, (2) by reason of the Executive's death, or (3) by the Executive
other than for Good Reason (as each term is defined herein), the Company shall
pay the Executive all amounts earned or accrued through the Termination Date but
not paid as of the Termination Date, including (i) base salary, (ii)
reimbursement for reasonable and necessary expenses incurred by the Executive on
behalf of the Company during the period ending on the Termination Date, (iii)
vacation pay, and (iv) sick leave (collectively, "Accrued Compensation"). In
addition to the foregoing, if the Executive's employment is terminated by the
Company for Disability or by reason of the Executive's death, the Company shall
pay to the Executive or the Executive's beneficiaries an amount equal to the
"Pro Rata Bonus" (as hereinafter defined). The "Pro Rata Bonus" is an amount
equal to the Bonus Amount (as hereinafter defined) multiplied by a fraction the
numerator of which is the number of days in such fiscal year through the
Termination Date and the denominator of which is 365. The term "Bonus Amount"
shall mean the greater of the following: (x) most recent annual bonus paid or
payable to the Executive, or (y) target annual bonus payable for the fiscal year
during which the Termination Date occurs, or if greater, the fiscal year during
which a Change in Control occurred, or (z) average of the annual bonuses paid or
payable during the three (3) full fiscal years ended prior to the
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Termination Date or, if greater, the three (3) full fiscal years ended prior to
the Change in Control (or, in each case, such lesser period for which annual
bonuses were paid or payable to the Executive). Executive's entitlement to any
other compensation or benefits shall be determined in accordance with the
Company's employee benefit plans and other applicable programs and practices
then in effect.
(b) If the Executive's employment with the Company
shall be terminated (other than by reason of death) during such 24-month period,
(1) by the Company other than for Cause or Disability, or (2) by the Executive
for Good Reason, the Executive shall be entitled to the following:
(i) the Company shall pay the Executive all
Accrued Compensation and a Pro-Rata Bonus;
(ii) the Company shall pay the Executive as
severance pay and in lieu of any further compensation for periods subsequent to
the Termination Date, in a single payment an amount (the "Severance Amount") in
cash equal to two (2) times the sum of (A) the greater of the Executive's base
salary in effect on the Termination Date or at any time during the 90-day period
prior to the Change in Control ("Base Salary") and (B) the Bonus Amount.
Notwithstanding the foregoing, if the Executive has attained at least age 63 on
the Termination Date, the Severance Amount to be paid under this Subsection (ii)
shall be the amount described in the preceding sentence multiplied by a fraction
(which in no event shall be less than one-half) the numerator of which shall be
the number of months (for this purpose any partial month shall be considered as
a whole month) remaining until the Executive's 65th birthday (but in no event
shall be less than 12) and the denominator of which shall be 24;
(iii) for a number of months equal to the
lesser of (A) twenty-four (24) or (B) the number of months remaining until the
Executive's 65th birthday (the "Continuation Period"), the Company shall at its
expense continue on behalf of the Executive and the Executive's dependents and
beneficiaries the life insurance, disability, medical, dental, and
hospitalization benefits provided (x) to the Executive at the time the Notice of
Termination is given, at any time during the 90-day period prior to the Change
in Control or at any time thereafter, or (y) to other similarly situated
executives who continue in the employ of the Company during the Continuation
Period. The coverage and benefits (including deductibles and costs) provided in
this Section 3.1(b)(iii) during the Continuation Period shall be no less
favorable to the Executive and the Executive's dependents and beneficiaries,
than the most favorable of such coverages and benefits during any of the periods
referred to in clauses (x) and (y) above. The Company's obligation hereunder
with respect to the foregoing benefits shall be limited to the extent that the
Executive obtains any such benefits pursuant to a subsequent employer's benefit
plans, in which case the Company may reduce the coverage of any benefits it is
required to provide the Executive hereunder as long as the aggregate coverages
and benefits of the combined benefit plans is no less favorable to the
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Executive than the coverages and benefits required to be provided hereunder.
This Subsection (iii) shall not be interpreted so as to limit any benefits to
which the Executive or the Executive's dependents may be entitled under any of
the Company's employee benefit plans, programs, or practices following the
Executive's termination of employment, including, without limitation, retiree
medical and life insurance benefits;
(iv) the Company shall pay in a single
payment an amount in cash equal to the excess of (A) the Supplemental Retirement
Benefit (as defined below) had (w) the Executive remained employed by the
Company for an additional two (2) complete years of credited service (or until
the Executive's 65th birthday if earlier), (x) the Executive's annual
compensation during such period been equal to the Executive's Base Salary and
the Bonus Amount, (y) the Company and/or the Business Unit made employer
contributions to each defined contribution plan in which the Executive was a
participant at the Termination Date (in an amount equal to the amount of such
contribution for the plan year immediately preceding the Termination Date) and
(z) the Executive been fully (100%) vested in the Executive's benefit under each
retirement plan in which the Executive was a participant, over (B) the lump sum
actuarial equivalent of the aggregate retirement benefit the Executive is
actually entitled to receive under such retirement plans. For purposes of this
Subsection (iv), the "Supplemental Retirement Benefit" shall mean the lump sum
actuarial equivalent of the aggregate retirement benefit the Executive would
have been entitled to receive under the Company's supplemental executive and
other retirement plans, including, but not limited to, the National Service
Industries Pension Plan B and the National Linen Service Retirement and 401(k)
Plan for Eligible Management Associates; provided, however, if the Executive has
attained at least age 50 and has been employed by the Company for at least ten
(10) years as of the Termination Date the calculation of the Supplemental
Retirement Benefit shall be made pursuant to the early retirement provisions
under any applicable supplemental retirement plan for executives and pension
plan covering the Executive without regard to the Executive's attained age or
years of credited service. For purposes of this Subsection (iv), the "actuarial
equivalent" shall be determined in accordance with the actuarial assumptions
used for the calculation of benefits under any applicable pension plan as
applied prior to the Termination Date in accordance with such plan's past
practices; and
(v) (A) the restrictions on any outstanding
incentive awards (including achievement awards, restricted stock and granted
Performance Shares) granted to the Executive under the Long-Term Achievement
Incentive Plan or under any other incentive plan or arrangement shall lapse and
such incentive awards shall become one hundred percent (100%) vested, all stock
options and stock appreciation rights granted to the Executive shall become
immediately exercisable and shall become 100% vested, and all Performance Units
granted to the Executive shall become 100% vested and (B) the Executive shall
have the right to require the Company to purchase, for cash, any shares of
unrestricted stock or shares purchased upon exercise of any options, at a
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price equal to the fair market value of such shares on the date of purchase by
the Company.
(c) The amounts provided for in Sections 3.1(a) and
3.1(b)(i), (ii), (iv), and (v) shall be paid within five (5) days after the
Executive's Termination Date.
(d) The Executive shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise and no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to the Executive in any
subsequent employment except as provided in Section 3.1(b)(iii).
3.2 The severance pay and benefits provided for in Sections
3.1(a) and 3.1(b)(i) and (ii) shall be in lieu of any other severance pay to
which the Executive may be entitled under any Company severance plan, program,
or arrangement for a termination of employment covered by such circumstances.
4. Notice of Termination. Following a Change in Control, any purported
termination by the Company or by the Executive shall be communicated by written
Notice of Termination to the other. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. For purposes of this
Agreement, no such purported termination shall be effective without such Notice
of Termination.
5. Termination Date. "Termination Date" shall mean in the case of the
Executive's death, the Executive's date of death, and in all other cases, the
date specified in the Notice of Termination subject to the following:
(a) If the Executive's employment is terminated by the Company
for Cause or due to Disability, the date specified in the Notice of Termination
shall be at least thirty (30) days from the date the Notice of Termination is
given to the Executive, provided that in the case of Disability the Executive
shall not have returned to the full-time performance of the Executive's duties
during such period of at least thirty (30) days; and
(b) If the Executive's employment is terminated for Good
Reason, the date specified in the Notice of Termination shall not be more than
sixty (60) days from the date the Notice of Termination is given to the Company.
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6. Excise Tax Payments.
(a) Notwithstanding anything contained in this Agreement to
the contrary and without regard to whether the Executive's employment with the
Company has terminated, in the event that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the "Code"), to the Executive or for the Executive's benefit, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise in connection with, or arising out of, the Executive's employment
with the Company or a change in ownership or effective control of the Company or
of a substantial portion of its assets (a "Payment" or "Payments"), would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes and the Excise Tax), including any
Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) An initial determination as to whether a Gross-Up Payment
is required pursuant to this Section 6 and the amount of such Gross-Up Payment
shall be made by an accounting firm selected by the Company and reasonably
acceptable to the Executive which is designated one of the five largest
accounting firms in the United States (the "Accounting Firm"). The Accounting
Firm shall provide its determination (the "Determination"), together with
detailed supporting calculations and documentation to the Company and the
Executive within five (5) days of the Termination Date if applicable, or such
other time as requested by the Company or by the Executive (provided the
Executive reasonably believes that any of the Payments may be subject to the
Excise Tax) and if the Accounting Firm determines that no Excise Tax is payable
by the Executive with respect to a Payment or Payments, it shall furnish the
Executive with an opinion reasonably acceptable to the Executive that no Excise
Tax will be imposed with respect to any such Payment or Payments. Within five
(5) days of the delivery of the Determination to the Executive, the Executive
shall have the right to dispute the Determination (the "Dispute). The Gross-Up
Payment, if any, as determined pursuant to this Section 6(b) shall be paid by
the Company to the Executive within five (5) days of the receipt of the
Accounting Firm's determination or, subject to Executive's approval, all or a
portion of the Gross-Up Payment may be paid directly to the appropriate tax
authorities. The existence of the Dispute shall not in any way affect the right
of the Executive to receive the Gross-Up Payment in accordance with the
Determination. If there is no Dispute, the Determination shall be binding,
final, and conclusive upon the Company and the Executive subject to the
application of Section 6(c).
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(c) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a
portion thereof) will be paid which should not have been paid (an "Excess
Payment") or a Gross-Up Payment (or a portion thereof) which should have been
paid will not have been paid (an "Underpayment"). An Underpayment shall be
deemed to have occurred (1) upon notice (formal or informal) to the Executive
from any governmental taxing authority that the tax liability of the Executive
(whether in respect of the then current taxable year of the Executive or in
respect of any prior taxable year of the Executive) may be increased by reason
of the imposition of the Excise Tax on a Payment or Payments with respect to
which the Company has failed to make a sufficient Gross-Up Payment, (2) upon a
determination by a court, (3) by reason of a determination by the Company (which
shall include the position taken by the Company, or together with its
consolidated group, on its federal income tax return) or (4) upon the resolution
to the satisfaction of the Executive of the Dispute. If an Underpayment occurs,
the Executive shall promptly notify the Company and the Company shall pay to the
Executive at least five (5) days prior to the date on which the applicable
government taxing authority has requested payment, an additional Gross-Up
Payment equal to the amount of the Underpayment plus any interest and penalties
(other than interest and penalties imposed by reason of a failure to file timely
a tax return or pay taxes shown due on a return) imposed on the Underpayment. An
Excess Payment shall be deemed to have occurred upon a "Final Determination" (as
hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or
Payments with respect to which the Executive had previously received a Gross-Up
Payment. A Final Determination shall be deemed to have occurred when the
Executive has received from the applicable government taxing authority a refund
of taxes or other reduction in the Executive's tax liability by reason of the
Excess Payment and upon either (i) the date a determination is made by, or an
agreement is entered into with, the applicable governmental taxable authority
which finally and conclusively binds the Executive and such taxing authority, or
in the event that a claim is brought before a court of competent jurisdiction,
the date upon which a final determination has been made by such court and either
all appeals have been taken and finally resolved or the time for all appeals has
expired or (ii) the statute of limitations with respect to the Executive's
applicable tax return has expired. If an Excess Payment is determined to have
been made, the amount of the Excess Payment shall be treated as a loan by the
Company to the Executive and the Executive shall pay to the Company on demand
(but not less than ten (10) days after the determination of such Excess Payment)
the amount of the Excess Payment plus interest at an annual rate equal to the
rate provided for in Section 1274(b)(2)(B) of the Code from the date the
Gross-Up Payment (to which the Excess Payment relates) was paid to the Executive
until the date of repayment to the Company.
(d) Notwithstanding anything contained in this Agreement to
the contrary, in the event that, according to the Determination, an Excise Tax
will be imposed on any Payment or Payments, the Company shall pay to the
applicable government taxing authorities as Excise Tax withholding, the amount
of the Excise Tax that the Company has actually withheld from the Payment or
Payments.
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7. Unauthorized Disclosure. During the period that the Executive is
actively employed by the Company or Business Unit, the Executive shall not make
any Unauthorized Disclosure. For purposes of this Agreement, "Unauthorized
Disclosure" shall mean disclosure by the Executive without the consent of the
Board (other than pursuant to a court order) to any person, other than an
employee or director of the Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by the Executive of
the Executive's duties as an executive of the Company or as may be legally
required, of any material Confidential Information obtained by the Executive
while in the employ of the Company (including any material Confidential
Information with respect to any of the Company's customers or methods of
distribution) the disclosure of which is demonstrably and materially injurious
to the Company; provided, however, that such term shall not include the use or
disclosure by the Executive, without consent, of any information known generally
to the public (other than as a result of disclosure by the Executive in
violation of this Section 7) or any information not otherwise considered
confidential and material by a reasonable person engaged in the same business as
that conducted by the Company; provided further, however, that any breach of
this Section 7 shall in no event subject the Executive to damages (including
costs, fees, and expenses incurred by the Company or the Business Unit) in
excess of $10,000 in the aggregate.
8. Non-Compete. During the period that the Executive is actively
employed by the Company or Business Unit, the Executive shall not directly or
indirectly, own, manage, operate, control, consult with, or be connected as an
officer, employee, agent, partner, director, or consultant with, or have any
financial interest in, or assist anyone in the conduct of, any business which
directly competes with the businesses of the Company in the State of Georgia.
Notwithstanding the foregoing, the Executive shall not be in violation of the
preceding sentence due to ownership (directly or indirectly) by the Executive of
not more than five percent (5%) of the issued and outstanding class of
securities of a corporation whose securities are publicly traded.
9. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure to
the benefit of the Company, its successors and assigns and the Company shall
require any successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place. The
term "the Company" as used herein shall include such successors and assigns. The
term "successors and assigns" as used herein shall mean a corporation or other
entity acquiring all or substantially all the assets and business of the Company
(including this Agreement) whether by operation of law or otherwise.
(b) Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive or by the Executive's
beneficiaries or legal
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representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.
10. Arbitration of Disputes; Expenses. All claims by Executive for
compensation and benefits under this Agreement shall be directed to and
determined by the Board and shall be in writing. Any denial by the Board of a
claim for benefits under this Agreement shall be delivered to Executive in
writing and shall set forth the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to Executive for a review of a decision denying a claim and shall
further allow Executive to appeal to the Board a decision of the Board within 60
days after notification by the Board that Executive's claim has been denied. Any
further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Atlanta, Georgia, in
accordance with the commercial arbitration rules of the American Arbitration
Association then in effect. The arbitration award shall be final and binding
upon the parties and judgment upon the award may be entered in any court having
jurisdiction. In the event Executive incurs legal fees and other expenses in
seeking to obtain or to enforce any rights or benefits provided by this
Agreement (or the Plans listed on Appendix A) in connection with a hearing
before, or appeal to, the Board, negotiations, arbitration, court proceedings or
otherwise, and is successful, in whole or in part, in obtaining or enforcing any
such rights or benefits through settlement, arbitration or otherwise, the
Company shall promptly pay Executive's reasonable legal fees and expenses
incurred in enforcing this Agreement and the fees of the arbitrator(s). Except
to the extent provided in the preceding sentence, each party shall pay its own
legal fees and other expenses associated with any dispute, provided, however,
that the fee for the arbitrator(s) shall be shared equally.
11. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.
12. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive, or other plan or program provided by the Company or any of its
subsidiaries and for which the Executive may qualify (except as provided in
Section 3.2 with respect to severance plans or programs), nor shall anything
herein limit or reduce such rights as the Executive may have under any other
agreements with the Company or any of its
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subsidiaries. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any of
its subsidiaries shall be payable in accordance with such plan or program,
except as explicitly modified by this Agreement.
13. Settlement of Claims. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense, or other right which
the Company may have against the Executive or others.
14. Miscellaneous. No provision of this Agreement may be modified,
waived, or discharged unless such waiver, modification, or discharge is agreed
to in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
15. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Georgia without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in Xxxxxx County in the State of Georgia.
16. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.
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ATTEST: NATIONAL SERVICE INDUSTRIES, INC.
______________________________ By:_____________________________________
Secretary Xxxxx X. Xxxxxx
Chairman of the Board,
Chief Executive Officer, and President
EXECUTIVE:
_________________________________________
Name:____________________________________
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APPENDIX A
(AS OF JUNE 26, 2002)
Executives' Deferred Compensation Plan
Supplemental Deferred Savings Plan
Senior Management Benefit Plan
Long-Term Incentive Program
Long-Term Achievement Incentive Plan
Management Compensation and Incentive Plan
Pension Plan B (or similar retirement plan covering the Executive)
Retirement and 401(k) Plan
(or similar 401(k) deferred compensation plan covering the Executive)
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