Exhibit 10(iii)A(2)
Page 23
NONQUALIFIED STOCK OPTION AGREEMENT
(SURRENDERED ASPIRATION AWARD)
THIS AGREEMENT, made as of the 4th day of October, 2000 (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.
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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.
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The price at which the Optionee shall be entitled to purchase Shares upon the
exercise of the Option shall be $19.4375 per Share.
3. Duration of Option.
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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.
Exhibit 10(iii)A(2)
Page 24
4. Exercisability of Option.
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The Option is, immediately upon grant, fully vested and exercisable, subject to
expiration and termination as provided herein.
5. Manner of Exercise and Payment.
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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.
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6.1 In General.
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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.
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If the Optionee's termination of employment is due to death, Disability,
Exhibit 10(iii)A(2)
Page 25
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.
Exhibit 10(iii)A(2)
Page 26
(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.
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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.
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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.
Exhibit 10(iii)A(2)
Page 27
9. No Right to Continued Employment.
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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.
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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.
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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.
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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.
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The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof.
Exhibit 10(iii)A(2)
Page 28
14. Modification of Agreement.
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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.
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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.
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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.
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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.
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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 Xxxxx X. Xxxxxxx
Chairman, President, and
Chief Executive Officer
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Name of Optionee: "Name"
