EXHIBIT 10(iii)A(2
)
RESTRICTED STOCK AWARD AGREEMENT
UNDER THE
NATIONAL SERVICE INDUSTRIES, INC.
LONG-TERM ACHIEVEMENT INCENTIVE PLAN
THIS AGREEMENT, made and entered into as of the 7th day of October,
2002, by and between NATIONAL SERVICE INDUSTRIES, INC. (the "Company") and
_______ _____________ ("Grantee").
WITNESSETH THAT:
WHEREAS, the Company maintains the National Service Industries, Inc.
Long-Term Achievement Incentive Plan (the "Plan"), and Grantee has been
selected by the Committee to receive a Restricted Stock Award under the Plan;
NOW, THEREFORE, IT IS AGREED, by and between the Company and Grantee,
as follows:
1. AWARD OF RESTRICTED STOCK
1.1 The Company hereby grants to Grantee an award of _______
Shares of restricted stock ("Restricted Stock"), subject to, and in accordance
with, the restrictions, terms, and conditions set forth in this Agreement. The
grant date of this award of Restricted Stock is October 7, 2002 ("Grant Date").
1.2 This Agreement shall be construed in accordance 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. RESTRICTIONS
2.1 Subject to Sections 2.2 and 2.3 below, if Grantee remains
employed by the Company, Grantee shall become vested in the Restricted Stock as
set forth below on each anniversary of the Grant Date (each such date shall be
a "Vesting Date"), such that on October 7, 2005 ("Final Vesting Date") all of
the Shares of Restricted Stock shall be fully vested:
Date Number of Shares Vested
October 7, 2003 33 1/3% (______ Shares)
October 7, 2004 33 1/3% (______ Shares)
October 7, 2005 33 1/3% (______ Shares)
On each Vesting Date, Grantee shall own the Vested Shares of Restricted Stock
free and clear of all restrictions imposed by this Agreement (except those
imposed by Section 3.4 below). The Company shall deliver a certificate(s) for
the Vested Shares of Restricted Stock to Grantee as soon as practical after
each Vesting Date. For purposes of this Agreement, employment with a Subsidiary
of the Company shall be considered employment with the Company.
2.2 (a) In the event, prior to the Final Vesting Date, (i)
Grantee dies while actively employed by the Company, or (ii) Grantee's
employment is terminated by reason of Disability, the Restricted Stock
shall become fully vested and nonforfeitable as of the date of
Grantee's death or Disability. The Company shall deliver
certificate(s) for the Restricted Stock, free and clear of any
restrictions imposed by this Agreement (except for Section 3.4) to
Grantee (or, in the event of death, Grantee's surviving spouse or, if
none, to Grantee's estate) as soon as practical after Grantee's date
of death or termination for Disability.
(b) If Grantee retires from the Company on or after
attaining (i) age 65, or (ii) age 55 with 10 years of service, the
vesting of the Restricted Stock shall continue as if Grantee were an
active employee, unless within two (2) years of Grantee's date of
termination of employment, Grantee violates the Restrictive Covenant
(Non-Competition Agreement) attached as Exhibit "A" hereto, at which
time all unvested Shares of Restricted Stock shall immediately be
forfeited. If Grantee dies after retiring under this Section 2.4, but
prior to the Final Vesting Date for any Shares of Restricted Stock,
the Restricted Stock shall become fully vested and nonforfeitable as
of the date of Grantee's death.
(c) Except as provided in Section 2.3, if Grantee
terminates Grantee's employment or if the Company terminates Grantee's
employment for any reason other than death or Disability or retirement
(as provided in subsection (b) above) prior to the Final Vesting Date,
the Restricted Stock shall cease to vest further and Grantee shall
only be entitled to the Restricted Stock that is vested as of
Grantee's date of termination of employment.
2.3 Notwithstanding the other provisions of this Agreement, in
the event of a Change in Control prior to Grantee's Final Vesting Date, the
Restricted Stock shall become fully vested and nonforfeitable as of the date of
the Change in Control. On the date of the Change in Control, the Company shall
deliver to Grantee a certificate(s) for the Restricted Stock, free and clear of
any restrictions imposed by this Agreement.
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2.4 The Restricted Stock may not be sold, assigned, transferred,
pledged, or otherwise encumbered prior to the date Grantee becomes vested in
the Restricted Stock.
3. STOCK; DIVIDENDS; VOTING
3.1 The stock certificate(s) evidencing the Restricted Stock
shall be registered on the Company's books in the name of Grantee as of the
Grant Date. The Company may issue stock certificates or evidence Grantee's
interest by using a book entry account. Physical possession or custody of such
stock certificates shall be retained by the Company until such time as the
Shares are vested in accordance with Section 2. The Company reserves the right
to place a legend on the stock certificate(s) restricting the transferability
of such certificates and referring to the terms and conditions (including
forfeiture) of this Agreement and the Plan.
3.2 During the period the Restricted Stock is not vested, Grantee
shall be entitled to receive dividends and/or other distributions declared on
such Restricted Stock and Grantee shall be entitled to vote such Restricted
Stock.
3.3 In the event of a Change in Capitalization, the number and
class of Shares or other securities that Grantee shall be entitled to, and
shall hold, pursuant to this Agreement shall be appropriately adjusted or
changed to reflect the Change in Capitalization, provided that any such
additional Shares or additional or different shares or securities shall remain
subject to the restrictions in this Agreement.
3.4 Grantee represents and warrants that he is acquiring the
Restricted Stock for investment purposes only, and not with a view to
distribution thereof. Grantee is aware that the Restricted Stock may not be
registered under the federal or any state securities laws and that, in addition
to the other restrictions on the Shares, they will not be able to be
transferred unless an exemption from registration is available or the Shares
are registered. By making this award of Restricted Stock, the Company is not
undertaking any obligation to register the Restricted Stock under any federal
or state securities laws.
4. NO RIGHT TO CONTINUED EMPLOYMENT
Nothing in this Agreement or the Plan shall be interpreted or
construed to confer upon Grantee 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
Grantee's employment at any time.
5. TAXES AND WITHHOLDING
Grantee shall be responsible for all federal, state, and
local income taxes payable with respect to this award of Restricted Stock.
Grantee shall have the right to make such elections under the Internal Revenue
Code of 1986, as amended, as are available in connection with this award of
Restricted Stock. The Company and Grantee
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agree to report the value of the Restricted Stock in a consistent manner for
federal income tax purposes. The Company shall have the right to retain and
withhold from any payment of Restricted Stock the amount of taxes required by
any government to be withheld or otherwise deducted and paid with respect to
such payment. At its discretion, the Company may require Grantee to reimburse
the Company for any such taxes required to be withheld and may withhold any
distribution in whole or in part until the Company is so reimbursed. In lieu
thereof, the Company shall have the right to withhold from any other cash
amounts due to Grantee an amount equal to such taxes required to be withheld or
withhold and cancel (in whole or in part) a number of shares of Restricted
Stock having a market value not less than the amount of such taxes.
6. GRANTEE BOUND BY THE PLAN
Grantee hereby acknowledges receipt of a copy of the Plan and
the prospectus for the Plan, and agrees to be bound by all the terms and
provisions thereof.
7. 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.
8. 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.
9. 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.
10. SUCCESSORS IN INTEREST
This Agreement shall inure to the benefit of, and be binding
upon, the Company and its successors and assigns, whether by merger,
consolidation, reorganization, sale of assets, or otherwise. This Agreement
shall inure to the benefit of Grantee's legal representatives. All obligations
imposed upon Grantee and all rights granted to the Company under this Agreement
shall be final, binding, and conclusive upon Grantee's heirs, executors,
administrators, and successors.
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11. 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 Grantee
and the Company for all purposes.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NATIONAL SERVICE INDUSTRIES, INC.
By:
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Xxxxx X. Xxxxxx, Chairman,
Chief Executive Officer and President
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EXHIBIT "A"
RESTRICTIVE COVENANTS
1. DEFINITIONS
The following terms used in this Exhibit "A" shall have the following
meanings:
(A) "Trade Secrets" means information, without regard to
form, relating to the Company's business which is not commonly known
by or available to the public and which derives economic value, actual
or potential, from not being generally known to other persons and is
the subject of efforts that are reasonable under the circumstances to
maintain its secrecy or confidentiality, including, but not limited
to, technical or nontechnical data, formulae, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial
data, financial plans, product plans, or lists of actual or potential
customers or suppliers.
(B) "Confidential Information" means information of the
Company which is non-public, proprietary, and confidential in nature
but is not a Trade Secret.
(C) "Person" means any individual, firm, partnership,
association, corporation, limited liability entity, trust, venture, or
other business organization, entity, or enterprise;
(D) "Restricted Business" means the business of
manufacturing and selling envelopes and items incidental to such
products and/or the business of renting and/or processing textile
products and providing related services for customers;
(E) "Restricted Period" means the two (2) year period
following the date of the Grantee's retirement under Section 2.2 of
the Restricted Stock Award Agreement, as set forth in this Amendment;
and
(F) "Territory" means the United States.
2. NON-COMPETITION COVENANT
During the Restricted Period, the Grantee will not, directly or
indirectly, for the Grantee or on behalf of any other Person (except the
Company), within the Territory, engage in, provide, or perform sales,
marketing, operational, financial, accounting, or administrative services in or
for any business engaged in the Restricted Business.
3. NON-DISCLOSURE COVENANT
The Grantee will not, directly or indirectly, for the Grantee or on
behalf of any other Person, use for the Grantee's own benefit or disclose to
any other party, any Trade Secrets or Confidential Information of the Company.
The foregoing confidentiality obligations shall continue (A) with respect to
all Trade Secrets, at all times so long as such Trade Secrets constitute trade
secrets under applicable law, and (B) with respect to all Confidential
Information, at all times during the Restricted Period.
4. NON-RECRUITMENT COVENANT
During the Restricted Period, the Grantee will not, directly or
indirectly, for the Grantee or on behalf of any other Person, solicit, induce,
persuade, or encourage, or attempt to solicit, induce, persuade, or encourage,
any management-level employee of the Company or the Company's business unit in
which the Grantee was employed (if applicable) to terminate such employee's
position with the Company, whether or not such employee is a full-time or
temporary employee of the Company and whether or not such employment is
pursuant to a written agreement, for a determined period, or at will.
5. SEPARABILITY
The Grantee acknowledges that each of the foregoing restrictive
covenants is a separate and distinct obligation of the Grantee and is deemed to
be separable from the remaining restrictive covenants. If any of the provisions
of the foregoing restrictive covenants should ever be deemed to exceed the
time, geographic, product, or other limitations permitted by applicable law in
any jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic, product, or other limitations
permitted by applicable law.
