STOCK OPTION AGREEMENT
FOR NONEMPLOYEE DIRECTORS
THIS AGREEMENT, made as of the 21st day of December, 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. 1992
Nonemployee Directors' Stock Option Plan (the "Plan") in order to provide
additional incentive to nonemployee directors to exert maximum efforts for the
success of the Company; and
WHEREAS, pursuant to the terms of the Plan, the Optionee is entitled to the
option grant provided herein.
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 422A 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 $22.5625 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
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Section 6 hereof.
4. Exercisability of Option.
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Unless otherwise provided in this Agreement or the Plan, the Option shall
entitle the Optionee to purchase, in whole at any time or in part from time to
time, the shares covered by the option after the expiration of one (1) year from
the Grant Date.
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, 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 12 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 Service.
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6.1 Termination for Cause. If the Optionee's service as a Director
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terminates for Cause, the Option shall immediately terminate in full and no
rights hereunder may be exercised.
6.2 Other Termination of Service. If the Optionee's service as a Director
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is terminated for any reason other than for Cause, the Option shall continue to
be exercisable in whole or in part (to the extent exercisable on the date of
such termination) at any time within three (3) years after the date of such
termination, but in no event after the expiration of the Exercise Term. In the
event of the Optionee's death, the Option shall be exercisable, to the extent
provided in the Plan and this Agreement, by the legatee or legatees under his
will, or by his personal representatives or distributees and such person or
persons shall be substituted for the Optionee each time the Optionee is referred
to herein.
7. Effect of Change in Control.
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Notwithstanding anything contained in this Agreement to the contrary, in
the event of a Change in Control, (i) the Option shall become immediately and
fully exercisable, and (ii) the Optionee will 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 the 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 the portion of the Option surrendered, over (B)
the aggregate purchase price for such Shares under the Option; provided,
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however, that if the Option was granted within six (6) months prior to the
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Change in Control, the Optionee shall be entitled to surrender for cancellation
the Option or any portion of the Option 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.
8. Nontransferability.
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The Option shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Optionee, the Option shall
be exercisable only by the Optionee.
9. No Right to Continuing Service.
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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 service as a
director of the Company, nor shall this Agreement or the Plan interfere in any
way with the right of the Company to terminate the Optionee's service as a
director at any time.
10. Adjustments.
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In the event of a Change in Capitalization, the Board shall 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 Board's adjustment shall be made in accordance with the
provisions of Section 7 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. Optionee 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.
13. 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.
14. 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.
15. 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.
16. Successors in Interest.
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This Agreement shall inure to the benefit of and be binding upon each
successor to the Company. 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, administrators, and
successors.
17. 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 Board. 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"
