EXHIBIT 10.16(a)
SEVERANCE PROTECTION AGREEMENT FOR KEY MANAGEMENT
THIS AGREEMENT made as of the (Day) day of (Month), 2000, by and
between National Service Industries, Inc., a Delaware Corporation (the
"Company"), and (Name) (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 threat of or 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 a threat or occurrence of a Change in Control and to
ensure his continued dedication and efforts in such event without undue concern
for his personal financial and employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Company (including its subsidiary corporations and partnerships),
particularly in the event of a threat or the occurrence of a Change in Control,
the Company desires to enter into this Agreement with the Executive to provide
the Executive with certain benefits in the event his employment is terminated as
a result of, or in connection with, a Change in Control and to provide the
Executive with certain other benefits whether or not the Executive's employment
is terminated.
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 (DateOriginal)
and shall continue in effect until the earlier of (DateTwoYear) or the
Executive's termination of employment prior to a Change in Control; provided,
however, that commencing on (DateOneYear) and on each (Month) (Day2) thereafter,
the term of this Agreement shall automatically be extended for one (1) year
unless either the Company or the Executive shall have given written notice to
the other at least ninety (90) days prior thereto that the term of this
Agreement shall not be so extended.
(b) Notwithstanding the foregoing, (1) the term of this
Agreement shall not expire during a Threatened Change in Control Period or prior
to the expiration of 24 months after the occurrence of a Change in Control and
(2) prior to a Change in Control and other than during a Threatened Change in
Control Period, the term of this Agreement shall expire on the date the
Executive's employment with the Company is terminated unless such termination
was at the request of a Third Party or otherwise occurred in connection with, or
in anticipation of, a Change in Control.
2. Definitions.
2.1 Cause. For purposes of this Agreement, "Cause" shall
mean a reasonable determination by the Company that the Executive (a)
intentionally and
continually failed substantially to perform his reasonably assigned duties with
the Company (other than a failure resulting from the Executive's incapacity due
to physical or mental illness or from the Executive's assignment of duties that
would constitute "Good Reason" as hereinafter defined) 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 substantially to perform, or (b)
intentionally engaged in conduct which is demonstrably and materially injurious
to the Company or was convicted of a misdemeanor or a felony involving moral
turpitude; 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 in person by the Board or a committee of the
Board so designated (with the assistance of the Executive's counsel if the
Executive so desires). Neither an act nor a failure to act, on the Executive's
part shall be considered "intentional" unless the Executive has acted or failed
to act with a lack of good faith and with a lack of 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 the occurrence of any of the following:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting Securities") by
any "Person" (as the term person is used for purposes of Section 13(d) or 14(d)
of the Exchange Act), immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of twenty percent (20%) or more of the then outstanding Shares or the combined
voting power of the Company's then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has occurred pursuant to
this Section 2.2(a), Shares or Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control Acquisition"
shall mean an acquisition by (i) an employee benefit plan (or a trust forming a
part thereof) maintained by (A) the Company or (B) any corporation or other
Person of which a majority of its voting power or its voting equity securities
or equity interests is owned, directly or indirectly, by the Company (for
purposes of this definition, a "Related Entity"), (ii) the Company or any
Related Entity, or (iii) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined);
(b) The individuals who, on (DateOriginal), are
members of the Board (the "Incumbent Board"), cease for any reason to constitute
at least two-thirds
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of the members of the Board or, following a Merger which results in a Parent
corporation, the board of directors of the ultimate Parent Corporation (as
defined in paragraph (c)(i)(A) below); provided, however, that if the election,
or nomination for election by the Company's common 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 a member
of the Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or
reorganization with or into the Company or in which securities of the Company
are issued ( a "Merger"), unless such Merger is a "Non-Control Transaction." A
"Non-Control Transaction" shall mean a Merger where:
(A) the stockholders of the
Company, immediately before such Merger own directly or indirectly immediately
following such Merger at least seventy percent (70%) of the combined voting
power of the outstanding voting securities of (x) the corporation resulting from
such Merger (the "Surviving Corporation") if seventy percent (70%) or more of
the combined voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or indirectly by
another Person (a "Parent Corporation"), or (y) if there are one or more Parent
Corporations, the ultimate Parent Corporation; and,
(B) the individuals who were
members of the Incumbent Board immediately prior to the execution of the
agreement providing for such Merger constitute at least two-thirds of the
members of the board of directors of (x) the Surviving Corporation, if there is
no Parent Corporation, or (y) if there are one or more Parent Corporations, the
ultimate Parent Corporation; and
(C) no Person other than (1)
the Company, (2) any Related Entity, (3) any employee benefit plan (or any trust
forming a part thereof) that, immediately prior to such Merger was maintained by
the Company or any Related Entity, or (4) any Person who, immediately prior to
such Merger had Beneficial Ownership of twenty percent (20%) or more of the then
outstanding Voting Securities or Shares, has Beneficial Ownership of twenty
percent (20%) or more of the combined voting power of the outstanding voting
securities or common stock of (x) the Surviving Corporation if there is no
Parent Corporation, or (y) if there are one or more Parent Corporations, the
ultimate Parent Corporation.
(ii) A complete liquidation or
dissolution of the Company; or
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(iii) The sale or other disposition of
all or substantially all of the assets of the Company to any Person (other than
a transfer to a Related Entity or the distribution to the Company's stockholders
of the stock of a Related Entity or any other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Shares or Voting
Securities as a result of the acquisition of Shares or Voting Securities by the
Company which, by reducing the number of Shares or Voting Securities then
outstanding, increases the proportional number of shares Beneficially Owned by
the Subject Person, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of any additional
Shares or Voting Securities which increases the percentage of the then
outstanding Shares or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.
(d) Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's employment is terminated prior to
a Change in Control and the Executive reasonably demonstrates that such
termination (1) was at the request of a Third Party (as hereinafter defined) or
(2) otherwise occurred in connection with, or in anticipation of, a Change in
Control (including, without limitation, during a Threatened Change in Control
Period), then for all purposes of this Agreement, the date of a Change in
Control shall be deemed to be the date immediately prior to the date of such
termination of the Executive's employment provided a Change in Control shall
actually have occurred.
2.3 Company. Each place in the 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 the Subsidiary which is the
primary employer of the Executive. Further, in each place where the 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 the Subsidiary. Notwithstanding the foregoing, the references in
the definitions of "Change in Control," "Threatened Change in Control Period"
and similar references to changes in ownership and control of the Company shall
mean and refer to National Service Industries, Inc., a Delaware corporation.
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 his duties under this Agreement for
a period of one hundred eighty (180) consecutive days.
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2.5 (a) Good Reason. 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 (8) hereof:
(1) a change in the Executive's title, position
or responsibilities (including reporting responsibilities) which, in the
Executive's reasonable judgment, represents an adverse change from his 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 his title, position or
responsibilities; or any removal of the Executive from or failure to reappoint
or reelect him to any of such offices or positions, except in connection with
the termination of his employment for Disability, Cause, as a result of his
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 he is
entitled within five days of the date due;
(3) the Company's requiring the Executive to be
based at any place outside a 40-mile radius from the Executive's principal place
of employment immediately prior to the Change in Control, 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 to (A) 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
plans listed on the Appendix, unless a substitute or replacement plan has been
implemented which provides substantially identical compensation or benefits to
the Executive or (B) 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
other than the Executive, including the Company) of a petition for bankruptcy of
the Company;
(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) Any event or condition described in Section 2.5(a)(1)
through (8) which occurs prior to a Change in Control but which the Executive
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reasonably demonstrates (1) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated to effect a Change
in Control (a "Third Party"), or (2) otherwise arose in connection with or in
anticipation of a Change in Control, shall constitute Good Reason for purposes
of this Agreement notwithstanding that it occurred prior to the Change in
Control, provided that a Change in Control shall actually have occurred.
(c) The Executive's right to terminate his employment
pursuant to this Section 2.5 shall not be affected by his incapacity due to
physical or mental illness.
2.6 Threatened Change in Control. For purposes of this Agreement,
a Threatened Change in Control shall mean the occurrence of any of the following
events:
(a) when the Company is aware of, or is contemplating, a
proposal (a "Proposal") for any Person, other than any corporation owned
directly or indirectly by the stockholders of the Company in the same proportion
as their ownership of stock in the Company (a "Related Person"), (1) to acquire
five percent (5%) or more of the voting power of the Company's outstanding
securities or (2) to merge or consolidate with another entity, transfer or sell
assets of the Company, or liquidate or dissolve the Company, in each case
described in this clause (2) in a transaction that would constitute a Change in
Control; or
(b) any Person other than a Related Person,
(1) acquires five percent (5%) or more of the
voting power of the Company's outstanding securities, other than as a holder
whose investment in the Company is eligible to be reported on Schedule 13G
pursuant to Rule 13d-l(b)(1) promulgated under the Exchange Act, or
(2) initiates a tender or exchange offer to
acquire such number of securities as would result in such Person holding twenty
percent (20%) or more of the voting power of the Company's outstanding
securities, or
(3) solicits proxies for votes to elect members
of the Board at a shareholders' meeting of the Company.
2.7 Threatened Change in Control Period. For purposes of this
Agreement, a Threatened Change in Control Period shall mean the period
commencing on the date that a Threatened Change in Control has occurred and
ending upon:
(a) the date the Proposal referred to in Section 2.6(a)
is abandoned;
(b) the acquisition of five percent (5%) of the voting
power of the Company's outstanding securities by the Person referred to in
Section 2.6(a)(1) if such acquisition does not constitute a Threatened Change in
Control under Section 2.6(b)(1);
(c) the date when any Person described in Section
2.6(b), (1) shall own less than five percent (5%) of the voting power of the
Company's outstanding securities, (2) shall have abandoned the tender or
exchange offer, or (3) shall not have elected a member of the Board, as the case
may be; or
(d) the date a Change in Control occurs.
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3. Termination of Employment.
3.1 If, during the term of this Agreement, the
Executive's employment with the Company shall be terminated within 24 months
following a Change in Control, the Executive shall be entitled to the following
compensation and benefits (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 (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, 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 his 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 greatest of (x) the most recent annual
bonus paid or payable to the Executive, or (y) the target annual bonus for the
fiscal year during which the Termination Date occurs or, if greater, for the
fiscal year in which the Change in Control occurred or (z) the average of the
annual bonuses paid or payable during the three full fiscal years ended prior to
the Termination Date or, if greater, the three 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),
(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: (1) the Company shall pay the
Executive all Accrued Compensation and a Pro-Rata Bonus; (2) 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 one and one-half 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 1/2 on the Termination Date the Severance Amount
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to be paid under this Subsection (2) 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 9) and the
denominator of which shall be 18;
(3) for a number of months equal to the
lesser of (A) 18 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 his dependents and beneficiaries the
life insurance, disability, medical, dental and hospitalization benefits
provided (x) to the Executive at the time 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)(3) during the
Continuation Period shall be no less favorable to the Executive and his
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 Executive than the coverages and benefits required to be
provided hereunder. This Subsection (3) shall not be interpreted so as to limit
any benefits to which the Executive or his 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;
(4) 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 one and one-half years of credited service (or until
his 65th birthday if earlier), (x) his annual compensation during such period
been equal to his Base Salary and the Bonus Amount, (y) the Company and/or the
Division 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) he been fully (100%) vested in his 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 (4), 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 and other
retirement plans. For purposes of
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this Subsection (4), the "actuarial equivalent" shall be determined in
accordance with the actuarial assumptions used for the calculation of benefits
under each of the Company's supplemental and other retirement plans under which
the Executive is entitled to benefits as applied immediately prior to the
Termination Date in accordance with each such plan's past practices; and
(5) (A) the restrictions on any
outstanding incentive awards (including restricted stock and performance units)
granted to the Executive under the Company's equity-based plans or other
arrangements 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 Aspiration Incentive Awards granted to the Executive shall
become vested and payable as provided by and in accordance with the Aspiration
Incentive Award Agreements therefor, 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 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)(1), (2), (4) and (5) 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)(3).
3.2 The severance pay and benefits provided for in
Sections 3.1(a) and 3.1(b)(1) and (2) shall be in lieu of any other severance
pay to which the Executive is entitled under any existing Company severance
plans, programs or arrangements, except that if the severance pay of the type
referenced in Section 3.1(b)(2) provided under such other plans, programs or
arrangements is greater than the amount calculated under Section 3.1(b)(2), then
that greater amount and not the amount under Section 3.1(b)(2) shall be paid.
4. Notice of Termination. During a Threatened Change in Control
Period and 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, his date of death, and in all other cases, the date
specified in the Notice of Termination subject to the following:
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(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 his duties
during such period of at least 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.
6. Excise Tax Limitation.
(a) Notwithstanding anything contained in this Agreement
to the contrary, to the extent that the payments and benefits provided under
this Agreement ("Agreement Payments") and benefits provided to, or for the
benefit of, the Executive under any other Company plan or agreement (such
payments or benefits are collectively referred to as the "Total Payments") would
be subject to the excise tax (the "Excise Tax") imposed under Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code"), the Agreement
Payments shall be reduced or eliminated if and to the extent necessary so that
no Agreement Payment to be made to the Executive shall be subject to the Excise
Tax. Unless the Executive shall have given prior written notice specifying a
different order to the Company to effectuate the foregoing, the Company shall
reduce or eliminate the Agreement Payments, by first reducing or eliminating the
portion of the Agreement Payments which are payable in cash and then by reducing
or eliminating non-cash payments, in each case in reverse order beginning with
Agreement Payments which are to be paid the farthest in time from the
Determination (as hereinafter defined). Any notice given by the Executive
pursuant to the preceding sentence shall take precedence over the provisions of
any other plan, arrangement or agreement governing the Executive's rights and
entitlements to any benefits or compensation.
(b) The determination of whether the Agreement Payments
shall be reduced or eliminated as provided in Section 6(a) above and the amount
of such reduction shall be made, at the Company's expense, by an accounting firm
selected by the Company which is 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 fifteen
(15) business 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 Total 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 the Total Agreement Payments, it shall furnish the Executive
with an opinion reasonably acceptable to the Executive that no Excise Tax will
be imposed with respect to the Total Payments. The Determination shall be
binding, final and conclusive upon the Company and the Executive.
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(c) 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.
7. Non-Compete. During the period that the Executive is actively
employed by the Company, and for six months following the Executive's
termination of employment with the Company, the Executive shall not, directly or
indirectly, own, manage, operate, join, control, be employed by, have any
financial interest in consult with, or participate in the ownership, management,
operation or control of any entity that directly competes or seeks directly to
compete with any business or line of business of the Company. 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.
8. Non-Solicitation. For six-months after termination of
employment with the Company for any reason, the Executive shall not directly or
indirectly solicit or hire, or assist any other person in soliciting or hiring,
any employee of the Company (as of the date of termination), or induce any such
employee to terminate his or her employment with the Company.
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, his
beneficiaries or legal 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. Fees and Expenses. The Company shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel) incurred
by the Executive as they become due as a result of (a) the Executive's
termination of employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of employment), (b) the
Executive seeking to obtain or enforce any right or benefit provided by this
Agreement or by any other plan or arrangement maintained by the Company under
which the Executive is or may be entitled to receive benefits, or (c) the
Executive's hearing before the Board as contemplated in Section 2.1 of this
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Agreement; provided, however, that the circumstances set forth in clauses (a)
and (b) (other than as a result of the Executive's termination of employment
under circumstances described in Section 2.2(d)) occurred on or after a Change
in Control.
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, 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 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 law 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.
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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.
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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.
ATTEST: NATIONAL SERVICE INDUSTRIES, INC.
By:
---------------------------- -----------------------------------
Secretary Xxxxx X. Xxxxxxx
Chairman of the Board, President
and Chief Executive Officer
--------------------------------
(Name)
In consideration of the Executive's performing valuable services for the
Subsidiary, the undersigned Subsidiary does hereby agree to the terms and
conditions of the Agreement and does hereby guarantee the payment and
performance of all the Company's obligations and responsibilities under the
Agreement.
This (Day) day of (Month), 2000.
SUBSIDIARY:
(Subsidiary)
By:
-----------------------
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APPENDIX
National Service Industries, Inc. Retirement and 401(k) Plan
Pension Plan C
Executives' Deferred Compensation Plan
Supplemental Deferred Savings Plan
Senior Management Benefit Plan
Long-Term Achievement Incentive Plan
Employee Stock Purchase Plan
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