-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, aKNyfuylKZoYadHhGpowyBgKxBToQVMT12Fi3KTx9ATIFVfsOjnlOS298jQO1iFm 8nLTE+f3VWpsqqctrJ0arw== 0000070538-94-000023.txt : 19940712 0000070538-94-000023.hdr.sgml : 19940712 ACCESSION NUMBER: 0000070538-94-000023 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL SERVICE INDUSTRIES INC CENTRAL INDEX KEY: 0000070538 STANDARD INDUSTRIAL CLASSIFICATION: 3640 IRS NUMBER: 580364900 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03208 FILM NUMBER: 94536391 BUSINESS ADDRESS: STREET 1: 1420 PEACHTREE ST NE CITY: ATLANTA STATE: GA ZIP: 30309 BUSINESS PHONE: 4048531000 MAIL ADDRESS: STREET 1: 1420 PEACHTREE ST NE CITY: ATLANTA STATE: GA ZIP: 30309 11-K 1 ZEP MFG CO PROFIT SHARING/401/(K) RETIRE PLAN CONTRACT EMP 1 Page 1 of 13 Exhibit Index on Page 2 FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]. For the fiscal year ended: December 31, 1993 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. For the transition period from to Commission file number 1- 3208 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees B. Name of issuer of the securities held pursuant to the plan and the address of the principal executive office: National Service Industries, Inc. 1420 Peachtree Street, NE Atlanta, Georgia 30309 2 Page 2 REQUIRED INFORMATION The following documents are filed as a part of this report: 1. Financial Statements Plan financial statements prepared in accordance with the financial reporting requirements of ERISA include the following: Report of Independent Public Accountants Statements of Net Assets Available for Plan Benefits as of December 31, 1993 and August 31, 1993 Statements of Changes in Net Assets Available for Plan Benefits for the Four-Month Period Ended December 31, 1993 and the Year Ended August 31, 1993 Notes to Financial Statements 2. Exhibits Sequentially Numbered The following exhibit is filed with this report: Page 23 Consent of Arthur Andersen & Co. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees Date: June 28, 1994 By: National Service Industries, Inc. Plan Administrator By: /s/ D. Raymond Riddle Name: D. Raymond Riddle Title: President and Chief Executive Officer 3 Page 3 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Plan Administrator of the Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees: We have audited the accompanying statements of net assets available for plan benefits of the ZEP MANUFACTURING COMPANY PROFIT SHARING/401(k) RETIREMENT PLAN FOR CONTRACT EMPLOYEES as of December 31, 1993 and August 31, 1993 and the related statements of changes in net assets available for plan benefits for the four-month period ended December 31, 1993 and the year ended August 31, 1993. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan amd perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees as of December 31, 1993 and August 31, 1993 and the changes in net assets available for plan benefits for the four-month period ended December 31, 1993 and the year ended August 31, 1993 in conformity with generally accepted accounting principles. /s/ Arthur Andersen & Co. ARTHUR ANDERSEN & CO. Atlanta, Georgia June 6, 1994 4 Page 4 ZEP MANUFACTURING COMPANY PROFIT SHARING/401(k) RETIREMENT PLAN FOR CONTRACT EMPLOYEES STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS DECEMBER 31,1993 AND AUGUST 31, 1993 December 31, 1993 August 31, 1993 RECEIVABLES: Employer $ 0 $ 17,094 Employee 0 7,255 --------- --------- Total Receivables 0 24,349 --------- --------- INVESTMENTS, at market value (Note 1): NSI DC Fixed Income Fund 2,928,166 2,848,109 NSI DC Zep Equity Fund 1,420,144 1,424,132 NSI Common Stock 431,064 428,961 ---------- ---------- Total Investments 4,779,374 4,701,202 ---------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 4,779,374 $ 4,725,551 ========= ========= The accompanying notes are an integral part of these statements. 5 Page 5 ZEP MANUFACTURING COMPANY PROFIT SHARING/401(k) RETIREMENT PLAN FOR CONTRACT EMPLOYEES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE FOUR MONTH PERIOD ENDED DECEMBER 31, 1993 AND THE YEAR ENDED AUGUST 31, 1993 Four Month Period Ended Year Ended December 31, 1993 August 31, 1993 CONTRIBUTIONS (Note 3): Employer $ 0 $ 207,419 Employee 85,629 94,498 --------- --------- 85,629 301,917 --------- --------- NET GAIN FROM INVESTMENTS IN: NSI DC Fixed Income Fund (Note 1) 80,057 140,059 NSI DC Zep Equity Fund (Note 1) 22,006 93,517 NSI Common Stock (Note 1) 2,103 25,233 FIF Units (Note 1) 0 70,082 MIF Units (Note 1) 0 102,084 --------- --------- 104,166 430,975 --------- --------- DIVIDENDS ON COMMON STOCK (Note 1) 4,402 17,327 INTEREST INCOME 0 9 --------- --------- 4,402 17,336 --------- --------- AMOUNTS PAID TO PARTICIPANTS <135,835> <130,026> --------- --------- TRANSFER TO ZEP I PLAN <4,539> 0 --------- --------- INCREASE IN NET ASSETS AVAILABLE FOR PLAN BENEFITS 53,823 620,202 NET ASSETS AVAILABLE FOR PLAN BENEFITS AT BEGINNING OF PERIOD 4,725,551 4,105,349 --------- --------- NET ASSETS AVAILABLE FOR PLAN BENEFITS AT END OF PERIOD $ 4,779,374 $ 4,725,551 ========= ========= The accompanying notes are an integral part of these statements. 6 Page 6 ZEP MANUFACTURING COMPANY PROFIT SHARING/401(k) RETIREMENT PLAN FOR CONTRACT EMPLOYEES NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993 AND AUGUST 31, 1993 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Accounting - The accounts of the Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees (the "Plan") of Zep Manufacturing Company (the "Company"), a division of National Service Industries, Inc. (NSI), are maintained by the trustee on the cash basis of accounting. The accompanying financial statements have been prepared using the accrual method of accounting by application of memorandum entries. Investment in NSI Fixed Income Fund - A portion of the Plan's assets were commingled in a Fixed Income Fund (FIF) together with the assets of certain pension and profit sharing plans of other NSI divisions. Investments of the FIF were reflected at market values determined by the custodian from publicly stated price information. These investments are subject to certain administrative guidelines and limitations as to type and amount of securities held. The net gain from investments in FIF units in the accompanying Statements of Changes in Net Assets Available for Plan Benefits reflects interest income on guaranteed investment contracts and master notes. On January 1, 1993, investments of this fund were reinvested in the NSI Defined Contribution Fixed Income Fund. Summarized financial information of the FIF for the period September 1, 1992 to December 31, 1992 is presented as follows: 1992 Net gain from investments in FIF units during the period $ 1,774,924 ========= Allocation to NSI plans (based on number of units owned): Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees $ 70,082 All other NSI plans 1,704,842 --------- Total $ 1,774,924 ========= 7 Page 7 -2- Investment in NSI Master Investment Fund - A portion of the Plan's assets were commingled in a Master Investment Fund (MIF) together with the assets of pension and profit sharing plans of other NSI divisions. Investments of the MIF were reflected at market values determined by the custodian from publicly stated price information. These investments are subject to certain administrative guidelines and limitations as to type and amount of securities held. Certain fund assets are allocated to selected independent investment managers to invest under the general MIF guidelines. On January 1, 1993 investments of this fund were reinvested in the NSI Defined Contribution Zep Equity Fund. Summarized financial information of the MIF for the period September 1, 1992 to December 31, 1992, is presented as follows: 1992 Interest and dividend income $ 3,550,017 Net realized and unrealized appreciation in market value of investments 5,633,296 Investment management fees <278,569> --------- Net gain from investments in MIF units during the period $ 8,904,744 ========= Allocation to NSI plans (based on number of units owned): Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees $ 102,084 All other NSI plans 8,802,660 --------- Total $ 8,904,744 ========= Investment in NSI Defined Contribution Fixed Income Fund - As of January 1, 1993, a portion of the Plan's assets were commingled in a Defined Contribution Fixed Income Fund (DC Fixed Income Fund) together with the assets of certain profit sharing plans of other NSI divisions. Investments of the DC Fixed Income Fund are reflected at market values determined by the custodian from publicly stated price information. These investments are subject to certain administrative guidelines and limitations as to type and amount of securities held. Certain fund assets are allocated to selected independent investment managers to invest under the general DC Fixed Income Fund guidelines. 8 Page 8 -3- Summarized financial information of the DC Fixed Income Fund is presented as follows: September 1, 1993 January 1, 1993 to to December 31, 1993 August 31, 1993 Interest and dividend income $ 1,464,731 $ 2,507,338 Investment management fees <6,775> <5,631> --------- --------- Net gain from investments in the DC Fixed Income Fund during the period $ 1,457,956 $ 2,501,707 ========= ========= Allocation to NSI plans: Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees $ 80,057 $ 140,059 All other NSI plans 1,377,899 2,361,648 --------- --------- Total $ 1,457,956 $ 2,501,707 ========= ========= DC FIXED INCOME FUND INVESTMENTS: December 31, 1993 August 31, 1993 Guaranteed Investment Contracts $ 36,541,338 $ 50,929,142 Master Note 16,618,541 1,052,739 Cash 22,953 6,141 Accrued investment income 9,817 0 ---------- ---------- Total investments $ 53,192,649 $ 51,988,022 ========== ========== Allocation to NSI Plans (based on participant balances): December 31, 1993 August 31, 1993 Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees $ 2,928,166 5.50% $ 2,848,109 5.48% All other NSI Plans 50,264,483 94.50% 49,139,913 94.52% ----------- ------ ----------- ------ $53,192,649 100.00% $51,988,022 100.00% =========== ====== =========== ====== 9 Page 9 -4- Investment in NSI Defined Contribution Zep Equity Fund - As of January 1, 1993, a portion of the Plan's assets were placed in the Defined Contribution Zep Equity Fund (DC Zep Equity Fund) together with the assets of Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan. Investments of the DC Zep Equity Fund are reflected at market values determined by the custodian from publicly stated price information. These investments are subject to certain administrative guidelines and limitations as to type and amount of securities held. Certain fund assets are allocated to selected independent investment managers to invest under the general DC Zep Equity Fund guidelines. Summarized financial information of the DC Zep Equity Fund is presented as follows: September 1, 1993 January 1, 1993 to to December 31, 1993 August 31, 1993 Interest and dividend income $ 405,744 $ 248,921 Net realized and unrealized (depreciation) appreciation in market value of investments <90,708> 1,137,575 Investment management fees <4,393> <6,340> ------- --------- Net gain from investments in the DC Zep Equity Fund during the period $ 312,623 $ 1,380,156 ======= ========= Allocation to NSI plans: Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees $ 22,006 $ 93,517 Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan 290,617 1,286,639 ------- --------- Total $ 312,623 $ 1,380,156 ======= ========= DC ZEP EQUITY FUND INVESTMENTS: December 31, 1993 August 31, 1993 Common Stock $ 0 $ 20,728,390 Master Note 199,058 7,119 Receivable from Pending Sales 21,474,407 24 ---------- ---------- Total investments $ 21,673,465 $ 20,735,533 ========== ========== 10 Page 10 -5- ALLOCATION TO NSI PLANS (based on participant balances): December 31, 1993 August 31, 1993 Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees $ 1,420,144 6.55% $ 1,424,132 6.86% Zep Manufacturing Company Profit Sharing/401(k) 20,253,321 93.45% 19,311,401 93.14% Retirement Plan ----------- ------ ----------- ------ $21,673,465 100.00% $ 20,735,533 100.00% =========== ====== ============ ====== Investment in NSI Common Stock - As of December 31, 1993, approximately 9% of the Plan's net assets were invested in common stock of NSI, a party-in- interest. The Plan's investment in NSI common stock was reflected at market value in the accompanying financial statements. Tax Status - The Plan has not received a favorable determination letter from the Internal Revenue Service. However, the plan administrator believes that the Plan is currently designed and is being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, the plan administrator believes that the Plan was tax-exempt as of December 31, 1993. Net Assets Available for Plan Benefits - At August 31, 1993, $26,085 of net assets available for plan benefits were allocated to accounts of participants who have withdrawn from participating in the earnings and operations of the Plan. There were no such amounts allocated at December 31, 1993. 2. TRUST AGREEMENT: Under a trust agreement dated September 1, 1993, as amended, Wachovia Bank of Georgia, N.A. was appointed trustee of the NSI Defined Contribution Plans Master Trust (which includes the DC Fixed Income Fund, DC Zep Equity Fund and Common Stock discussed in Note 1). Certain officers of NSI were appointed administrators of the Plan's assets together with the income derived therefrom. 11 Page 11 -6- Prior to September 1, 1993, the assets of the Plan were included in the NSI General Retirement Trust (GRT). Under a trust agreement dated March 1, 1978, certain officers of NSI were appointed trustee of the GRT and were administrators of the Plan's assets and Wachovia Bank of Georgia was the custodian. 3. PLAN DESCRIPTION: The following brief description of the Plan is provided for informational purposes only. Participants should refer to the Plan agreement for more complete information. The Plan was established as a spin-off from the Zep Manufacturing Company Profit Sharing Retirement Plan (the "Prior Plan") to cover all eligible hourly paid employees represented by a collective bargaining unit. The Plan is a voluntary, defined contribution plan covering all union employees of the Company, who have attained the age of 21, with at least six months of service, as defined. Participants may contribute between 1% and 10% of before-tax compensation but not to exceed $7,000 (or such larger amount as may be determined by the Secretary of Treasury) for any participant in any calendar year. Contributions are made by the Company in an amount equal to the same percentage of compensation of participants under this Plan as employer contributions to the Prior Plan bears to the total compensation of the eligible employees who are participants under the Prior Plan. The Company contributes 5% of net profits, as defined. The total of these amounts can be increased for any additional discretionary amount determined by the Board of Directors of NSI. The maximum compensation with respect to any participant for purposes of employer contributions to the Plan is $35,000. During December, 1993, the Plan was amended and restated to allow participant directed investments effective January 1, 1994. In addition, the Plan year end was changed from August 31 to December 31. Thus, the accompanying financial statements are for the year ended August 31, 1993 and the four month period in the short plan year ended December 31, 1993. The Plan, as amended and restated, does not permit employer contributions during the short plan year. Non-vested employer contributions are forfeited upon withdrawal or termination, as defined, from the Plan and are allocated to remaining participants. Vesting of employer contributions occurs on an increasing scale ranging from 20% vesting after three years of service, as defined, to 100% vesting after seven years of service. Participants are always fully vested in their individual contributions. 12 Page 12 -7- Although the Company intends for the Plan to be permanent, the Plan provides that the Company has the right to discontinue contributions or to terminate the Plan at any time. In the event of termination, each participant shall be vested with the balance of his account and his proportionate share of any future adjustments or forfeitures. EX-23 2 1 Page 13 Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K into National Service Industries, Inc.'s previously filed Registration Statement covering the Zep Manufacturing Company Profit Sharing/401(k) Retirement Plan for Contract Employees. /s/ Arthur Andersen & Co. ARTHUR ANDERSEN & CO. Atlanta, Georgia June 28, 1994 -----END PRIVACY-ENHANCED MESSAGE-----