-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QdSOclVZh7slRdVZCi/JFM6GA8/5Vj2OFyOAu5jg/xj7Karsm6YPty66385uIqLD 2qiLATKjolmFkdrT3equJw== 0000070538-96-000007.txt : 19960701 0000070538-96-000007.hdr.sgml : 19960701 ACCESSION NUMBER: 0000070538-96-000007 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL SERVICE INDUSTRIES INC CENTRAL INDEX KEY: 0000070538 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [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: 96587529 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 AECO EMPLOYEE'S 401(K) RET & SAVINGS PLAN Page 1 of 11 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, 1995 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: AECO Employees' 401(k) Retirement and Savings Plan 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 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 Statement of Net Assets Available for Benefits as of December 31, 1995 Statement of Changes in Net Assets Available for Benefits, with Fund Information, for the Six Months Ended December 31, 1995 Notes to Financial Statements 2. Exhibits Sequentially Numbered The following exhibit is filed with this report: Page 23 Consent of Arthur Andersen LLP 11 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. AECO Employees' 401(k) Retirement and Savings Plan Date: June 28, 1996 By: National Service Industries, Inc. Plan Administrator By: /s/ James S. Balloun Name: James S. Balloun Title: Chairman and Chief Executive Officer Page 3 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Plan Administrator of AECO Employees' 401(k) Retirement and Savings Plan: We have audited the accompanying statement of net assets available for benefits of the AECO EMPLOYEES' 401(k) RETIREMENT AND SAVINGS PLAN as of December 31, 1995 and the related statement of changes in net assets available for benefits, with fund information, for the six months then ended. 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 audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and 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 audit provides 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 benefits of the Plan as of December 31, 1995 and the changes in net assets available for benefits for the six months then ended in conformity with generally accepted accounting principles. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The fund information in the statement of changes in net assets available for benefits is presented for the purpose of additional analysis rather than to present the changes in net assets available for benefits of each fund. The fund information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Atlanta, Georgia May 31, 1996 Page 4 AECO EMPLOYEES 401(k) RETIREMENT AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1995 CONTRIBUTIONS RECEIVABLE - Participant ........................... $ 20,901 INVESTMENT IN NSI DC TRUST, at fair value (Note 2): Diversified Equity Fund ...................................... 248,246 NSI Stock Fund ............................................... 153,567 Balanced Fund ................................................ 160,740 Stable Value Fund ............................................ 64,679 International Fund ........................................... 50,451 Loan Fund .................................................... 814 Total investments ............................ 678,497 REFUNDS PAYABLE TO PARTICIPANTS................................... (42,753) NET ASSETS AVAILABLE FOR BENEFITS ................................ $656,645 The accompanying notes are an integral part of this statement. Page 5 AECO EMPLOYEES' 401(k) RETIREMENT AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION, FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 Nonparticipant -----------------------Participant-Directed---------------------- Directed Stable Diversified NSI NSI Balanced Value Equity Stock Loan Internat'l Stock Fund Fund Fund Fund Fund Fund Fund Total CONTRIBUTIONS: Employer .............................. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 85,500 $ 85,500 Participant ........................... 147,695 63,236 213,244 48,978 0 47,048 0 520,201 Total contributions ............. 147,695 63,236 213,244 48,978 0 47,048 85,500 605,701 NET GAIN FROM INVESTMENT IN NSI DC TRUST ............................. 8,374 956 13,658 4,553 17 851 7,734 36,143 BENEFITS PAID TO PARTICIPANTS ............ (875) (2,068) (2,515) (114) 0 (375) (769) (6,716) INTRAPLAN TRANSFERS ...................... 148 (307) 445 40 (203) (123) 0 0 OTHER .................................... 0 1,728 7,769 6,810 1,000 0 4,210 21,517 NET INCREASE ............................. 155,342 63,545 232,601 60,267 814 47,401 96,675 656,645 NET ASSETS AVAILABLE FOR BENEFITS, July 1, 1995 ............................. 0 0 0 0 0 0 0 0 NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1995 ........................ $ 155,342 $ 63,545 $ 232,601 $ 60,267 $ 814 $ 47,401 $ 96,675 $ 656,645
The accompanying notes are an integral part of this statement. Page 6 AECO Employees' 401(k) Retirement and Savings Plan Financial Statements as of December 31, 1995 Together With Auditors' Report 1. PLAN DESCRIPTION The following brief description of the AECO Employees' 401(k) Retirement and Savings Plan (the "Plan") of the AECO Products Division (the "Company") of National Service Industries, Inc. ("NSI") is provided for informational purposes only. Participants should refer to the plan agreement for more complete information. General The Plan is a defined contribution plan established effective July 1, 1995 under the provisions of Section 401(a) of the Internal Revenue Code ("IRC") which covers all nonunion employees of the Company who have attained the age of 21 and either were hired prior to April 1, 1995 or have completed one year of service, as defined. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. Contributions Participants may elect to contribute between 1% and 10% of before-tax compensation, as defined in the Plan, subject to certain limitations under the IRC. Contributions are made by the Company in an amount equal to 25% of the participant's contribution up to the lesser of 4% of the participant's annual compensation or $500. Additional discretionary amounts, as determined by the board of directors of NSI, may be contributed by the Company. Vesting Participants are always fully vested in their individual contributions. Vesting of employer contributions occurs on an increasing scale ranging from 10% vesting after two years of service, as defined, to 100% vesting after seven years of service. Nonvested employer contributions are forfeited upon withdrawal or termination, as defined, from the Plan and are used to reduce future employer contributions. Administration 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 (the "NSI DC Trust"). Page 7 The responsibility for administration of the Plan rests with the Plan's retirement committee, which is appointed by the board of directors of NSI. All administrative expenses of the Plan were paid by the Company during the six months ended 1995. Participants' Accounts Individual accounts are maintained for each of the Plan's participants to reflect the particular participant's contributions and related employer contributions, as well as the participant's share of the Plan's income and any related administrative expenses. Effective with the change in 1995 from monthly to daily valuation of participant accounts, the Plan assigns units to its participants. At December 31, 1995, 60,886 units were assigned to plan participants. Unit values for each investment fund were as follows at December 31, 1995: Stable Value Fund $10.59 Diversified Equity Fund 10.57 Balanced Fund 22.95 NSI Stock Fund 12.39 International Fund 4.59 Investment in NSI DC Trust The Plan's assets are commingled in the NSI DC Trust together with the assets of certain defined contribution plans of other NSI divisions. The investments of the NSI DC Trust 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 these general guidelines. Investment Options The separate investment options made available under the Plan may be changed, eliminated, or modified from time to time by the investment committee of the NSI DC Trust. Participants make their investment elections in 5% increments, with changes allowed on a daily basis. Participants may not direct the investment of company matching or discretionary contributions. These are invested in the NSI Stock Fund discussed below. The separate investment options offered by the Plan are as follows: * Diversified Equity Fund. This fund is a diversified stock fund designed to invest in a broad range of common stocks providing capital growth. * Stable Value Fund. This is a fixed income fund designed to provide a steady level of current income while focusing on preservation of principal. * Balanced Fund. This fund is invested in a changing mix of high-quality stocks and bonds. The fund is designed to provide capital growth and current income while limiting the risk of principal loss. * NSI Stock Fund. This fund is invested in NSI common stock, although it may hold other short-term investments from time to time. A participant may not direct more than 50% of his/her account balance to be invested in this fund. * International Fund. This fund is invested in the stock of non-U.S. companies and is designed to provide long-term growth. Page 8 Loans to Participants The Plan permits loans to participants up to the lower of 50% of the participant's vested account balance or $50,000. Participants have up to five years to pay back the principal and interest unless the loan is for the purchase of a primary residence, in which case the repayment period will be established at the time the loan is approved. Loan processing fees are charged directly to the participant's account. Interest rates on loans to participants are based on market rates as determined by the plan administrator. Benefits A participant is entitled to receive the distribution of his/her vested account balance on death, disability, or retirement (age 65). These benefits are payable in a lump-sum amount or in installment payments at the election of the participant if he/she is age 55 or older and his/her account balance is greater than $3,500. A participant who terminated employment with the Company for other than these reasons is entitled to receive his/her contributions in a lump sum as soon as administratively feasible. Benefits are payable in cash, except that any portion of a participant's account balance which is invested in the NSI Stock Fund is generally distributed in the form of shares of NSI common stock, with fractional shares paid in cash. If the equivalent number of shares to be distributed to a participant is less than 100, then the participant may elect to receive cash instead of shares as his/her distribution. Hardship withdrawals may be made upon proven financial hardship of a participant as defined in the plan agreement and approved by the Plan's retirement committee. Plan Termination 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 Plan termination, each participant shall be vested in the balance of his/her account and his/her proportionate share of any future adjustments. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The accounts of the Plan 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. The preparation of the financial statements in conformity with generally accepted accounting principles requires the Plan's management to use estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from these estimates. Page 9 Investment Valuation Investments of the NSI DC Trust, except for the guaranteed investment contracts ("GICs"), are stated at fair value as determined by the trustee from quoted market prices. Securities traded on a national exchange are valued at the last reported sales price on the last business day of the plan year; investments traded in the over-the-counter market and listed securities for which no sale was reported on the last day of the plan year are valued at the last reported bid price. GICs included in the master trust are fully benefit-responsive and are therefore carried at contract value (cost plus accrued interest) in the accompanying financial statements in accordance with Statement of Position 94-4. At December 31, 1995, contract value approximates fair value. At December 31, 1995, the weighted average crediting interest rate was 6.77%. For the year ended December 31, 1995, the annual yield on the GICS held by the NSI DC Trust was 6.9%. For certain contracts held by the trust, crediting interest rates may be changed in the event of certain events such as early retirements, plant closings, etc., but in no case are adjusted to a rate less than 0%. GICs are subject to credit risk based on the ability of the insurance company to meet interest or principal payments, or both, as they become due. 3. NSI DC TRUST Investment Income Investment income of the NSI DC Trust for the year ended December 31, 1995 is summarized as follows: Dividends on common stock ................................... $ 245,288 Interest income ............................................. 4,597,435 Net appreciation in fair value of common stock .............. 1,408,275 Net income from mutual fund ................................. 11,982,057 Net income from common/collective trust ..................... 10,492,727 Net income from pooled separate account ..................... 21,986 Investment expenses ......................................... (274,795) Net investment income ....................................... $ 28,472,973 The investment income of the NSI DC Trust for the year ended December 31, 1995 is allocated to participating plans is as follows: AECO Employees' 401(k) Retirement and Savings Plan .......................................... $ 36,143 All other NSI plans ....................................... 28,436,830 Total ....................................... $28,472,973 Page 10 Net Assets Net assets of the NSI DC Trust are as follows at December 31, 1995: Mutual fund ............................................. $ 47,636,487 Common/collective trust ................................. 48,146,903 Guaranteed investment contracts ......................... 55,129,605 Loans receivable from participants ...................... 6,104,302 NSI common stock ........................................ 7,637,554 Money market fund ....................................... 1,377,443 Pooled separate account ................................. 871,467 166,903,761 Cash .................................................... 127,031 167,030,792 Accrued investment income ............................... 76,779 Adjustments for pending trades .......................... (211,964) Other ................................................... 49,961 Net assets ................................ $ 166,945,568 The allocation of the net assets of the NSI DC Trust to participating plans is based on participant balances and is as follows as of December 31, 1995: AECO Employees' 401(k) Retirement and Savings Plan ......................................... $ 678,497 All other plans .......................................... 166,267,071 Total ...................................... $166,945,568 Investment in NSI Common Stock As of December 31, 1995, approximately 4.6% of the NSI DC Trust's net assets were invested in the common stock of NSI, a party in interest to the Plan. 4. TAX STATUS The Plan has not received a 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 IRC. Therefore, the plan administrator believes that the Plan was qualified and that the related trust was tax-exempt as of December 31, 1995. EX-23 2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS Page 11 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 AECO Employees' 401(k) Retirement and Savings Plan. /s/ Arthur Andersen LLP Arthur Andersen LLP Atlanta, Georgia June 21, 1996 -----END PRIVACY-ENHANCED MESSAGE-----