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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:
Lithonia Lighting Profit-Sharing and Retirement
Plan for Salaried 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
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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 Benefits as of December 31, 1995
and 1994.
Statement of Changes in Net Assets Available for Benefits, with Fund
Information, for the Year Ended December 31, 1995.
Notes to Financial Statements and Schedule
Schedule I: Item 27e - Schedule of Nonexempt Transactions for the Year
Ended December 31, 1995
2. Exhibits
Sequentially
Numbered
The following exhibit is filed with this report: Page
23 Consent of Arthur Andersen LLP 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.
Lithonia Lighting Profit Sharing
and Retirement Plan for Salaried Employees
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
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of
Lithonia Lighting Profit Sharing and Retirement Plan for Salaried Employees:
We have audited the accompanying statements of net assets available for benefits
of LITHONIA LIGHTING PROFIT SHARING AND RETIREMENT PLAN FOR SALARIED EMPLOYEES
as of December 31, 1995 and 1994 and the related statement of changes in net
assets available for benefits, with fund information, for the year ended
December 31, 1995. These financial statements and the schedule of nonexempt
transactions (Schedule I) are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits 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 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 benefits of the Plan as of
December 31, 1995 and 1994 and the changes in net assets available for benefits
for the year ended December 31, 1995 in conformity with generally accepted
accounting principles.
Our audits were 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 supplemental schedule of nonexempt transactions
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements but is supplementary information required by
the Department of Labor Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedule
and fund information have been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion , are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Atlanta, Georgia
May 31, 1996
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LITHONIA LIGHTING PROFIT SHARING AND
RETIREMENT PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995 AND 1994
1995 1994
CONTRIBUTIONS RECEIVABLE:
Employer ....................................... $ 121,693 $ 25,421
Participant .................................... 0 75,617
Total contributions receivable ....... 121,693 101,038
INVESTMENT IN NSI DC TRUST,
at fair value (Note 2):
Stable Value Fund .............................. 21,297,500 20,958,760
Balanced Fund .................................. 17,706,719 12,693,251
Diversified Equity Fund ........................ 16,676,083 11,858,437
Loan Fund ...................................... 2,190,138 1,638,476
NSI Stock Fund ................................. 480,967 303,025
International Fund ............................. 154,648 0
58,506,055 47,451,949
NET ASSETS AVAILABLE FOR BENEFITS .................. $58,627,748 $47,552,987
The accompanying notes are an integral part of these statements.
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LITHONIA LIGHTING PROFIT SHARING AND
RETIREMENT PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION, FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
Diversified Stable NSI
Balanced Equity Value Stock Loan Internat'l
Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
CONTRIBUTIONS:
Employer ............................ $ 470,752 $ 523,110 $ 442,106 $ 22,024 $ 0 $ 7,550 $ 1,465,542
Participant ......................... 1,153,295 1,344,307 1,086,075 62,578 0 22,513 3,668,768
Total contributions ....... 1,624,047 1,867,417 1,528,181 84,602 0 30,063 5,134,310
NET GAIN FROM INVESTMENT IN NSI DC TRUST 3,901,544 4,319,782 1,507,547 128,230 140,169 4,444 10,001,716
BENEFITS PAID TO PARTICIPANTS ........... (850,659) (872,480) (2,159,963) (68,111) (96,409) (881) (4,048,503)
INTRAPLAN TRANSFERS ..................... 352,765 (473,845) (542,205) 33,866 507,901 121,518 0
OTHER ................................... (6,485) (21,571) 15,310 0 0 (16) (12,762)
NET INCREASE ............................ 5,021,212 4,819,303 348,870 178,587 551,661 155,128 11,074,761
NET ASSETS AVAILABLE FOR BENEFITS,
December 31, 1994 ....................... 12,723,884 11,894,022 20,992,784 303,820 1,638,477 0 47,552,987
NET ASSETS AVAILABLE FOR BENEFITS,
December 31, 1995 ....................... $ 17,745,096 $ 16,713,325 $ 21,341,654 $ 482,407 $ 2,190,138 $ 155,128 $ 58,627,748
</TABLE>
The accompanying notes are an integral part of this statement.
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LITHONIA LIGHTING PROFIT SHARING AND
RETIREMENT PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 1995 AND 1994
1. PLAN DESCRIPTION
The following brief description of the Lithonia Lighting Profit Sharing and
Retirement Plan for Salaried Employees (the "Plan") of Lithonia Lighting
Company (the "Company"), a division 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, as amended and restated effective September 1, 1989 and as
further amended through September 1, 1993, is a defined contribution plan
established under the provisions of Section 401(a) of the Internal Revenue
Code ("IRC"). The Plan covers all nonunion, salaried, nonhourly employees
of the Company who have one year of service, as defined, and who are 21
years of age. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
Contributions
Contributions are made by the participants and the Company. Participants
may elect to contribute between 1% and 15% of before-tax compensation, as
defined in the Plan, subject to certain limitations under the IRC. The
Company provides a matching contribution in an amount equal to 50% of each
participant's contributions, up to 6% of compensation for the plan year.
For any plan year in which the Company's net profits, as defined, equal or
exceed $6,000,000, the Company will make a profit-sharing contribution
equal to 2% of the net profits for the plan year, less the aggregate
matching contribution for the plan year.
If 2% of net profits, plus any forfeitures of nonvested participant
accounts, less matching contributions, equals or exceeds 30% of the 2% of
net profits, plus forfeitures, then such 30% is allocated among
participants on the basis of service credits, as defined. The remainder of
the profit-sharing contribution is allocated to participants who made
elective deferrals during the plan year and who are employed on the last
day of the plan year. This allocation is based on the relative elective
deferrals, up to 6% of compensation. If the 30% criteria is not met, the
entire profit-sharing contribution is allocated to participants on the
basis of service credits.
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Vesting
Participants are 100% vested in their voluntary contributions. Vesting of
employer contributions occurs on an increasing scale ranging from 10% after
one year of service, as defined, to 100% after seven years of service.
Nonvested employer contributions are forfeited upon withdrawal or
termination, as defined, from the Plan and are added to the employer
contribution for allocation to remaining participants based on service
credits.
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").
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
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, 6,550,609 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.
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The separate investment options offered by the Plan are:
* 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.
Loans to Participants
The Plan permits loans to participants up to the lower of 50% of the
particular participant's vested account balance or $50,000. A participant
has 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 upon death, disability, or retirement (age 65). These
benefits are payable in a lump-sum amount. A participant who terminated
employment with the Company for reasons other than these 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 distributed in
the form of shares of NSI common stock, with fractional shares paid in
cash.
Hardship withdrawals may be made upon proven financial hardship of a
participant, as defined in the plan agreement and as 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, the
participants are vested in the amounts allocated to their respective
accounts; however, the accounts shall continue to be held by the trustee
until such time as the participants terminate their employment or otherwise
become entitled to such vested benefits under the provisions of the Plan.
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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.
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 of the 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 as follows:
Lithonia Lighting Profit Sharing and Retirement Plan for
Salaried Employees .......................................... $10,001,716
All other NSI plans ............................................. 18,471,257
Total ............................................. $28,472,973
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Net Assets
Net assets of the NSI DC Trust are as follows at December 31, 1995 and
1994:
1995 1994
Mutual fund ......................... $ 47,636,487 $ 32,108,552
Common/collective trust ............. 48,146,903 34,036,863
Guaranteed investment contracts ..... 55,129,605 52,672,980
Loans receivable from participants .. 6,104,302 5,145,365
NSI common stock .................... 7,637,554 4,925,868
Money market fund ................... 1,377,443 3,343,227
Pooled separate account ............. 871,467 0
166,903,761 132,232,855
Cash ................................ 127,031 0
167,030,792 132,232,855
Accrued investment income ........... 76,779 74,167
Adjustments for pending trades ...... (211,964) (149,089)
Other ............................... 49,961 7,738
Net assets ............ $ 166,945,568 $ 132,165,671
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
and 1994:
1995 1994
Lithonia Lighting Profit Sharing and
Retirement Plan for Salaried Employees ........ $ 58,506,055 $ 47,451,949
All other plans ................................ 108,439,513 84,713,722
Total ............................. $166,945,568 $132,165,671
Investment in NSI Common Stock
As of December 31, 1995 and 1994, approximately 4.6% and 3.7%,
respectively, of the NSI DC Trust's net assets were invested in the common
stock of NSI, a party in interest to the Plan.
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4. TAX STATUS
The Plan has received a favorable determination letter from the Internal
Revenue Service dated September 5, 1986, stating that the Plan, as
designed, is in accordance with plan design requirements as of that date.
The Plan has been amended since receiving the determination letter, and a
request for a new determination letter has been filed. 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 and 1994.
5. NONEXEMPT TRANSACTIONS
Due to an administrative error, participant contributions to the Plan for
certain company payroll periods from December, 1993 through April, 1994
were not deposited to the NSI DC Trust in a timely manner. These
contributions, together with appropriate earnings, have been deposited into
the Trust. (See Schedule I)
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SCHEDULE I
LITHONIA LIGHTING PROFIT SHARING AND
RETIREMENT PLAN FOR SALARIED EMPLOYEES
ITEM 27e-SCHEDULE OF NONEXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
Description of Transactions,
Including Maturity Date,
Relationship to Plan, Employer, or Rate of Interest, Collateral, and
Identity of Party Involved Other Party in Interest Par or Maturity Value Amount
<S> <C> <C> <C>
Lithonia Lighting Sponsor Participant contributions for certain $321,492
Company, a division payroll periods from December, 1993 to
of National Service April, 1994 were not timely remitted to
Industries, Inc. the trust.
</TABLE>
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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 Lithonia Lighting
Profit-Sharing and Retirement Plan for Salaried Employees.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Atlanta, Georgia
June 21, 1996
