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Exhibit Index on Page 2
FORM 11-K
UNITED STATES
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.
For the fiscal year ended: December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
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 401(k) Plan for Hourly 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
Statement of Net Assets Available for Benefits as of December 31, 1999
Statement of Changes in Net Assets Available for Benefits for the
Period from Inception (January 1, 1999) through December 31, 1999
Notes to Financial Statements
2. Exhibits
Sequentially
Numbered
The following exhibit is filed with this report: Page
23 Consent of Arthur Andersen LLP 10
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 Ligthing 401(k) Plan for Hourly Employees
Date: November 3, 2000 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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Lithonia Lighting 401(k)Plan for Hourly Employees
Financial Statements
as of December 31, 1999
Together With Auditors' Report
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of
Lithonia Lighting 401(k) Plan for Hourly Employees:
We have audited the accompanying statement of net assets available for benefits
of LITHONIA LIGHTING 401(k) PLAN FOR HOURLY EMPLOYEES as of December 31,1999 and
the related statement of changes in net assets available for benefits for the
period from inception (January 1, 1999) through December 31, 1999. 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 auditing standards generally accepted
in the United States. 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, 1999 and the changes in its net assets available for benefits for
the period from inception (January 1, 1999) through December 31, 1999 in
conformity with accounting principles generally accepted in the United States.
Atlanta, Georgia
September 8, 2000
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LITHONIA LIGHTING 401(k) PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999
INVESTMENT IN NSI DC TRUST,
at fair value (Notes 2 and 3) $94,343
PARTICIPANT CONTRIBUTIONS RECEIVABLE 1,566
---------
NET ASSETS AVAILABLE FOR BENEFITS $95,909
=========
The accompanying notes are an integral part of this statement.
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LITHONIA LIGHTING 401(k) PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE PERIOD FROM INCEPTION (JANUARY 1, 1999) THROUGH DECEMBER 31, 1999
PARTICIPANT CONTRIBUTIONS $92,283
NET GAIN FROM INVESTMENT IN NSI DC TRUST (Note 3) 5,445
BENEFITS PAID TO PARTICIPANTS (1,819)
---------
NET INCREASE 95,909
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period 0
---------
End of period $95,909
=========
The accompanying notes are an integral part of this statement.
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LITHONIA LIGHTING 401(k) PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. PLAN DESCRIPTION
The following is a brief description of the Lithonia Lighting 401(k) Plan for
Hourly Employees (the "Plan") of the Lithonia Lighting Division of National
Service Industries, Inc. (Georgia) and the Lithonia Lighting Division of NSI
Enterprises, Inc. (together, the "Employer"). Both National Service Industries,
Inc. of Georgia and NSI Enterprises, Inc. are wholly owned subsidiaries of
National Service Industries, Inc. ("NSI"). This description is provided for
informational purposes only. Participants should refer to the plan agreement for
a complete description.
General
The Plan was adopted effective January 1, 1999 (inception) and is a defined
contribution plan established under the provisions of Section 401(a) of the
Internal Revenue Code (IRC) with a 401(k) feature. The Plan covers hourly
employees of the Employer who are members of any group which has been designated
by the company as an eligible group and who have completed six months of
service, as defined, and who are at least 21 years of age. Entry dates are the
first day of each calendar month. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended.
Contributions
Only the participants make contributions; no employer contributions are
permitted. 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.
Vesting
Participants are always fully vested in their voluntary contributions and the
earnings thereon.
Administration
The responsibility for administration of the Plan rests with the Employer. The
Employer paid all administrative expenses of the Plan during the 1999 plan year.
Participants Accounts
Individual accounts are maintained for each of the Plan's participants to
reflect the particular participant's contributions as well as the participant's
share of the Plan's income and any related investment management fees and
expenses.
Investment in Master Trust
The Plan's assets are commingled in the National Service Industries, Inc.
Defined Contribution Plans Master Trust (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
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and limitations as to the type and amount of securities held. Certain fund
assets are allocated to selected independent investment managers to invest under
these general guidelines.
Institutional Trust Company ("ITC") is the appointed trustee of the NSI DC
Trust.
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 1% increments, with
changes allowed on a daily basis.
The separate investment options offered by the Plan are as follows:
Diversified Equity Fund. This fund is invested in a mutual fund that is
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.
The majority of this fund's assets are investment contracts (GICs) and
synthetic GICs with insurance companies and banks. This fund is
managed by ITC or its affiliates.
Balanced Fund. This fund is invested in a commingled fund that invests 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. This fund is managed by ITC or its affiliates.
NSI Stock Fund. This fund is invested primarily 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. Shares allocated to a participant's account
are voted by the participant on all matters presented to the
shareholders of NSI.
International Fund. This fund is invested in a mutual fund that invests in
the stock of non-U.S. companies and is designed to provide long-term
growth.
S & P 500 Index Fund. This fund is invested in a mutual fund that invests
in all of the stocks in the Standard & Poor's 500 Composite Stock
Price Index.
Small Company Growth Fund. This fund is invested in a mutual fund that
invests in small or emerging companies that show potential for
increased size and profitability. The fund seeks little or no current
income. This fund is managed by ITC or its affiliates.
Bond Index Fund. This fund is invested in a collective trust that invests
in a well-diversified portfolio that is representative of the domestic
investment-grade bond market, and is designed to match the returns of
the Lehman Brothers Aggregate Bond Index.
Loans to Participants
Loans to participants are not permitted.
Benefits
A participant or his/her beneficiary is entitled to receive the distribution of
his/her vested account balance upon death, disability, retirement (age 65), or
other termination of employment. These benefits are payable in a lump-sum
amount.
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Benefits are payable in cash, except that any portion of a participant's account
balance which is invested in the NSI Stock Fund may be distributed in the form
of shares of NSI common stock, with fractional shares paid in cash, at the
request of the participant.
Hardship withdrawals may be made upon proven financial hardship of a
participant, as defined in the plan agreement and as approved by the plan
administrator.
Plan Termination
Although the Employer intends for the Plan to be permanent, the Plan provides
that the Employer 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.
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 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 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 NSI DC Trust are fully benefit-responsive and are therefore
carried at contract value (cost plus accrued interest) by the NSI DC Trust in
accordance with Statement of Position 94-4, "Reporting of Investment Contracts
Held by Health and Welfare Benefit Plans and Defined Contribution Pension
Plans." At December 31, 1999, contract value approximates fair value. At
December 31, 1999, the weighted average crediting interest rate was 6.18%. For
the year ended December 31, 1999, the annual yield on the GICs held by the NSI
DC Trust was 6.4%. For certain of the GICs held by the NSI DC Trust, crediting
interest rates may be changed if certain events occur, 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 issuers to meet
interest or principal payments, or both, as they become due.
Certain GICs included in the NSI DC Trust are synthetic; that is, the NSI DC
Trust owns certain fixed income securities, and the contract issuer provides a
"wrapper" that guarantees a fixed rate of return and provides benefit
responsiveness. At December 31, 1999, the fair value of the underlying assets of
the synthetic GICs (determined from quoted market prices) was $54,030,000 and
the value of the related wrapper contracts was $990,000.
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3. NSI DC TRust
Investment Income
Investment income of the NSI DC Trust for the year ended December 31, 1999 is
summarized as follows:
Interest income $ 4,392,012
Dividends on NSI common stock 492,305
Net depreciation in fair value of NSI common stock (3,126,435)
Net loss from common/collective trusts (389,640)
Net income from mutual funds 21,103,949
------------
Total investment income $22,472,191
============
Net Assets
The net assets of the NSI DC Trust are as follows as of December 31, 1999:
Mutual funds $150,101,844
Common/collective trusts 61,734,231
Guaranteed investment contracts 62,398,546
NSI common stock 11,026,746
Loans receivable from participants 7,942,464
Cash equivalents 4,873,957
-------------
298,077,788
Accrued investment income 23,712
Adjustments for pending trades 219,969
Accrued expenses and other (28,248)
-------------
Net assets $298,293,221
=============
The allocation of the net assets of the NSI DC Trust to participating plans is
based on participant units and is as follows as of December 31, 1999:
<TABLE>
<CAPTION>
Amount Percent
<S> <C> <C>
Lithonia Lighting 401(k) Plan for Hourly Employees $ 94,343 0.03%
All other plans 298,198,878 99.97
------------- -----------
Total $298,293,221 100.00%
============= ===========
Investment in NSI Common Stock>
</TABLE>
As of December 31, 1999, approximately 3.7% 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 yet applied for a determination letter from the Internal
Revenue Service. 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, 1999.
