<PAGE> 1
As filed with the Securities and Exchange Commission on July 23, 1998
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
SERVICE EXPERTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 62-1639453
(State or other juris- (I.R.S. Employer
diction of incorporation Identification No.)
or organization)
Six Cadillac Drive, Suite 400
Brentwood, Tennessee 37027
(Address of Principal Executive Offices)
(Zip Code)
--------------------
SERVICE EXPERTS, INC.
AMENDED 1996 INCENTIVE STOCK PLAN
AMENDED 1996 EMPLOYEE STOCK PURCHASE PLAN
1997 NONQUALIFIED STOCK OPTION PLAN
AMENDED 1997 NONQUALIFIED STOCK PURCHASE PLAN AND
AMENDED SERVICE CENTER STOCK OPTION PLAN
(Full title of the plan)
Alan R. Sielbeck Copies to:
Service Experts, Inc. J. Chase Cole, Esq.
Six Cadillac Drive, Suite 400 Waller Lansden Dortch & Davis,
Brentwood, Tennessee 37027 A Professional Limited Liability Company
(Name and address of agent for service) 2100 Nashville City Center
(615) 371-9990 511 Union Street
(Telephone number, including area code, Nashville, Tennessee 37219
of agent for service)
<TABLE>
<CAPTION>
================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered(1) Per Share Price Registration Fee
================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, $.01 par 302,353 shares $31.14 $9,415,272.42 $2,778
value (2)
- ----------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par 71,087 shares $21.36 $1,518,418.32 $448
value (3)
- ----------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par 184,870 shares $32.08 $5,930,629.60 $1,750
value (4)
- ----------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par 5,112 shares $21.36 $109,192.32 $32
value (5)
- ----------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par 259,321 shares $27.35 $7,092,429.35 $2,092
value (6)
- ----------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par 782,681 shares (8) $36.44 $28,518,938.94 $8,413
value (7)
- ----------------------------------------------------------------------------------------------------------------
Total 1,605,424 shares $32.75 $52,584,880.95 $15,513
================================================================================================================
</TABLE>
(1) 1,300,000 and 350,000 shares of Common Stock are authorized for issuance
under the Amended 1996 Incentive Stock Plan and Amended 1996 Employee
Stock Purchase Plan, respectively, of which 700,000 and 100,000 shares,
respectively, were registered on the Company's Registration Statement on
Form S-8 (Reg. No. 333-11791).
(2) Represents 302,353 shares reserved for issuance at the weighted average
exercise price of $31.14 per share pursuant to options previously granted
under the Amended 1996 Incentive Stock Plan.
(3) Represents 71,087 shares reserved for issuance at the weighted average
exercise price of $21.36 per share pursuant to options previously
granted under the Amended 1996 Employee Stock Purchase Plan.
(4) Represents 184,870 shares reserved for issuance at the weighted average
exercise price of $32.08 per share pursuant to options previously granted
under the Amended 1997 Nonqualified Stock Option Plan.
(5) Represents 5,112 shares reserved for issuance at the weighted average
exercise price of $21.36 per share pursuant to options previously granted
under the Amended 1997 Nonqualified Stock Purchase Plan
(6) Represents 259,321 shares reserved for issuance at the weighted average
exercise price of $27.35 per share pursuant to options previously granted
under the Amended Service Center Stock Option Plan.
(7) Represents 297,647, 178,913, 87,330, 144,888 and 73,903 shares reserved
for issuance pursuant to future grants of stock options under the Amended
1996 Incentive Stock Plan, Amended 1996 Employee Stock Purchase Plan, the
1997 Nonqualified Stock Option Plan, the Amended 1997 Nonqualified Stock
Purchase Plan, and the Amended Service Center Stock Option Plan,
respectively.
(8) Estimated solely for purposes of determining the amount of the
registration fee, in accordance with Rules 457(c) and (h)(1) under the
Securities Act of 1933, as amended, and based upon the average of the
high and low sales price on July 20, 1998.
<PAGE> 2
EXPLANATORY NOTE
The Reoffer Prospectus which is filed as a part of this Registration
Statement has been prepared in accordance with the requirements of Part I of
Form S-3 and may be used for reoffers or resales of the common stock, $.01 par
value per share (the "Common Stock"), of Service Experts, Inc., a Delaware
corporation (the "Company"), acquired by "affiliates" (as such term is defined
in Rule 405 promulgated under the Securities Act of 1933, as amended (the
"Securities Act")) and by holders of shares of Common Stock issued under certain
employee benefit plans of the Company which shares constitute "restricted
securities" as defined in Rule 144(a)(3) under the Securities Act, pursuant to
the exercise of options under the Company's Amended 1996 Incentive Stock Plan,
Amended 1996 Employee Stock Purchase Plan, 1997 Nonqualified Stock Option Plan,
Amended 1997 Nonqualified Stock Purchase Plan and Amended Service Center Stock
Option Plan.
<PAGE> 3
Reoffer Prospectus
1,605,424 SHARES
SERVICE EXPERTS, INC.
COMMON STOCK
This Reoffer Prospectus (the "Prospectus") is being used in connection with
the reoffer or resale of shares of Common Stock, $.01 par value per share (the
"Common Stock"), of Service Experts, Inc., a Delaware corporation (the
"Company"), by certain "affiliates" of the Company (as such term is defined in
Rule 405 promulgated under the Securities Act of 1933, as amended (the
"Securities Act")), and employees of the Company (the "Selling Stockholders")
who hold shares of Common Stock issued under certain employee benefit plans of
the Company which shares constitute "restricted securities" as defined in Rule
144(a)(3) promulgated under the Securities Act, which have been or may be
acquired by them and are available to be resold by them pursuant to the
Company's Amended 1996 Incentive Stock Plan (the "Incentive Plan"), Amended 1996
Employee Stock Purchase Plan (the "Purchase Plan"), 1997 Nonqualified Stock
Option Plan (the "Nonqualified Option Plan"), Amended 1997 Nonqualified Stock
Purchase Plan (the "Nonqualified Purchase Plan") and the Amended Service Center
Option Plan (the "Service Center Plan") (collectively, the "Plans").
The shares may be offered by the Selling Stockholders from time to time in
transactions on the New York Stock Exchange, in negotiated transactions, through
the writing of options on the shares, or a combination of such methods of sale,
at prices related to prevailing market prices, or at negotiated prices. The
Selling Stockholders may effect such transactions by selling the shares to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Stockholders
and/or the purchasers of the shares for whom such broker-dealers may act as
agent or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
None of the proceeds from the sale of the shares by any of the Selling
Stockholders will be received by the Company. The Company has agreed to bear all
expenses (other than underwriting discounts and selling commissions, and fees
and expenses of counsel and other advisors to the Selling Stockholders) in
connection with the registration of the shares being offered by such Selling
Stockholders.
---------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------------------------
July 23, 1998
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
AVAILABLE INFORMATION..........................................................3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................4
SERVICE EXPERTS, INC...........................................................5
USE OF PROCEEDS................................................................5
SELLING STOCKHOLDERS...........................................................6
PLAN OF DISTRIBUTION...........................................................6
LEGAL MATTERS..................................................................7
EXPERTS........................................................................7
</TABLE>
2
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). The Company has furnished and intends to furnish
reports to its stockholders, which will include financial statements audited by
its independent certified public accounts, and such other reports as it may
determine to furnish or as required by law, including Sections 13(a) and 15(d)
of the Exchange Act. Proxy statements, reports and other information concerning
the Company can be inspected and copied at the Commission's office at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at its regional offices
located in the Northwestern Atrium Center, Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661; and 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains an Internet Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically, and the address of such site is
http://www.sec.gov. The Company's Common Stock is listed on the New York Stock
Exchange. Proxy statements, reports and other information concerning the Company
can be inspected and copied at the offices of the New York Stock Exchange
located at 20 Broad Street, New York, New York 10005.
The Company has filed a registration statement (the "Registration
Statement") on Form S-8 with respect to the Common Stock offered hereby with the
Commission under the Securities Act. This Prospectus, which constitutes a part
of the Registration Statement, does not contain all of the information set forth
in the Registration Statement, certain items of which are contained in schedules
and exhibits to the Registration Statement as permitted by the rules and
regulations of the Commission. Statements contained in this Prospectus as to the
contents of any agreement, instrument or other document referred to are not
necessarily complete. With respect to each such agreement, instrument or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERINGS HEREIN CONTAINED AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY, THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT ANY INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
3
<PAGE> 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated herein by reference as of the dates thereof:
(1) Annual Report on Form 10-K for the year ended December 31, 1997;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
(3) Current Report on Form 8-K dated January 8, 1998; and
(4) The description of the Common Stock contained in the Registration
Statement on Form 8-A, filed pursuant to Section 12 of the Exchange
Act on May 23, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Common Stock shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus. Subject to the foregoing, all information appearing herein
is qualified in its entirety by the information appearing in the documents
incorporated herein by reference.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF
THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE
INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH DOCUMENTS).
REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO ANTHONY M. SCHOFIELD, SERVICE
EXPERTS, INC., SIX CADILLAC DRIVE, SUITE 400, BRENTWOOD, TENNESSEE 37027
(TELEPHONE NUMBER 615-371-9990).
4
<PAGE> 7
SERVICE EXPERTS, INC.
The Company is one of the leading providers of residential heating,
ventilating and air conditioning ("HVAC") services and replacement equipment in
the United States, and management believes the Company will continue to be a
leading consolidator of the fragmented HVAC service and replacement industry. As
of the date of this Prospectus, the Company operates 85 HVAC service and
replacement businesses ("Service Centers") in 32 states and owns Contractor
Success Group, Inc., a company that provides HVAC businesses proprietary
products, as well as marketing, management, educational and advisory services.
The Service Centers install, service and maintain central air conditioners,
furnaces and heat pumps, primarily in existing homes. Management estimates that
in 1997 over 80% of the Company's pro forma net revenue was derived from
replacing, maintaining and servicing HVAC equipment at existing residences and
to the sale of ancillary products such indoor air quality devices and services.
The Company focuses on the service and replacement segment of the HVAC industry
rather than the new construction segment because management believes that the
service and replacement segment exposes the Company to less credit risk and
offers higher margins.
The executive offices of the Company are located at Six Cadillac Drive,
Suite 400, Brentwood, Tennessee 37027, and its telephone number is 615-371-9990.
The shares of Common Stock offered hereby have been or will be purchased by
the Selling Stockholders upon exercise of options granted to them and will be
sold for the account of the Selling Stockholders.
USE OF PROCEEDS
All of the shares of Common Stock are being offered by the Selling
Stockholders. The Company will not receive any proceeds from the sale of shares
of Common Stock by any of the Selling Stockholders as contemplated herein.
5
<PAGE> 8
SELLING STOCKHOLDERS
The following table shows (i) the name of each of the Selling Stockholders
who may be considered "affiliates" of the Company within the meaning of the
Securities Act (the "Affiliates"); (ii) the number of shares of Common Stock
held by each Affiliate as of July 15, 1998; (iii) the number of such shares of
Common Stock covered by this Prospectus; and (iv) the amount and the percentage
of the Common Stock to be owned by each Selling Stockholder after completion of
this offering, assuming the sale of all shares of Common Stock covered by this
Prospectus:
<TABLE>
<CAPTION>
SHARES OWNED PERCENTAGE
POTENTIAL AS OF SHARES SHARES OWNED OF
SELLING STOCKHOLDER JULY 15, 1998 (1) OFFERED AFTER OFFERING CLASS (2)
- ------------------- ----------------- ------- -------------- ---------
<S> <C> <C> <C> <C>
Alan R. Sielbeck 821,252 40,000 781,252 5.0%
Ronald L. Smith 64,324 40,000 24,324 *
Alfred W. Taylor III 40,000 40,000 0 *
Anthony M. Schofield 43,000 0 43,000 *
Norman T. Rolf, Jr. 138,341 17,778 120,563 *
</TABLE>
- ---------------
* Indicates less than 1% ownership.
(1) Includes shares of Common Stock underlying options granted to such
Selling Stockholders under the Amended 1996 Incentive Stock Plan and
the 1997 Nonqualified Stock Option Plan, whether or not exercisable as
of or within 60 days of July 15, 1998.
(2) Computation based upon 16,549,473 shares outstanding on July 15, 1998.
The preceding table reflects all Affiliates who are eligible to reoffer and
resell Common Stock, whether or not they have a present intent to do so. At the
date of this Prospectus, the Company does not know the names of any persons who
intend to resell shares of Common Stock of the Company acquired pursuant to the
Plans. There can be no assurance that any of the Selling Stockholders will sell
any or all of the Common Stock offered by them hereunder. The Selling
Stockholders will be employees or executive officers of the Company or its
subsidiaries who have been or may be granted options under the Plans. The
Company will supplement this Prospectus with the names of the Selling
Stockholders not shown in the table above and the amount of shares of Common
Stock to be reoffered by them as that information becomes known, unless such
Selling Stockholders are not Affiliates and are selling no more than the lesser
of 1,000 shares or one percent of the shares issuable under the applicable Plan.
PLAN OF DISTRIBUTION
The shares of Common Stock being offered by the Selling
Stockholders are offered for their own accounts. The Company will not receive
any of the proceeds from any eventual sales of such shares of Common Stock. The
shares may be offered by the Selling Stockholders from time to time in
transactions on the New York Stock Exchange, in negotiated transactions, through
the writing of options on the shares, or a combination of such methods of sale,
at prices related to prevailing market prices, or at negotiated prices.
6
<PAGE> 9
The Selling Stockholders may effect such transactions by selling the shares to
or through broker-dealers, and such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the Selling Stockholders
and/or the purchasers of the shares for which such broker-dealers may act as
agent or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
LEGAL MATTERS
Certain legal matters with respect to the validity of the shares of Common
Stock offered hereby have been passed upon by Waller Lansden Dortch & Davis, A
Professional Limited Liability Company, Nashville, Tennessee, counsel to the
Company.
EXPERTS
The consolidated financial statements of Service Experts, Inc. and the
combined financial statements of Parrot Mechanical, Inc. et al. incorporated by
reference in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, to the extent indicated in their
reports thereon incorporated by reference. Such financial statements have been
incorporated herein by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
7
<PAGE> 10
Prospectus
1,605,424 SHARES
SERVICE EXPERTS, INC.
COMMON STOCK
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents incorporated by reference into Item 3 of Part II of this
Registration Statement (not including exhibits to the information that is
incorporated by reference, unless such exhibits are specifically incorporated by
reference into the information that this Registration Statement incorporates)
are incorporated by reference into the Section 10(a) prospectus, and are
available, without charge, to the participants upon written or oral request to
Anthony M. Schofield, Service Experts, Inc., Six Cadillac Drive, Suite 400,
Brentwood, Tennessee 37027 (telephone number 615-371-9990).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
by the Registrant are incorporated herein by reference as of the dates thereof:
(1) Annual Report on Form 10-K for the year ended December 31, 1997;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31,
1998;
(3) Current Report on Form 8-K dated January 8, 1998; and
(4) The description of the Common Stock contained in the Registration
Statement on Form 8-A, filed pursuant to Section 12 of the Exchange Act on
May 23, 1997.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing such documents. Any statements contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained herein (or in any other
subsequently filed document which is also incorporated by reference herein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof except as so modified or
superseded.
<PAGE> 11
ITEM 4. Description of Securities.
Not applicable.
ITEM 5. Interests of Named Experts and Counsel.
Not applicable.
ITEM 6. Indemnification of Directors and Officers.
(a) The Delaware General Corporation Law ("DGCL") provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of such person's status as a current or former
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and settlements
actually and reasonably incurred by such person provided such person acted (i)
in good faith, (ii) in a manner reasonably believed to be in or not opposed to
the best interests of the corporation and (iii) with respect to a criminal
action, had no reasonable cause to believe such person's conduct was unlawful.
The termination of an action, suit or proceeding by a judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent shall
not create a presumption that a person did not meet the standard of conduct set
forth above. In actions brought by or in the right of the corporation, however,
the DGCL provides that no indemnification may be made if the person was adjudged
to be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. To the extent
that a present or former director or officer of the corporation is successful,
on the merits or otherwise, in the defense of any proceeding instigated because
of his or her status as a director or officer, the DGCL mandates that the
corporation indemnify such person against expenses (including attorneys' fees)
incurred by such person in connection with such proceeding. The corporation may
advance litigation expenses, including attorneys' fees, to an officer or
director who is a party to a proceeding upon such persons' undertaking to repay
such amount if it shall ultimately be determined that such person is not
entitled to indemnification. The indemnification and advancement of expenses
under the DGCL are not deemed exclusive of any other rights to which a person
may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
(b) Article VII of the Registrant's Restated Certificate of
Incorporation provides as follows:
(i) The Corporation shall indemnify, and upon request
shall advance expenses (including attorneys' fees) to, in the
manner and to the fullest extent permitted by law, any officer
or director (or the estate of any such person) who was or is a
party to, or is threatened to be made a party to, any
threatened, pending or completed action, suit or proceeding,
whether civil,
2
<PAGE> 12
criminal, administrative, investigative or otherwise, by
reason of the fact that such person is or was a director or
officer of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, partner,
trustee, employee or agent of another corporation,
partnership, joint venture, trust, other enterprise or
employee benefit plan (an "indemnitee"). The Corporation
may, to the fullest extent permitted by law, purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust,
other enterprise or employee benefit plan against any
liability which may be asserted against such person. To the
fullest extent permitted by law, the indemnification and
advances provided for herein shall include expenses
(including attorneys' fees), judgments, penalties, fines and
amounts paid in settlement. The indemnification provided
herein shall not be deemed to limit the right of the
Corporation to indemnify any other person for any such
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement to the fullest extent permitted
by law, both as to action in his official capacity and as to
action in another capacity while holding such office.
(ii) Notwithstanding the foregoing, the Corporation
shall not indemnify any such indemnitee who was or is a party
or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the
Corporation to secure a judgment in its favor against such
indemnitee with respect to any claim, issue or matter as to
which the indemnitee shall have been adjudged to be liable to
the Corporation, unless and only to the extent that, the Court
of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances
of the case, such indemnitee is fairly and reasonably entitled
to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(iii) The rights to indemnification and advancement
of expenses set forth in this Article VII are intended to be
greater than those which are otherwise provided for in the
General Corporation Law of the State of Delaware, are
contractual between the Corporation and the person being
indemnified, his heirs, executors and administrators, and,
with respect to this Article VII are mandatory,
notwithstanding a person's failure to meet the standard of
conduct required for permissive indemnification under the
General Corporation Law of the State of Delaware, as amended
from time to time. The rights to indemnification and
advancement of expenses set forth in this Article VII are
nonexclusive of other similar rights which may be granted by
law, this Certificate, the Bylaws, a resolution of the Board
of Directors or stockholders or an agreement with the
Corporation, which means of indemnification and advancement of
expenses are hereby specifically authorized.
(iv) Any repeal or modification of the provisions of
this Article VII, either directly or by the adoption of an
inconsistent provision of this
3
<PAGE> 13
Certificate, shall be prospective only and shall not
adversely affect any right or protection set forth herein
existing in favor of a particular individual at the time of
such repeal or modification. In addition, if an amendment to
the General Corporation Law of the State of Delaware limits
or restricts in any way the indemnification rights permitted
by law as of the date hereof, such amendment shall apply
only to the extent mandated by law and only to activities of
persons subject to indemnification under this Article VII
which occur subsequent to the effective date of such
amendment.
(c) The Company has obtained insurance for its directors and
executive officers in amounts of $5,000,000 per claim and $5,000,000 for
annual aggregate claims.
(d) The Amended 1996 Employee Stock Purchase Plan and Amended
1997 Nonqualified Stock Purchase Plan each provide that, with respect to the
administration of the plan, the Company shall indemnify each present and future
member of the Compensation Committee and the Board of Directors against, and
each member of the Compensation Committee and the Board of Directors shall be
entitled without further act on his or her part to indemnity from the Company,
for all expenses (including the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him or her in
connection with or arising out of any action, suit or proceeding in which he or
she may be involved by reason of his or her being or having been a member of the
Compensation Committee and the Board of Directors, whether or not he or she
continues to be such a member at the time of incurring such expenses; provided,
however, that such indemnity shall not include any expenses incurred by any such
member (i) in respect of matters as to which he or she shall be finally adjudged
in any such action, suit or proceeding to have been guilty of gross negligence
or willful misconduct in the performance of his or her duty as such a member of
the Compensation Committee and the Board of Directors or (ii) in respect of any
matter in which any settlement is effected, to an amount in excess of the amount
approved by the Company on the advice of its legal counsel; and provided,
further, that no right of indemnification under the provisions described above
shall be available to or enforceable by any such member unless, within 60 days
after institution of any such action, suit or proceeding, he or she shall have
offered the Company, in writing, the opportunity to handle and defend the same
at its own expense. The right of indemnification shall inure to the benefit of
the heirs, executors, or administrators of each such member of the Compensation
Committee and the Board of Directors and shall be in addition to all other
rights to which such member of the Compensation Committee or Board of Directors
may be entitled as a matter of law, contract or otherwise.
ITEM 7. Exemption from Registration Claimed.
Shares of Common Stock previously issued under the Company's
Amended 1996 Incentive Stock Plan, Amended 1996 Employee Stock Purchase Plan,
1997 Nonqualified Stock Option Plan, Amended 1997 Nonqualified Stock Purchase
Plan and Amended Service Center Stock Option Plan, including the granting of
options to purchase shares of Common Stock, were so issued or granted in
reliance upon Section 4(2) of the Securities Act.
4
<PAGE> 14
ITEM 8. Exhibits.
<TABLE>
<S> <C> <C>
4.1 - Restated Certificate of Incorporation of the Registrant (a)
4.2 - Bylaws of the Registrant (a)
4.3 - Form of Common Stock Certificate (b)
5 - Opinion of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company
23.1 - Consent of Ernst & Young LLP
23.2 - Consent of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company (contained in their opinion filed
as Exhibit 5 to this Registration Statement)
24 - Power of Attorney (included on the signature page)
99.1 - Registrant's 1996 Incentive Stock Plan (a)
99.2 - Amendment No. 1 to 1996 Incentive Stock Plan
99.3 - Amendment No. 2 to 1996 Incentive Stock Plan
99.4 - Registrant's 1996 Employee Stock Purchase Plan (a)
99.5 - Amendment No. 1 to 1996 Employee Stock Purchase Plan
99.6 - Amendment No. 2 to 1996 Employee Stock Purchase Plan
99.7 - Registrant's 1997 Nonqualified Stock Option Plan (c)
99.8 - Registrant's 1997 Nonqualified Stock Purchase Plan (c)
99.9 - Amendment No. 1 to 1997 Nonqualified Stock Purchase Plan
99.10 - Service Center Stock Option Plan
99.11 - Amendment No. 1 to Service Center Stock Option Plan
</TABLE>
- --------------------
(a) Incorporated by reference to the Registrant's Registration Statement
on Form S-1, Registration No. 333-07037.
(b) Incorporated by reference to the Registrant's Registration Statement
on Form 8-A, File No. 000-21173.
(c) Incorporated by reference to the Registrant's Registration Statement
on Form S-4, Registration No. 333-12319.
5
<PAGE> 15
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change of such
information in the Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purposes of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant
6
<PAGE> 16
to Section 15(d) of the Securities Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
7
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Nashville, State of Tennessee, on July 22, 1998.
SERVICE EXPERTS, INC.
By: /s/ Alan R. Sielbeck
--------------------------------------
Alan R. Sielbeck
Chairman, Chief Executive Officer and
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Alan R. Sielbeck and Anthony M. Schofield
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as each might or could do in
person hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Alan R. Sielbeck Chairman of the Board, Chief July 22, 1998
- ------------------------------------ Executive Officer and President
Alan R. Sielbeck (principal executive officer)
/s/ Anthony M. Schofield Chief Financial Officer (principal July 22, 1998
- ------------------------------------ financial and accounting officer)
Anthony M. Schofield
</TABLE>
<PAGE> 18
<TABLE>
<S> <C> <C>
/s/ Raymond J. DeRiggi
- ------------------------------------ Director July 22, 1998
Raymond J. DeRiggi
/s/ Allen L. Hovious
- ------------------------------------ Director July 22, 1998
Allen L. Hovious
/s/ Norman T. Rolf, Jr.
- ------------------------------------ Director July 22, 1998
Norman T. Rolf, Jr.
/s/ William G. Roth
- ------------------------------------ Director July 22, 1998
William G. Roth
- ------------------------------------ Director
Timothy G. Wallace
</TABLE>
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
4.1 - Restated Certificate of Incorporation of the Registrant (a)
4.2 - Bylaws of the Registrant (a)
4.3 - Form of Common Stock Certificate (b)
5 - Opinion of Waller Lansden Dortch & Davis, A Professional Limited
Liability Company
23.1 - Consent of Ernst & Young LLP
23.2 - Consent of Waller Lansden Dortch & Davis, A Professional Limited
Liability Company (contained in their opinion filed as
Exhibit 5 to this Registration Statement)
24 - Power of Attorney (included on the signature page)
99.1 - Registrant's 1996 Incentive Stock Plan (a)
99.2 - Amendment No. 1 to 1996 Incentive Stock Plan
99.3 - Amendment No. 2 to 1996 Incentive Stock Plan
99.4 - Registrant's 1996 Employee Stock Purchase Plan (a)
99.5 - Amendment No. 1 to 1996 Employee Stock Purchase Plan
99.6 - Amendment No. 2 to 1996 Employee Stock Purchase Plan
99.7 - Registrant's 1997 Nonqualified Stock Option Plan (c)
99.8 - Registrant's 1997 Nonqualified Stock Purchase Plan (c)
99.9 - Amendment No. 1 to 1997 Nonqualified Stock Purchase Plan
99.10 - Registrant's Service Center Stock Option Plan
99.11 - Amendment No. 1 to Service Center Stock Option Plan
</TABLE>
- --------------------
(a) Incorporated by reference to the Registrant's Registration Statement on
Form S-1, Registration No. 333-07037.
(b) Incorporated by reference to the Registrant's Registration Statement on
Form 8-A, File No. 000-21173.
(c) Incorporated by reference to the Registrant's Registration Statement on
Form S-4, Registration No. 333-12319.
<PAGE> 1
EXHIBIT 5
July 23, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Service Experts, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
In our capacity as counsel to Service Experts, Inc., a Delaware
corporation (the "Company"), we have examined the Registration Statement on Form
S-8 (the "Registration Statement") in form as proposed to be filed by the
Company under the Securities Act of 1933, as amended, relating to the
registration of 1,605,424 shares of the Common Stock, $.01 par value per share,
of the Company (the "Common Stock"), pursuant to the terms of the Amended 1996
Incentive Stock Plan, the Amended 1996 Employee Stock Purchase Plan, the 1997
Nonqualified Stock Option Plan, the Amended 1997 Nonqualified Stock Purchase
Plan and the Amended Service Center Stock Option Plan (collectively, the
"Plans"). In this regard, we have examined and relied upon such records,
documents and other instruments as in our judgment are necessary or appropriate
in order to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that the shares of
Common Stock referred to in the Registration Statement, to the extent actually
issued pursuant to the Plans and in the manner and on the terms described in the
Plans, will be duly and validly issued, fully paid and nonassessable shares of
the Common Stock of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the reference to us under the
caption "Legal Matters" in the Prospectus included in the Registration
Statement.
Very truly yours,
/s/ Waller Lansden Dortch & Davis,
A Professional Limited Liability Company
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-8 pertaining to the reoffer and resale of
1,605,424 shares of Common Stock issued under Service Experts Inc.'s Amended
1996 Incentive Stock Plan, Amended 1996 Employee Stock Plan, 1997 Nonqualified
Stock Option Plan, Amended 1997 Nonqualified Stock Purchase Plan and Amended
Service Center Stock Option Plan and to the incorporation by reference therein
of: (1) our report dated February 23, 1998, with respect to the consolidated
financial statements of Service Experts, Inc. included in the Annual Report
(Form 10-K) for the year ended December 31, 1997; (2) our report dated December
9, 1997, with respect to the consolidated financial statements of Service
Experts, Inc. as of December 31, 1995 and 1996 and each of the three years in
the period ended December 31, 1996 included in the Form 8-K dated January 8,
1998; and (3) of our report dated November 14, 1997 with respect to the combined
financial statements of Parrott Mechanical, Inc. et al. as of and for the year
ended September 30, 1996 included in the Form 8-K dated January 8, 1998, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Nashville, Tennessee
July 21, 1998
<PAGE> 1
Exhibit 99.2
AMENDMENT TO SERVICE EXPERTS, INC.
1996 INCENTIVE STOCK PLAN
WHEREAS, on August 16, 1996, Service Experts, Inc. (the "Company")
adopted the 1996 Incentive Stock Plan (the "Plan"); and
WHEREAS, the Board of Directors desires to (1) increase the number of
authorized shares available for issuance under the Plan, (2) modify the terms of
the Plan so that compensation amounts payable thereunder will be treated as
"performance based compensation" that is described in Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), and (3) consistent with
modifications to Rule 16b-3 promulgated under the Securities Exchange Act of
1934, provide for approval of amendments to the Plan only in circumstances
described in Sections 162(m) and 422 of the Code;
NOW, THEREFORE, the Plan is hereby amended as follows, effective April
3, 1997:
1. Section 2 of the Plan is hereby amended by deleting the reference to
"700,000 shares of Stock" and replacing such reference with "1,300,000
shares of Stock".
2. The following language is added to the end of Section 4 of the Plan:
No person may receive an Option to purchase more than 250,000 shares
of Stock (subject to increases and adjustments for changes in the
capitalization of the Company) during any three year period.
3. Section 10 of the Plan is deleted in its entirety and restated
as follows:
10. Termination and Amendment of the Plan. The Plan shall terminate on
the date ten years after the adoption of the Plan by the Board of Directors and
no Stock Incentive shall be granted under the Plan after that date, but Stock
Incentives granted before termination of the Plan shall remain exercisable
thereafter until they expire or lapse according to their terms. The Board of
Directors may otherwise sooner amend or terminate this Plan at any time;
provided, however, an amendment that would have a material adverse effect on the
rights of a holder of an existing Stock Incentive is not valid with respect to
such Stock Incentive without the Participant's consent. Provided further that
the shareholders of the Corporation must approve any amendment:
(a) 12 months before or after the date an amendment is adopted that
increases the aggregate number of shares of Stock that may be issued under
Incentive Options or changes the employees (or class of employees) eligible to
receive Incentive Options.
(b) Before the effective date of an amendment that changes the number
of shares in the aggregate which may be issued pursuant to Stock Incentives
granted under the Plan or the maximum number of shares with respect to which any
individual may receive Stock Incentives during any period specified herein,
except pursuant to Article VIII.
(c) Before the effective date of an amendment that increases the
period during which Stock Incentives may be granted or exercised.
IN WITNESS WHEREOF, the undersigned officer has executed this
Amendment pursuant to authority granted by the board of directors of the
Company on this 3rd day of April, 1997.
SERVICE EXPERTS, INC.
By: /s/ Alan R. Sielbeck
------------------------------------
Title: President
--------------------------------
1
<PAGE> 1
Exhibit 99.3
SECOND AMENDMENT TO SERVICE EXPERTS, INC.
1996 INCENTIVE STOCK PLAN
WHEREAS, on August 16, 1996, Service Experts, Inc. (the "Company")
adopted the 1996 Incentive Stock Plan (the "Plan");
WHEREAS, the Plan has been amended effective April 3, 1997, and such
amendment was approved by the stockholders of the Company; and
WHEREAS, the Company desires to further amend the Plan to (1) limit
the acceleration of exercisability of awards under the Plan that occurs upon a
change in control so that no person will be subject to "golden parachute" taxes
under Sections 280G and 4999 of the Internal Revenue Code as a result of such
acceleration, and (2) consistent with modifications to Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, provide for the administration of the
Plan by a committee of two or more directors who are not employees of the
Company.
NOW, THEREFORE, the Plan is hereby amended as follows, effective April
3, 1997:
1. Section 3 of the Plan is deleted in its entirety and restated as
follows:
3. Administration of the Plan. This Plan shall be administered
by the "Committee" that is appointed by the Board of Directors and
consists of not less than two individuals who are members of the Board
of Directors and are not employees of the Company or an "affiliate" of
the Company (as defined in Section 424(f) of the Code), or such other
composition that satisfies Section 162(m)(4)(C) of the Code and Rule
16b-3 promulgated by the Securities and Exchange Commission ("Rule
16b-3"). Subject to the provisions of the Plan, the Committee shall
have full and conclusive authority to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the respective Stock
Incentive agreements (which need not be identical); to determine the
restrictions on transferability of Stock acquired upon exercise of
Options (which restrictions need not be identical); and to make all
other determinations necessary or advisable for the proper
administration of the Plan.
2. Section 6(g) of the Plan is deleted in its entirety and restated as
follows:
(g) Limited Right of Exercise. Upon the occurrence of any of
the following events (each a "Change in Control"), an Option may be
exercised during the Option term as to the lesser of (a) the full
number of shares covered by the Option and (b) the maximum number of
shares covered by the Option to extent that any acceleration of the
right to exercise upon the Change in Control would not cause the
grantee or holder of such Option to be liable for the payment of taxes
pursuant to Section 4999 of the Code:
<PAGE> 2
(1) a tender offer or exchange offer has been made for shares of
Stock, provided that the corporation, person, or other entity making
such offer purchases or otherwise acquires shares of Stock
representing 50% or more of the outstanding shares of Stock pursuant
to such offer; (2) the shareholders of the Corporation have approved a
definitive agreement (the "Agreement") to merge or consolidate with or
into another corporation pursuant to which the Corporation will not
survive or will survive only as a subsidiary of another corporation,
or to sell or otherwise dispose of all or substantially all of its
assets; or (3) any person or group, as such terms are defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), becomes the holder of 50% or more of the
outstanding shares of Stock. If a Change in Control has occurred, the
Option shall be fully exercisable: (x) in the event of (1) above,
during the term of the tender or exchange offer; (y) in the event of
(2) above, within a 30-day period commencing on the date of approval
by the shareholders of the Agreement; or (z) in the event of (3)
above, within a 30-day period commencing on the date upon which the
Corporation is provided a copy of Schedule 13D (filed pursuant to
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) indicating that any person or group has become
the holder of 50% or more of the outstanding shares of Stock or, if
the Corporation is not subject to Section 13(d) of the Exchange Act,
within a 30-day period commencing on the date upon which the
Corporation receives written notice that any person or group has
become the holder of 50% or more of the outstanding shares of Stock.
Notwithstanding the foregoing, no person subject to Section 16(a) of
the Exchange Act with respect to the Stock may sell or otherwise
dispose of Stock acquired pursuant to an Option granted within six
months of the date of sale or other disposition.
3. Section 9(e) of the Plan is deleted in its entirety and restated as
follows:
(e) In the event of any Change in Control in which shares of
Stock are purchased for cash in a tender offer or are to be converted
into cash in a merger, then, unless the Committee otherwise
determines, each Option (other than an Option granted within the last
six months held by a person subject to Section 16(b) of the Exchange
Act) shall be converted into a fully exercisable right to receive an
amount in cash per share subject to such Option equal to (A) in the
case of a tender offer or merger, the excess, if any, of the price
paid in such tender offer or merger over the exercise price of such
Option and (B) in the case of conversion, the excess, if any, of the
highest market price of the Stock on the date of conversion over the
exercise price of such Option; provided, however, that any
acceleration of the right to exercise an Option that occurs under this
Section 6(e) shall be limited to the maximum number of shares covered
by the Option for which the right of acceleration upon the Change in
Control will not cause the grantee or holder of such Option to be
liable for the payment of taxes pursuant to Section 4999 of the Code.
IN WITNESS WHEREOF, the undersigned officer has executed this
Amendment pursuant to authority granted by the board of directors of the
Company on this 3rd day of April, 1997.
SERVICE EXPERTS, INC.
By: /s/ Alan R. Sielbeck
-------------------------------------
Title: President
----------------------------------
<PAGE> 1
Exhibit 99.5
AMENDMENT TO SERVICE EXPERTS, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
WHEREAS, on August 16, 1996, Service Experts, Inc. (the "Company")
adopted the 1996 Employee Stock Purchase Plan (the "Plan"); and
WHEREAS, the Board of Directors desires to increase the number of
authorized shares available for issuance under the Plan;
NOW, THEREFORE, effective April 4, 1997, Article II of the Plan is
hereby amended by deleting the reference to "one hundred thousand (100,000)
shares of Sponsoring Employer Stock" and replacing such reference with "two
hundred thousand (200,000) shares of Sponsoring Employer Stock".
IN WITNESS WHEREOF, the undersigned officer has executed this
Amendment pursuant to authority granted by the Board of Directors of the Company
on this 4th day of April, 1997.
SERVICE EXPERTS, INC.
By: /s/ Alan R. Sielbeck
-----------------------------------
Title: President
---------------------------------
<PAGE> 1
Exhibit 99.6
SECOND AMENDMENT TO SERVICE EXPERTS, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
WHEREAS, on August 16, 1996, Service Experts, Inc. (the "Company")
adopted the 1996 Employee Stock Purchase Plan (the "Plan"); and
WHEREAS, the Plan has been amended effective April 14, 1997, and such
amendment was approved by the stockholders of the Company;
WHEREAS, the Board of Directors desires to increase the number of
authorized shares available for issuance under the Plan;
NOW, THEREFORE, effective April 1, 1998, Article II of the Plan
is hereby amended by deleting the reference to "two hundred thousand (200,000)
shares of Sponsoring Employer Stock" and replacing such reference with "three
hundred fifty thousand (350,000) shares of Sponsoring Employer Stock".
IN WITNESS WHEREOF, the undersigned officer has executed this
Amendment pursuant to authority granted by the Board of Directors of the Company
on this 1st day of April, 1998.
SERVICE EXPERTS, INC.
By: /s/ Alan R. Sielbeck
------------------------------------
Title: President
--------------------------------
<PAGE> 1
Exhibit 99.9
AMENDMENT TO SERVICE EXPERTS, INC.
1997 NONQUALIFIED STOCK PURCHASE PLAN
WHEREAS, on June 27, 1997, Service Experts, Inc. (the "Company")
adopted the 1997 Nonqualified Stock Purchase Plan (the "Plan"); and
WHEREAS, the Board of Directors desires to increase the number of
authorized shares available for issuance under the Plan;
NOW, THEREFORE, effective April 1, 1998, Article II of the Plan
is hereby amended by deleting the reference to "one hundred thousand (100,000)
shares of Sponsoring Employer Stock" and replacing such reference with "one
hundred fifty thousand (150,000) shares of Sponsoring Employer Stock".
IN WITNESS WHEREOF, the undersigned officer has executed this
Amendment pursuant to authority granted by the Board of Directors of the Company
on this 1st day of April, 1998.
SERVICE EXPERTS, INC.
By: /s/ Alan R. Sielbeck
------------------------------------
Title: President
---------------------------------
<PAGE> 1
Exhibit 99.10
SERVICE EXPERTS, INC.
SERVICE CENTER STOCK OPTION PLAN
MARCH 12, 1998
<PAGE> 2
SERVICE EXPERTS, INC.
SERVICE CENTER STOCK OPTION PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I. DEFINITIONS
<S> <C> <C>
1.1 Affiliate 1
1.2 Agreement 1
1.3 Board 1
1.4 Code 1
1.5 Committee 1
1.6 Company 1
1.7 Date of Exercise 1
1.8 Fair Market Value 1
1.9 Option 2
1.10 Participant 2
1.11 Plan 2
1.12 Stock 2
ARTICLE II. PURPOSE 2
ARTICLE III. ADMINISTRATION
3.1 Administration of Plan 2
3.2 Authority to Grant Options 3
ARTICLE IV. ELIGIBILITY AND LIMITATIONS ON GRANTS
4.1 Participation 3
4.2 Grant of Options 3
ARTICLE V. STOCK SUBJECT TO PLAN
5.1 Source of Shares 3
5.2 Maximum Number of Shares 3
5.3 Forfeitures 3
ARTICLE VI. EXERCISE OF OPTIONS
6.1 Exercise Price 3
6.2 Right to Exercise 4
6.3 Maximum Exercise Period 4
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
6.4 Transferability 4
6.5 Employee Status 4
ARTICLE VII. METHOD OF EXERCISE
7.1 Exercise 4
7.2 Payment 4
7.3 Federal Withholding Tax Requirements 4
7.4 Stockholder Rights 4
7.5 Issuance and Delivery of Shares 4
ARTICLE VIII. ADJUSTMENT UPON CORPORATE CHANGES
8.1 Adjustments to Shares 5
8.2 Substitution of Options on Merger or Acquisition 5
8.3 Effect of Certain Transactions 5
8.4 No Preemptive Rights 6
8.5 Fractional Shares 6
ARTICLE IX. COMPLIANCE WITH LAW AND APPROVAL OF
REGULATORY BODIES
9.1 General 6
9.2 Representations by Participants 6
ARTICLE X. GENERAL PROVISIONS
10.1 Effect on Employment 7
10.2 Unfunded Plan 7
10.3 Rules of Construction 7
10.4 Governing Law 7
10.5 Amendment 7
10.6 Effective Date of Plan 7
</TABLE>
ii
<PAGE> 4
SERVICE EXPERTS, INC.
SERVICE CENTER STOCK OPTION PLAN
PREAMBLE
WHEREAS, Service Experts, Inc. (the "Company") desires to establish a
plan through which the Company may grant options to purchase the common stock of
the Company to employees of the Company, or employees of the Company's
subsidiaries or affiliated business entities, who are not executive officers and
who are not subject to section 16(b) of the Securities Exchange Act of 1934; and
WHEREAS, the Company intends for all options that are granted hereunder
not to qualify as "incentive stock options" within the meaning of section 422 of
the Code;
NOW, THEREFORE, the Company hereby establishes the Service Experts,
Inc. Service Center Stock Option Plan (the "Plan"), effective March 12, 1998:
ARTICLE I. DEFINITIONS
1.1 Affiliate. A "parent corporation," as defined in section 424(e) of
the Code, or "subsidiary corporation," as defined in section 424(f) of the Code,
of the Company, as well as any other business entity that is owned by such a
parent or subsidiary corporation.
1.2 Agreement. A written agreement (including any amendment or
supplement thereto) between the Company or Affiliate and a Participant
specifying the terms and conditions of an Option granted to such Participant.
1.3 Board. The board of directors of the Company.
1.4 Code. The Internal Revenue Code of 1986, as amended.
1.5 Committee. A committee of the Board that is designated by the Board
to administer the Plan.
1.6 Company. Service Experts, Inc. and its successors.
1.7 Date of Exercise. The date that the Company accepts tender of the
Option exercise price.
1.8 Fair Market Value. On any given date, Fair Market Value shall be
(unless, where appropriate, the Committee determines in good faith the fair
market value of the Stock to be otherwise) the closing price of the Stock on the
New York Stock Exchange (or such other exchange as is then the primary market
for trading the Stock) on the date for which Fair Market
1
<PAGE> 5
Value is being determined, or the closing price on the next preceding trading
day on which such prices were published if no Stock was traded on such trading
day.
1.9 Option. The right that is granted hereunder to a Participant to
purchase from the Company a stated number of shares of Stock at the price set
forth in an Agreement.
1.10 Participant. An employee of the Company or of an Affiliate who:
either satisfies the requirements of Article and is selected by the Committee to
receive an Option, or receives an Option pursuant to a grant authorized in this
Plan.
1.11 Plan. The Service Experts, Inc. Service Center Stock Option Plan.
1.12 Stock. The common stock of the Company.
ARTICLE II. PURPOSE
The purpose of the Plan is to provide a performance incentive and to
encourage stock ownership by certain employees of the Company and its Affiliates
who are not executive officers and who are not subject to section 16(b) of the
Securities Exchange Act of 1934, and to align the interests of such individuals
with those of the Company, its Affiliates and its stockholders. It is intended
that Participants may acquire or increase their proprietary interests in the
Company and be encouraged to remain in the employ of the Company or of its
Affiliates. The proceeds received by the Company from the sale of Stock pursuant
to this Plan may be used for general corporate purposes.
ARTICLE III. ADMINISTRATION
3.1 Administration of Plan. The Plan shall be administered by the
Committee. The express grant in the Plan of any specific power to the Committee
shall not be construed as limiting any power or authority of the Committee. Any
decision made or action taken by the Committee to administer the Plan shall be
final and conclusive. No member of the Committee shall be liable for any act
done in good faith with respect to this Plan or any Agreement or Option. The
Company shall bear all expenses of Plan administration. In addition to all other
authority vested with the Committee under the Plan, the Committee shall have
complete authority to:
(a) Interpret all provisions of this Plan;
(b) Prescribe the form of any Agreement and notice and manner for
executing or giving the same;
(c) Make amendments to all Agreements;
(d) Adopt, amend, and rescind rules for Plan administration; and
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(e) Make all determinations it deems advisable for the administration
of this Plan.
3.2 Authority to Grant Options. The Committee shall have authority to
grant Options upon such terms as the Committee deems appropriate and that are
not inconsistent with the provisions of this Plan. Such terms may include
conditions on the exercise of all or any part of an Option.
ARTICLE IV. ELIGIBILITY AND LIMITATIONS ON GRANTS
4.1 Participation. The Committee may from time to time designate
employees to whom Options are to be granted and who are eligible to become
Participants. Such designation shall specify the number of shares of Stock, if
any, subject to each Option. All Options granted under this Plan shall be
evidenced by Agreements which shall be subject to applicable provisions of this
Plan or such other provisions as the Committee may adopt that are not
inconsistent with the Plan.
4.2 Grant of Options. An Option shall be deemed to be granted to a
Participant at the time that the Committee designates in a writing that is
adopted by the Committee as the grant of an Option, and that makes reference to
the name of the Participant and the number of shares of Stock that may be
purchased under the Option and the exercise price therefor. Accordingly, an
Option may be deemed to be granted prior to the time that an Agreement is
executed by the Participant and the Company.
ARTICLE V. STOCK SUBJECT TO PLAN
5.1 Source of Shares. Upon the exercise of an Option, the Company shall
deliver to the Participant authorized but unissued Stock, treasury shares or
Stock that has been acquired on the open market under a Stock repurchase program
of the Company.
5.2 Maximum Number of Shares. The maximum aggregate number of shares of
Stock that may be issued pursuant to the exercise of Options under the Plan is
214,697 shares, subject to increases and adjustments as provided in Article
VIII.
5.3 Forfeitures. If any Option granted hereunder expires or terminates
for any reason during the calendar year in which it was granted, the unpurchased
shares subject thereto shall again be available for issuance pursuant to an
Option award during that year.
ARTICLE VI. EXERCISE OF OPTIONS
6.1 Exercise Price. The exercise price of an Option shall be the price
determined by the Committee at the time the Option is granted. If the exercise
price of an Option is changed after the date it is granted, such change shall be
deemed to be a termination of the existing Option and the issuance of a new
Option.
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6.2 Right to Exercise. An Option shall be exercisable on the date
established by the Committee or provided for in an Agreement.
6.3 Maximum Exercise Period. The maximum period in which an Option may
be exercised shall be determined by the Committee on the date of grant. All
Options shall terminate on the date the Participant's employment with the
Company terminates, except as otherwise provided in the Agreement.
6.4 Transferability. Any Option granted under this Plan shall be
transferable by will or by the laws of descent and distribution only, except as
otherwise expressly provided for in an Agreement. No right or interest of a
Participant in any Option shall be liable for, or subject to, any lien,
obligation or liability of such Participant.
6.5 Employee Status. The Committee shall determine the extent to which
a leave of absence for military or government service, illness, temporary
disability, or other reasons shall be treated as a termination or interruption
of employment for purposes of determining questions of forfeiture and exercise
of an Option after termination of employment.
ARTICLE VII. METHOD OF EXERCISE
7.1 Exercise. An Option granted hereunder shall be deemed to have been
exercised on the Date of Exercise. Subject to the provisions of Articles VI and
IX, an Option may be exercised in whole or in part at such times and in
compliance with such requirements as the Committee shall determine.
7.2 Payment. Unless otherwise provided by the Agreement, payment of the
Option price shall be made in cash or, to the extent approved by the Committee,
Stock that was acquired prior to the exercise of the Option, other consideration
acceptable to the Committee, or a combination thereof.
7.3 Federal Withholding Tax Requirements. Upon exercise of an Option by
a Participant who is an employee of the Company or an Affiliate, the Participant
shall, upon notification of the amount due and prior to or concurrently with the
delivery of the certificates representing the shares, pay to the Company amounts
necessary to satisfy applicable federal, state and local withholding tax
requirements or shall otherwise make arrangements satisfactory to the Company
for such requirements.
7.4 Stockholder Rights. No Participant shall have any rights as a
stockholder with respect to shares subject to his Option prior to the Date of
Exercise of such Option.
7.5 Issuance and Delivery of Shares. Shares of Stock issued pursuant to
the exercise of Options hereunder shall be delivered to Participants by the
Company (or its transfer agent) as soon as administratively feasible after a
Participant exercises an Option hereunder and
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executes any applicable stockholder agreement or agreement described in Section
9.2 that the Company requires at the time of exercise.
ARTICLE VIII. ADJUSTMENT UPON CORPORATE CHANGES
8.1 Adjustments to Shares. The maximum number and kind of shares of
stock with respect to which Options hereunder may be granted and which are the
subject of outstanding Options shall be adjusted by way of increase or decrease
as the Committee determines (in its sole discretion) to be appropriate, in the
event that:
(a) the Company or an Affiliate effects one or more stock
dividends, stock splits, reverse stock splits, subdivisions,
consolidations or other similar events;
(b) the Company or an Affiliate engages in a transaction to which
section 424 of the Code applies; or
(c) there occurs any other event which in the judgment of the
Committee necessitates such action.
Provided, however, that if an event described in paragraph (a) or (b) occurs,
the Committee shall make adjustments to the limits on Options specified in
Section 5.2 that are proportionate to the modifications of the Stock that are on
account of such corporate changes.
8.2 Substitution of Options on Merger or Acquisition. The Committee may
grant Options in substitution for stock awards, stock options, stock
appreciation rights or similar awards held by an individual who becomes an
employee of the Company or an Affiliate in connection with a transaction to
which section 424(a) of the Code applies. The terms of such substituted Options
shall be determined by the Committee in its sole discretion, subject only to the
limitations of Article V.
8.3 Effect of Certain Transactions. Upon a merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation of
the Company, as a result of which the stockholders of the Company receive cash,
stock or other property in exchange for their shares of Stock (but not a public
offering of Stock by the Company), and the Company is not the surviving entity,
any Option granted hereunder shall terminate, provided that the Participant
shall have the right immediately prior to any such merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation to
exercise his Options in whole or in part whether or not the vesting requirements
set forth in any Agreement have been satisfied, unless the Committee elects to
convert all Options hereunder into options to purchase stock of an acquiring
corporation; provided, however, that, notwithstanding the foregoing, a portion
of the acceleration of exercisability of Options shall not occur with respect to
any holder to the extent that such portion of acceleration would cause the
grantee or holder of such Option to be liable for the payment of taxes pursuant
to section 4999 of the Code. If the Committee so elects to convert the Options,
the amount and price of such converted options shall be determined by
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adjusting the amount and price of the Options granted hereunder in the same
proportion as used for determining the number of shares of stock of the
acquiring corporation the holders of the Stock receive in such merger,
consolidation, acquisition of property or stock, separation or reorganization,
and the vesting schedule set forth in the Agreement may continue to apply to the
converted options if so determined by the Committee.
8.4 No Preemptive Rights. The issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
for cash or property, or for labor or services rendered, either upon direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, outstanding Options.
8.5 Fractional Shares. Only whole shares of Stock may be acquired
through the exercise of an Option. Any amounts tendered in the exercise of an
Option remaining after the maximum number of whole shares have been purchased
will be returned to the Participant.
ARTICLE IX. COMPLIANCE WITH LAW AND APPROVAL OF
REGULATORY BODIES
9.1 General. No Option shall be exercisable, no Stock shall be issued,
no certificates for shares of Stock shall be delivered, and no payment shall be
made under this Plan except in compliance with all federal or state laws and
regulations (including, without limitation, withholding tax requirements),
federal and state securities laws and regulations and the rules of all
securities exchanges or self-regulatory organizations on which the Company's
shares may be listed. The Company shall have the right to rely on an opinion of
its counsel as to such compliance. Any certificate issued to evidence shares of
Stock for which an Option is exercised may bear such legends and statements as
the Committee upon advice of counsel may deem advisable to assure compliance
with federal or state laws and regulations. No Option shall be exercisable, no
Stock shall be issued, no certificate for shares shall be delivered and no
payment shall be made under this Plan until the Company has obtained such
consent or approval as the Committee may deem advisable from any regulatory
bodies having jurisdiction over such matters.
9.2 Representations by Participants. As a condition to the exercise of
an Option, the Company may require a Participant to represent and warrant at the
time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares.
At the option of the Company, a stop transfer order against any shares of stock
may be placed on the official stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold or otherwise
transferred unless an opinion of counsel was provided (concurred in by counsel
for the Company) and stating that such transfer is not in violation of any
applicable law or regulation may be stamped on the stock certificate in order to
assure exemption from registration. The Committee may also require such other
action or agreement by the Participants as may from time to time be necessary to
comply with
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federal or state securities laws. This provision shall not obligate the Company
or any Affiliate to undertake registration of Options or stock hereunder.
ARTICLE X. GENERAL PROVISIONS
10.1 Effect on Employment. Neither the adoption of this Plan, its
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or an Affiliate or in any way affect any right and power of the
Company or an Affiliate to terminate the employment of any employee at any time
with or without assigning a reason therefor.
10.2 Unfunded Plan. The Plan, insofar as it provides for grants, shall
be unfunded, and the Company shall not be required to segregate any assets that
may at any time be represented by grants under this Plan. Any liability of the
Company to any person with respect to any grant under this Plan shall be based
solely upon contractual obligations that may be created hereunder. No such
obligation of the Company shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of the Company.
10.3 Rules of Construction. Headings are given to the articles and
sections of this Plan solely as a convenience to facilitate reference. The
masculine gender when used herein refers to both masculine and feminine. The
reference to any statute, regulation or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.
10.4 Governing Law. The laws of the State of Tennessee shall apply to
all matters arising under this Plan, to the extent that federal law does not
apply.
10.5 Amendment. The Board may amend or terminate this Plan at any time;
provided, however, an amendment that would have a material adverse effect on the
rights of a Participant under an outstanding Option is not valid with respect to
such Option without the Participant's consent.
10.6 Effective Date of Plan. This Plan shall be effective on March 12,
1998, the date of its adoption by the Board, and Options may be granted
hereunder at any time on or after such date.
IN WITNESS WHEREOF, the undersigned officer has executed this Plan on
this the 12th day of March, 1998.
SERVICE EXPERTS, INC.
By: /s/ Alan R. Sielbeck
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Its: President
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Exhibit 99.11
AMENDMENT TO THE SERVICE EXPERTS, INC.
1998 SERVICE CENTER STOCK OPTION PLAN
WHEREAS, on March 12, 1998, Service Experts, Inc. (the "Company")
adopted the 1998 Service Center Stock Option Plan (the "Plan"); and
WHEREAS, the Board of Directors desires to increase the number of
authorized shares available for issuance under the Plan;
NOW, THEREFORE, effective May 1, 1998, Section 5.2 of the Plan is
hereby amended by deleting the reference to "214,697 shares" and replacing such
reference with "333,224 shares."
IN WITNESS WHEREOF, the undersigned officer has executed this
Amendment pursuant to authority granted by the Board of Directors of the Company
on this 1st day of May, 1998.
SERVICE EXPERTS, INC.
By: /s/ Alan R. Sielbeck
-----------------------------------
Title: President
--------------------------------
