<PAGE>
Schedule 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Group Maintenance America Corp.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously by written preliminary materials
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party
4) Date Filed:
<PAGE>
8 Greenway Plaza
Suite 1500
[GROUPMAC LOGO] April 13, 1999 Houston, Texas 77046
Dear Shareholder:
On behalf of the Board of Directors and employees of Group Maintenance
America Corp., I cordially invite you to attend the 1999 Annual Meeting of
Shareholders at the Houston City Club, Greenway Plaza, Houston, Texas, on
Wednesday, May 12, 1999, at 1:30 p.m. Houston time.
At the meeting, shareholders will be asked to
. elect five directors for a term expiring at the 2002 shareholders
meeting,
. approve the GroupMAC Employee Stock Purchase Plan,
. approve the selection of independent public accountants, and
. conduct other business properly brought before the meeting.
Information about the meeting, the election of directors and the GroupMAC
Employee Stock Purchase Plan is included in the attached proxy statement.
Whether or not you plan to attend the meeting, please take the time to vote
by completing and mailing the enclosed proxy card to us. As explained in the
proxy statement, your proxy may be withdrawn at any time before it is actually
voted at the meeting.
Very truly yours,
/s/ James P. Norris
James P. Norris
Chairman of the Board
<PAGE>
GROUP MAINTENANCE AMERICA CORP.
8 Greenway Plaza, Suite 1500
Houston, Texas 77046
(713) 860-0100
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 12, 1999
TO THE SHAREHOLDERS OF GROUP MAINTENANCE AMERICA CORP.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Group
Maintenance America Corp., a Texas corporation (the "Company"), will be held
on May 12, 1999, at 1:30 p.m., Houston time, at the Houston City Club,
Greenway Plaza, Houston, Texas.
The meeting will be held for the following purposes:
(1) To elect five directors to serve a term ending at the Company's 2002
Annual Meeting of Shareholders;
(2) To approve the adoption of the GroupMAC Employee Stock Purchase Plan;
(3) To approve the appointment by the Board of Directors of KPMG LLP as
the Company's independent public accountants for the year 1999; and
(4) To act on such other matters as may properly be brought before the
meeting affecting the business and affairs of the Company.
The Board of Directors has fixed the close of business on March 17, 1999, as
the record date for the determination of shareholders entitled to notice of
and to vote at the meeting and any adjournments or postponements thereof. A
list of such shareholders will be available for examination at the offices of
the Company, located at 8 Greenway Plaza, Suite 1500, Houston, Texas, for a
period of at least ten days prior to the meeting.
Each shareholder who does not expect to attend the meeting is urged to
complete, date and sign the enclosed proxy and return it to the Company in the
enclosed envelope, which requires no postage if mailed in the United States.
The proxy must be signed and returned in order to be counted.
By Order of the Board of Directors,
/s/ Randolph W. Bryant
RANDOLPH W. BRYANT
Secretary
Houston, Texas
April 13, 1999
<PAGE>
GROUP MAINTENANCE AMERICA CORP.
8 Greenway Plaza, Suite 1500
Houston, Texas 77046
PROXY STATEMENT
This Proxy Statement is furnished by the Board of Directors (the "Board") of
Group Maintenance America Corp. in connection with its solicitation of proxies
for use at the Annual Meeting of Shareholders to be held on Wednesday, May 12,
1999, at 1:30 p.m. Houston time at the Houston City Club, Greenway Plaza,
Houston, Texas, and at any and all adjournments thereof. Mailing of the proxy
statement will commence on or about April 13, 1999. Holders of record of the
Company's Common Stock (the "Common Stock") at the close of business on March
17, 1999, will be entitled to one vote for each share held on all matters to
come before the meeting. On that date, there were outstanding 35,438,090
shares of Common Stock.
Proxies and Voting
A proxy on the enclosed form may be revoked by notice in writing to the
Secretary at any time before it has been voted. Unless the proxy is revoked or
there is a direction to abstain on one or more proposals, it will be voted on
each proposal and, if a choice is made with respect to any matter to be acted
upon, in accordance with such choice. If no choice is specified, the proxy
will be voted as recommended by the Board.
A quorum of shareholders is necessary to hold a valid meeting. A quorum for
the meeting will exist if a majority of the votes entitled to be cast on
matters to be considered are present at the meeting. If a share is represented
for any purpose at the meeting, it is deemed to be present for all other
matters. Shares abstaining with regard to a matter to be presented to the
shareholders constitute part of the quorum present with respect to such
matter; however, shares for which voting power has been withheld, such as
broker non-votes, do not constitute part of the quorum present with respect to
such matter. Consequently, the number of shares representing the quorum
present for the meeting may be greater than the shares present for action on a
particular proposal.
Directors are elected by a plurality vote of shares present at the meeting,
meaning that the director nominee with the most affirmative votes for a
particular slot is elected for that slot. Other action is by an affirmative
vote of a majority of the shares present at the meeting. Abstentions and
broker non-votes have the effect of a vote cast against a particular item.
Shareholders may not cumulate their votes in the election of directors.
Proxy Solicitation
The Company will bear the cost of this solicitation. The Company will
solicit proxies by mail, and the directors, officers, and employees of the
Company may also solicit proxies by telephone, telegram or personal contact.
These persons will receive no additional compensation for such services. In
addition, the Company has retained ChaseMellon Shareholder Services, L.L.C. to
assist in soliciting proxies for a fee of $4,000 plus reasonable out-of-pocket
expenses. The Company will reimburse brokers and other shareholders of record
for their expenses in forwarding proxy material to beneficial owners.
1
<PAGE>
ITEM 1--ELECTION OF DIRECTORS
The Board of Directors presently consists of 14 members, divided into three
classes. The Board has nominated the following five individuals, each of whom
is presently serving as a director of the Company, to be elected at the Annual
Meeting to serve for a term to expire at the 2002 Annual Meeting of
Shareholders and until their successors are chosen and have qualified. Nine
directors will continue to serve as set forth below. The persons named as
proxy voters in the accompanying proxy, or their substitutes, will vote for
the nominees of the Board. If, for any reason not presently known, any of the
nominees is not available for election, the proxy voters may, in their
discretion, vote for another person or other persons who may be nominated.
Directors are elected by the affirmative vote of the holders of a plurality of
the shares present, in person or by proxy, and authorized to vote on the
matter.
Brief statements setting forth the age (at March 1, 1999), the principal
occupation, and employment during the past five years, the year in which first
elected a director, and other information concerning each nominee and the
remaining directors appear below.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
For Three-Year Term Expiring at the 2002 Annual Meeting of Shareholders (Class
II)
David L. Henninger Director since 1997
Age 54
[Photo of Mr Henninger is President of Van's Comfortemp Air
David L. Henninger Conditioning, Inc. ("Van's"), a subsidiary of the
appears here] Company providing heating, ventilation and air
conditioning ("HVAC") services to residential and
light commercial customers in the Palm Beach-Ft.
Lauderdale, Florida, area. He acquired Van's in 1975
and has served as its President since that time.
Donald L. Luke Director since 1997
Age 62 Member, Acquisitions Committee
[Photo of Mr. Luke became a Director and President and Chief
Donald L. Luke Operating Officer of the Company in August 1997. From
appears here] November 1996 to July 1997, he served as Chairman of
Arriva Air International, Inc., a start-up commercial
air cargo business. From September 1996 to August
1997, he served as chief executive officer of CTW,
Inc., a privately held acquisitions and management
company, and a consultant to Batteries Batteries,
Inc., a consolidator of specialty battery
distribution companies that completed its initial
public offering in April 1996. From 1995 to September
1996, he served as President, Chief Executive Officer
and Director of Batteries Batteries, Inc. From 1991
to 1995, Mr. Luke served as President and Chief
Executive Officer of Miracle Ear New York City.
2
<PAGE>
J. Patrick Millinor, Jr. Director since 1997
Age 53 Member, Acquisitions Committee
[Photo of Mr. Millinor has been Chief Executive Officer of the
J. Patrick Millinor, Jr. Company since April 1997 and also served as President
appears here] of the Company from April 1997 until June 1997. From
October 1996 through April 1997, he served as Chief
Executive Officer of the Company's predecessor. From
September 1994 to October 1996, Mr. Millinor worked
directly for Gordon Cain, a major shareholder in the
Company, assisting in the formation and management of
Agennix Incorporated and Lexicon Genetics, two
biotechnology companies. From March 1993 to September
1994, he served as Chief Executive Officer of
UltrAir, Inc., a start-up passenger airline, and from
October 1992 to March 1993, he served as its Chief
Financial Officer. He currently serves as a director
of Agennix Incorporated and Haelan Health(R)
Corporation.
Lucian L. Morrison Director since 1997
Age 62 Member, Audit and Compensation Committees
[Photo of Mr. Morrison has been engaged as a trustee and
Lucian L. Morrison consultant with respect to trust, estate, probate and
appears here] qualified plan matters since 1992. From 1990 through
1992, he served as Chief Fiduciary Officer of
Northern Trust Bank of Texas, and from 1979 until
1990 he served as Chief Executive Officer of Heritage
Trust Company.
Robert Munson, III Director since 1998
Age 52
[Photo of Mr. Munson is Chief Executive Officer of Trinity
Robert Munson, III Contractors, Inc. ("Trinity"), a subsidiary of the
appears here] Company which provides mechanical and electrical
contracting services to commercial and industrial
customers, primarily in the Dallas-Ft. Worth area. He
founded Trinity in 1981 and has served as its Chief
Executive Officer since 1988.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
For Three-Year Term Expiring at the 2001 Annual Meeting of Shareholders
(Class I)
Chester J. Jachimiec Director since 1997
Age 44 Member, Acquisitions Committee
[Photo of Mr. Jachimiec is Executive Vice President-
Chester J. Jachimiec Acquisitions of the Company, a position he has held
appears here] with the Company and its predecessor since October
1996. From February 1994 to October 1996, Mr.
Jachimiec served as the Director of Acquisitions &
Investments for Tenneco Energy, Inc., and from 1990
to 1994, he was an investor in or consultant to
various private ventures engaged in natural gas
gathering, processing and exploration as well as
computer software development. Prior to 1990, Mr.
Jachimiec practiced securities law and public
accounting with several professional firms.
3
<PAGE>
Thomas B. McDade Director since 1997
Age 75 Member, Audit Committee
[Photo of Mr. McDade is engaged in consulting and managing his
Thomas B. McDade personal investments. From 1957 to 1985, he was
appears here] employed by Texas Commerce Bancshares, last serving
in the capacity of Vice Chairman. He currently serves
as a director of Bankers Trust Co. of the Southwest,
TransTexas Gas, TransAmerican Energy Corp. and
TransAmerican Refining Corp.
James D. Weaver Director since 1997
Age 49 Member, Compensation Committee
[Photo of Mr. Weaver has been the President of the Gordon and
James D. Weaver Mary Cain Foundation, a nonprofit organization, since
appears here] 1989 and the Director of the Good Samaritan
Foundation, a nonprofit organization, since 1986.
William M. Witz Director since 1999
Age 60
[Photo of Mr. Witz is Chief Executive Officer of Continental
James D. Weaver Electrical Construction Co., a subsidiary of the
appears here] Company that provides electrical contracting services
in the Chicago metropolitan area. Mr. Witz joined
Continental Electrical in 1973 and has served as its
Chief Executive Officer since 1976.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
For Three-Year Term Expiring at the 2000 Annual Meeting of Shareholders
(Class III)
Andrew Jeffrey Kelly Director since 1997
Age 44
[Photo of Mr. Kelly is Chief Executive Officer of K & N
Andrew Jeff Kelly Plumbing, Heating and Air Conditioning, Inc. ("K&N"),
appears here] a subsidiary of the Company providing plumbing and
HVAC services to residential new construction markets
in the Dallas-Ft. Worth and Austin areas. He founded
K&N in 1979 and has served as its Chief Executive
Officer since that time.
Timothy Johnston Director since 1997
Age 43
[Photo of Mr. Johnston joined Airtron, Inc. ("Airtron") in 1988
Timothy Johnston and has served as its Senior Vice President since
appears here] 1995. He has served as Airtron's Secretary/Treasurer
(since 1991) and its Chief Financial Officer (since
1988). He became a director of the Company in 1997 in
connection with the acquisition by the Company of
Airtron.
4
<PAGE>
James P. Norris Director since 1997
Age 60
[Photo of Mr. Norris has been Chairman of the Board of the
James P. Norris Company since June 1997. From 1969 to May 1997, he
appears here] served as Executive Vice President of Air
Conditioning Contractors of America, an industry
trade association based in Washington, D.C.
Fredric J. Sigmund Director since 1997
Age 57
[Photo of Mr. Sigmund is Chief Executive Officer of MacDonald-
Fredric J. Sigmund Miller Industries, Inc. ("MacDonald-Miller"), a
appears here] subsidiary of the Company providing a full range of
HVAC services to commercial and industrial customers
in the Pacific Northwest. He became an employee of
MacDonald-Miller in 1967 and has been its Chief
Executive Officer since 1986.
John M. Sullivan Director since 1997
Age 63 Member, Audit and Compensation Committees
[Photo of Mr. Sullivan has been President of Beta Consulting,
John M. Sullivan Inc., a financial and tax consulting firm, since
appears here] 1994. From 1992 through 1994, he was the
International Tax Director of General Motors
Corporation. Prior to 1992, Mr. Sullivan was a tax
partner with Arthur Andersen LLP. He currently serves
as a director of Atlantic Coast Airlines Holdings,
Inc.
5
<PAGE>
Stock Ownership
To the knowledge of the Company, no person, firm or group beneficially owned
(as defined in Rule 13d-3 of the Securities Exchange Act of 1934) more than 5%
of the shares of Common Stock of the Company outstanding on the record date,
except that Gordon Cain, 8 Greenway Plaza, Suite 702, Houston, Texas 77046,
was the record owner of 2,417,350 shares of Common Stock, or approximately
6.8% of the shares outstanding. The following table sets forth, at February
28, 1999, the number of shares of Common Stock of the Company beneficially
owned by (i) each of the Company's directors and the executive officers named
in the summary compensation table on page 8 and (ii) all executive officers
and directors as a group:
<TABLE>
<CAPTION>
Shares
Beneficially
Owned(1)(2)
---------------------
Number Percent
--------- -------
<S> <C> <C>
Ronald D. Bryant........................................ 466,806 1.3%
David L. Henninger...................................... 112,201 (3) *
Chester J. Jachimiec.................................... 178,532 (4) *
Timothy Johnston........................................ 261,349 (5) *
Andrew J. Kelly......................................... 362,800 1.0%
Donald L. Luke.......................................... 19,948 *
Thomas B. McDade........................................ 9,000 *
J. Patrick Millinor, Jr................................. 274,446 (6) *
Lucian L. Morrison...................................... 6,500 *
Robert Munson, III...................................... 556,437 (7) 1.6%
James P. Norris......................................... 24,958 *
Fredric J. Sigmund...................................... 207,600 (8) *
John M. Sullivan........................................ 27,750 *
James D. Weaver......................................... 87,500 *
William M. Witz......................................... 202,522 *
All executive officers and directors as a group (22 in
number)................................................ 3,713,389 (9) 10.2%
</TABLE>
- --------
* Less than one percent.
(1) Except as otherwise noted, each shareholder, director and executive
officer has sole voting and investment power over the shares beneficially
owned as set forth in this column.
(2) Includes shares that are subject to options granted by the Company
exercisable at February 28, 1999, or within 60 days thereafter, to
purchase 46,927, 13,269, 18,948, 51,861 and 23,458 shares for Messrs.
Jachimiec, Johnston, Luke, Millinor and Norris, respectively, and to
purchase 1,000 shares for each of Messrs. McDade, Morrison, Sullivan and
Weaver.
(3) Includes 55,001 shares held by Mr. Henninger's spouse.
(4) Includes 5 shares beneficially owned by Mr. Jachimiec through the GroupMAC
Savings Plan and 32,000 shares held by him as trustee of two trusts for
the benefit of his children.
(5) Includes 206,740 shares beneficially owned by Mr. Johnston through
Airtron, Inc. employee benefit plans.
(6) Includes 140 shares beneficially owned by Mr. Millinor through the
GroupMAC Savings Plan and 200 shares held by Mr. Millinor's children.
(7) Includes 129,399 shares held by Mr. Munson as trustee of a trust for the
benefit of his family.
(8) Includes 33,760 shares beneficially owned by Mr. Sigmund through the
GroupMAC Savings Plan.
(9) Includes 812,579 shares that are subject to options or warrants that are
exercisable by all executive officers and directors as a group.
6
<PAGE>
Committees and Meeting Attendance
The Board of Directors has established three committees--the Audit
Committee, the Compensation Committee, and the Acquisitions Committee. The
membership of these committees is determined from time to time by the Board.
The Board of Directors has not established a nominating committee.
The Audit Committee held two meetings during 1998. The committee has the
responsibility, among other things, for (i) recommending the selection of the
Company's independent public accountants, (ii) reviewing and approving the
scope of the independent public accountants' audit activity and extent of non-
audit services, (iii) reviewing with management and such independent public
accountants the adequacy of the Company's basic accounting system and the
effectiveness of the Company's internal audit plan and activities, (iv)
reviewing with management and the independent public accountants the Company's
financial statements and exercising general oversight of the Company's
financial reporting process and (v) reviewing with the Company litigation and
other legal matters that may affect the Company's financial condition, and
monitoring compliance with the Company's business ethics and other policies.
The members of the Audit Committee are Messrs. Morrison (Chair), McDade and
Sullivan.
The Compensation Committee has the responsibility, among other things, for
(i) establishing the salary rates of officers and employees of the Company and
its subsidiaries, (ii) examining periodically the compensation structure of
the Company and (iii) supervising the welfare and pension plans and
compensation plans of the Company. During 1998, the Compensation Committee met
once and acted by written consent seven times. The members of the Compensation
Committee are Messrs. Sullivan (Chair), Morrison and Weaver.
The Acquisitions Committee has the authority to approve the terms and
conditions of acquisitions by the Company of businesses having less than $40
million of revenues and $20 million of assets, including the authority to
approve the issuance of debt and equity securities of the Company in
connection with such acquisitions, provided that the consideration paid by the
Company for each such business is less than $20 million. The members of the
Acquisition Committee are Messrs. Millinor (Chair), Jachimiec and Luke.
During 1998 the Board of Directors held eight meetings. Each director
attended at least 75% of the aggregate of all meetings of the Board of
Directors and all meetings of the committees of the Board on which the
director served except for Messrs. Morrison and Weaver.
Compensation of Directors
The Company did not pay to any of its directors compensation for services
rendered in 1998. In December 1997, the Company granted to each director of
the Company who was not an employee of the Company or any subsidiary (Messrs.
McDade, Morrison, Sullivan and Weaver) an option to purchase 4,000 shares of
Common Stock at a purchase price of $14.00 per share. These options will
remain in effect for five years after the date of grant and 1,000 shares of
each grant will become exercisable on each anniversary of the date of grant.
If a director ceases to serve in such capacity because of his death,
disability or retirement, all unexercised options granted to that director
will become exercisable for a one-year period.
In January 1999, the Board approved the following compensation for outside
directors:
Stock Options: 5,000 shares upon each election to the Board
Attendance Fees: $1,000 for each Board meeting
$500 for each Board Committee meeting
Expenses related to attendance
Beginning in 2000, the attendance fees will be increased to $2,000 and
$1,000, respectively.
7
<PAGE>
Executive Compensation
The following table sets forth the remuneration paid by the Company to the
Chief Executive Officer and the four other most highly compensated executive
officers of the Company based on 1998 salaries and bonuses.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation(1) Compensation
---------------------- ------------
Securities All Other
Underlying Compen-
Name and Principal Position Year Salary Bonus Options sation(2)
--------------------------- ---- -------- -------- ------------ ---------
<S> <C> <C> <C> <C> <C>
James P. Norris.................. 1998 $151,829 $140,000 5,000 $29,528
Chairman of the Board 1997 87,500 43,750 84,500 --
J. Patrick Millinor, Jr.......... 1998 $153,810 145,000 5,000 584
Chief Executive Officer 1997 150,000 87,500 56,500 1,080
Donald L. Luke................... 1998 $151,829 142,500 15,000 13,287
President and Chief Operating
Officer 1997 62,500 31,250 70,969 --
Ronald D. Bryant................. 1998 150,000 146,865 6,825 4,518
President of Masters 1997 17,941 -- -- 896
Timothy Johnston................. 1998 170,942 573,552 -- 3,201
Senior Vice President and Chief 1997 99,000 122,000 53,078 1,000
Financial Officer of Airtron
</TABLE>
- --------
(1) The annual amount of perquisites or other personal benefits provided to
each individual was less than 10% of reported salary and bonus.
(2) All Other Compensation for 1998 consists of (i) reimbursement of
nondeductible moving expenses and related income tax expense for Messrs.
Norris and Luke of $28,615 and $5,481, respectively, (ii) insurance
premiums and reimbursement of related income tax expense for Messrs.
Norris, Millinor and Luke of $913, $584 and $7,806, respectively, (iii)
Company contributions to retirement programs on behalf of Messrs. Bryant
and Johnston of $3,444 and $3,201, respectively, and (iv) insurance
premiums for Mr. Bryant of $1,074.
Mr. Norris commenced his employment with the Company in June 1997; Mr. Luke
commenced his employment with the Company in August 1997; Mr. Johnston
commenced his employment with the Company in May 1997; and Mr. Bryant
commenced his employment with the Company in November 1997.
Stock Option Grants in 1998
The following table sets forth the number of stock options that were granted
during 1998 to the persons named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Potential
Realizable Value
Individual Grants at Assumed
--------------------------------------------- Annual Rates of
% of Total Stock Price
Number of Options Exercise Appreciation for
Shares Granted to or Base Option Term (2)
Underlying Employees in Price Expiration ----------------
Name Options (1) Fiscal Year Per Share Date 5% 10%
---- ----------- ------------ --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
James P. Norris......... 5,000 .3% $12.938 12-09-2003 $17,873 $ 39,494
J. Patrick Millinor,
Jr..................... 5,000 .3 12.938 12-09-2003 17,873 39,494
Donald L. Luke.......... 15,000 .8 12.938 12-09-2003 53,618 118,482
Ronald D. Bryant........ 6,825 .4 12.938 12-09-2003 24,396 53,909
Timothy Johnston........ -- -- -- -- -- --
</TABLE>
- --------
(1) All options were granted on December 9, 1998, have an exercise price equal
to 100% of the fair market value on the date of grant, have a five year
term and become exercisable with respect to 25% of the shares subject to
the option on each anniversary of the date of grant.
(2) The dollar amounts in these columns were calculated on the basis of the
indicated rates of appreciation in the fair market value of the Common
Stock, compounded annually from the grant date to the end of the option
term. The indicated rates of appreciation are prescribed by the Securities
and Exchange Commission and are not intended to forecast possible future
appreciation. In order to realize the potential values set forth in the 5%
and 10% columns of this table, the per share price of the Company's Common
Stock would be $16.51and $20.84 respectively, or 28% and 61%,
respectively, above the exercise price.
8
<PAGE>
Options Exercised in 1998 and
1998 Year-End Values
The following table presents information as to the value of stock options
held, as of December 31, 1998, by the persons named in the Summary
Compensation Table. None of the named executive officers exercised any options
to acquire shares during 1998.
<TABLE>
<CAPTION>
Total No. of Unexercised Value of Unexercised
Options Held at In-the-Money Options Held
December 31, 1998 at December 31, 1998(1)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James P. Norris............ 23,458 66,042 $ 84,440 $168,890
J. Patrick Millinor, Jr.... 51,861 66,244 341,416 170,717
Donald L. Luke............. 18,948 67,021 43,636 87,272
Ronald D. Bryant........... -- 6,825 -- --
Timothy Johnston........... 13,269 39,809 -- --
</TABLE>
- --------
(1) The closing price for the Common Stock on the New York Stock Exchange on
December 31, 1998, was $12.125. Value is calculated on the basis of the
difference between the option exercise price and $12.125, multiplied by
the number of shares of Common Stock underlying the options.
Group Maintenance America Corp. Compensation Committee Report on Executive
Compensation
The Compensation Committee (the "Committee") of the Board of Directors is
responsible for overseeing the development and implementation of the executive
compensation philosophy, plans and programs of the Company as described below.
The Committee is composed entirely of non-employee Directors.
Compensation Philosophy
The Company has established a philosophy for compensation of the Company
executives and those of its principal subsidiaries that is intended to
appropriately align the interests of the executives with those of the
Company's shareholders and be based on awarding compensation in line with
performance.
In implementing this philosophy, the program has been structured to:
. Provide as current compensation a base salary with a variable incentive
award premised on achieving the Company's business objectives for the
year.
. Develop and administer stock ownership programs for executives that
provide strong incentives for long-term retention of senior executives.
. Encourage stock ownership at all levels of the organization through stock
option and employee stock purchase plans.
The Committee continues to carefully review the effects in operation of the
plans implemented to date to insure that the desired results are achieved, and
will recommend to management any changes deemed desirable as a result of such
review.
Annual Cash Compensation Program
Base Salaries
As described elsewhere, each of the executive officers of the Company
entered into an employment agreement upon initial employment with the Company
providing for a specified base salary and an annual cash bonus depending on
the actual performance of the Company. Upon the successful completion of the
Company's Initial Public Offering in November 1997, the Company paid a special
cash bonus to each of its executives based upon their respective salaries and
length of time employed by the Company, and each executive agreed to
9
<PAGE>
continue at his then salary level through December 31, 1998. Salaries were
adjusted effective January 1, 1999 so that those salaries would be closer to
the median salaries paid for comparable positions at other companies. The
Committee will continue to review from time to time the salary structure of
the Company compared to those of comparably-situated companies to determine
that future adjustments are appropriate.
Incentive Bonus Plans
The Board of Directors of the Company approved a cash incentive bonus plan
for its headquarters employees in 1998. Individual amounts payable under this
plan were dependent on (1) achieving a targeted earnings-per-share result; (2)
influence of the individual position on ability to achieve overall corporate
objectives; and (3) assessment of individual performance in carrying out the
assigned responsibilities.
The Company utilized a cash bonus program for the key employees of its
subsidiaries under which awards were determined based upon the performance of
each subsidiary. The size of the bonus pool was equal to a defined percentage
of the amount by which the subsidiary's after-tax net operating profit (as
defined) less a charge for capital allocated to the subsidiary exceeded a
similar calculation of the previous year's results. A certain percentage of
earned bonuses are carried over to the following year for retention purposes
and to promote long-term goal achievement. Messrs. Johnston, Bryant,
Henninger, Kelly and Sigmund participated in the program in 1998.
Long-Term Incentives--Stock Plans
The Company's long-term incentive plans (the 1997 Stock Awards Plan, the
1997 Stock Option Plan and the Employee Stock Purchase Plan) are intended to
be a significant portion of the total compensation package of the Company's
senior executives and to provide an ownership opportunity to employees at all
levels of the organization. Pursuant to this objective, the Company granted
awards under the stock option plans at the time of the Company's initial
public offering and will make additional awards periodically based on
individual performance evaluations and recommendations of the CEO and/or the
chief executive officer of each subsidiary corporation, as applicable. An
employee stock purchase plan will be implemented on July 1, 1999 subject to
shareholder approval.
1998 Chief Executive Officer Compensation
The base compensation of the CEO for 1998 continued at the level of $150,000
as established in his initial employment agreement in 1996. While information
provided by compensation consultants indicates that this compensation is below
base salaries of CEOs of comparable companies, the Committee and the executive
officers believe the Company's management group, including the CEO, is
properly incentivized by the overall compensation program as described above.
In 1998, Mr. Millinor received a cash bonus of $145,000 and an option to
purchase 5,000 shares of common stock. This option is exercisable at $12.938
per share over a period of five years, with 25% of such shares becoming
exercisable at each anniversary of the date of grant.
Mr. Millinor's leadership since inception of the Company has been
outstanding, with the IPO being completed after only one year with an initial
revenue run rate in excess of $300 million and with the achievement of over $1
billion in pro forma annual revenues as of December 31, 1998. The Company's
outstanding growth and operating performance have been achieved through a team
effort led by Mr. Millinor. He participates directly in the identification and
negotiation process in acquiring new companies as Chairman of the Acquisitions
Committee. He provides overall direction and guidance to staff and operating
personnel and has strongly emphasized management and technical training at all
levels to insure consistency of service.
COMPENSATION COMMITTEE
John M. Sullivan, Chairman
Lucian L. Morrison
James D. Weaver
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Performance Graphs
The following graph compares the percentage change in the market value of
the Company's Common Stock to the cumulative total stockholder return (change
in stock price plus reinvested dividends) of the Standard & Poor's 500 Stock
Index ("S&P 500 Index") and a group of three peer issuers (the "Peer Group
Index") for 1998 and the portion of 1997 that the Company's Common Stock was
registered pursuant to Section 12 of the Securities Exchange Act of 1934,
assuming the investment of $100 on November 7, 1997, the date immediately
following the date of the IPO, and the reinvestment of all dividends since
that date to December 31, 1998. The three peer issuers are American
Residential Services, Inc., Comfort Systems USA, Inc. and Service Experts,
Inc., each of which is a publicly traded company engaged (either directly or
through subsidiaries) in the same or similar business as the Company. The Peer
Group Index was weighted for market capitalization.
[COMPARISON OF CUMULATIVE TOTAL RETURN CHART APPEARS HERE]
GROUP
MAINTENANCE PEER GROUP S&P 500
----------- ---------- -------
NOV 1997 100.00 100.00 100.00
DEC 1997 120.09 113.58 106.43
MAR 1998 120.98 114.15 121.27
JUN 1998 128.57 125.24 125.27
SEP 1998 102.68 92.75 112.81
DEC 1998 86.61 86.53 136.84
The performance of the Company's Common Stock reflected above is not
necessarily indicative of future performance of the Common Stock. The total
return on investment for the period shown for the Company, the S&P 500 Index
and the Peer Group Index is based on the stock price or composite index at
November 7, 1997.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
In 1997, Mr. Norris entered into an employment agreement with the Company
which was amended in March 1998. The employment agreement provides for an
annual base salary of $150,000 and an annual cash bonus of up to 100% of his
base salary depending on the actual performance of the Company. The agreement
expires on March 1, 2001.
In 1996, Mr. Millinor entered into an employment agreement with the Company
which was amended in March 1998. The employment agreement provides for an
annual base salary of $150,000 and an annual cash bonus of up to 100% of his
base salary depending on the actual performance of the Company. The agreement
expires on March 1, 2001.
In 1997, Mr. Luke entered into an employment agreement with the Company
which was amended in March 1998. The employment agreement provides for an
annual base salary of $150,000 and an annual cash bonus of up to 100% of his
base salary depending on the actual performance of the Company. The agreement
expires on March 1, 2001.
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Each of the foregoing employment agreements obligate the employee not to
disclose Company information and to not compete with the Company for a six
month period following his termination of employment. In the event of the
disability of the employee, the Company will continue payment of the
employee's compensation during the first 12 month period of such disability to
the extent not covered by the Company's disability insurance policies. In the
event his employment is terminated without cause, the Company will pay the
employee (i) if the termination occurs within 24 months following a change of
control (as defined therein), an amount equal to twice his annual salary and
target bonus plus a tax gross-up amount to eliminate the effects of any excise
tax imposed on such payments, if any, and (ii) otherwise, an amount equal to
his base salary.
Masters has an employment agreement with Mr. Bryant which provides for an
annual salary of $150,000. The agreement expires on November 13, 2000. In the
event of Mr. Bryant's disability, Masters will continue payment of his
compensation during the first twelve month period of such disability to the
extent not covered by Masters' disability insurance policies. If his
employment is terminated, Mr. Bryant will receive compensation for the periods
described in the agreement. In addition, Mr. Bryant has agreed not to compete
with the Company until the later to occur of November 13, 2002, or (ii) two
years following his termination of employment.
Airtron has an employment agreement with Mr. Johnston which provides for an
annual base salary of $150,000. Mr. Johnston also participates in the Airtron
incentive bonus plan (which provides him with an award equal to 1.50% of
Airtron's EBITDA before corporate bonus, not to exceed $154,000 annually). The
agreement expires on April 30, 2000. In the event of Mr. Johnston's
disability, Airtron will continue payment of his compensation during the first
six month period of such disability to the extent not covered by Airtron's
disability insurance policies. If his employment is terminated, Mr. Johnston
will receive compensation for the periods described in the agreement. In
addition, Mr. Johnston has agreed not to compete with Airtron until the later
to occur of (i) April 30, 2002 or (ii) one year following his termination of
employment.
Transactions with Management and Others
Airtron leases its headquarters offices in Dayton, Ohio, and its operating
facilities in Cincinnati and Cleveland, Ohio, Indianapolis, Indiana,
Clearwater, Florida, Dallas, Houston and San Antonio, Texas and Wichita,
Kansas from entities controlled by certain former shareholders of Airtron,
including Mr. Johnston and James D. Jennings, who resigned as a director of
the Company in April 1998. None of these leases expire prior to 2008. The
aggregate annual base rent to be paid under these leases is approximately
$758,000 with annual increases based on the consumer price index. The Company
believes that the terms of such leases are no less favorable to the Company
than could have been negotiated by the Company with unaffiliated third
parties. Messrs. Johnston and Jennings also received from the Company in 1998
$751,503 and $1,778,305, respectively, as additional consideration for the
sale of their Airtron stock to the Company in 1997. These amounts were based
upon the tax savings to the Company resulting from the payment to Messrs.
Johnston and Jennings in 1998 of compensation that had been deferred by them
in periods prior to the acquisition and were part of the original contract for
the acquisition of Airtron. The Company estimates that it will pay to Messrs.
Johnston and Jennings in the future approximately $610,000 and $1,440,000,
respectively, as the remaining deferred compensation is paid to them.
In connection with the Company's acquisition of K&N in 1997, the Company
agreed to pay additional consideration based on the operating results of K&N
for the 15 month period ended June 30, 1998. During 1998, Mr. Kelly received
$1,823,907 pursuant to this contract. K&N leases its Arlington, Texas,
facility from Sigma Management, a company owned by Mr. Kelly. In 1998, K&N
paid $94,800 in rent under this lease. The Company believes that the terms of
such lease are no less favorable to the Company than could have been
negotiated by the Company with unaffiliated third parties.
In connection with the Company's acquisition of MacDonald-Miller, the
Company agreed to pay additional consideration in the form of an earnout,
based on the operating results of MacDonald-Miller for the 12 month period
ended December 31, 1997, which was subsequently extended to December 31, 1998,
to the former shareholders of MacDonald-Miller, including Mr. Sigmund. The
Company estimates that the payment to Mr. Sigmund will be approximately
$144,000 in cash and 19,000 shares of Common Stock. MacDonald-Miller leases
its Seattle facility from F&V Investments, a company owned by Mr. Sigmund and
his wife. In 1998, MacDonald-
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Miller paid $475,200 in rent under this lease. The Company believes that the
terms of this lease are no less favorable to the Company than could have been
negotiated by the Company with unaffiliated third parties.
Masters leases its Gaithersburg, Maryland, facility from an entity
controlled by Mr. Bryant. In 1998, Masters paid $243,048 in rent under this
lease, and the lease provides that the rent will increase 4% each year. The
Company believes that the terms of this lease are no less favorable to the
Company than could have been negotiated by the Company with unaffiliated third
parties.
Van's leases its Delray Beach, Florida, facility from an entity controlled
by Mr. Henninger. In 1998, Van's paid $86,122 in rent under this lease, which
provides that the rent will increase by 3% each year. The Company believes
that the terms of this lease are no less favorable to the Company than could
have been negotiated by the Company with unaffiliated third parties.
In connection with the acquisition of Continental Electrical Construction
Co. by the Company in October 1998, Mr. Witz received approximately $10
million in cash and 202,522 shares of Common Stock. Additionally, a trust
under which Mr. Witz is a beneficiary has leased two buildings to Continental
Electrical for an aggregate amount of approximately $24,000 per month. Each
lease has an initial five year term and provides for rent increases based upon
changes in the Consumer Price Index beginning in the fourth year of each
lease. The Company believes that the terms of each lease are no less favorable
to the Company than could have been negotiated by the Company with
unaffiliated third parties.
In 1998, the Company purchased the stock of Trinity Contractors, Inc. from
its shareholders, including Robert Munson III and a trust of which Mr. Munson
is the beneficiary. As consideration for these shares, Mr. Munson and the
trust received $16,081,473 in cash, 555,437 shares of Common Stock, a warrant
to purchase 317,510 shares of Common Stock, and $6,128,979 of subordinated
debt of the Company. In early 1999, Mr. Munson exercised a put option to
require the Company to repurchase the warrants and debt for an amount equal to
the principal amount of the debt plus the accrued and unpaid interest thereon.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, among others, to file reports of ownership
and changes in ownership of the Company's Common Stock with the Securities and
Exchange Commission and the New York Stock Exchange. Copies of these reports
must also be furnished to the Company. Based solely upon a review of the
copies of the forms filed under Section 16(a) and furnished to the Company, or
written representations from reporting persons, the Company believes that all
filing requirements applicable to its executive officers and directors were
complied with during 1998 except that one report with respect to each of
Messrs. W. Michael Callahan, David L. Henninger and Alfred R. Roach, Jr. was
inadvertently filed late.
Compensation Committee Interlocks and Insider Participation
During 1998, Messrs. Morrison, Sullivan and Weaver (none of whom was or had
been an officer or employee of the Company or any of its subsidiaries) served
on the Company's Compensation Committee. There were no interlocks or insider
participation with other companies with the meaning of the proxy rules of the
Securities and Exchange Commission during 1998.
ITEM 2
APPROVAL OF
GROUPMAC EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors recommends a vote FOR the approval of this Proposal
The Board of Directors of the Company, on March 10, 1999, unanimously
approved the GroupMAC Employee Stock Purchase Plan (the "Plan") and directed
that the Plan be submitted to the shareholders for their approval at the 1999
Annual Meeting of Shareholders. The Plan will become effective, subject to
shareholder approval, on July 1, 1999.
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Under the Plan, eligible employees may purchase up to 1,000,000 shares of
the Company's Common Stock, par value $.001 per share.
The Plan is being presented to the shareholders of the Company for approval
to enable the Plan to qualify under Section 423 of the Internal Revenue Code
of 1986, as amended (the "Tax Code"). A discussion of the tax consequences of
the Plan is set forth below. The Plan is not subject to any of the provisions
of the Employee Retirement Income Security Act of 1974, as amended, or Section
401(a) of the Tax Code. The Company is unable to determine the amount of the
benefits which may be received by Plan participants, or would have been
received by Plan participants had the Plan been in effect for fiscal year
1998, as participation may vary in the discretion of the individual employees.
Set forth below is a summary of the major provisions of the Plan, which is
qualified in its entirety by reference to the full text of the Plan attached
to this Proxy Statement as Appendix A.
Summary of the Stock Purchase Plan
Objective. The objective of the Plan is to permit employees of the Company
and its subsidiaries to acquire an equity interest in the Company through the
purchase of the Company's Common Stock.
Eligibility and Participation. Each full-time employee of the Company or any
of its subsidiaries who has completed at least 90 days of service with the
Company is eligible to participate in the Plan except employees who are
customarily employed less than 20 hours per week or less than five months per
year or are employed by a subsidiary which has been excluded from
participation in the Plan, as determined by the Compensation Committee.
However, no employee is eligible who would own, after purchasing Common Stock
subject to options, shares of capital stock representing 5% or more of the
total combined voting stock of the Company. The Company estimates that
approximately 10,000 employees of the Company and its subsidiaries will be
eligible to participate in the Plan. An eligible employee may enroll in the
Plan as of each January 1 and July 1 (the "Enrollment Dates") and may
thereafter make contributions on an after-tax basis through payroll deductions
over a six month period ending on June 30 and December 31, respectively,
ranging from a minimum of $10 per month up to an overall maximum of 10% of the
participant's base compensation (or such other amount as the Compensation
Committee may determine). A participant may withdraw from the Plan at any
time, in which event any accumulated payroll deductions will be paid to him.
Purchase of Common Stock. On each June 30 and December 31, the participants'
payroll deductions since the preceding Enrollment Date will be invested in
shares of Common Stock. Shares will be purchased at a price equal to 85% of
the Fair Market Value (as defined in the Plan) of such Common Stock on the
Enrollment Date or the date of purchase, whichever is lower. The shares
purchased may be authorized but unissued shares, shares previously issued and
reacquired by the Company, or shares purchased on the open market.
Recapitalization. In the event of any reorganization, stock split, reverse
stock split or other change in the capital structure of the Company, the
Compensation Committee may make an appropriate adjustment to the number, kind
and purchase price of the shares available for purchase under the Plan and the
maximum number of shares which may be issued under the Plan.
Costs of Administration. The Company will pay the costs of administering the
Plan and will also pay any brokerage fees for the sale by a participant of
shares purchased under the Plan and held for two years.
Taxes. The Plan is intended to qualify as an "employee stock purchase plan"
under Section 423 of the Tax Code. This section provides that participants
will not be taxed on the discount until the participant disposes of the stock,
and the determination of the ordinary and capital portion of the resulting
gain or loss depends on the length of time the employee has held the stock.
The Company will be entitled to a deduction equal to the amount of the
employee's ordinary income if the employee disposes of the shares within two
years of the applicable Enrollment Date; otherwise, the Company will have no
tax consequences.
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Plan Amendment. The Board of Directors of the Company may amend or terminate
the Plan at any time as permitted by law. However, no amendment that requires
shareholder approval in order for the Plan to meet the requirements of Section
423 will be effective unless within one year after it is adopted by the Board
of Directors it is approved by the Company's shareholders.
Administration. The Compensation Committee of the Board of Directors will
administer the Plan. The Committee is empowered to adopt rules and regulations
concerning the administration and interpretation of the Plan.
The affirmative vote of at least a majority of the outstanding shares
present in person or by proxy at the annual meeting is necessary for the
adoption of the Plan.
ITEM 3
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends a vote FOR the approval of this Proposal
Financial statements of the Company and its consolidated subsidiaries are
included in the Company's annual report furnished to all shareholders. The
annual report does not constitute part of the proxy solicitation material. The
Board of Directors has appointed KPMG LLP as independent public accountants
for the Company to examine its consolidated financial statements for the year
ended December 31, 1999 and has determined that it would be desirable to
request that the shareholders approve such appointment. If the shareholders
should not approve such appointment, the Board would reconsider the
appointment. KPMG LLP also acted as the Company's principal accountants for
the fiscal year ended December 31, 1998. Representatives of KPMG LLP are
expected to be present at the annual meeting and will have the opportunity to
make a statement if they desire to do so and also are expected to be available
to respond to appropriate questions.
OTHER MATTERS
The Board of Directors is not aware of any other matters that may properly
come before the annual meeting. However, should any such matter come before
the annual meeting, it is the intention of the persons named in the enclosed
form of proxy to vote all proxies (unless otherwise directed by shareholders)
in accordance with their judgment on such matters.
SUBMISSION OF SHAREHOLDER PROPOSALS
In order to properly present a proposal for consideration at the 2000 Annual
Meeting of Shareholders, a shareholder must deliver to the Secretary of the
Company written notice of that proposal no earlier than November 14, 1999 and
no later than December 14, 1999. The Company will consider any proposal
submitted during this period for inclusion in its proxy statement and form of
proxy relating to that meeting.
RANDOLPH W. BRYANT
Senior Vice President, General Counsel
and Secretary
The Company will furnish without charge to each person whose Proxy is being
solicited, upon the written request of any such person, a copy of the
Company's annual report on Form 10-K for the fiscal year ended December 31,
1998, as filed with the Securities and Exchange Commission, including the
financial statements and schedules thereto. Requests for copies of such report
should be directed to Randolph W. Bryant, Senior Vice President, General
Counsel and Secretary, Group Maintenance America Corp., 8 Greenway Plaza,
Suite 1500, Houston, Texas 77046.
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APPENDIX A
GROUPMAC EMPLOYEE STOCK PURCHASE PLAN
(Effective July 1, 1999)
1. Purpose
The GroupMAC Employee Stock Purchase Plan (the "Plan") is designed to
encourage and assist all employees of Group Maintenance America Corp.
("GroupMAC") and its Subsidiaries (as defined in Section 4) (hereinafter
collectively referred to as the "Company"), where permitted by applicable laws
and regulations, to acquire an equity interest in GroupMAC through the
purchase of shares of common stock, $.001 par value, of GroupMAC ("Common
Stock"). It is intended that this Plan shall constitute an "employee stock
purchase plan" within the meaning of Section 423 of the Internal Revenue Code
of 1986, as amended (the "Code").
2. Administration of the Plan
The Plan shall be administered and interpreted by the Compensation Committee
(the "Committee") of the Board of Directors of GroupMAC (the "Board"). The
Committee shall supervise the administration and enforcement of the Plan
according to its terms and provisions and shall have all powers necessary to
accomplish these purposes and discharge its duties hereunder including, but
not by way of limitation, the power to (i) employ and compensate agents of the
Committee for the purpose of administering the accounts of participating
employees; (ii) construe or interpret the Plan; (iii) determine all questions
of eligibility; and (iv) compute the amount and determine the manner and time
of payment of all benefits according to the Plan.
3. Nature and Number of Shares
The Common Stock subject to issuance under the terms of the Plan shall be
shares of GroupMAC's authorized but unissued shares, previously issued shares
reacquired and held by GroupMAC or shares purchased on the open market. The
aggregate number of shares which may be issued under the Plan shall not exceed
1,000,000 shares of Common Stock. All shares purchased under the Plan,
regardless of source, shall be counted against the 1,000,000 share limitation.
In the event of any reorganization, stock split, reverse stock split, stock
dividend, combination of shares, merger, consolidation, offering of rights or
other similar change in the capital structure of GroupMAC, the Committee may
make such adjustment, if any, as it deems appropriate in the number, kind and
purchase price of the shares available for purchase under the Plan and in the
maximum number of shares which may be issued under the Plan, subject to the
approval of the Board and in accordance with Section 19.
4. Eligibility Requirements
Each Employee (as hereinafter defined), except as described in the next
following paragraph, shall become eligible to participate in the Plan in
accordance with Section 5 on the first Enrollment Date (as defined therein)
following employment by the Company. Participation in the Plan is voluntary.
The following Employees are not eligible to participate in the Plan:
(i) Employees who would, immediately upon enrollment in the Plan, own
directly or indirectly, or hold options or rights to acquire, an aggregate
of five percent or more of the total combined voting power or value of all
outstanding shares of all classes of GroupMAC or any Subsidiary (in
determining stock ownership of an individual, the rules of Section 424(d)
of the Code shall be applied, and the Committee may rely on representations
of fact made to it by the Employee and believed by it to be true);
(ii) Employees who are customarily employed by the Company less than 20
hours per week or less than 5 months in any calendar year; and
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(iii) Employees who have not completed at least 90 days of service with
the Company as of an Enrollment Date.
"Employee" means any individual employed full-time by GroupMAC or any
Subsidiary. "Subsidiary" means any corporation (a) which is in an unbroken
chain of corporations beginning with GroupMAC if, on or after the Effective
Date, each of the corporations other than the last corporation in the chain
owns stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain
and (b) which has not been excluded from Plan participation by action of the
Committee.
5. Enrollment
Each eligible Employee of GroupMAC or any Subsidiary as of July 1, 1999 (the
"Effective Date") may enroll in the Plan as of the Effective Date. Each other
eligible Employee of GroupMAC or a participating Subsidiary who thereafter
becomes eligible to participate may enroll in the Plan on the first to occur
of January 1 or July 1 following the date he first meets the eligibility
requirements of Section 4. Any eligible Employee not enrolling in the Plan
when first eligible may enroll in the Plan on any subsequent January 1 or July
1. Any eligible Employee may enroll or re-enroll in the Plan on the dates
hereinabove prescribed or such other specific dates established by the
Committee from time to time ("Enrollment Dates"). In order to enroll, an
eligible Employee must complete, sign and submit the appropriate form to the
person designated by the Committee.
6. Method of Payment
Payment for shares is to be made as of the applicable Purchase Date (as
defined in Section 9) through payroll deductions on an after-tax basis (with
no right of prepayment) over the Plan's designated purchase period (the
"Purchase Period"), with the first such deduction commencing with the first
payroll period ending after the Enrollment Date. Each Purchase Period under
the Plan shall be a period of six calendar months beginning on each January 1
and ending on the following June 30 and on each July 1 and ending on the
following December 31 or such other period as the Committee may prescribe.
Each participating Employee (hereinafter referred to as a "Participant") will
authorize such deductions from his pay for each month during the Purchase
Period and such amounts will be deducted in conformity with his employer's
payroll deduction schedule.
Each Participant may elect to make contributions each pay period in amounts
not less than $10, not to exceed an annual contribution equal to ten percent
of the Participant's base salary (or such other dollar amounts as the
Committee may establish from time to time before an Enrollment Date for all
purchases to occur during the relevant Purchase Period). In establishing other
dollar amounts of permitted contributions, the Committee may take into account
the Maximum Share Limitation (as defined in Section 8). The rate of
contribution shall be designated by the Participant in the enrollment form.
A Participant may elect to increase or decrease the rate of contribution
effective as of the first day of the Purchase Period by giving prior written
notice to the person designated by the Committee on the appropriate form. A
Participant may not elect to increase or decrease the rate of contribution
during a Purchase Period. A Participant may suspend payroll deductions at any
time during the Purchase Period, by giving prior written notice to the person
designated by the Committee on the appropriate form. If a Participant elects
to suspend his payroll deductions, such Participant's account will be used to
purchase stock at the end of the Purchase Period. A Participant may also elect
to withdraw his entire contributions for the current Purchase Period in
accordance with Section 8, by giving prior written notice to the person
designated by the Committee on the appropriate form. Any Participant who
withdraws his contributions will receive, as soon as practicable, his entire
account balance. Any Participant who suspends payroll deductions or withdraws
contributions during any Purchase Period cannot resume payroll deductions
during such Purchase Period and must re-enroll in the Plan in order to
participate in the next Purchase Period.
Except in case of cancellation of election to purchase, death, resignation
or other terminating event, the amount in a Participant's account at the end
of the Purchase Period will be applied to the purchase of the shares.
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7. Crediting of Contributions and Payment of Dividends
Contributions shall be credited to a Participant's account as soon as
administratively feasible after payroll withholding. Any such contributions
shall be deposited in or held by a bank or financial institution designated by
the Committee for this purpose (the "Custodian"). Dividends on shares held in
a Participant's account in the Plan will be paid directly to such Participant.
Interest will not be credited to a Participant's account.
8. Grant of Right to Purchase Shares on Enrollment
Enrollment in the Plan by an eligible Employee on an Enrollment Date will
constitute the grant by the Company to the Participant of the right to
purchase shares of Common Stock under the Plan. Re-enrollment by a Participant
in the Plan will constitute a grant by the Company to the Participant of a new
opportunity to purchase shares on the Enrollment Date on which such re-
enrollment occurs. A Participant who has not (a) terminated employment, (b)
withdrawn his contributions from the Plan, or (c) notified the Company in
writing, by such date as the Committee shall establish (which date shall not
be later than June 1 or December 1, as applicable), of his election to
withdraw his payroll deductions as of the applicable of June 30 or December 31
will have shares of Common Stock purchased for him on the applicable Purchase
Date, and he will automatically be re-enrolled in the Plan on the Enrollment
Date immediately following the Purchase Date on which such purchase has
occurred, unless each Participant notifies the person designated by the
Committee on the appropriate form that he elects not to re-enroll.
Each right to purchase shares of Common Stock under the Plan during a
Purchase Period shall have the following terms:
(i) the right to purchase shares of Common Stock during a particular
Purchase Period shall expire on the earlier of: (A) the completion of the
purchase of shares on the Purchase Date occurring in the Purchase Period,
or (B) the date on which participation of such Participant in the Plan
terminates for any reason;
(ii) payment for shares purchased will be made only through payroll
withholding in accordance with Sections 6 and 7;
(iii) purchase of shares will be accomplished only in accordance with
Section 9;
(iv) the price per share will be determined as provided in Section 9;
(v) the right to purchase shares (taken together with all other such
rights then outstanding under this Plan and under all other similar stock
purchase plans of GroupMAC or any Subsidiary) will in no event give the
Participant the right to purchase a number of shares during a calendar year
in excess of the number of shares of Common Stock derived by dividing
$25,000 by the fair market value of the Common Stock (the "Maximum Share
Limitation") on the applicable Grant Date determined in accordance with
Section 9;
(vi) shares purchased under this Plan may not be sold within one year of
the Purchase Date, or such longer period as may be required under
applicable insider trading or other securities laws and regulations unless
the Committee, in its sole discretion, waives this requirement to the
extent permissible under such applicable laws and regulations; and
(vii) the right to purchase shares will in all respects be subject to the
terms and conditions of the Plan, as interpreted by the Committee, in its
sole discretion, from time to time.
9. Purchase of Shares
The right to purchase shares of Common Stock granted by the Company under
the Plan is for the term of a Purchase Period. The fair market value of the
Common Stock ("Fair Market Value") to be purchased during such Purchase Period
will be the average of the high and low sales price per share of the Common
Stock as reported on the New York Stock Exchange on the first trading day of
the calendar month of January or July, as applicable, or such other trading
date designated by the Committee (the "Grant Date"). The Fair Market Value of
the Common Stock will again be determined in the same manner on the last
trading day of the calendar month
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of June or December, as applicable, or such other trading date designated by
the Committee (the "Purchase Date"); however, in no event shall the Committee,
in the exercise of its discretion, designate a Purchase Date beyond 27 months
from the related Enrollment Date or otherwise fail to meet the requirements of
Section 423(b)(7) of the Code. These dates constitute the date of grant and
the date of exercise for valuation purposes of Section 423 of the Code.
As of the Purchase Date, the Committee shall apply the funds then credited
to each Participant's account to the purchase of whole and fractional shares
of Common Stock. The cost to the Participant for the shares purchased during a
Purchase Period shall be the lower of:
(i) eighty-five percent of the Fair Market Value of Common Stock on the
Grant Date; or
(ii) eighty-five percent of the Fair Market Value of Common Stock on the
Purchase Date.
GroupMAC will deliver certificates evidencing shares purchased to the
Custodian or to any other bank or financial institution designated by the
Committee for this purpose as soon as administratively feasible after the
Purchase Date. Notwithstanding the foregoing, Participants shall be treated as
the owners of their shares effective as of the Purchase Date. Shares that are
held by the Custodian or any other designated bank or financial institution
shall be held in book entry form. If for any reason the purchase of shares
with a Participant's contributions to the Plan exceeds or would exceed the
Maximum Share Limitation, such excess amounts shall be refunded to the
Participant as soon as practicable after such excess has been determined to
exist.
If as of any Purchase Date the shares authorized for purchase under the Plan
are exceeded, enrollments shall be reduced proportionately to eliminate the
excess. Any funds that cannot be applied to the purchase of shares due to
excess enrollment shall be refunded as soon as administratively feasible. The
Committee in its discretion may also provide that excess enrollments may be
carried over to the next Purchase Period under this Plan or any successor plan
according to the regulations set forth under Section 423 of the Code.
10. Manner of Withdrawal
A Participant may elect to withdraw at any time (without withdrawing from
participation in the Plan), and to receive a certificate for, the number of
shares which have been held in his account for at least one year after such
shares were purchased, by giving notice to the person designated by the
Committee on the appropriate form. Upon receipt of such notice from the person
designated by the Committee, the Custodian, bank or other financial
institution designated by the Committee for this purpose will arrange for the
issuance and delivery of such shares held in the Participant's account as soon
as administratively feasible.
This one-year holding requirement may be waived by the Committee, in its
sole discretion. Until such certificates are distributed to the Participant,
the Participant will not be permitted to transfer ownership of the
certificates except as contemplated by Section 14 of the Plan.
11. Termination of Participation
The right to participate in the Plan terminates immediately when a
Participant ceases to be employed by the Company for any reason whatsoever
(including death, unpaid disability or when the Participant's employer ceases
to be a Subsidiary) or the Participant otherwise becomes ineligible.
Participation also terminates immediately when the Participant voluntarily
withdraws his contributions from the Plan. A Participant whose participation
in the Plan has not terminated or has not suspended his payroll deductions
during a Purchase Period will automatically be re-enrolled in the Plan for the
next Purchase Period, unless such eligible Employee notified the person
designated by the Committee on the appropriate form that he elects not to re-
enroll. Participation terminates immediately after the Purchase Date if the
Participant elects not to re-enroll in the Plan for the next Purchase Period
or if the Participant has suspended payroll deductions during any Purchase
Period and has not re-enrolled in the Plan for the next Purchase Period. As
soon as administratively feasible after termination of participation, the
Committee shall pay to the Participant or his beneficiary or legal
representative all funds
A-4
<PAGE>
credited to his account. The Participant may elect to receive a certificate
for the number of shares held in his account for at least one year after such
shares were purchased (unless the one-year holding requirement is waived by
the Committee in its sole discretion), in accordance with Section 10 of the
Plan. For purposes of the Plan, a Participant is not deemed to have terminated
his employment if he transfers employment from GroupMAC to a Subsidiary, or
vice versa, or transfers employment between Subsidiaries.
12. Unpaid Leave of Absence
Unless the Participant has voluntarily withdrawn his contributions from the
Plan, shares will be purchased for his account on the Purchase Date next
following commencement of an unpaid leave of absence by such Participant,
provided such leave does not constitute a termination of employment. The
number of shares to be purchased will be determined by applying to the
purchase the amount of the Participant's contributions made up to the
commencement of such unpaid leave of absence. If the Participant's unpaid
leave of absence both commences and terminates during the same Purchase Period
and he has resumed eligible employment prior to the Purchase Date related to
that Purchase Period, he may also resume payroll deductions immediately, and
shares will be purchased for him on such Purchase Date as otherwise provided
in Section 9.
13. Designation of Beneficiary
Each Participant may designate one or more beneficiaries in the event of
death and may, in his sole discretion, change such designation at any time.
Any such designation shall be effective upon receipt by the person designated
by the Committee and shall control over any disposition by will or otherwise.
As soon as administratively feasible after the death of a Participant,
amounts credited to his account shall be paid in cash and a certificate for
any shares shall be delivered to the Participant's designated beneficiaries
or, in the absence of such designation, to the executor, administrator or
other legal representative of the Participant's estate. Such payment shall
relieve the Company of further liability to the deceased Participant with
respect to the Plan. If more than one beneficiary is designated, each
beneficiary shall receive an equal portion of the account unless the
Participant has given express contrary instructions.
14. Assignment
Except as provided in Section 13, the rights of a Participant under the Plan
will not be assignable or otherwise transferable by the Participant, other
than by will or the laws of descent and distribution. No purported assignment
or transfer of such rights of a Participant under the Plan, whether voluntary
or involuntary, by operation of law or otherwise, shall vest in the purported
assignee or transferee any interest or right therein whatsoever, but
immediately upon such assignment or transfer, or any attempt to make the same,
such rights shall terminate and become of no further effect. If this provision
is violated, the Participant's election to purchase Common Stock shall
terminate, and the only obligation of the Company remaining under the Plan
will be to pay to the person entitled thereto the amount then credited to the
Participant's account. No Participant may create a lien on any funds,
securities, rights or other property held for the account of the Participant
under the Plan, except to the extent that there has been a designation of
beneficiaries in accordance with the Plan, and except to the extent permitted
by will or the laws of descent and distribution if beneficiaries have not been
designated. A Participant's right to purchase shares under the Plan shall be
exercisable only during the Participant's lifetime and only by him.
15. Costs
All costs and expenses incurred in administering this Plan shall be paid by
GroupMAC. Any brokerage fees for the sale of shares purchased under the Plan
shall be paid by the Participant; provided, however, that in the event Common
Stock is retained by the Participant for a period of two years (or more)
beginning on the Purchase Date of such Common Stock, then GroupMAC shall pay
the brokerage fees related to the sale of such shares of Common Stock.
A-5
<PAGE>
16. Reports
As soon as practicable following the end of each Purchase Period, GroupMAC
shall provide or cause to be provided to each Participant a report of his
contributions and the number of whole and fractional shares of Common Stock
purchased with such contributions by that Participant on each Purchase Date.
17. Equal Rights and Privileges
All eligible Employees shall have equal rights and privileges with respect
to the Plan so that the Plan qualifies as an "employee stock purchase plan"
within the meaning of Section 423 or any successor provision of the Code and
related regulations. Any provision of the Plan which is inconsistent with
Section 423 or any successor provision of the Code shall without further act
or amendment by the Company be reformed to comply with the requirements of
Section 423. This Section 17 shall take precedence over all other provisions
in the Plan.
18. Rights as Shareholders
A Participant will have no rights as a shareholder under the election to
purchase until he becomes a shareholder as herein provided. A Participant will
become a shareholder with respect to shares for which payment has been
completed as provided in Section 9 at the close of business on the last
trading day of the Purchase Period.
19. Modification and Termination
The Board may amend or terminate the Plan at any time insofar as permitted
by law. No amendment shall be effective unless within one year after it is
adopted by the Board it is approved by the holders of GroupMAC's outstanding
shares if and to the extent such amendment is required to be approved by
shareholders in order to cause the rights granted under the Plan to purchase
shares of Common Stock to meet the requirements of Section 423 of the Code (or
any successor provision).
The Plan shall terminate after all Common Stock issued under the Plan has
been purchased, unless terminated earlier by the Board or unless additional
Common Stock is issued under the Plan with the approval of the shareholders.
In the event the Plan is terminated, the Committee may elect to terminate all
outstanding rights to purchase shares under the Plan either immediately or
upon completion of the purchase of shares on the next Purchase Date, unless
the Committee has designated that the right to make all such purchases shall
expire on some other designated date occurring prior to the next Purchase
Date. If the rights to purchase shares under the Plan are terminated prior to
expiration, all funds contributed to the Plan which have not been used to
purchase shares shall be returned to the Participants as soon as
administratively feasible.
20. Board and Shareholder Approval; Effective Date
This Plan shall be effective as of the Effective Date. Notwithstanding the
foregoing, the adoption of this Plan is expressly conditioned upon the
approval of (i) the Board and (ii) the holders of a majority of the
outstanding shares of Common Stock, on or before the Effective Date. If the
Board or the shareholders of the Company should fail so to approve this Plan
on or before such date, this Plan shall terminate and cease to be of any
further force or effect and all purchases of shares of Common Stock under the
Plan shall be null and void.
21. Governmental Approvals or Consents
This Plan and any offering or sale made to Employees under it are subject to
any governmental approvals or consents that may be or become applicable in
connection therewith. Subject to the provisions of Section 19, the Board may
make such changes in the Plan and include such terms in any offering under the
Plan as may be desirable to comply with the rules or regulations of any
governmental authority.
A-6
<PAGE>
22. Listing of Shares and Related Matters
If at any time the Board or the Committee shall determine, based on opinion
of legal counsel, that the listing, registration or qualification of the
shares covered by the Plan upon any national securities exchange or reporting
system or under any state or federal law is necessary or desirable as a
condition of, or in connection with, the sale or purchase of shares under the
Plan, no shares will be sold, issued or delivered unless and until such
listing, registration or qualification shall have been effected or obtained,
or otherwise provided for, free of any conditions not acceptable to legal
counsel.
23. Employment Rights
The Plan shall neither impose any obligation on GroupMAC or on any
Subsidiary to continue the employment of any Participant, nor impose any
obligation on any Participant to remain in the employ of GroupMAC or of any
Subsidiary.
24. Withholding of Taxes
The Committee may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with
the purchase of Common Stock under the Plan.
25. Governing Law
The Plan and rights to purchase shares that may be granted hereunder shall
be governed by and construed and enforced in accordance with the laws of the
State of Texas.
26. Use of Gender
The gender of words used in the Plan shall be construed to include whichever
may be appropriate under any particular circumstances of the masculine,
feminine or neuter genders.
27. Other Provisions
The agreements to purchase shares of Common Stock under the Plan shall
contain such other provisions as the Committee and the Board shall deem
advisable, provided that no such provision shall in any way be in conflict
with the terms of the Plan.
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<PAGE>
[GROUPMAC LETTERHEAD APPEARS HERE]
April 13, 1999
Dear Benefit Plan Participant:
The Annual Meeting of Shareholders of Group Maintenance America Corp. is
scheduled to be held in Houston, Texas, at 1:30 p.m. on Wednesday, May 12, 1999.
A copy of the Notice and Proxy Statement, which is being sent to all
shareholders of record in connection with the Annual Meeting, is enclosed for
your information.
Also enclosed with this letter is a form of proxy card, which designates the
number of shares held in your benefit plan account. By executing this proxy, you
instruct the benefit plan trustee (the "Trustee") how to vote the shares of
GroupMAC stock in your account that you are entitled to vote. The Trustee will
vote all shares eligible to be voted by benefit plan participants in accordance
with their instructions.
If you return your form of proxy executed but without furnishing voting
instructions, the eligible shares in your account will be voted by the Trustee,
as holder of record of the shares in your account, FOR the election of the
nominees for Directors named in the Proxy Statement, FOR the approval of the
GroupMAC Employee Stock Purchase Plan, FOR the approval of the appointment of
KPMG LLP as the Company's independent public accountants for the year 1999, and,
as recommended by management, on all other matters to be considered at the
Annual Meeting.
If you do not return your executed form of proxy to the Trustee, then your
shares can be voted by the Trustee only in accordance with the requirements of
your benefit plan, which may or may not reflect your views.
YOUR VOTE IS IMPORTANT. PLEASE SEND YOUR EXECUTED FORM OF PROXY CARD WITH
YOUR VOTING INSTRUCTIONS AT YOUR EARLIEST OPPORTUNITY. For your convenience, a
return envelope is enclosed.
Very truly yours,
/s/ J. Patrick Millinor, Jr.
<PAGE>
GROUP MAINTENANCE AMERICA CORP.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 12, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
GROUP MAINTENANCE AMERICA CORP.
The undersigned hereby appoints J. Patrick Millinor, Jr. and Randolph W.
Bryant, and each of them, proxies for the undersigned, with full power of
substitution, to vote all shares of Group Maintenance America Corp. Common Stock
which the undersigned may be entitled to vote at the Annual Meeting of
Shareholders of Group Maintenance America Corp. to be held on Wednesday, May 12,
1999, or at any adjournment thereof, upon the matters set forth on the reverse
side and described in the accompanying Proxy Statement and upon such other
business as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed.
Please mark this proxy as indicated on the reverse side to vote on any item. If
you wish to vote in accordance with the Board of Directors' recommendations, no
boxes need to be checked. Regardless of how you vote, the proxy must be signed
to be valid. If you attend the meeting, you may revoke your proxy and vote in
person.
(CONTINUED ON REVERSE SIDE)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Please mark your votes
as indicated in this [X]
example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3
<S> <C>
1. Election of the following nominees for director: David L. Henninger, Donald L. Luke, J. Patrick Millinor, Jr.,
Lucian L. Morrison, Robert Munson, III
FOR all nominees WITHHOLD AUTHORITY (INSTRUCTION: To withhold authority to vote for
(Except as marked (For all nominees any individual nominee, write that nominee's name
to the contrary) listed) in the space below)
[_] [_] ----------------------------------------------------
2. Approval of GroupMAC Employee Stock Purchase Plan
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Approval of KPMG LLP as independent public accountants
FOR AGAINST ABSTAIN
[_] [_] [_]
4. In the discretion of the proxies named herein, the Proxies are authorized to vote upon other matters as may properly
come before the meeting.
The signer hereby revokes all proxies heretofore given by the signer to vote at said meeting or any adjournments thereof.
</TABLE>
Please sign exactly as your name appears on this
Proxy. Joint owners should each sign. When signing
as attorney, executor, administrator, trustee or
guardian, please give full title as such.
___________________________________________________
___________________________________________________
Signature(s) Date
