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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 2000
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20552
-------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------
ENCOMPASS SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 76-0535259
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3 GREENWAY PLAZA, SUITE 2000 77046
HOUSTON, TEXAS (ZIP CODE)
(Address of Principal Executive Offices)
ENCOMPASS SERVICES CORPORATION
2000 STOCK AWARDS PLAN
(Full title of plan)
GRAY H. MUZZY
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
3 GREENWAY PLAZA, SUITE 2000
HOUSTON, TEXAS 77046
(Name and address of agent for service)
(713) 860-0100
(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
===============================================================================
Proposed
Title of Securities Amount to be Maximum Aggregate Amount of
to be Registered Registered Offering Price Registration Fee
- --------------------------------------------------------------------------------
Common Stock,
$.001 par value (1)... 2,500,000 shares (2) $13,125,000 (3) $3,465 (3)
===============================================================================
(1) This Registration Statement covers the solicitation of offers to buy shares
of Common Stock, $.001 par value (the "Common Stock"), of Encompass
Services Corporation which may be directed to participants in the 2000
Stock Awards Plan.
(2) Pursuant to Rule 416(a), this Registration Statement also registers such
indeterminate number of additional shares of Common Stock issuable in
connection with stock splits, share dividends or similar transactions.
(3) Estimated pursuant to Rule 457(h) solely for the purpose of calculating the
registration fee based on the average of the high and low prices for the
Common Stock on the New York Stock Exchange on April 17, 2000 ($5.25 per
share).
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Note: The documents containing the information specified in this Part I will be
sent or given to employees as specified by Rule 428(b)(1) ((S) 230.428(b)(1)).
Such documents need not be filed with the Commission either as part of this
registration statement or as prospectuses or prospectus supplements pursuant to
Rule 424 ((S) 230.424). These documents and the documents incorporated by
reference in the registration statement pursuant to Item 3 of Part II of this
Form, taken together, constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act. See Rule 428(a)(1) ((S) 230.428(a)(1)).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
1. The following documents, or portions of documents, previously filed by
Encompass Services Corporation (the "Company") with the Securities and Exchange
Commission (the "Commission") are hereby incorporated herein by reference:
(a) (i) Annual Report on Form 10-K for the year ended December 31, 1999;
and
(ii) Current Reports on Form 8-K dated January 20, 2000; February 2,
2000; and February 25, 2000 and on Form 8-K/A dated April 17,
2000.
(b) The description of the Company's Common Stock, $.001 par value,
contained in the Registration Statement on Form 8-A dated November 4, 1997.
2. All reports subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(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 in this Registration Statement and to be a part hereof from the date
of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1.B of the Texas Business Corporation Act, as amended (the
"TBCA"), grants to a corporation the power to indemnify a person who was, is or
is threatened to be made a named defendant or respondent in a proceeding because
the person is or was a director against judgments, penalties (including excise
and similar taxes), fines, settlements and reasonable expenses actually incurred
in connection therewith, only if it is determined that the person (1) conducted
himself in good faith; (2) reasonably believed that (a) in the case of conduct
in his official capacity as a director of the corporation, his conduct was in
the corporation's best interests, and (b) in all other cases, his conduct was at
least not opposed to the corporation's best interest; and (3) in the case of any
criminal proceeding, he had no reasonable cause to believe that his conduct was
unlawful. Article 2.02-1.C limits the allowable indemnification by providing
that, except to the extent permitted by Article 2.02-1.E, a director may not be
indemnified in respect of a proceeding in which the person was found liable (1)
on the basis that he improperly received a personal benefit, whether or not the
benefit resulted from an action taken in his official capacity, or (2) to the
corporation. Article 2.02-1.E provides that if a director is found liable to the
corporation or is found liable on the basis that he improperly received a
personal benefit, the permissible indemnification (1) is limited to reasonable
expenses actually incurred by the person in connection with the proceeding, and
(2) shall not be made in respect of any proceeding in which the person shall
have been found liable for willful or intentional misconduct in the performance
of his duty to the corporation. Finally, Article 2.02-1.H provides that a
corporation shall indemnify a director against reasonable expenses incurred by
him in connection with a proceeding in which he is a named defendant or
respondent because he is or was a director if he has been wholly successful, on
the merits or otherwise, in the defense of the proceeding.
With respect to the officers of a corporation, Article 2.02-1.O of the TBCA
provides that a corporation may indemnify and advance expenses to an officer of
the corporation to the same extent that it may indemnify and advance expenses to
directors under Article 2.02-1. Further, Article 2.01-1.O provides that an
officer of a corporation shall be indemnified as, and to the same extent,
provided by Article 2.02-1.H for a director.
The Amended and Restated Certificate of Incorporation of the Company (the
"Certificate") provides that each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, any appeal in such action, suit or
proceeding, and any inquiry or investigation that would lead to such action,
suit or proceeding (hereinafter a
3
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"proceeding"), by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a director or officer of the Company
or is or was serving at the request of the Company as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to any employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director or officer or in any other capacity
while serving as a director or officer, shall be indemnified and held harmless
by the Company to the fullest extent authorized by the TBCA, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than permitted prior thereto), against all judgments,
fines, penalties (including excise tax and similar taxes), settlements, and
reasonable expenses actually incurred by such indemnitee in connection
therewith. The right to indemnification conferred in this Article shall include
the right to be paid by the Company the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter an "advancement of
expenses"); provided, however, that if the TBCA requires, and advancement of
expenses incurred by an indemnitee shall be made only upon delivery to the
Company of any undertaking, by or on behalf of such indemnitee, to repay all
amount so advanced if it shall ultimately be determined by that such indemnitee
is not entitled to be indemnified for such expenses under this Article or
otherwise.
The Certificate also provides, to the greatest extent permitted by
applicable law in effect from time to time, a director of the Company shall not
be liable to the Company or its shareholders for monetary damages for an act or
omission in the director's capacity as a director except for liability for: (i)
a breach of a director's duty of loyalty to the Company or its shareholders;
(ii) an act or omission not in good faith that constitutes a breach of duty of
the director to the Company or that involved intentional misconduct or a knowing
violation of the law; (iii) a transaction from which a director received an
improper benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office; (iv) an act or omission for which the
liability of a director is expressly provided for by statute; or (v) an act
related to any unlawful stock repurchase or unlawful payment of a dividend.
The Certificate provides that the Company may purchase and maintain
insurance, at its expense, on behalf of any indemnitee against any liability
asserted against him and incurred by him in such a capacity or arising out of
his status as a representative of the Company, whether or not the Company would
have the power to indemnify such person against such expense, liability or loss
under the TBCA.
The Company has entered into employment agreements with its executive
officers pursuant to which the Company is generally obligated to indemnify such
officers to the full extent permitted by the TBCA as described above.
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The Company has purchased liability insurance policies covering the
directors and officers of the Company, including to provide protection where the
Company cannot legally indemnify a director or officer and where a claim arises
under the Employee Retirement Income Security Act of 1974 against a director or
officer based on an alleged breach of fiduciary duty or other wrongful act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
5.1 Opinion of Randolph W. Bryant, General Counsel.
23.1 Consent of KPMG LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Frazier & Deeter, LLC.
23.4 Consent of Schenck & Associates SC.
23.5 Consent of Randolph W. Bryant (included in his opinion filed as
Exhibit 5.1).
24.1 Powers of Attorney.
99.1 2000 Stock Awards Plan.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to the registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the Act;
(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;
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(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (i) and (ii) do not apply if the
registration statement is on Form S-8 and 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 Section 15(d)
of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Act, 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the 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.
Insofar as indemnification for liabilities arising under the Act 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.
6
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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 or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Houston, State of Texas, on April 17,
2000.
ENCOMPASS SERVICES CORPORATION
By: /s/ J. Patrick Millinor, Jr.
---------------------------------
J. Patrick Millinor, Jr.
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons in the indicated capacities on April 17, 2000.
Signature Title
/s/J. Patrick Millinor, Jr. Director and Chairman of the Board
- ---------------------------
J. Patrick Millinor, Jr.
/s/Joseph M. Ivey Director, President and Chief Executive Officer
- --------------------------- (principal executive officer)
Joseph M. Ivey
/s/Darren B. Miller Senior Vice President and Chief Financial Officer
- --------------------------- (principal financial officer)
Darren B. Miller
/s/Daniel W. Kipp Vice President, Treasurer and Chief Information
- --------------------------- Officer
Daniel W. Kipp (principal accounting officer)
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/s/Andrew Africk* Director
- ----------------------------------
Andrew Africk
/s/Vincent W. Eades* Director
- ----------------------------------
Vincent W. Eades
/s/Michael Gross* Director
- ----------------------------------
Michael Gross
/s/William P. Love, Jr.* Director
- ----------------------------------
William P. Love, Jr.
/s/Donald L. Luke* Director, Executive Vice President
- ---------------------------------- and Chief Operating Officer
Donald L. Luke
/s/Lucian L. Morrison* Director
- ----------------------------------
Lucian L. Morrison
/s/Brooks Newmark* Director
- ----------------------------------
Brooks Newmark
/s/M. Jude Reyes* Director
- ----------------------------------
M. Jude Reyes
/s/John M. Sullivan* Director
- ----------------------------------
John M. Sullivan
*By: Randolph W. Bryant
----------------------------------
Randolph W. Bryant
(Attorney-in-Fact for persons indicated)
8
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EXHIBIT 5.1
April 14, 2000
Encompass Services Corporation
3 Greenway Plaza, Suite 2000
Houston, Texas 77046
Ladies and Gentlemen:
The undersigned is the General Counsel of Encompass Services Corporation
(formerly named Group Maintenance America Corp.), a Texas corporation (the
"Company"). This letter is delivered in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), of the sale of up to
2,500,000 shares of common stock, $.001 par value, of the Company (the "Shares")
to employees, directors or consultants pursuant to the 2000 Stock Awards Plan
(the "Plan").
I have reviewed the Form S-8 Registration Statement ("Registration Statement")
filed with the Securities and Exchange Commission (the "Commission") under the
Act. I also have examined (i) the Articles of Incorporation of the Company, as
amended; (ii) the By-laws of the Company, as amended; (iii) certain resolutions
adopted by the Board of Directors of the Company and committees thereof; and
(iv) such other documents and records as I have deemed necessary for purposes
hereof.
In such examination, I have assumed the genuineness of all signatures, the
authenticity of all documents and records submitted to me as originals, the
conformity to authentic original documents and records of all documents and
records submitted to me as copies, and the truthfulness of all statements of
fact contained therein. Based on the foregoing and subject to the
qualifications set forth herein, and having due regard for such legal
considerations as I deem relevant, I am of the opinion that:
1. The Company is a corporation duly incorporated and validly existing under
the laws of the State of Texas.
2. The Shares, when issued in accordance with the terms and conditions of the
Plan, will be legally issued.
The foregoing opinion is based on and is limited to the law of the State of
Texas, and I render no opinion with respect to the law of any other
jurisdiction.
<PAGE>
Encompass Services Corporation
April 14, 2000
Page 2
This opinion is solely for your benefit and may not be relied on or furnished to
any other person without the prior written consent of the undersigned. I
consent to the filing of this opinion with the Commission as an exhibit to the
Registration Statement. By giving such consent, I do not admit that I am within
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Randolph W. Bryant
<PAGE>
EXHIBIT 23.1
CONSENT OF KPMG LLP
The Board of Directors
Encompass Services Corporation:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG LLP
KPMG LLP
Houston, Texas
April 17, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF PRICEWATERHOUSECOOPERS LLP
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 12, 2000, except for Notes 1
and 19, which are as of February 22, 2000, relating to the financial statements
of Building One Services Corporation, which appears in Encompass Services
Corporation's Current Report on Form 8-K/A dated April 17, 2000.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Minneapolis, Minnesota
April 17, 2000
<PAGE>
EXHIBIT 23.3
CONSENT OF FRAZIER & DEETER, LLC
The Board of Directors
Encompass Services Corporation
(formerly named Group Maintenance America Corp.):
We consent to the use of our reports incorporated herein by reference.
/s/ FRAZIER & DEETER, LLC
FRAZIER & DEETER, LLC
Atlanta, Georgia
April 17, 2000
<PAGE>
EXHIBIT 23.4
CONSENT OF SCHENCK & ASSOCIATES SC
The Board of Directors
Encompass Services Corporation
(formerly named Group Maintenance America Corp.):
We consent to the use of the reports of Shinners, Hucovski and Company, S.C.
incorporated herein by reference. Effective July 1, 1999, Shinners, Hucovski and
Company, S.C. merged with Schenck & Associates SC.
/s/ SCHENCK & ASSOCIATES SC
SCHENCK & ASSOCIATES SC
Green Bay, Wisconsin
April 17, 2000
<PAGE>
EXHIBIT 24.1
ENCOMPASS SERVICES CORPORATION
POWER OF ATTORNEY
The undersigned, in his capacity as a Director of Encompass Services
Corporation (the "Company"), does hereby appoint Randolph W. Bryant and
Darren B. Miller, and each of them, severally, his true and lawful attorneys, or
attorney, to execute in his name, place and stead, in his capacity as a Director
of said Company, a Registration Statement on Form S-8 for the registration of
shares of the Company's common stock, par value $.001 per share, which may be
offered by the Company to the participants in the Company's 2000 Stock Awards
Plan, and any and all amendments and post-effective amendments to said
Registration Statement, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission, granting to each of said attorneys the full power and authority to
do and perform, with or without the other of said attorneys, in the name and on
behalf of the undersigned, in any and all capacities, every lawful act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as the undersigned might or could in person, the
undersigned hereby ratifying and approving the lawful acts of said attorneys and
each of them.
IN TESTIMONY WHEREOF, the undersigned has executed this instrument this
1st day of March, 2000.
/s/ Andrew Africk
--------------------------
Andrew Africk
<PAGE>
ENCOMPASS SERVICES CORPORATION
POWER OF ATTORNEY
The undersigned, in his capacity as a Director of Encompass Services
Corporation (the "Company"), does hereby appoint Randolph W. Bryant and
Darren B. Miller, and each of them, severally, his true and lawful attorneys, or
attorney, to execute in his name, place and stead, in his capacity as a Director
of said Company, a Registration Statement on Form S-8 for the registration of
shares of the Company's common stock, par value $.001 per share, which may be
offered by the Company to the participants in the Company's 2000 Stock Awards
Plan, and any and all amendments and post-effective amendments to said
Registration Statement, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission, granting to each of said attorneys the full power and authority to
do and perform, with or without the other of said attorneys, in the name and on
behalf of the undersigned, in any and all capacities, every lawful act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as the undersigned might or could in person, the
undersigned hereby ratifying and approving the lawful acts of said attorneys and
each of them.
IN TESTIMONY WHEREOF, the undersigned has executed this instrument this
1st day of March, 2000.
/s/ Vincent W. Eades
--------------------------
Vincent W. Eades
<PAGE>
ENCOMPASS SERVICES CORPORATION
POWER OF ATTORNEY
The undersigned, in his capacity as a Director of Encompass Services
Corporation (the "Company"), does hereby appoint Randolph W. Bryant and
Darren B. Miller, and each of them, severally, his true and lawful attorneys, or
attorney, to execute in his name, place and stead, in his capacity as a Director
of said Company, a Registration Statement on Form S-8 for the registration of
shares of the Company's common stock, par value $.001 per share, which may be
offered by the Company to the participants in the Company's 2000 Stock Awards
Plan, and any and all amendments and post-effective amendments to said
Registration Statement, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission, granting to each of said attorneys the full power and authority to
do and perform, with or without the other of said attorneys, in the name and on
behalf of the undersigned, in any and all capacities, every lawful act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as the undersigned might or could in person, the
undersigned hereby ratifying and approving the lawful acts of said attorneys and
each of them.
IN TESTIMONY WHEREOF, the undersigned has executed this instrument this
1st day of March, 2000.
/s/ Michael Gross
--------------------------
Michael Gross
<PAGE>
ENCOMPASS SERVICES CORPORATION
POWER OF ATTORNEY
The undersigned, in his capacity as a Director of Encompass Services
Corporation (the "Company"), does hereby appoint Randolph W. Bryant and
Darren B. Miller, and each of them, severally, his true and lawful attorneys, or
attorney, to execute in his name, place and stead, in his capacity as a Director
of said Company, a Registration Statement on Form S-8 for the registration of
shares of the Company's common stock, par value $.001 per share, which may be
offered by the Company to the participants in the Company's 2000 Stock Awards
Plan, and any and all amendments and post-effective amendments to said
Registration Statement, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission, granting to each of said attorneys the full power and authority to
do and perform, with or without the other of said attorneys, in the name and on
behalf of the undersigned, in any and all capacities, every lawful act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as the undersigned might or could in person, the
undersigned hereby ratifying and approving the lawful acts of said attorneys and
each of them.
IN TESTIMONY WHEREOF, the undersigned has executed this instrument this
1st day of March, 2000.
/s/ William P. Love, Jr.
--------------------------
William P. Love, Jr.
<PAGE>
ENCOMPASS SERVICES CORPORATION
POWER OF ATTORNEY
The undersigned, in his capacity as a Director of Encompass Services
Corporation (the "Company"), does hereby appoint Randolph W. Bryant and
Darren B. Miller, and each of them, severally, his true and lawful attorneys, or
attorney, to execute in his name, place and stead, in his capacity as a Director
of said Company, a Registration Statement on Form S-8 for the registration of
shares of the Company's common stock, par value $.001 per share, which may be
offered by the Company to the participants in the Company's 2000 Stock Awards
Plan, and any and all amendments and post-effective amendments to said
Registration Statement, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission, granting to each of said attorneys the full power and authority to
do and perform, with or without the other of said attorneys, in the name and on
behalf of the undersigned, in any and all capacities, every lawful act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as the undersigned might or could in person, the
undersigned hereby ratifying and approving the lawful acts of said attorneys and
each of them.
IN TESTIMONY WHEREOF, the undersigned has executed this instrument this
1st day of March, 2000.
/s/ Donald L. Luke
--------------------------
Donald L. Luke
<PAGE>
ENCOMPASS SERVICES CORPORATION
POWER OF ATTORNEY
The undersigned, in his capacity as a Director of Encompass Services
Corporation (the "Company"), does hereby appoint Randolph W. Bryant and
Darren B. Miller, and each of them, severally, his true and lawful attorneys, or
attorney, to execute in his name, place and stead, in his capacity as a Director
of said Company, a Registration Statement on Form S-8 for the registration of
shares of the Company's common stock, par value $.001 per share, which may be
offered by the Company to the participants in the Company's 2000 Stock Awards
Plan, and any and all amendments and post-effective amendments to said
Registration Statement, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission, granting to each of said attorneys the full power and authority to
do and perform, with or without the other of said attorneys, in the name and on
behalf of the undersigned, in any and all capacities, every lawful act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as the undersigned might or could in person, the
undersigned hereby ratifying and approving the lawful acts of said attorneys and
each of them.
IN TESTIMONY WHEREOF, the undersigned has executed this instrument this
1st day of March, 2000.
/s/ Lucian L. Morrison
--------------------------
Lucian L. Morrison
<PAGE>
ENCOMPASS SERVICES CORPORATION
POWER OF ATTORNEY
The undersigned, in his capacity as a Director of Encompass Services
Corporation (the "Company"), does hereby appoint Randolph W. Bryant and
Darren B. Miller, and each of them, severally, his true and lawful attorneys, or
attorney, to execute in his name, place and stead, in his capacity as a Director
of said Company, a Registration Statement on Form S-8 for the registration of
shares of the Company's common stock, par value $.001 per share, which may be
offered by the Company to the participants in the Company's 2000 Stock Awards
Plan, and any and all amendments and post-effective amendments to said
Registration Statement, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission, granting to each of said attorneys the full power and authority to
do and perform, with or without the other of said attorneys, in the name and on
behalf of the undersigned, in any and all capacities, every lawful act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as the undersigned might or could in person, the
undersigned hereby ratifying and approving the lawful acts of said attorneys and
each of them.
IN TESTIMONY WHEREOF, the undersigned has executed this instrument this
1st day of March, 2000.
/s/ Brooks Newmark
--------------------------
Brooks Newmark
<PAGE>
ENCOMPASS SERVICES CORPORATION
POWER OF ATTORNEY
The undersigned, in his capacity as a Director of Encompass Services
Corporation (the "Company"), does hereby appoint Randolph W. Bryant and
Darren B. Miller, and each of them, severally, his true and lawful attorneys, or
attorney, to execute in his name, place and stead, in his capacity as a Director
of said Company, a Registration Statement on Form S-8 for the registration of
shares of the Company's common stock, par value $.001 per share, which may be
offered by the Company to the participants in the Company's 2000 Stock Awards
Plan, and any and all amendments and post-effective amendments to said
Registration Statement, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission, granting to each of said attorneys the full power and authority to
do and perform, with or without the other of said attorneys, in the name and on
behalf of the undersigned, in any and all capacities, every lawful act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as the undersigned might or could in person, the
undersigned hereby ratifying and approving the lawful acts of said attorneys and
each of them.
IN TESTIMONY WHEREOF, the undersigned has executed this instrument this
1st day of March, 2000.
/s/ M. Jude Reyes
--------------------------
M. Jude Reyes
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ENCOMPASS SERVICES CORPORATION
POWER OF ATTORNEY
The undersigned, in his capacity as a Director of Encompass Services
Corporation (the "Company"), does hereby appoint Randolph W. Bryant and
Darren B. Miller, and each of them, severally, his true and lawful attorneys, or
attorney, to execute in his name, place and stead, in his capacity as a Director
of said Company, a Registration Statement on Form S-8 for the registration of
shares of the Company's common stock, par value $.001 per share, which may be
offered by the Company to the participants in the Company's 2000 Stock Awards
Plan, and any and all amendments and post-effective amendments to said
Registration Statement, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission, granting to each of said attorneys the full power and authority to
do and perform, with or without the other of said attorneys, in the name and on
behalf of the undersigned, in any and all capacities, every lawful act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as the undersigned might or could in person, the
undersigned hereby ratifying and approving the lawful acts of said attorneys and
each of them.
IN TESTIMONY WHEREOF, the undersigned has executed this instrument this
1st day of March, 2000.
/s/ John Sullivan
--------------------------
John Sullivan
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EXHIBIT 99.1
ENCOMPASS SERVICES CORPORATION
2000 STOCK AWARDS PLAN
I. PURPOSE
The purpose of the Encompass Services Corporation 2000 Stock Awards Plan (the
"Plan") is to provide a means through which Encompass Services Corporation, a
Texas corporation (the "Company"), and its subsidiaries, may attract able
persons to the Company and to provide a means whereby those employees, Directors
and consultants, upon whom the responsibilities of the successful administration
and management of the Company rest, and whose present and potential
contributions to the welfare of the Company are of importance, can acquire and
maintain stock ownership, thereby strengthening their concern for the welfare of
the Company and their desire to remain in its employ or service. A further
purpose of the Plan is to provide such key employees, Directors and consultants
with additional incentive and reward opportunities designed to enhance the
profitable growth of the Company. Accordingly, the Plan provides for granting
Incentive Stock Options, options which do not constitute Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Performance Awards,
Phantom Stock Awards, or any combination of the foregoing, as is best suited to
the circumstances of the particular employee, Director or consultant, as
provided herein.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:
(a) "Affiliates" means any "parent corporation" of the Company and any
"subsidiary" of the Company within the meaning of Code Sections 424(e) and
(f), respectively, and any entity which directly or indirectly through one
or more intermediaries controls, is controlled by, or is under common
control with the Company.
(b) "Award" means, individually or collectively, any Option, Restricted
Stock Award, Phantom Stock Award, Performance Award or Stock Appreciation
Right.
(c) "Board" means the Board of Directors of the Company.
(d) "Change of Control" means the occurrence of any of the following
events: (i) the Company shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of
an entity other than a previously wholly-owned subsidiary of the Company),
(ii) the Company sells, leases or exchanges all or substantially all of its
assets to any other person or entity (other than a wholly-owned subsidiary
of the Company), (iii) the Company is to be dissolved and liquidated, (iv)
any person or entity, including a "group" as contemplated by Section
13(d)(3) of the 1934 Act, acquires or gains ownership or control
(including, without limitation, power to vote) of more than 50% of the
outstanding shares of the Company's voting stock (based upon voting power),
or (v) as a result of or in connection with a contested election of
directors, the persons who were directors of the Company before such
election shall cease to constitute a majority of the Board; provided,
however, that the following transactions shall not be a Change of Control
for the purposes of this Plan:
A. the transaction contemplated in that certain Agreement and Plan of
Merger dated as of November 2, 1999 by and between the Company and
Building One Services Corporation;
B. the acquisition by BOSS II, LLC of the Company's convertible
preferred stock pursuant to the Subscription and Exchange Agreement
by and between the Company and BOSS II, LLC dated as of November 2,
1999;
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C. the acquisition by Apollo Management, L.P. ("Apollo") or one of the
Apollo Affiliates (as defined below) of shares of Stock pursuant to
the exercise of certain rights it has under various agreements with
the Company;
D. the transfer of shares among Apollo or any Apollo Affiliates;
provided however, any transfer or transfers among Apollo or any
Apollo Affiliates which is transacted in combination with another
transaction or series of transactions involving a party or parties
other than Apollo or any Apollo Affiliates where all transactions
combined satisfy any of clauses (i) through (v) above shall be a
Change of Control.
For purposes of this definition, an "Apollo Affiliate" shall mean any
entity which would be an "affiliate" of Apollo as provided in Rule 12b-2 under
the 1934 Act.
(e) "Change of Control Value" shall mean (i) the per share price offered
to stockholders of the Company in any such merger, consolidation,
reorganization, sale of assets or dissolution transaction, (ii) the price
per share offered to stockholders of the Company in any tender offer or
exchange offer whereby a Change of Control takes place, or (iii) if such
Change of Control occurs other than pursuant to a tender or exchange offer,
the Fair Market Value per share of the shares into which Awards are
exercisable, as determined by the Committee, whichever is applicable. In
the event that the consideration offered to stockholders of the Company
consists of anything other than cash, the Committee shall determine the
fair cash equivalent of the portion of the consideration offered which is
other than cash.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include
any amendments or successor provisions to any section and any regulations
under such section.
(g) "Committee" means the Compensation Committee of the Board which
shall be (i) constituted so as to permit the Plan to comply with Rule 16b-3
and (ii) constituted solely of "outside directors," within the meaning of
section 162(m) of the Code and applicable interpretive authority
thereunder.
(h) "Company" means Group Maintenance America Corp. and any of its
Affiliates.
(i) A "consultant" means an individual who performs services for the
Company or its Affiliates as an independent contractor.
(j) "Director" means an individual elected to the Board by the
stockholders of the Company or by the Board under applicable corporate law
who is serving on the Board on the date the Plan is adopted by the Board or
is elected to the Board after such date.
(k) An "employee" means any person (including an officer or a Director)
in an employment relationship with the Company or any parent or subsidiary
corporation (as defined in section 424 of the Code).
(l) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(m) "Fair Market Value" means, as of any specified date, the mean of the
high and low sales prices of the Stock (i) reported by the any interdealer
quotation system on which the Stock is quoted on that date or (ii) if the
Stock is listed on a national stock exchange, reported on the stock
exchange composite tape on that date; or, in either case, if no prices are
reported on that date, on the last preceding date on which such prices of
the Stock are so reported. If the Stock is traded over the counter at the
time a determination of its fair market value is required to be made
hereunder, its fair market value shall be deemed to be equal to the average
between the reported high and low or closing bid and asked prices of Stock
on the most recent date on which Stock was publicly traded. In the event
Stock is not publicly traded at the time a determination of its value is
required to be made hereunder, the determination of its fair market value
shall be made by the Committee in such manner as it deems appropriate.
(n) "Holder" means an employee, Director or consultant who has been
granted an Award.
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(o) "Incentive Stock Option" means an option that is designated an
incentive stock option within the meaning of section 422(b) of the Code.
(p) "Nonqualified Stock Option" means an option granted under Paragraph
VII of the Plan to purchase Stock which does not constitute an Incentive
Stock Option.
(q) "Option" means an Award granted under Paragraph VII of the Plan and
includes both Incentive Stock Options to purchase Stock and Nonqualified
Stock Options to purchase Stock.
(r) "Option Agreement" means a written agreement between the Company and
a Holder with respect to an Option.
(s) "Performance Award" means an Award granted under Paragraph X of the
Plan.
(t) "Performance Award Agreement" means a written agreement between the
Company and a Holder with respect to a Performance Award.
(u) "Phantom Stock Award" means an Award granted under Paragraph XI of
the Plan.
(v) "Phantom Stock Award Agreement" means a written agreement between
the Company and a Holder with respect to a Phantom Stock Award.
(w) "Plan" means the Group Maintenance America Corp. 2000 Stock Awards
Plan, as amended from time to time.
(x) "Reload Option" means the grant of a new Option to a Holder who
exercises an Option(s) as provided in Paragraph VII(f) of the Plan.
(y) "Restricted Stock Agreement" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.
(z) "Restricted Stock Award" means an Award granted under Paragraph IX
of the Plan.
(aa) "Rule 16b-3" means SEC Rule 16b-3 promulgated under the 1934 Act,
as such may be amended from time to time, and any successor rule,
regulation or statute fulfilling the same or a similar function.
(bb) "Spread" means, in the case of a Stock Appreciation Right, an
amount equal to the excess, if any, of the Fair Market Value of a share of
Stock on the date such right is exercised over the exercise price of such
Stock Appreciation Right.
(cc) "Stock" means the common stock, $0.001 par value of the Company.
(dd) "Stock Appreciation Right" means an Award granted under Paragraph
VIII of the Plan.
(ee) "Stock Appreciation Rights Agreement" means a written agreement
between the Company and a Holder with respect to an Award of Stock
Appreciation Rights.
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective upon the date of its adoption by the Board,
provided that the Plan is approved by the stockholders of the Company within
twelve months thereafter. No further Awards may be granted under the Plan
after the expiration of ten years from the date of its adoption by the Board.
The Plan shall remain in effect until all Awards granted under the Plan have
been satisfied or expired.
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IV. ADMINISTRATION
(a) Committee. The Plan shall be administered by the Committee.
(b) Powers. Subject to the provisions of the Plan, the Committee shall have
sole authority, in its discretion, to determine which employees, Directors and
consultants shall receive an Award, the time or times when such Award shall be
made, whether an Incentive Stock Option, Nonqualified Option or Stock
Appreciation Right shall be granted, the number of shares of Stock which may
be issued under each Option, Stock Appreciation Right or Restricted Stock
Award, and the value of each Performance Award and Phantom Stock Award. In
making such determinations the Committee may take into account the nature of
the services rendered by the respective employees, Directors and consultants,
their present and potential contributions to the Company's success and such
other factors as the Committee in its discretion shall deem relevant.
(c) Additional Powers. The Committee shall have such additional powers as
are delegated to it by the other provisions of the Plan. Subject to the
express provisions of the Plan, the Committee is authorized to construe the
Plan and the respective agreements executed thereunder, to prescribe such
rules and regulations relating to the Plan as it may deem advisable to carry
out the Plan, and to determine the terms, restrictions and provisions of each
Award, including such terms, restrictions and provisions as shall be requisite
in the judgment of the Committee to cause designated Options to qualify as
Incentive Stock Options, and to make all other determinations necessary or
advisable for administering the Plan. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in any agreement relating
to an Award in the manner and to the extent it shall deem expedient to carry
it into effect. The determinations of the Committee on the matters referred to
in this Paragraph IV shall be conclusive.
V. GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS,
RESTRICTED STOCK AWARDS, PERFORMANCE AWARDS
AND PHANTOM STOCK AWARDS; SHARES SUBJECT TO THE PLAN
(a) Stock Grant and Award Limits. The Committee may from time to time grant
Awards to one or more employees, Directors or consultants determined by it to
be eligible for participation in the Plan in accordance with the provisions of
Paragraph VI. Subject to Paragraph XII, the aggregate number of shares of
Stock that may be issued under the Plan shall not exceed 2,500,000 shares.
Shares of Stock shall be deemed to have been issued under the Plan only to the
extent actually issued and delivered pursuant to an Award. To the extent that
an Award lapses or the rights of its Holder terminate or the Award is paid in
cash, any shares of Stock subject to such Award shall again be available for
the grant of an Award. Separate stock certificates shall be issued by the
Company for those shares acquired pursuant the exercise of an Incentive Stock
Option and for those shares acquired pursuant to the exercise of a
Nonqualified Stock Option.
(b) Stock Offered. The stock to be offered pursuant to the grant of an
Award may be authorized but unissued Stock or Stock previously issued and
outstanding and reacquired by the Company.
VI. ELIGIBILITY
Awards may be granted only to persons who, at the time of grant, are
employees, Directors or consultants. An Award may be granted on more than one
occasion to the same person, and, subject to the limitations set forth in the
Plan, such Award may include an Incentive Stock Option or a Nonqualified Stock
Option, a Stock Appreciation Right, a Restricted Stock Award, a Performance
Award, a Phantom Stock Award or any combination thereof.
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VII. STOCK OPTIONS
(a) Option Period. The term of each Option shall be as specified by the
Committee at the date of grant; provided that, the term of an incentive stock
option cannot exceed ten years from the date of grant.
(b) Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by the
Committee.
(c) Special Limitations on Incentive Stock Options. No more than 2,500,000
shares of Stock may be subject to Incentive Stock Options. Incentive Stock
Options may only be granted to employees of the Company and its Affiliates. To
the extent that the aggregate Fair Market Value (determined at the time the
respective Incentive Stock Option is granted) of Stock with respect to which
Incentive Stock Options are exercisable for the first time by an individual
during any calendar year under all incentive stock option plans of the Company
and its parent and subsidiary corporations exceeds $100,000, such Incentive
Stock Options shall be treated as Nonqualified Stock Options as determined by
the Committee. The Committee shall determine, in accordance with applicable
provisions of the Code, Treasury Regulations and other administrative
pronouncements, which of an optionee's Incentive Stock Options will not
constitute Incentive Stock Options because of such limitation and shall notify
the optionee of such determination as soon as practicable after such
determination. No Incentive Stock Option shall be granted to an individual if,
at the time the Option is granted, such individual owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or of its parent or subsidiary corporation, within the meaning of
section 422(b)(6) of the Code, unless (i) at the time such Option is granted
the option price is at least 110% of the Fair Market Value of the Stock
subject to the Option and (ii) such Option by its terms is not exercisable
after the expiration of five years from the date of grant.
(d) Option Agreement. Each Option shall be evidenced by an Option Agreement
in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code. No individual may be granted in any calendar
year an Option to purchase more than 500,000 shares of Stock. An Option
Agreement may provide for the payment of the option price, in whole or in
part, by the delivery of a number of shares of Stock (plus cash if necessary)
having a Fair Market Value equal to such option price. Payment in full or in
part may also be made by a reduction in the number of shares of Stock issuable
upon the exercise of an Option, based on the Fair Market Value of the shares
of Stock on the date the Option is exercised. Each Option Agreement shall
specify the effect of termination of employment, the cessation of serving on
the Board or the cessation of performing services as a consultant to the
Company on the exercisability of the Option. Moreover, an Option Agreement may
provide for a "cashless exercise" of the Option by establishing procedures
whereby the Holder, by a properly-executed written notice, directs (i) an
immediate market sale or margin loan respecting all or a part of the shares of
Stock to which he is entitled upon exercise pursuant to an extension of credit
by the Company to the Holder of the option price, (ii) the delivery of the
shares of Stock from the Company directly to a brokerage firm and (iii) the
delivery of the option price from the sale or margin loan proceeds from the
brokerage firm directly to the Company. Such Option Agreement may also
include, without limitation, provisions relating to (i) vesting of Options,
subject to the provisions hereof accelerating such vesting on a Change of
Control, (ii) tax matters (including provisions (y) permitting the delivery of
additional shares of Stock or the withholding of shares of Stock from those
acquired upon exercise to satisfy federal or state income tax withholding
requirements and (z) dealing with any other applicable employee wage
withholding requirements), and (iii) any other matters not inconsistent with
the terms and provisions of this Plan that the Committee shall in its sole
discretion determine. The terms and conditions of the respective Option
Agreements need not be identical.
(e) Option Price and Payment. The price at which a share of Stock may be
purchased upon exercise of an Option shall be determined by the Committee, but
(i) such purchase price shall not be less than the Fair Market Value of Stock
subject to an Option on the date the Option is granted and (ii) such purchase
price shall be subject to adjustment as provided herein. The Option or portion
thereof may be exercised by delivery of an
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irrevocable notice of exercise to the Company. The purchase price of the
Option or portion thereof shall be paid in full in the manner prescribed by
the Committee.
(f) Reload Options. The Committee shall have the authority to and, in its
sole discretion may, specify at or after the time of grant of a Nonqualified
Stock Option, that a Holder shall be automatically granted a Reload Option in
the event such Holder exercises all or part of an original option ("Original
Option") within ten years of the date of grant of the Original Option, by
means of, in accordance with Paragraph VII(d) of this Plan, (i) a cashless
exercise, (ii) a reduction in the number of shares of Stock issuable upon such
exercise sufficient to pay the purchase price and the applicable withholding
taxes, based on the Fair Market Value of the shares of Stock on the date the
Option is exercised, or (iii) surrendering to the Company already owned shares
of Stock in full or partial payment of the purchase price under the Original
Option and the applicable withholding taxes. The grant of Reload Options shall
be subject to the availability of shares of Stock under this Plan at the time
of exercise of the Original Option and to the limits provided for in Paragraph
V of this Plan. The Committee shall have the authority to determine the terms
of any Reload Options granted.
(g) Stockholder Rights and Privileges. The Holder shall be entitled to all
the privileges and rights of a stockholder only with respect to such shares of
Stock as have been purchased under the Option and for which certificates of
stock have been registered in the Holder's name.
(h) Options and Rights in Substitution for Stock Options Granted by Other
Corporations. Options and Stock Appreciation Rights may be granted under the
Plan from time to time in substitution for stock options held by individuals
employed by corporations who become employees as a result of a merger or
consolidation of the employing corporation with the Company or any subsidiary,
or the acquisition by the Company or a subsidiary of the assets of the
employing corporation, or the acquisition by the Company or a subsidiary of
stock of the employing corporation with the result that such employing
corporation becomes a subsidiary.
VIII. STOCK APPRECIATION RIGHTS
(a) Stock Appreciation Rights. A Stock Appreciation Right is the right to
receive an amount equal to the Spread with respect to a share of Stock upon
the exercise of such Stock Appreciation Right. Stock Appreciation Rights may
be granted in connection with the grant of an Option, in which case the Option
Agreement will provide that exercise of Stock Appreciation Rights will result
in the surrender of the right to purchase the shares under the Option as to
which the Stock Appreciation Rights were exercised. Alternatively, Stock
Appreciation Rights may be granted independently of Options in which case each
Award of Stock Appreciation Rights shall be evidenced by a Stock Appreciation
Rights Agreement which shall contain such terms and conditions as may be
approved by the Committee. No individual may be granted in any calendar year
more than 500,000 Stock Appreciation Rights. The Spread with respect to a
Stock Appreciation Right may be payable either in cash, shares of Stock with a
Fair Market Value equal to the Spread or in a combination of cash and shares
of Stock. With respect to Stock Appreciation Rights that are subject to
Section 16 of the 1934 Act, however, the Committee shall, except as provided
in Paragraph XII(c), retain sole discretion (i) to determine the form in which
payment of the Stock Appreciation Right will be made (i.e., cash, securities
or any combination thereof) or (ii) to approve an election by a Holder to
receive cash in full or partial settlement of Stock Appreciation Rights. Each
Stock Appreciation Rights Agreement shall specify the effect of termination of
employment, the cessation of serving on the Board or the cessation of
performing services as a consultant to the Company on the exercisability of
the Stock Appreciation Rights.
(b) Other Terms and Conditions. At the time of such Award, the Committee,
may in its sole discretion, prescribe additional terms, conditions or
restrictions relating to Stock Appreciation Rights, including, but not limited
to rules pertaining to termination of employment, the cessation of serving on
the Board or the cessation of performing services as a consultant to the
Company (by retirement, disability, death or otherwise) of a Holder prior to
the expiration of such Stock Appreciation Rights. Such additional terms,
conditions or restrictions shall be set forth in the Stock Appreciation Rights
Agreement made in conjunction with the Award.
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Such Stock Appreciation Rights Agreements may also include, without
limitation, provisions relating to (i) vesting of Awards, subject to the
provisions hereof accelerating vesting on a Change of Control,(ii) tax matters
(including provisions covering applicable wage withholding requirements), and
(iii) any other matters not inconsistent with the terms and provisions of this
Plan, that the Committee shall in its sole discretion determine. The terms and
conditions of the respective Appreciation Rights Agreements need not be
identical.
(c) Exercise Price. The exercise price of each Stock Appreciation Right
shall be determined by the Committee, but such exercise price (i) shall not be
less than the Fair Market Value of a share of Stock on the date the Stock
Appreciation Right is granted (or such greater exercise price as may be
required if such Stock Appreciation Right is granted in connection with an
Incentive Stock Option that must have an exercise price equal to 110% of the
Fair Market Value of the Stock on the date of grant pursuant to Paragraph
VII(c)), and (ii) shall be subject to adjustment as provided in Paragraph XII.
(d) Exercise Period. The term of each Stock Appreciation Right shall be as
specified by the Committee at the date of grant.
(e) Limitations on Exercise of Stock Appreciation Right. A Stock
Appreciation Right shall be exercisable in whole or in such installments and
at such times as determined by the Committee.
IX. RESTRICTED STOCK AWARDS
(a) Forfeiture Restrictions to be Established by the Committee. Shares of
Stock that are the subject of a Restricted Stock Award shall be subject to
restrictions on disposition by the Holder and an obligation of the Holder to
forfeit and surrender the shares to the Company under certain circumstances
(the "Forfeiture Restrictions"). The Forfeiture Restrictions shall be
determined by the Committee in its sole discretion, and the Committee may
provide that the Forfeiture Restrictions shall lapse upon (i) the attainment
of targets established by the Committee that are based on (1) the price of a
share of Stock, (2) the Company's earnings per share, (3) the Company's
revenue, (4) the revenue of a business unit of the Company designated by the
Committee, (5) the return on stockholders' equity achieved by the Company, or
(6) the Company's pre-tax cash flow from operations, (ii) the Holder's
continued service or employment with the Company for a specified period of
time, or (iii) a combination of any two or more of the factors listed in
clauses (i) and (ii) of this sentence. Each Restricted Stock Award may have
different Forfeiture Restrictions, in the discretion of the Committee. The
Forfeiture Restrictions applicable to a particular Restricted Stock Award
shall not be changed except as permitted by Paragraph IX(b) or Paragraph XII.
(b) Other Terms and Conditions. No individual may be awarded more than
500,000 shares of Stock that are subject to a Restricted Stock Award in any
calendar year. Stock awarded pursuant to a Restricted Stock Award shall be
represented by a stock certificate registered in the name of the Holder of
such Restricted Stock Award. The Holder shall have the right to receive
dividends with respect to Stock subject to a Restricted Stock Award, to vote
Stock subject thereto and to enjoy all other stockholder rights, except that
(i) the Holder shall not be entitled to delivery of the stock certificate
until the Forfeiture Restrictions shall have expired, (ii) the Company shall
retain custody of the Stock until the Forfeiture Restrictions shall have
expired, (iii) the Holder may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the Stock until the Forfeiture
Restrictions shall have expired, and (iv) a breach of the terms and conditions
established by the Committee pursuant to the Restricted Stock Agreement, shall
cause a forfeiture of the Restricted Stock Award. At the time of such Award,
the Committee may, in its sole discretion, prescribe additional terms,
conditions or restrictions relating to Restricted Stock Awards, including, but
not limited to, rules pertaining to the termination of employment, the
cessation of serving on the Board or the cessation of performing services as a
consultant to the Company (by retirement, disability, death or otherwise) of a
Holder prior to expiration of the Forfeiture Restrictions. Such additional
terms, conditions or restrictions shall be set forth in a Restricted Stock
Agreement made in conjunction with the Award. Such Restricted Stock Agreement
may also include, without limitation, provisions relating to (i) subject to
the provisions hereof accelerating vesting on a Change of Control, vesting
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of Awards, (ii) tax matters (including provisions (y) covering any applicable
employee wage withholding requirements and (z) prohibiting an election by the
Holder under section 83(b) of the Code), and (iii) any other matters not
inconsistent with the terms and provisions of this Plan that the Committee
shall in its sole discretion determine. The terms and conditions of the
respective Restricted Stock Agreements need not be identical.
(c) Payment for Restricted Stock. The Committee shall determine the amount
and form of any payment for Stock received pursuant to a Restricted Stock
Award, provided that in the absence of such a determination, a Holder shall
not be required to make any payment for Stock received pursuant to a
Restricted Stock Award, except to the extent otherwise required by law.
(d) Agreements. At the time any Award is made under this Paragraph IX, the
Company and the Holder shall enter into a Restricted Stock Agreement setting
forth each of the matters as the Committee may determine to be appropriate.
The terms and provisions of the respective Restricted Stock Agreements need
not be identical.
X. PERFORMANCE AWARDS
(a) Performance Period. The Committee shall establish, with respect to and
at the time of each Performance Award, a performance period over which the
performance of the Holder shall be measured.
(b) Performance Awards. Each Performance Award shall have a maximum value
established by the Committee at the time of such Award, provided that no
individual may be granted a Performance Award in any calendar year where the
value of such award exceeds the Fair Market Value of 500,000 shares of Stock.
(c) Performance Measures. A Performance Award shall be awarded to an
employee, Director or consultant contingent upon future performance of the
employee, Director or consultant, the Company or any subsidiary, division or
department thereof by or in which is he employed or for which he performs
services during the performance period. The Committee shall establish the
performance measures applicable to such performance prior to the beginning of
the performance period but subject to such later revisions as the Committee
shall deem appropriate to reflect significant, unforeseen events or changes.
(d) Awards Criteria. In determining the value of Performance Awards, the
Committee shall take into account an employee's, Director's or consultant's
responsibility level, performance, potential, other Awards and such other
considerations as it deems appropriate.
(e) Payment. Following the end of the performance period, the Holder of a
Performance Award shall be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Award, based on the achievement
of the performance measures for such performance period, as determined by the
Committee. Payment of a Performance Award may be made in cash, Stock or a
combination thereof, as determined by the Committee. Payment shall be made in
a lump sum or in installments as prescribed by the Committee. Any payment to
be made in Stock shall be based on the Fair Market Value of the Stock on the
payment date. If a payment of cash is to be made on a deferred basis, the
Committee shall establish whether interest shall be credited, the rate thereof
and any other terms and conditions applicable thereto.
(f) Termination of Employment, Cessation of Serving on Board or Termination
of Service. A Performance Award shall terminate if the Holder does not remain
continuously in the employ of the Company or fails to serve on the Board or
fails to perform services for the Company at all times during the applicable
performance period, except as may be determined by the Committee or as may
otherwise be provided in the Award at the time granted.
(g) Agreements. At the time any Award is made under this Paragraph X, the
Company and the Holder shall enter into a Performance Award Agreement setting
forth each of the matters contemplated hereby, and, in
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addition such matters are set forth in Paragraph IX(b) as the Committee may
determine to be appropriate. The terms and provisions of the respective
agreements need not be identical.
XI. PHANTOM STOCK AWARDS
(a) Phantom Stock Awards. Phantom Stock Awards are rights to receive shares
of Stock (or cash in an amount equal to the Fair Market Value thereof), or
rights to receive an amount equal to any appreciation in the Fair Market Value
of Stock (or portion thereof) over a specified period of time, which vest over
a period of time or upon the occurrence of an event (including without
limitation a Change of Control) as established by the Committee, without
payment of any amounts by the Holder thereof (except to the extent otherwise
required by law) or satisfaction of any performance criteria or objectives.
Each Phantom Stock Award shall have a maximum value established by the
Committee at the time of such Award, provided that no individual may be
granted a Phantom Stock Award in any calendar year for more than 500,000
shares of Stock.
(b) Award Period. The Committee shall establish, with respect to and at the
time of each Phantom Stock Award, a period over which or the event upon which
the Award shall vest with respect to the Holder.
(c) Awards Criteria. In determining the value of Phantom Stock Awards, the
Committee shall take into account an employee's, Director's or consultant's
responsibility level, performance, potential, other Awards and such other
considerations as it deems appropriate.
(d) Payment. Following the end of the vesting period for a Phantom Stock
Award, the Holder of a Phantom Stock Award shall be entitled to receive
payment of an amount, not exceeding the maximum value of the Phantom Stock
Award, based on the then vested value of the Award. Payment of a Phantom Stock
Award may be made in cash, Stock or a combination thereof as determine by the
Committee. Payment shall be made in a lump sum or in installments as
prescribed by the Committee in its sole discretion. Any payment to be made in
Stock shall be based on the Fair Market Value of the Stock on the payment
date. Cash dividend equivalents may be paid during or after the vesting period
with respect to a Phantom Stock Award, as determined by the Committee. If a
payment of cash is to be made on a deferred basis, the Committee shall
establish whether interest shall be credited, the rate thereof and any other
terms and conditions applicable thereto.
(e) Termination of Employment, Cessation of Serving on Board or Termination
of Service A Phantom Stock Award shall terminate if the Holder does not remain
continuously in the employ of the Company or fails to serve on the Board or
fails to perform services for the Company at all times during the applicable
vesting period, except as may be otherwise determined by the Committee or as
set forth in the Award at the time of grant.
(f) Agreements. At the time any Award is made under this Paragraph XI, the
Company and the Holder shall enter into a Phantom Stock Award Agreement
setting forth each of the matters contemplated hereby and, in addition such
matters as are set forth in Paragraph IX(b) as the Committee may determine to
be appropriate. The terms and provisions of the respective agreements need not
be identical.
XII. RECAPITALIZATION OR REORGANIZATION
(a) The shares with respect to which Awards may be granted are shares of
Stock as presently constituted, but if, and whenever, prior to the expiration
of an Award theretofore granted, the Company shall effect a subdivision or
consolidation by the Company, the number of shares of Stock with respect to
which such Award may thereafter be exercised or satisfied, as applicable, (i)
in the event of an increase in the number of outstanding shares shall be
proportionately increased, and the purchase price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares shall be proportionately reduced, and the purchase price
per share shall be proportionately increased.
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(b) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise or satisfaction, as applicable, of an
Award theretofore granted the Holder shall be entitled to (or entitled to
purchase, if applicable) under such Award, in lieu of the number of shares of
Stock then covered by such Award, the number and class of shares of stock and
securities to which the Holder would have been entitled pursuant to the terms
of the recapitalization if, immediately prior to such recapitalization, the
Holder had been the holder of record of the number of shares of Stock then
covered by such Award.
(c) Unless all or a portion of a Holder's Awards vest or are exercisable
upon the occurrence of a Change of Control specifically provided under an
Option Agreement, a Performance Award Agreement, a Phantom Stock Award
Agreement, a Restricted Stock Agreement, a Stock Appreciation Rights Agreement
or an Employment Agreement, the Committee, in its discretion, shall determine
upon the occurrence of a Change of Control the exercisability of any Award not
otherwise exercisable, which may vary among Holders and types of Awards. The
Committee, in its discretion, may determine that upon the occurrence of a
Change of Control, each Award other than an Option outstanding hereunder shall
terminate within a specified number of days after notice to the Holder, and
such Holder shall receive, with respect to each share of Stock subject to such
Award, cash in an amount equal to the excess, if any, of the Change of Control
Value over the exercise price. Further, in the event of a Change of Control,
the Committee, in its discretion shall act to effect one or more of the
following alternatives with respect to outstanding Options, which may vary
among individual Holders and which may vary among Options held by any
individual Holder: (1) determine a limited period of time for exercise of such
Option on or before a specified date (before or after such Change of Control)
after which specified date all unexercised Options and all rights of Holders
thereunder shall terminate, (2) require the mandatory surrender to the Company
by selected Holders of some or all of the outstanding Options held by such
Holders (irrespective of whether such Options are then exercisable under the
provisions of the Plan) as of a date, before or after such Change of Control,
specified by the Committee, in which event the Committee shall thereupon
cancel such Options and the Company shall pay to each Holder an amount of cash
per share equal to the excess, if any, of the Change of Control Value of the
shares subject to such Option over the exercise price(s) under such Options
for such shares, (3) make such adjustments to Options then outstanding as the
Committee deems appropriate to reflect such Change of Control (provided,
however, that the Committee may determine in its sole discretion that no
adjustment is necessary to Options then outstanding) or (4) provide that
thereafter upon any exercise of an Option theretofore granted the Holder shall
be entitled to purchase under such Option, in lieu of the number of shares of
Stock then covered by such Option the number and class of shares of stock or
other securities or property (including, without limitation, cash) to which
the Holder would have been entitled pursuant to the terms of the agreement of
merger, consolidation or sale of assets and dissolution if, immediately prior
to such merger, consolidation or sale of assets and dissolution the Holder has
been the holder of record of the number of shares of Stock then covered by
such Option. The provisions contained in this paragraph shall be inapplicable
to an Award granted within six (6) months before the occurrence of a Change of
Control if the Holder of such Award is subject to the reporting requirements
of Section 16(a) of the 1934 Act. The provisions contained in this paragraph
shall not alter any rights or terminate any rights of the Holder to further
payments pursuant to any other agreement with the Company following a Change
of Control.
(d) In the event of changes in the outstanding Stock by reason of
recapitalization, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any Award and not otherwise provided for by this Paragraph
XII, any outstanding Awards and any agreements evidencing such Awards shall be
subject to adjustment by the Committee at its discretion as to the number and
price of shares of Stock or other consideration subject to such Awards. In the
event of any such change in the outstanding Stock, the aggregate number of
shares available under the Plan may be appropriately adjusted by the
Committee, whose determination shall be conclusive.
(e) The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization
or other change in the Company's capital structure or its business, any merger
or consolidation of the Company, any issue of debt or equity securities ahead
of or affecting Stock or the rights thereof, the
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dissolution or liquidation of the Company or any sale, lease, exchange or
other disposition of all or any part of its assets or business or any other
corporate act or proceeding.
(f) Any adjustment provided for in Subparagraphs (a), (b), (c) or (d) above
shall be subject to any required stockholder action.
(g) Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon
the exercise of rights or warrants to subscribe therefor, or upon conversion
of shares of obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number
of shares of Stock subject to Awards theretofore granted or the purchase price
per share, if applicable.
XIII. AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with respect
to any shares for which Awards have not theretofore been granted. The Board
shall have the right to alter or amend the Plan or any part thereof from time
to time; provided that no change in any Award theretofore granted may be made
which would impair the rights of the Holder without the consent of the Holder
(unless such change is required in order to cause the benefits under the Plan
to qualify as performance-based compensation within the meaning of section
162(m) of the Code and applicable interpretive authority thereunder), and
provided, further, that the Board may not, without approval of the
stockholders, amend the Plan:
(a) to increase the maximum number of shares which may be issued on
exercise or surrender of an Award, except as provided in Paragraph XII;
(b) to change the Option price;
(c) to change the class of employees, Directors or consultants eligible to
receive Awards or materially increase the benefits accruing to employees,
Directors or consultants under the Plan;
(d) to extend the maximum period during which Awards may be granted under
the Plan;
(e) to modify materially the requirements as to eligibility for
participation in the Plan; or
(f) to decrease any authority granted to the Committee hereunder in
contravention of Rule 16b-3.
XIV. MISCELLANEOUS
(a) Right to An Award. Neither the adoption of the Plan by the Company nor
any action of the Board or the Committee shall be deemed to give an employee,
Director or consultant any right to be granted an Award to purchase Stock, a
right to a Stock Appreciation Right, a Restricted Stock Award, a Performance
Award or a Phantom Stock Award or any of the rights hereunder except as may be
evidenced by an Award or by an Option Agreement, Stock Appreciation Rights
Agreement, Restricted Stock Agreement, Performance Award Agreement or Phantom
Stock Award Agreement on behalf of the Company, and then only to the extent
and on the terms and conditions expressly set forth therein. The Plan shall be
unfunded. The Company shall not be required to establish any special or
separate fund or to make any other segregation of funds or assets to assure
the payment of any Award.
(b) No Employment or Service Rights Conferred. Nothing contained in the
Plan shall (i) confer upon any employee any right with respect to continuation
of employment or service with the Company or any subsidiary or (ii) interfere
in any way with the right of the Company or any subsidiary to terminate his or
her employment or service at any time.
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(c) Other Laws; Withholding. The Company shall not be obligated to issue
any Stock pursuant to any Award granted under the Plan at any time when the
shares covered by such Award have not been registered under the Securities Act
of 1933 and such other state and federal laws, rules or regulations as the
Company or the Committee deems applicable and, in the opinion of legal counsel
for the Company, there is no exemption from the registration requirements of
such laws, rules or regulations available for the issuance and sale of such
shares. No fractional shares of Stock shall be delivered, nor shall any cash
in lieu of fractional shares be paid. The Company shall have the right to
deduct in connection with all Awards any taxes required by law to be withheld
and to require any payments required to enable it to satisfy its withholding
obligations.
(d) No Restriction on Corporate Action. Nothing contained in the Plan shall
be construed to prevent the Company or any subsidiary from taking any
corporate action which is deemed by the Company or such subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan. No employee,
beneficiary or other person shall have any claim against the Company or any
subsidiary as a result of any such action.
(e) Restrictions on Transfer. An Award shall not be transferable otherwise
than by will or the laws of descent and distribution or pursuant to a
"qualified domestic relations order" as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and shall be exercisable during the Holder's lifetime only by such
Holder or the Holder's guardian or legal representative.
(f) Rule 16b-3. It is intended that the Plan and any grant of an Award made
to a person subject to Section 16 of the 1934 Act meet all of the requirements
of Rule 16b-3. If any provision of the Plan or any such Award would disqualify
the Plan or such Award under, or would otherwise not comply with, Rule 16b-3,
such provision or Award shall be construed or deemed amended to conform to
Rule 16b-3.
(g) Section 162(m). If the plan is subject to 162(m) of the Code, it is
intended that the Plan comply fully with and meet all the requirements of
Section 162(m) of the Code so that Options and Stock Appreciation Rights
granted hereunder and, if determined by the Committee, Restricted Stock
Awards, shall constitute "performance-based" compensation within the meaning
of such section. If any provision of the Plan would disqualify the Plan or
would not otherwise permit the Plan to comply with Section 162(m) as so
intended, such provision shall be construed or deemed amended to conform to
the requirements or provisions of Section 162(m); provided that no such
construction or amendment shall have an adverse effect on the economic value
to a Holder of any Award previously granted hereunder.
(h) Governing Law. This Plan shall be construed in accordance with the laws
of the State of Texas.
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