EXHIBIT 10.1
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QUANTA SERVICES, INC.
STOCK EMPLOYEE COMPENSATION TRUST
EFFECTIVE AS OF MARCH 13, 2002
TABLE OF CONTENTS
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PAGE
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ARTICLE 1.
Trust, Trustee and Trust Fund.....................................1
1.1. Trust..................................................1
1.2. Trustee................................................1
1.3. Trust Fund.............................................2
1.4. Trust Fund Subject to Claims...........................2
1.5. Definitions............................................2
ARTICLE 2.
Contributions and Dividends.......................................5
2.1. Contributions..........................................5
2.2. Dividends..............................................5
ARTICLE 3.
Release and Allocation of Company Stock...........................6
3.1. Release of Shares......................................6
3.2. Allocations............................................6
ARTICLE 4.
Compensation, Expenses and Tax Withholding........................6
4.1. Compensation and Expenses..............................6
4.2. Withholding of Taxes...................................6
ARTICLE 5.
Administration of Trust Fund......................................7
5.1. Management and Control of Trust Fund...................7
5.2. Investment of Funds....................................7
5.3. Trustee's Administrative Powers........................7
5.4. Voting and Tendering of Company Stock..................8
5.5. Indemnification.......................................10
5.6. General Duty to Communicate to Committee..............11
ARTICLE 6.
Accounts and Reports of Trustee..................................11
6.1. Records and Accounts of Trustee.......................11
6.2. Fiscal Year...........................................11
6.3. Reports of Trustee....................................11
6.4. Final Report..........................................11
ARTICLE 7.
Succession of Trustee............................................11
7.1. Resignation of Trustee................................11
7.2. Removal of Trustee....................................11
7.3. Appointment of Successor Trustee......................12
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7.4. Succession to Trust Fund Assets.......................12
7.5. Continuation of Trust.................................12
7.6. Changes in Organization of Trustee....................12
7.7. Continuance of Trustee's Powers in Event of
Termination of the Trust..............................12
ARTICLE 8.
Amendment or Termination.........................................12
8.1. Amendments............................................12
8.2. Termination...........................................13
8.3. Form of Amendment or Termination......................13
ARTICLE 9.
Miscellaneous....................................................14
9.1. Controlling Law.......................................14
9.2. Committee Action......................................14
9.3. Notices...............................................14
9.4. Severability..........................................15
9.5. Protection of Persons Dealing with the Trust..........15
9.6. Tax Status of Trust...................................15
9.7. Participants to Have No Interest in the Company by
Reason of the Trust...................................15
9.8. Nonassignability......................................15
9.9. Gender and Plurals....................................15
9.10.Counterparts..........................................15
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QUANTA SERVICES, INC.
STOCK EMPLOYEE COMPENSATION TRUST
THIS TRUST AGREEMENT (the "AGREEMENT") made effective as of
March 13, 2002, between Quanta Services, Inc., a Delaware corporation, and
Wachovia Bank, N.A., as trustee.
W I T N E S S E T H :
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WHEREAS, the Company (as defined below) desires to establish a trust
(the "TRUST") in accordance with the laws of the State of Delaware and for the
purposes stated in this Agreement;
WHEREAS, the Trustee (as defined below) desires to act as trustee of
the Trust, and to hold legal title to the assets of the Trust, in trust, for the
purposes hereinafter stated and in accordance with the terms hereof;
WHEREAS, the Company desires to provide assurance of the availability
of the shares of its common stock necessary to satisfy certain of its
obligations or those of its subsidiaries under the Plans (as defined below);
WHEREAS, the Company desires that the assets to be held in the Trust
Fund (as defined below) should be principally or exclusively securities of the
Company and, therefore, expressly waives any diversification of investments that
might otherwise be necessary, appropriate, or required pursuant to applicable
provisions of law; and
WHEREAS, Wachovia Bank, N.A., has been appointed as trustee and has
accepted such appointment as of the date set forth first above;
NOW, THEREFORE, the parties hereto hereby establish the Trust and
agree that the Trust will be comprised, held and disposed of as follows:
ARTICLE 1
TRUST, TRUSTEE AND TRUST FUND
1.1. TRUST. This Agreement and the Trust shall be known as the Quanta
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Services, Inc. Stock Employee Compensation Trust. The parties intend that the
Trust will be an independent legal entity with title to and power to convey all
of its assets. The parties hereto further intend that the Trust not be subject
to the Employee Retirement Income Security Act of 1974, as amended. The assets
of the Trust will be held, invested and disposed of by the Trustee, in
accordance with the terms of the Trust.
1.2. TRUSTEE. The trustee named above, and its successor or
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successors, is hereby designated as the trustee hereunder, to receive, hold,
invest, administer and distribute the Trust Fund in accordance with this
Agreement, the provisions of which shall govern the power, duties and
responsibilities of the Trustee.
1.3. TRUST FUND. The assets held at any time and from time to time
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under the Trust collectively are herein referred to as the "TRUST FUND" and
shall consist of contributions received by the Trustee, any Company Stock
acquired by the Trust, proceeds of any loans, investments and reinvestment
thereof, the earnings and income thereon (or proceeds resulting from the
disposition thereof), less disbursements therefrom. Except as herein otherwise
provided, title to the assets of the Trust Fund shall at all times be vested in
the Trustee and securities that are part of the Trust Fund shall be held in such
manner that the Trustee's name and the fiduciary capacity in which the
securities are held are fully disclosed, subject to the right of the Trustee to
hold title in bearer form or in the name of a nominee, and the interests of
others in the Trust Fund shall be only the right to have such assets received,
held, invested, administered and distributed in accordance with the provisions
of the Trust.
1.4. TRUST FUND SUBJECT TO CLAIMS. Notwithstanding any provision of
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this Agreement to the contrary, the Trust Fund shall at all times remain subject
to the claims under federal and state law of the general creditors of (i) the
Company and (ii) those of the Company's subsidiaries that participate in any of
the Plans.
In addition, the Board of Directors and Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the Company
alleges in writing to the Trustee that the Company has become Insolvent, the
Trustee shall determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue allocations pursuant to Article 3.
Unless the Trustee has actual knowledge of the Company's Insolvency,
or has received notice from the Company or a person claiming to be a creditor
alleging that the Company is Insolvent, the Trustee shall have no duty to
inquire whether the Company is Insolvent. The Trustee may in all events rely on
such evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for making a
determination concerning the Company's Insolvency.
If at any time the Trustee has determined that the Company is
Insolvent, the Trustee shall discontinue allocations pursuant to Article 3 and
shall hold the Trust Fund for the benefit of the Company's general creditors.
Nothing in this Agreement shall in any way diminish any rights of employees as
general creditors of the Company with respect to benefits due under the Plan(s)
or otherwise.
The Trustee shall resume allocations pursuant to Article 3 only after
the Trustee has determined that the Company is not Insolvent (or is no longer
Insolvent).
1.5. DEFINITIONS. In addition to the terms defined in the
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preceding portions of this Agreement, certain capitalized terms have the
meanings set forth below:
Available Shares. "AVAILABLE SHARES" shall have the meaning
assigned to it in Section 3.1.
Board of Directors. "BOARD OF DIRECTORS" means the board of
directors of the Company.
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Bonus Plan. "BONUS PLAN" means the Executive Deferred Compensation
Stock Plan of the Company.
Change of Control. "CHANGE OF CONTROL" means any of the following
events:
(a) an acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT")) resulting in beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) by such individual,
entity or group of 75% or more of the total number of shares of Company Stock
outstanding (on an as converted basis), assuming full conversion of all
securities and full exercise of all outstanding rights, options and warrants to
acquire the Company Stock; provided, however, that the following acquisitions
shall not constitute a Change of Control: (i) an acquisition by or directly from
the Company, (ii) an acquisition by any employee benefit plan or trust sponsored
or maintained by the Company; and (iii) any acquisition described in subclauses
(A) or (B) of subsection (b) below; or
(b) consummation by the Company of (i) a complete dissolution or
liquidation of the Company, (ii) a sale or other disposition of all or
substantially all of the Company's assets or (iii) a reorganization, merger, or
consolidation ("BUSINESS COMBINATION") unless either (A) all or substantially
all of the stockholders of the Company immediately prior to the Business
Combination own more than 25% of the voting securities of the entity surviving
the Business Combination, or the entity which directly or indirectly controls
such surviving entity, in substantially the same proportion as they owned the
voting securities of the Company immediately prior thereto, or (B) the
consideration (other than cash paid in lieu of fractional shares or payment upon
perfection of appraisal rights) issued to stockholders of the Company in the
Business Combination is solely common stock which is publicly traded on an
established securities exchange in the United States.
Code. "CODE" means the Internal Revenue Code of 1986, as amended.
Committee. "COMMITTEE" means a committee of the Company which is
charged by the Board of Directors with administration of the Trust.
Company. "COMPANY" means Quanta Services, Inc., a Delaware
corporation, or any successor thereto. References to the Company shall include
its subsidiaries where appropriate.
Company Stock. "COMPANY STOCK" means shares of common stock, par
value $0.00001 per share, issued by the Company or any successor securities.
Directing Participants. "DIRECTING PARTICIPANTS" shall have the
meaning assigned to it in Section 5.5(a).
ESPP. "ESPP" shall have the meaning assigned to it in
Section 5.4(a).
ESPP Participant. "ESPP PARTICIPANT" shall have the meaning assigned
to it in Section 5.4(a).
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ESPP Participant Directed Amount. "ESPP PARTICIPANT DIRECTED AMOUNT"
shall have the meaning assigned to it in Section 5.4(a).
Extraordinary Dividend. "EXTRAORDINARY DIVIDEND" means any dividend
or other distribution of cash or other property (other than Company Stock) made
with respect to Company Stock, which the Board of Directors declares generally
to be other than an ordinary dividend.
Fair Market Value. "FAIR MARKET VALUE" means as of any date the
average of the highest and lowest reported sales price regular way on such date
(or if such date is not a trading day, then on the most recent prior date which
is a trading day) of a share of Company Stock as reported on the composite tape,
or similar reporting system, for issues listed on the New York Stock Exchange
(or, if the Company Stock is no longer traded on the New York Stock Exchange, on
such other national securities exchange on which the Company Stock is listed or
national securities or central market system upon which transactions in Company
Stock are reported, as either shall be designated by the Committee for the
purposes hereof) or if sales of Company Stock are not reported in any manner
specified above, the average of the high bid and low asked quotations on such
date (or if such date is not a trading day, then on the most recent prior date
which is a trading day) in the over the counter market as reported by the
National Association of Securities Dealers' Automated Quotation System or, if
not so reported, by National Quotation Bureau, Incorporated or similar
organization selected by the Committee.
Insolvent/Insolvency. "INSOLVENT" means as to the Company (i) unable
to pay its debts as they come due or (ii) subject to a pending proceeding as
debtor under the provisions of Title 11 of the United States Code. "INSOLVENCY"
means the state of being Insolvent.
Instruction Form. "INSTRUCTION FORM" shall have the meaning
assigned to it in Section 5.4(a).
Loan. "LOAN" means the extension of credit to the Trust evidenced
by the promissory note made by the Trustee dated March 13, 2002.
Newly Issued Shares. "NEWLY ISSUED SHARES" shall have the meaning
assigned to it in Section 2.1(a).
Plans. "PLANS" means the employee benefit plans listed on Schedule A
hereto and any other employee benefit plan of the Company or its subsidiaries
designated as such by the Committee in good faith taking into account the best
interests of the Company and a broad cross section of the employees of the
Company and its subsidiaries.
Plan Participant. "PLAN PARTICIPANT" means a participant in any of
the Plans.
Principal Payment. "PRINCIPAL PAYMENT" shall have the meaning
assigned to it in Section 3.1.
Tender Form. "TENDER FORM" shall have the meaning assigned to it in
Section 5.4(b).
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Trustee. "TRUSTEE" means Wachovia Bank, N.A. (not in its corporate
capacity but as trustee of the Trust) or any successor trustee.
Trust Fund. "TRUST FUND" shall have the meaning assigned to it in
Section 1.3.
Trust Year. "TRUST YEAR" means the period beginning on the date
hereof and ending on December 31, 2002, and each 12 month period beginning on
January 1 and ending on December 31 thereafter.
ARTICLE 2
CONTRIBUTIONS AND DIVIDENDS
2.1. CONTRIBUTIONS.
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(a) The Company has contributed to the Trust cash in the amount of
seventy dollars and fourteen cents ($70.14), representing the aggregate par
value of those shares of Company Stock to be purchased by the Trust which,
immediately prior to such purchase, will not have been issued by the Company
(the "NEWLY ISSUED SHARES").
(b) For each Trust Year, the Company shall contribute to the Trust in
cash such amount, which together with dividends, as provided in Section 2.2, and
any other earnings of the Trust, shall enable the Trustee to make all payments
of principal and interest due under the Loan on a timely basis. Unless otherwise
expressly provided herein, the Trustee shall apply all such contributions,
dividends and earnings to the payment of principal and interest due under the
Loan. If, at the end of any Trust Year, no such contribution has been made in
cash, such contribution shall be deemed to have been made in the form of
forgiveness of principal and interest on the Loan to the extent of the Company's
failure to make contributions as required by this Section 2.1(b). All
contributions made under the Trust shall be delivered to the Trustee. The
Trustee shall be accountable for all contributions received by it, but shall
have no duty to require any contributions to be made to it.
2.2. DIVIDENDS. Except as otherwise provided herein, dividends paid in
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cash on Company Stock held by the Trust shall be applied to pay interest and
scheduled principal due under the Loan. Extraordinary Dividends shall not be
used to pay interest on or principal of the Loan, but shall be invested in
additional Company Stock as soon as practicable. Dividends which are not in cash
or in Company Stock (including Extraordinary Dividends, or portions thereof)
shall be reduced to cash by the Trustee and reinvested in Company Stock as soon
as practicable, provided that an Extraordinary Dividend constituting a spin off,
split off or similar transaction may be transferred to a trust sponsored by the
spun off company or dealt with in another equitable manner as determined in good
faith by the Committee. In the Trustee's discretion, investments in Company
Stock may be made through open market purchases, private transactions or (with
the Company's consent) purchases from the Company.
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ARTICLE 3
RELEASE AND ALLOCATION OF COMPANY STOCK
3.1. RELEASE OF SHARES. Subject to the other provisions of this
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Article 3, upon the payment or forgiveness in any Trust Year of any principal on
the Loan (a "PRINCIPAL PAYMENT"), the following number of shares of Company
Stock not previously released shall be available for allocation ("AVAILABLE
SHARES") as follows: the number of shares held in the Trust immediately before
such payment or forgiveness and not previously released, multiplied by a
fraction the numerator of which is the amount of the Principal Payment and the
denominator of which is the sum of such Principal Payment and the remaining
principal of the Loan outstanding after such Principal Payment.
3.2. ALLOCATIONS. Available Shares shall be allocated as directed by
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the Committee to the Plans no less frequently than annually. The Committee's
discretion shall be limited to the amounts allocated among Plans, with the
allocation itself being mandatory; PROVIDED, HOWEVER, that the Committee shall
not allocate Newly Issued Shares to the Bonus Plan or to any other employee
benefit plans of the Company or its subsidiaries not covering a broad cross
section of individuals employed by the Company or its subsidiaries. In the event
that any Available Shares remain after satisfaction of all benefit obligations
under each of the Plans for a given Trust Year, all remaining Available Shares
shall be contributed by the Trustee to such other plans of the Company or its
subsidiaries covering a broad cross section of individuals employed by the
Company or its subsidiaries as the Committee shall direct.
ARTICLE 4
COMPENSATION, EXPENSES AND TAX WITHHOLDING
4.1. COMPENSATION AND EXPENSES. The Trustee shall be entitled to such
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reasonable compensation for its services as may be agreed upon from time to time
by the Company and the Trustee and to be reimbursed for its reasonable legal,
accounting and appraisal fees, expenses and other charges reasonably incurred in
connection with the administration, management, investment and distribution of
the Trust Fund. Such compensation shall be paid, and such reimbursement shall be
made out of the Trust Fund. The Company agrees to make sufficient contributions
to the Trust to pay such amounts owing the Trustee in addition to those
contributions required by Section 2.1(b).
4.2. WITHHOLDING OF TAXES. The Trustee may withhold, require
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withholding, or otherwise satisfy its withholding obligation, on any
distribution which it is directed to make, such amount as it may reasonably
estimate to be necessary to comply with applicable federal, state and local
withholding requirements. Upon settlement of such tax liability, the Trustee
shall distribute the balance of such amount. Prior to making any distribution
hereunder, the Trustee may require such release or documents from any taxing
authority, or may require such indemnity, as the Trustee shall reasonably deem
necessary for its protection.
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ARTICLE 5
ADMINISTRATION OF TRUST FUND
5.1. MANAGEMENT AND CONTROL OF TRUST FUND. Subject to the terms of
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this Agreement, the Trustee shall have exclusive authority, discretion and
responsibility to manage and control the assets of the Trust Fund.
5.2. INVESTMENT OF FUNDS.
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Except as otherwise provided in Section 2.2 and in this Section 5.2,
the Trustee shall invest and reinvest the Trust Fund exclusively in Company
Stock, as well as consideration resulting from the proceeds of a tender offer,
recapitalization or similar transaction which, if not in Company Stock, shall be
reduced to cash as soon as practicable. The Trustee may invest any portion of
the Trust Fund temporarily pending investment in Company Stock, distribution or
payment of expenses in (i) investments in United States Government obligations
with maturities of less than one year, (ii) interest bearing accounts including
but not limited to certificates of deposit, time deposits, saving accounts and
money market accounts with maturities of less than one year in any bank,
including the Trustee's, with aggregate capital in excess of $1,000,000,000 and
a Moody's Investor Services rating of at least P1, or an equivalent rating from
a nationally recognized ratings agency, which accounts are insured by the
Federal Deposit Insurance Corporation or other similar federal agency, (iii)
obligations issued or guaranteed by any agency or instrumentality of the United
States of America with maturities of less than one year or (iv) short-term
discount obligations of the Federal National Mortgage Association.
5.3. TRUSTEE'S ADMINISTRATIVE POWERS.
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Except as otherwise provided herein, and subject to the Trustee's
duties hereunder, the Trustee shall have the following powers and rights, in
addition to those provided elsewhere in this Agreement or by law:
(a) to retain any asset of the Trust Fund;
(b) subject to Section 5.4(b), Section 8.2 and Articles 2 and 3, to
sell, transfer, mortgage, pledge, lease or otherwise dispose of, or grant
options with respect to, any Trust Fund assets at public or private sale;
(c) upon direction from the Company, to borrow from any lender or to
otherwise become indebted to any person (including the Company pursuant
to the Loan), to acquire Company Stock as authorized by this Agreement,
or to enter into lending agreements upon such terms (including reasonable
interest and security for the loan and rights to renegotiate and prepay
such loan) as may be determined by the Committee; provided, however, that
any collateral given by the Trustee for the Loan shall be limited to cash
and property contributed by the Company to the Trust and dividends paid on
Company Stock held in the Trust Fund and shall not include Company Stock
acquired by means of, in whole or in part, the Loan;
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(d) with the consent of the Committee, to settle, submit to
arbitration, compromise, contest, prosecute or abandon claims and demands
in favor of or against the Trust Fund;
(e) to vote or to give any consent with respect to any securities,
including any Company Stock, held by the Trust either in person or by
proxy for any purpose, provided that the Trustee shall vote, tender or
exchange all shares of Company Stock as provided in Section 5.4;
(f) to exercise any of the powers and rights of an individual owner
with respect to any asset of the Trust Fund and to perform any and all
other acts that in its judgment are necessary or appropriate for the
proper administration of the Trust Fund, even though such powers, rights
and acts are not specifically enumerated in this Agreement;
(g) to employ such accountants, actuaries, investment bankers,
appraisers, other advisors and agents as may be reasonably necessary in
collecting, managing, administering, investing, valuing, distributing and
protecting the Trust Fund or the assets thereof or any borrowings of the
Trustee made in accordance with Section 5.3(c); and to pay their
reasonable fees and expenses, which shall be deemed to be expenses of the
Trust and for which the Trustee shall be reimbursed in accordance with
Section 4.1;
(h) to cause any asset of the Trust Fund to be issued, held or
registered in the Trustee's name or in the name of its nominee, or in such
form that title will pass by delivery, provided that the records of the
Trustee shall indicate the true ownership of such asset;
(i) to utilize another entity as custodian to hold, but not invest or
otherwise manage or control, some or all of the assets of the Trust Fund;
and
(j) to consult with legal counsel (who may also be counsel for the
Trustee generally) with respect to any of its duties or obligations
hereunder; and to pay the reasonable fees and expenses of such counsel,
which shall be deemed to be expenses of the Trust and for which the
Trustee shall be reimbursed in accordance with Section 4.1.
Notwithstanding the foregoing, neither the Trust nor the Trustee
shall have any power to, and shall not, engage in any trade or business.
5.4. VOTING AND TENDERING OF COMPANY STOCK.
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(a) VOTING OF COMPANY STOCK. The Trustee shall follow the directions
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of participants in the Quanta Services, Inc. 1999 Employee Stock Purchase Plan
(the "ESPP") as to the manner in which shares of Company Stock held by the Trust
are to be voted on each matter brought before an annual or special stockholders'
meeting of the Company or the manner in which any consent is to be executed, in
each case as provided below. Before each such meeting of stockholders, the
Trustee shall cause to be furnished to each active employee of the Company who
exercised purchase rights under the ESPP during the one-year period terminating
on the tenth calendar day prior to the record date of the vote and who is not a
director of the Company ("ESPP PARTICIPANT") a copy of the proxy solicitation
material received by the Trustee, together
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with a form requesting confidential instructions ("INSTRUCTION FORM") as to how
to vote the shares of Company Stock held by the Trustee. Each ESPP Participant
shall have a reasonable period within which to return the Instruction Form to
the Trustee or to an agent hired by the Trustee. Upon the expiration of the
period for the return of Instruction Forms, the Trustee shall on each such
matter vote the number of shares (including fractional shares) of Company Stock
held by the Trust as follows:
The Trustee shall assign to each ESPP Participant a number of shares
(the "ESPP PARTICIPANT DIRECTED AMOUNT") equal to the product of (x) the total
number of shares of Company Stock held in the Trust Fund, and (y) a fraction,
the numerator of which is the number of shares of Company Stock acquired by such
ESPP Participant as a result of his/her exercise of purchase right(s) allocated
to him/her pursuant to the ESPP during the one-year period terminating on the
tenth calendar day prior to the record date of the vote, and the denominator of
which is the total number of shares of Company Stock acquired by all ESPP
Participants as a result of the exercise of purchase right(s) allocated pursuant
to the ESPP during such one-year period. Each share assigned to each ESPP
Participant in accordance with the previous sentence shall be voted in
accordance with such participant's Instruction Form. Any shares of Company Stock
which remain undirected pursuant to the foregoing provisions shall be voted for,
against or to abstain or withhold, as the case may be, in the same proportions
as the shares of Company Stock for which the Trustee is directed as provided
above. Similar provisions shall apply in the case of any action by stockholder
consent without a meeting.
(b) TENDER OR EXCHANGE OF COMPANY STOCK. The Trustee shall use its
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best efforts timely to distribute or cause to be distributed to ESPP
Participants any written materials distributed to stockholders of the Company
generally in connection with any tender offer or exchange offer for Company
Stock, together with a form requesting confidential instructions on whether or
not to tender or exchange shares of Company Stock held in the Trust (the "TENDER
FORM"). Each ESPP Participant shall have a reasonable period of time within
which to return the Tender Form. Upon expiration of the period for return of
Tender Forms, the Trustee shall tender or exchange or not tender or exchange the
ESPP Participant Directed Amount for each ESPP Participant in accordance with
such participant's Tender Form. Each ESPP Participant shall not be limited in
the number of instructions to tender or exchange or withdraw from tender or
exchange which he/she may give but shall not have the right to give instructions
to tender or exchange or withdraw from tender or exchange after a reasonable
time established by the Trustee. If the Trustee shall not receive from one or
more ESPP Participants timely instruction by means of a Tender Form as to the
manner in which to respond to such a tender or exchange offer, the Trustee shall
not tender or exchange any shares of Company Stock with respect to which such
ESPP Participants have the right of direction, and the Trustee shall have no
discretion in such matter.
(c) The Company shall maintain appropriate procedures to ensure that
all instructions by ESPP Participants are collected, tabulated, and transmitted
to the Trustee without being divulged or released to any person affiliated with
the Company or its affiliates. All actions taken by ESPP Participants and the
contents of the Instruction Forms and Tender Forms shall be held confidential by
the Trustee and shall not be divulged or released to any person, other than (i)
agents of the Trustee who are not affiliated with the Company or its affiliates
or (ii) by virtue of
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the execution by the Trustee of any proxy, consent or letter of transmittal for
the shares of Company Stock held in the Trust, or (iii) as required by court
order.
(d) In the event that the ESPP shall for any reason cease to exist, or
the Committee shall determine in good faith that it is no longer an appropriate
plan for the purpose of this Section 5.4, the Committee shall, for purposes of
this Section 5.4, substitute for such plan another employee benefit plan of the
Company or its subsidiaries covering a broad cross section of individuals
employed by the Company and its subsidiaries and exclude from participation
therein, in substantially the same manner as provided for in this Section 5.4
with respect to the ESPP, of persons who are directors of the Company.
5.5. INDEMNIFICATION.
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(a) To the extent lawfully allowable, the Company shall and hereby
does indemnify and hold harmless the Trustee from and against any claims,
demands, actions, administrative or other proceedings, causes of action,
liability, loss, cost, damage or expense (including reasonable attorneys' fees),
which may be asserted against it, in any way arising out of or incurred as a
result of its action or failure to act in connection with the operation and
administration of the Trust; provided that such indemnification shall not apply
to the extent that the Trustee has acted in willful or negligent violation of
applicable law or its duties under this Trust or in bad faith. The Trustee shall
be under no liability to any person for any loss of any kind which may result
(i) by reason of any action taken by it in accordance with any direction of the
Committee or any ESPP Participant acting pursuant to Section 5.4(b) (hereinafter
collectively referred to as the "DIRECTING PARTICIPANTS"), (ii) by reason of its
failure to exercise any power or authority or to take any action hereunder
because of the failure of any such Directing Participant to give directions to
the Trustee, as provided for in this Agreement, or (iii) by reason of any act or
omission of any of the Directing Participants with respect to its duties under
this Trust. The Trustee shall be fully protected in acting upon any instrument,
certificate, or paper delivered by the Committee or any ESPP Participant or
beneficiary and believed in good faith by the Trustee to be genuine and to be
signed or presented by the proper person or persons, and the Trustee shall be
under no duty to make any investigation or inquiry as to any statement contained
in any such writing, but may accept the same as conclusive evidence of the truth
and accuracy of the statements therein contained.
(b) The Company may, but shall not be required to, maintain liability
insurance to insure its obligations hereunder. If any payments made by the
Company or the Trust pursuant to this indemnity are covered by insurance, the
Company or the Trust (as applicable) shall be subrogated to the rights of the
indemnified party against the insurance company.
(c) Without limiting the generality of the foregoing, the Company may,
at the request of the Trustee, advance to the Trustee reasonable amounts of
expenses, including reasonable attorneys' fees and expenses, which the Trustee
advised have been incurred in connection with its investigation or defense of
any claim, demand, action, cause of action, administrative or other proceeding
arising out of or in connection with the Trustee's performance of its duties
under this Agreement.
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5.6. GENERAL DUTY TO COMMUNICATE TO COMMITTEE. The Trustee shall
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promptly notify the Committee of all communications with or from any government
agency or with respect to any legal proceeding with regard to the Trust and with
or from any Plan Participants concerning their entitlements under the Plans or
the Trust.
ARTICLE 6
ACCOUNTS AND REPORTS OF TRUSTEE
6.1. RECORDS AND ACCOUNTS OF TRUSTEE. The Trustee shall maintain
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accurate and detailed records and accounts of all transactions of the Trust,
which shall be available at all reasonable times for inspection or audit by any
person designated by the Company and which shall be retained as required by
applicable law.
6.2. FISCAL YEAR. The fiscal year of the Trust shall be the
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twelve month period beginning on January 1 and ending on December 31.
6.3. REPORTS OF TRUSTEE. The Trustee shall prepare and present to the
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Committee a report for the period ending on the last day of each fiscal year,
and for such shorter periods as the Committee may reasonably request, listing
all securities and other property acquired and disposed of and all receipts,
disbursements and other transactions effected by the Trust after the date of the
Trustee's last account, and further listing all cash, securities, and other
property held by the Trust, together with the fair market value thereof, as of
the end of such period. In addition to the foregoing, the report shall contain
such information regarding the Trust Fund's assets and transactions as the
Committee in its discretion may reasonably request.
6.4. FINAL REPORT. In the event of the resignation or removal of a
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Trustee hereunder, the Committee may request and the Trustee shall then with
reasonable promptness submit, for the period ending on the effective date of
such resignation or removal, a report similar in form and purpose to that
described in Section 6.3.
ARTICLE 7
SUCCESSION OF TRUSTEE
7.1. RESIGNATION OF TRUSTEE. The Trustee or any successor thereto may
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resign as Trustee hereunder at any time upon delivering a written notice of such
resignation, to take effect ninety (90) days after the delivery thereof to the
Committee, unless the Committee accepts shorter notice; provided, however, that
no such resignation shall be effective until a successor Trustee has assumed the
office of Trustee hereunder.
7.2. REMOVAL OF TRUSTEE. The Trustee or any successor thereto may be
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removed by the Company by delivering to the Trustee so removed an instrument
executed by the Committee. Such removal shall take effect at the date specified
in such instrument, which shall not be less than sixty (60) days after delivery
of the instrument, unless the Trustee accepts shorter notice; provided, however,
that no such removal shall be effective until a successor Trustee has assumed
the office of Trustee hereunder.
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7.3. APPOINTMENT OF SUCCESSOR TRUSTEE. Whenever the Trustee or any
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successor thereto shall resign or be removed or a vacancy in the position shall
otherwise occur, the Committee shall use its best efforts to appoint a successor
Trustee as soon as practicable after receipt by the Committee of a notice
described in Section 7.1, or the delivery to the Trustee of a notice described
in Section 7.2, as the case may be, but in no event more than one hundred eighty
(180) days after receipt or delivery, as the case may be, of such notice. A
successor Trustee's appointment shall not become effective until such successor
shall accept such appointment by delivering its acceptance in writing to the
Company. If a successor is not appointed within such 180 day period, the
Trustee, at the Company's expense, may petition a court of competent
jurisdiction for appointment of a successor. Any successor Trustee shall be an
institutional trustee not affiliated with the Company.
7.4. SUCCESSION TO TRUST FUND ASSETS. The title to all property held
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hereunder shall vest in any successor Trustee acting pursuant to the provisions
hereof without the execution or filing of any further instrument, but a
resigning or removed Trustee shall execute all instruments and do all acts
necessary to vest title in the successor Trustee. Each successor Trustee shall
have, exercise and enjoy all of the powers, both discretionary and ministerial,
herein conferred upon its predecessors. A successor Trustee shall not be obliged
to examine or review the accounts, records, or acts of, or property delivered
by, any previous Trustee and shall not be responsible for any action or any
failure to act on the part of any previous Trustee.
7.5. CONTINUATION OF TRUST. In no event shall the legal disability,
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resignation or removal of a Trustee terminate the Trust, but the Board of
Directors shall forthwith appoint a successor Trustee in accordance with Section
7.3 to carry out the terms of the Trust.
7.6. CHANGES IN ORGANIZATION OF TRUSTEE. In the event that any
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corporate Trustee hereunder shall be converted into, shall merge or consolidate
with, or shall sell or transfer substantially all of its assets and business to,
another entity, state or federal, the entity resulting from such conversion,
merger or consolidation, or the entity to which such sale or transfer shall be
made, shall thereunder become and be the Trustee under the Trust with the same
effect as though originally so named.
7.7. CONTINUANCE OF TRUSTEE'S POWERS IN EVENT OF TERMINATION OF THE
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TRUST. In the event of the termination of the Trust, as provided herein, the
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Trustee shall dispose of the Trust Fund in accordance with the provisions
hereof. Until the final distribution of the Trust Fund, the Trustee shall
continue to have all powers provided hereunder as necessary or expedient for the
orderly liquidation and distribution of the Trust Fund.
ARTICLE 8
AMENDMENT OR TERMINATION
8.1. AMENDMENTS. Except as otherwise provided herein, the Company may
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amend the Trust at any time and from time to time in any manner which it deems
desirable, provided that (a) no amendment which would adversely affect the
contingent rights of Plan Participants may change (i) the allocation formula
contained in Section 3.1 or Section 3.2, (ii) the provisions of Section 5.4,
other than an amendment to reflect a change in the Plans funded by this
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Trust, (iii) the provisions of Section 8.2, (iv) the provisions of this Section
8.1 or (v) any definition set forth in Section 1.5 relating to any of such
provisions, in each case, without the affirmative consent of at least 66 2/3% of
the Plan Participants that received an allocation of Available Shares in the
immediately preceding Trust Year, voting together as a single class with each
such Plan Participant having one vote and (b) no amendment may change the duties
of the Trustee without the Trustee's consent, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, the Company shall retain
the power under all circumstances to amend the Trust to correct any errors or
clarify any ambiguities or similar issues of interpretation in this Agreement.
8.2. TERMINATION. The Trust shall terminate on July 1, 2017, or any
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earlier date on which the Loan is paid in full (the "TERMINATION DATE"). The
Board of Directors may terminate the Trust at any time prior to the Termination
Date. The Trust shall also terminate automatically upon the Company giving the
Trustee notice of a Change of Control. As soon as practicable after receiving
notice from the Company of a Change of Control or upon any other termination of
the Trust, the Trustee shall cause the Trust to (i) fund any obligations then
pending under the Plans with, or otherwise by means of, Available Shares; (ii)
sell, to the extent necessary to comply with clause (iii) below, an amount of
Company Stock or other non-cash assets (if any) then held in the Trust Fund
sufficient to permit the Trust to return to the Company the amount specified in
clause (iii) below; and (iii) return to the Company an amount in cash equal to
the remaining principal plus any accrued interest on the Loan, which payment
will be deemed to terminate all remaining obligations of the Trust with respect
to the Loan. Any assets remaining in the Trust Fund after the Trust has given
effect to the transactions described in the previous sentence shall be
distributed with reasonable promptness first to Plan Participants and then to
individuals employed by the Company or its subsidiaries generally or to any
benefit plan or trust in which a broad cross section of individuals employed by
the Company or its subsidiaries participate, as the Committee may in good faith
determine taking into account the best interests of a broad cross section of the
individuals employed by the Company or its subsidiaries. In the event that any
Company Stock or any other non-cash assets shall remain in the Trust Fund after
the repayment of the Loan but before the distribution described in the previous
sentence, the Trustee shall effect such distribution by either (a) distributing
such remaining assets in kind in addition to any cash remaining in the Trust
Fund or (b) selling such remaining assets and distributing the proceeds of such
sale in addition to any cash remaining in the Trust Fund, in either case as the
Committee may in good faith determine taking into account the best interests of
a broad cross section of the individuals employed by the Company.
8.3. FORM OF AMENDMENT OR TERMINATION. Any amendment or termination of
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the Trust shall be evidenced by an instrument in writing signed by an authorized
officer of the Company, certifying that said amendment or termination has been
authorized and directed by the Company or the Board of Directors, as applicable,
and, in the case of any amendment, shall be consented to by signature of an
authorized officer of the Trustee, if required by Section 8.1.
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ARTICLE 9
MISCELLANEOUS
9.1. CONTROLLING LAW; JURISDICTION AND VENUE. The laws of the State of
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Delaware shall be the controlling law in all matters relating to the Trust,
without regard to conflicts of law. The parties hereto irrevocably agree that
any legal action or proceeding arising out of or relating to this Agreement
shall be brought and determined in the courts of the State of Delaware, and each
of the parties hereto hereby irrevocably submits with regard to any such action
or proceeding to the exclusive jurisdiction of the aforesaid courts. Each of the
parties hereto hereby irrevocably waives and agrees not to assert in any action
or proceeding with respect to this Agreement, any claim (a) that it is not
personally subject to the jurisdiction of the above-named courts for any reason,
(b) that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts, or (c) to the fullest
extent permitted by applicable law, that (i) the suit, action or proceeding in
such court is brought in an inconvenient forum, (ii) the venue of such suit,
action or proceeding is improper or (iii) this Agreement, or the subject matter
hereof, may not be enforced in or by such courts.
9.2. COMMITTEE ACTION. Any action required or permitted to be taken
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by the Committee may be taken on behalf of the Committee by any individual so
authorized. The Company shall furnish to the Trustee the name and specimen
signature of each member of the Committee upon whose statement of a decision or
direction the Trustee is authorized to rely. Until notified of a change in the
identity of such person or persons, the Trustee shall act upon the assumption
that there has been no change.
9.3. NOTICES. All notices, requests, or other communications required
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or permitted to be delivered hereunder shall be in writing, delivered by
registered or certified mail, return receipt requested as follows:
To the Company:
Quanta Services, Inc.
1360 Post Oak Boulevard, Suite 2100
Houston, TX 77056
Attention: General Counsel
To the Trustee:
Wachovia Bank, N.A.
One West Fourth Street, NC6251
Winston-Salem, NC 27012
Attention: Quanta Services Account Officer
Any party hereto may from time to time, by written notice given as aforesaid,
designate any other address to which notices, requests or other communications
addressed to it shall be sent.
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9.4. SEVERABILITY. If any provision of the Trust shall be held
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illegal, invalid or unenforceable for any reason, such provision shall not
affect the remaining parts hereof, but the Trust shall be construed and enforced
as if said provision had never been inserted herein.
9.5. PROTECTION OF PERSONS DEALING WITH THE TRUST. No person dealing
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with the Trustee shall be required or entitled to monitor the application of any
money paid or property delivered to the Trustee, or determine whether or not the
Trustee is acting pursuant to authorities granted to it hereunder or to
authorizations or directions herein required.
9.6. TAX STATUS OF TRUST. It is intended that the Company, as grantor
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hereunder, be treated for Federal income tax purposes as the owner of the entire
Trust and the trust assets under Section 671, et seq. of the Code. Until advised
otherwise, the Trustee may presume that the Trust is so characterized for
federal income tax purposes and shall make all filings of tax returns on that
presumption.
9.7. PARTICIPANTS TO HAVE NO INTEREST IN THE COMPANY BY REASON OF THE
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TRUST. Neither the creation of the Trust nor anything contained in the Trust
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shall be construed as giving any person, including any individual employed by
the Company or any subsidiary of the Company, any equity or interest in the
assets, business, or affairs of the Company except to the extent that any such
individuals are entitled to exercise stockholder rights with respect to Company
Stock pursuant to Section 5.4 and to consent to certain amendments to this
Agreement pursuant to Section 8.1.
9.8. NONASSIGNABILITY. No right or interest of any person to receive
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distributions from the Trust shall be assignable or transferable, in whole or in
part, either directly or by operation of law or otherwise, including, but not by
way of limitation, execution, levy, garnishment, attachment, pledge, or
bankruptcy, but excluding death or mental incompetency, and no right or interest
of any person to receive distributions from the Trust shall be subject to any
obligation or liability of any such person, including claims for alimony or the
support of any spouse or child.
9.9. GENDER AND PLURALS. Whenever the context requires or permits,
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the masculine gender shall include the feminine gender and the singular form
shall include the plural form and shall be interchangeable.
9.10. COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, each of which shall be considered an original.
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IN WITNESS WHEREOF, the Company and the Trustee have caused this
Agreement to be signed, and their seals affixed hereto, by their authorized
officers all as of the day, month and year first above written.
QUANTA SERVICES, INC.
By: /s/ Dana A. Gordon
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Name: Dana A. Gordon
Title: VP - General Counsel
WACHOVIA BANK, N.A.
By: /s/ John M. Smith, III
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Name: John M. Smith
Title: Senior Vice President
SCHEDULE A
Quanta Services, Inc. 1999 Employee Stock Purchase Plan
Quanta Services, Inc. 2001 Stock Incentive Plan
Executive Deferred Compensation Stock Plan