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EXHIBIT 10.2
AMERICAN PLUMBING & MECHANICAL, INC.
1999 STOCK OPTION PLAN
SECTION 1. Purpose of the Plan.
The American Plumbing & Mechanical, Inc. 1999 Stock Option Plan (the
"Plan") is intended to promote the interests of American Plumbing & Mechanical,
Inc., a Delaware corporation (the "Company"), by encouraging officers,
employees, directors and consultants of the Company, its subsidiaries and
affiliated entities to acquire or increase their equity interest in the Company
and to provide a means whereby they may develop a sense of proprietorship and
personal involvement in the development and financial success of the Company,
and to encourage them to remain with and devote their best efforts to the
business of the Company thereby advancing the interests of the Company and its
stockholders. The Plan is also contemplated to enhance the ability of the
Company, its subsidiaries and affiliated entities to attract and retain the
services of individuals who are essential for the growth and profitability of
the Company.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set
forth below:
"Affiliate" shall mean (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company and (ii) any entity in which
the Company has a significant equity interest, as determined by the Committee.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations thereunder.
"Committee" shall mean the committee appointed by the Board.
"Consultant" shall mean any individual, other than a Director or an
Employee, who renders consulting services to the Company or an Affiliate for a
fee.
"Director" shall mean a director of the Company who is not also an
Employee.
"Employee" shall mean any employee of the Company or an Affiliate.
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"Fair Market Value" shall mean the fair market value of a Share as of
the applicable date as determined in good faith by the Committee; provided,
however, if the Shares are then publicly traded, Fair Market Value shall mean
the closing sales price of a Share on the applicable date (or if there is no
trading in the Shares on such date, on the next preceding date on which there
was trading) as reported in The Wall Street Journal (or other reporting service
approved by the Committee).
"Option" shall mean an option to purchase Shares granted under the
Plan.
"Participant" shall mean any Director, Employee or Consultant granted
an Option under the Plan.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"Shares" or "Common Shares" or "Common Stock" shall mean the common
stock of the Company, $0.01 par value, and such other securities or property as
may become the subject of Options under the Plan.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the following, the Committee, in its
sole discretion, may delegate any or all of its powers and duties under the
Plan to the Chief Executive Officer of the Company, including the power to
grant Options under the Plan, other than to himself, subject to such
limitations on such delegated powers and duties as the Committee may impose.
Upon any such delegation all references in the Plan to the "Committee", other
than in Section 7, shall be deemed to include the Chief Executive Officer;
provided, however, that such delegation shall not limit the Chief Executive
Officer's right to receive Options under the Plan. Subject to the terms of the
Plan and applicable law, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the
number of Shares to be covered by Options; (iii) determine the terms and
conditions of any Option; (iv) interpret and administer the Plan and any
instrument or agreement relating to an Option made under the Plan; (v)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (vi) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Option shall be within the sole discretion of the Committee,
may be made at any time and shall be final, conclusive, and binding upon all
Persons.
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SECTION 4. Shares Available for Options.
(a) Shares Available. Subject to adjustment as provided in Section
4(c), the maximum number of Shares with respect to which Options may be granted
under the Plan shall be 3,700,000 shares or 15% of the aggregate number of
Shares outstanding determined immediately prior to the grant of such Option. If
any Option is forfeited, terminates or is canceled without the delivery of
Shares, then the Shares covered by such Option, to the extent of such
forfeiture, termination or cancellation, shall again be Shares with respect to
which Options may be granted.
(b) Sources of Shares Deliverable Under Options. Any Shares delivered
pursuant to an Option may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
(c) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the number and type
of Shares (or other securities or property) with respect to which Options may
be granted, (ii) the number and type of Shares (or other securities or
property) subject to outstanding Options, and (iii) the grant or exercise price
with respect to any Option or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Option; provided, that the number of
Shares subject to any Option shall always be a whole number.
SECTION 5. Eligibility.
Any Director, Employee or Consultant shall be eligible to be
designated a Participant by the Committee.
SECTION 6. Options.
(a) Options. Subject to the provisions of the Plan, the Committee
shall have the authority to determine the Participants to whom Options shall be
granted from time to time, the number of Shares to be covered by each Option,
the exercise price therefor and the terms, conditions and limitations
applicable to the exercise of the Option, including the following terms and
conditions and such additional terms and conditions as the Committee shall
determine are not inconsistent with the provisions of the Plan.
(i) Exercise Price. The exercise price per Share purchasable under
an Option shall be determined by the Committee.
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(ii) Time and Method of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in whole or in
part, and the method or methods by which, and the form or forms in
which payment of the exercise price with respect thereto may be made
or deemed to have been made, which may include, without limitation,
(i) cash or check acceptable to the Company in an amount equal to the
relevant exercise price, (ii) Shares already-owned by the Participant
having a Fair Market Value on the exercise date equal to the relevant
exercise price, (iii) a "cashless-broker" exercise (through procedures
approved by the Company) pursuant to which Shares delivered in payment
of the exercise price are valued at the Fair Market Value, (iv) a
personal note with such terms and security as the Committee deems
appropriate or other securities or other property having an aggregate
value, as determined in good faith by the Committee, on the exercise
date equal to the relevant exercise price or (v) any combination
thereof.
(iii) Limits on Transfer of Options.
(A) Except as provided in (C) below, each Option, and each
right under any Option, shall be exercisable only by the
Participant during the Participant's lifetime, or by the person to
whom the Participant's rights shall pass by will or the laws of
descent and distribution.
(B) Except as provided in (C) below, no Option and no right
under any such Option may be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a
Participant otherwise than by will or by the laws of descent and
distribution and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void
and unenforceable against the Company or any Affiliate.
(C) Notwithstanding anything in the Plan to the contrary, to
the extent specifically provided by the Committee with respect to
a grant, an Option may be transferred to immediate family members
or related family trusts, limited partnerships or similar entities
or on such terms and conditions as the Committee may establish.
(iv) Term of Options, etc. The term of each Option shall be for
such period as may be determined by the Committee; provided, that in
no event shall the term of any Option exceed a period of 10 years from
the date of its grant. The Committee shall have the discretion at any
time while an Option remains outstanding to accelerate the vesting of,
reduce the exercise price of, and/or to extend the period of time for
which the Option is to remain exercisable following the Participant's
termination, but in no event may an extension be beyond the expiration
of the Option's term.
(v) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan
pursuant to any Option or the exercise
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thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of federal or state
securities laws, any stock exchange upon which such Shares or other
securities are then listed, and any applicable federal or state laws,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(vi) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities shall be
delivered pursuant to any Option until payment in full of any amount
required to be paid pursuant to the Plan or the applicable Option
agreement (including, without limitation, any exercise price and
applicable tax withholding) is received by the Company. Such tax
withholding payments may be made by such method or methods and in such
form or forms as the Committee shall determine, including, without
limitation, cash, Shares, other securities, or property, withholding
of Shares, cashless exercise with simultaneous sale, or any
combination thereof.
(vii) Stockholders' Agreement. The Committee may condition the
grant and/or exercise of any Option upon the Participant's already
being, or becoming subject to, a stockholders' agreement covering,
inter alia, the transferability of the Shares, rights of the Company
to repurchase such Shares and such other matters as the Committee
deems appropriate.
(viii) Securities Laws Compliance. Unless the Stock has been
registered under the Securities Act of 1933 (and, in the case of any
Participant who may be deemed an affiliate of the Company for
securities law purposes, such Stock has been registered under such Act
for resale by such Participant), or the Company has determined that an
exemption from registration is available, the Company may require
prior to and as a condition of the exercise of any Option that (i) the
Participant desiring to exercise such Option give the Company written
notice of a desire to exercise such Option and that notice of exercise
may not be given by the Participant until 45 days thereafter (which
time period may be waived by the Committee in its sole discretion) in
order to allow the Company the opportunity to provide to such
Participant any disclosure materials, or to make such filings, as may
be required under federal and state securities laws and (ii) the
Participant desiring to exercise such Option furnish the Company with
a written representation in a form prescribed by the Board to the
effect that such person is acquiring said Stock solely with a view to
investment for his or her own account and not with a view to the
resale or distribution of all or any part thereof, and that such
person will not dispose of any of such Stock otherwise than in
accordance with the provisions of Rule 144 under the Act unless and
until either the shares of Common Stock are registered under the Act
or the Company is satisfied that an exemption from such registration
is available.
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SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law or the rules of the
principal securities market on which the shares are traded and unless otherwise
expressly provided in an Option agreement or in the Plan:
(i) Amendments to the Plan. The Board or the Committee may amend,
alter, suspend, discontinue, or terminate the Plan without the consent
of any stockholder, Participant, other holder or beneficiary of an
Option, or other Person.
(ii) Amendments to Options. The Committee may waive any conditions
or rights under, amend any terms of, or alter any Option theretofore
granted, provided no change, other than pursuant to Section 7(iii), in
any Option shall materially reduce the benefit to Participant without
the consent of such Participant.
(iii) Adjustment of Options Upon the Occurrence of Certain Unusual
or Nonrecurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included
in, Options in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4(c)
of the Plan) affecting the Company, any Affiliate, or the financial
statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan.
SECTION 8. Change in Control.
Notwithstanding any other provision of this Plan or an Option
agreement to the contrary, in the event of a Change in Control of the Company
all outstanding Options automatically shall become fully vested immediately
prior to such Change in Control (or such earlier time as set by the Committee).
For purposes of this Plan, a "Change in Control" shall be deemed to occur if:
(i) any person, entity or group (as such terms are used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Act")), other than persons and entities which owned any
capital stock of the Company on the closing date of the transactions
contemplated in the acquisition agreements between the Company and
certain other entities dated February 11, 1999, the Company or a
subsidiary (the "AmPaM Companies") or an employee benefit plan of the
AmPaM Companies, acquires, directly or indirectly, the beneficial
ownership (as defined in Section 13(d) of the Act) of any voting
security of the Company and immediately after such acquisition such
person, entity or group is, directly or indirectly, the beneficial
owner of voting securities representing 20% or more of the total
voting power of all of the then
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outstanding voting securities of the Company entitled to vote
generally in the election of directors;
(ii) upon the first purchase of the Company's common stock
pursuant to a tender or exchange offer (other than a tender or
exchange offer made by the Company);
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization or reorganization of the Company, or a
reverse stock split of outstanding voting securities, or consummation
of any such transaction if stockholder approval is not obtained, other
than any such transaction which would result in at least 75% of the
total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
beneficially owned by the holders of all of the outstanding voting
securities of the Company immediately prior to the transactions with
the voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction;
(iv) the stockholders of the Company shall approve a plan of
complete liquidation or dissolution of the Company or an agreement for
the sale or disposition by the Company of all or substantially all of
the Company's assets; or
(v) if, at any time during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority thereof, unless
the election or nomination for the election by the Company's
stockholders of each new director was approved a vote of at least
two-thirds of the directors then still in office who were directors at
the beginning of the period.
In the event of a Change in Control, the Committee, in its discretion,
may (i) provide for the purchase of the Option for an amount of cash or other
property that could have been received upon the exercise of the Option, (ii)
adjust the terms of the Option in a manner determined by the Committee to
reflect the Change in Control, (iii) cause the Option to be assumed, or new
rights substituted therefor, by another entity, or (iv) make such other
provision as the Committee may consider equitable and in the best interests of
the Company, including, without limitation, providing for the termination of
the Option to the extent not exercised.
SECTION 9. General Provisions.
(a) No Rights to Options. No Employee, Consultant or Director shall
have any claim to be granted any Option, and there is no obligation for
uniformity of treatment of Participants. The terms and conditions of Options
need not be the same with respect to each recipient.
(b) No Right to Employment. The grant of an Option shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any
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liability or any claim under the Plan, unless otherwise expressly provided in
the Plan or in any Option Agreement.
(c) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Texas and applicable federal law.
(d) Severability. If any provision of the Plan or any Option is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Option, or would disqualify the Plan or any
Option under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to the applicable laws, or if it
cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Option, such
provision shall be stricken as to such jurisdiction, Person or Option and the
remainder of the Plan and any such Option shall remain in full force and
effect.
(e) Other Laws. The Committee may refuse to issue or transfer any
Shares or other consideration under an Option if, acting in its sole
discretion, it determines that the issuance of transfer or such Shares or such
other consideration might violate any applicable law or regulation.
(f) No Trust or Fund Created. Neither the Plan nor the Option shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant
or any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Option, such right
shall be no greater than the right of any general unsecured creditor of the
Company or any Affiliate.
(g) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Option, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any
rights thereto shall be canceled, terminated, or otherwise eliminated.
(h) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 10. Effective Date of the Plan.
The Plan shall be effective as of the date of its approval by the
Board.
SECTION 11. Term of the Plan.
No Option shall be granted under the Plan after the 10th anniversary
of the date the Plan is adopted by the Board. However, unless otherwise
expressly provided in the Plan or in an applicable Option agreement, any Option
granted prior to such termination, and the authority of the Board or
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the Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Option or to waive any conditions or rights under such Option, shall
extend beyond such termination date.
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