1997 Stock Option Plan – Quanta Services Inc.
QUANTA SERVICES, INC.
AMENDED AND RESTATED
1997 STOCK OPTION PLAN
SECTION 1. PURPOSE OF PLAN. The purpose of the Quanta Services, Inc.
1997 Stock Option Plan (the "Plan") shall be to provide for the grant to
employees, officers, directors, and consultants of the Company options to
acquire Common Stock of the Company.
SECTION 2. DEFINITIONS. Unless the context clearly indicates otherwise,
the following terms, when used in the Plan, shall have the meanings set forth in
this Section 2.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cause" shall mean (i) Grantee's willful, material and
irreparable breach of any agreement that governs the terms and
conditions of his or her employment; (ii) Grantee's gross negligence or
gross incompetence in the performance or intentional nonperformance
(continuing for ten days after receipt of written notice of such
negligence) of any of Grantee's material duties and responsibilities;
(iii) Grantee's dishonesty, fraud or misconduct with respect to the
business or affairs of the Company or any Subsidiary; (iv) Grantee's
conviction of a felony crime; or (v) chronic alcohol abuse or illegal
drug abuse by Grantee.
(c) A "Change in Control" of the Company shall occur when: (i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 50 percent or more of the combined voting
power of the Company's then outstanding securities; (ii) as a result
of, or in connection with, any tender offer or exchange offer, merger,
or other business combination (a "Transaction"), the persons who were
directors of the Company immediately before the Transaction shall cease
to constitute a majority of the Board of Directors of the Company or
any successor to the Company; (iii) the Company is merged or
consolidated with another corporation and as a result of the merger or
consolidation less than 75 percent of the outstanding voting securities
of the surviving or resulting corporation shall then be owned in the
aggregate by the former stockholders of the Company; (iv) a tender
offer or exchange offer is made and consummated for the ownership of
securities of the Company representing 50 percent or more of the
combined voting power of the Company's then outstanding voting
securities; or (v) the Company transfers substantially all of its
assets to another corporation which is not controlled by the Company
(d) "Code" shall mean the Internal Revenue Code of 1986 as it
may be amended from time to time.
(e) "Committee" shall mean any Committee of two or more
Directors that may be designated by the Board to administer the Plan,
all of which Committee's members shall be Nonemployee Directors.
Additionally, if any Options are intended
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to qualify as performance-based compensation under Section 162(m)(4)(C)
of the Code, all members of the Committee granting such Options shall
be "outside directors" within the meaning of that Code section.
(f) "Common Stock" shall mean the common stock, par value
$.00001 per share, of the Company.
(g) "Consultant" shall mean any person who is engaged to
perform services for the Company or its Subsidiaries, other than as an
Employee or Director.
(h) "Control Person" shall mean any person who, as of the date
of the grant of an Option, owns (within the meaning of Section 422
(b)(6) of the Code) stock possessing more than ten percent of the total
combined voting power or value of all classes of all stock of the
Company or of any parent or Subsidiary.
(i) "Company" shall mean Quanta Services, Inc., a Delaware
corporation.
(j) "Director" shall mean any member of the Board.
(k) "Employee" shall mean any full-time employee of the
Company or any Subsidiary (including Directors who are otherwise
employed on a full-time basis by the Company or any Subsidiary).
(l) "Exchange Act" shall mean the securities Exchange Act of
1934 as it may be amended from time to time.
(m) "Fair Market Value" of the Common Stock on a given date
shall be based upon: (i) if the Common Stock is listed on a national
securities exchange or quoted in an interdealer quotation system, the
last sales price or , if such price is unavailable, the average of the
closing bid and asked prices per share of the Common Stock on such date
(or, if there was no trading or quotation in the Common Stock on such
date, on the next preceding date on which there was trading or
quotation) as provided by one of such organizations; or (ii) if the
Common Stock is not listed on a national securities exchange or quoted
in an interdealer quotation system, the value as determined by the
Board in good faith in its sole discretion; provided, however, that the
"Fair Market Value" of Common Stock on the date on which shares of
Common Stock are first issued and sold pursuant to a registration
statement filed with and declared effective by the SEC (the
"Registration Statement") shall be the Initial Public Offering price of
the shares so issued and sold, as set forth in the first final
prospectus used in such offering.
(n) "Grantee" shall mean a person granted an Option under the
Plan.
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(o) "Initial Public Offering" shall mean the initial public
offering of shares of Common Stock in a firm commitment underwriting
registered with the SEC in compliance with the provision of the 1933
Act.
(p) "ISO" shall mean an Option granted pursuant to the Plan to
purchase shares of Common Stock and intended to qualify as an incentive
stock option under Section 422 of the Code, as now or hereafter
constituted.
(q) "1933 Act" shall mean the Securities Act of 1933, as it
may be amended from time to time.
(r) "Nonemployee Director" shall mean a director who is not
currently an officer (as defined in Rule 16a-1(f) under the Exchange
Act) of the Company or a Subsidiary, or otherwise currently employed by
the Company or a Subsidiary.
(s) "NQSO" shall mean an Option granted pursuant to the Plan
to purchase shares of the Common Stock that is not an ISO.
(t) "Option" or "Options" shall refer to one or more NQSOs and
ISOs issued under and subject to the Plan.
(u) "Parent" shall mean any parent corporation as defined in
Section 424 of the Code.
(v) "SEC" means the United States Securities and Exchange
Commission.
(w) "Plan" shall mean the Quanta Services, Inc. Amended and
Restated 1997 Stock Option Plan as set forth herein and as amended from
time to time.
(x) "Stock" shall mean (i) Common Stock; (ii) limited vote
common stock, par value $.00001 per share, of the Company; and (iii)
Common Stock into which the outstanding shares of the Company's Series
A Preferred Stock, par value $.00001 per share, are convertible.
(y) "Subsidiary" shall mean any corporation with respect to
which the company owns, directly or indirectly, 50 percent or more of
the total combined voting power of all classes of stock of such
corporation.
SECTION 3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN. Subject to the
provisions of Section 10 hereof, the total amount of Common Stock with respect
to which Options may be granted under the Plan shall not exceed the greater of
(i) 2,380,850 shares (subject to adjustment pursuant to Section 10 hereof)and
(ii) 15 percent of the total number of shares of Stock, as determined at the
time of a particular grant, outstanding or reserved for issuance upon conversion
of the Company's Series A Preferred Stock from time to time. Notwithstanding the
foregoing, the total amount of Common Stock with respect to which ISOs may be
granted under the Plan shall not exceed
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2,380,850 shares. Moreover, the total amount of Common Stock with respect to
which Options may be granted under the Plan to any Grantee during the term of
the Plan shall not exceed 1,000,000 shares. Common Stock issuable under the Plan
may be authorized but unissued shares or reacquired shares of Common Stock. If,
prior to exercise, any Options are forfeited, lapse, or terminate for any
reason, the Common Stock covered thereby shall again be available for Option
grants under the Plan.
SECTION 4. ADMINISTRATION OF THE PLAN. The Plan shall be administered
by the Committee, provided that the Board, the Acquisition Committee of the
Board or the Small Acquisition Committee of the Board may make grants of Options
pursuant to the Plan in connection with the acquisition of businesses by the
Company. Subject to the express provisions of the Plan , the Committee shall
have the authority to interpret the Plan, to prescribe, amend, and rescind rules
and regulations relating to the Plan, to determine the terms and provisions of
stock option agreements thereunder, and to make all other determinations
necessary or advisable for the administration of the Plan. Any controversy or
claim arising out of or related to the Plan or the Options granted thereunder
shall be determined unilaterally by, and at the sole discretion of, the
Committee. To the extent necessary to comply with Rule 16b-3 under the Exchange
Act, determinations concerning Options granted to any person who is a Director
or officer or otherwise subject to Section 16 of the Exchange Act shall be made
by the Committee.
SECTION 5. TYPES OF OPTIONS. Options granted under the Plan may be of
two types: ISOs or NQSOs. The Committee shall have the authority and discretion
to grant to an eligible Employee either ISOs, NQSOs, or both but shall clearly
designate the nature of each Option at the time of grant. Grantees who are not
Employees of the Company or a Subsidiary on the date an Option is granted shall
receive only NQSOs.
SECTION 6. GRANT OF OPTIONS TO EMPLOYEES AND CONSULTANTS.
(a) Employees and Consultants of the Company and its
Subsidiaries shall be eligible to receive Options under the Plan.
(b) The exercise price per share of Common Stock subject to an
Option granted to an Employee or Consultant shall be determined by the
Committee; provided, however, that the exercise price of each share
subject to an Option shall be not less than 100 percent of the Fair
Market Value of a share of the Common Stock on the date such Option is
granted, or, in the case of an ISO granted to a Control Person, not
less than 110 percent of such Fair Market Value.
(c) The term of each Option granted to an Employee or
Consultant shall be determined by the Committee, provided that no ISO
shall be exercisable more than ten years from the date of grant of the
Option and further provided that no ISO granted to a Control Person
shall be exercisable more than five years from the date of grant of the
Option.
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(d) The committee shall determine and designate from time to
time Employees or Consultants who are to be granted Options, the nature
of each Option granted and the number of shares of Common Stock subject
to each such Option.
(e) Notwithstanding any other provisions hereof, the aggregate
Fair Market Value (determined at the time the ISO is granted) of the
Common Stock with respect to which ISOs are exercisable for the first
time by any Employee during any calendar year under all plans of the
Company and any Parent or Subsidiary corporation shall not exceed
$100,000. To the extent the limitation set forth in the preceding
sentence is exceeded, the Options with respect to such excess shall be
treated as NQSOs.
(f) The Committee, in its sole discretion, shall determine
whether any Option granted to an Employee or Consultant shall become
exercisable in one or more installments and shall specify the
installment dates. The Committee may also make such other provisions,
not inconsistent with the terms of this Plan, as it may deem desirable,
including such provisions as it may deem necessary to qualify any ISO
under the provisions of Section 422 of the Code. Without limitation of
the foregoing, the Committee may, in its discretion, provide that
Options shall immediately become exercisable upon (i) the death of an
Employee or Consultant while in the employ of the Company or any
Subsidiary or (ii) a Change in Control.
(g) The Committee may, at any time, grant new or additional
options to any eligible Employee or Consultant who has previously
received Options under the Plan or options under other plans, whether
such prior Options or other options are still outstanding, have been
exercised previously in whole or in part, or have been canceled. The
exercise price of such new or additional Options may be established by
the Committee, subject to Section 6(b) hereof without regard to such
previously granted Options or other options.
SECTION 7. GRANTS OF OPTIONS TO NONEMPLOYEE DIRECTORS.
(a) Nonemployee Directors of the Company shall be eligible to
receive Options under the Plan only pursuant to the provisions of this
Section 7. Each individual who agrees to become a Nonemployee Director
prior to the filing of the Registration Statement covering the Initial
Public Offering shall receive, without the exercise of the discretion
of any person, an NQSO under the Plan relating to the purchase of
10,000 shares of Common Stock. Each individual who agrees to become a
Nonemployee Director between the filing and effective date of the
Registration Statement covering the Initial Public Offering shall
receive, without the exercise of the discretion of any person, an NQSO
under the Plan relating to the purchase of 10,000 shares of Stock at an
exercise price equal to the Initial Public Offering price per share.
Thereafter, each individual who agrees to become a Nonemployee Director
within six months following (i) the effective date of the Registration
Statement covering the Initial Public Offering or (ii) an annual
meeting of the Company's Stockholders shall receive, without the
exercise of the discretion of any
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person, an NQSO under the Plan relating to the purchase of 10,000
shares of Common Stock. In addition, on the day after the first annual
meeting of stockholders next following the date of the Initial Public
Offering, and the date after each subsequent annual meeting, each
person who is a continuing Nonemployee Director on any such date shall
receive, without the exercise of the discretion of any person, an NQSO
under the Plan relating to the purchase of 5,000 shares of Common
Stock, and each person who is a new, first-time Nonemployee Director on
any such date and who became a Nonemployee Director more than six
months following (i) the effective date of the Registration Statement
covering the Initial Public Offering or (ii) the immediately preceding
annual meeting of the Company's stockholders shall receive, without the
exercise of the discretion of any person, an NQSO under the Plan
relating to the purchase of 10,000 shares of Common Stock. In the event
that there are not sufficient shares available under the Plan to allow
for the grant to each Nonemployee Director of an NQSO for the number of
shares provided herein, each Nonemployee Director shall receive an NQSO
for his pro rata share of the total number of shares of Common Stock
available under the Plan.
(b) The exercise price of each share of Common Stock subject
to an Option granted to a Nonemployee Director shall equal the Fair
Market Value of a share of Common Stock on the date such Option is
granted. Payment of the exercise price for the shares being purchased
shall be made in cash.
(c) Each Option granted to a Nonemployee Director shall become
exercisable six months from, and shall have a term of ten (10) years
from, the date of Option grant, or, if later, the date the Grantee
becomes a Nonemployee Director. Notwithstanding the exercise period of
any Option granted to a Nonemployee Director, all such Options shall
immediately become exercisable upon (i) the death of a Nonemployee
Director while serving as such or (ii) a Change in Control.
SECTION 8. EXERCISE OF OPTIONS.
(a) A Grantee shall exercise an Option by delivery of written
notice to the Company setting forth the number of shares with respect
to which the Option is to be exercised, together with cash, certified
check, bank draft, or postal or express money order payable to the
order of the Company for an amount equal to the Option price of such
shares and any income tax required to be withheld. The Committee may,
in its sole discretion, permit a Grantee to pay all or a portion of the
exercise price by a simultaneous sale of the shares of Common Stock to
be issued pursuant to such exercise pursuant to a brokerage or similar
arrangement.
(b) Except as provided pursuant to Section 9(a) hereof, no
Option granted to an Employee or Consultant shall be exercised unless
at the time of such exercise the Grantee is then an Employee or
Consultant of the Company or a Subsidiary.
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(c) Except as provided in Section 9(a) hereof, no Option
granted to a Nonemployee Director shall be exercised unless at the time
of such exercise the Grantee is then a Nonemployee Director.
(d) Before the Company issues Common Stock to a Grantee
pursuant to the exercise of an NQSO, the Company shall have the right
to require that the Grantee make such provision, or furnish the Company
such authorization, necessary or desirable so that the Company may
satisfy its obligation under applicable income tax laws to withhold
income or other taxes due upon or incident to such exercise.
SECTION 9. EXERCISE OF OPTIONS UPON TERMINATION.
(a) Subject to Section 9 (c) hereof, upon the termination of a
Grantee's relationship with the Company and its Subsidiaries, the
period during which such Grantee may exercise any outstanding and then
exercisable installments of his Options shall not exceed (i) if such
termination is due to death or permanent and total disability (within
the meaning of Section 22(e)(3) of the Code), one year from the date of
such termination, and (ii) in all other cases, three months (six months
for Nonemployee Directors) from the date of such termination, provided,
however, that in no event shall the period extend beyond the expiration
of the Option term. Notwithstanding the foregoing, all Options shall
immediately terminate upon a termination of a Grantee's employment if
the Committee determines, in its sole discretion, that such termination
is for Cause.
(b) In no event shall any Option be exercisable for more than
the maximum number of shares that the Grantee was entitled to purchase
at the date of termination of the relationship with the Company and its
Subsidiaries; provided, however, that in the case of Options granted
prior to the Initial Public Offering to a Grantee who at no time prior
to the date of termination of his relationship with the Company and its
Subsidiaries was subject to the provisions of Section 16(b) of the
Exchange Act, any member of the Board who had been the Grantee's
immediate or ultimate supervisor prior to the Initial Public Offering
may, in the sole discretion of such Board member, accelerate the
exercisability of all or a portion of such Options which are not then
otherwise exercisable if (i) such Grantee is terminated by the Company
or a Subsidiary without Cause or (ii) the Subsidiary employing such
Grantee is sold.
(c) The Committee may, in its discretion, extend the period of
exercisability set forth in clauses (i) and (ii) in paragraph (a)
above; provided, however, that such period may not be extended for
Options granted to Nonemployee Directors.
(d) Subject to Section 9(b) hereof, the sale of any Subsidiary
shall be treated as a termination of employment with respect to any
Grantee employed by such Subsidiary.
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(e) Subject to the foregoing, in the event of a Grantee's
death, Options may be exercised by the Grantee's legal representative.
SECTION 10. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If the Company
shall effect a subdivision or consolidation of shares or other increase or
reduction of shares of Common Stock outstanding without receiving compensation
therefor in money, services or property, or any other change in corporate
capital structure shall occur, then (a) the number of shares subject to
outstanding Options shall be proportionately adjusted (without a change in the
total price applicable to any such Option, but with a corresponding adjustment
in the price per share), and (b) the number of shares available for issuance
under Sections 3 and 7(a) shall be proportionately adjusted.
SECTION 11. RESTRICTIONS ON ISSUING SHARES. No Common Stock shall be
issued or transferred under the Plan unless and until all applicable legal
requirements have been compiled with to the satisfaction of the Committee. The
Committee shall have the right to condition any Option on the Grantee's
undertaking in writing to comply with such restrictions on any subsequent
disposition of the shares of Common Stock issued or transferred thereunder as
the Committee shall deem necessary or advisable as a result of any applicable
law, regulation, official interpretation thereof, or underwriting agreement, and
certificates representing such shares may be legended to reflect any such
restrictions.
SECTION 12. OPTION AGREEMENTS; MISCELLANEOUS TERMS.
(a) Each Option shall be evidenced by a written agreement
containing such terms and conditions, not inconsistent with the Plan,
as the Committee shall approve. The terms and provisions of such
agreements may vary among Grantees and among different Options granted
to the same Grantee.
(b) The grant of an Option in any year shall not give the
Grantee any right to similar grants in future years, any right to
continue such Grantee's employment relationship with the Company or its
Subsidiaries, or, until such Option is exercised and share certificates
are issued, any rights as a Stockholder of the Company. All Grantees
shall remain subject to discharge to the same extent as if the Plan
were not in effect.
(c) No Grantee, and no beneficiary or other persons claiming
under or through the Grantee, shall have any right, title, or interest
by reason of any Option to any particular assets of the Company or its
Subsidiaries or any shares of Common Stock allocated or reserved for
the purposes of the Plan or subject to any Option except as set forth
herein. The Company shall not be required to establish any fund or make
any other segregation of assets to assure the payment of any Option.
(d) No Option shall be subject to anticipation, sale,
assignment, pledge, encumbrance, or charge except by will or the laws
of descent and distribution, and an Option shall be exercisable during
the Grantee's lifetime only by the Grantee.
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(e) The issuance of shares of Common Stock to Grantees or to
their legal representatives shall be subject to any applicable taxes
and other laws or regulations of the United States or of any state
having jurisdiction thereof.
SECTION 13. AMENDMENT AND TERMINATION. The Board may, at any time,
alter, amend, suspend, discontinue, or terminate the Plan; provided, however,
that no such action shall adversely affect the rights of Grantees to Options
previously granted hereunder and provided further that any stockholder approval
necessary or desirable in order to comply with Rule 16b-3 under the Exchange Act
or with Section 422 of the Code (or other applicable law or regulation) shall be
obtained in the manner required therein.
SECTION 14. EFFECTIVE DATE OF PLAN. The Plan shall be effective upon
its adoption by the Board and it approval by the Company's stockholders. No ISO
may be granted more than ten years after such effective date.
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