Exhibit 10.1

Quanta Services, Inc.

Term Sheet

Annual Incentive Plan 2012 – Operating Units

 

Participants    Employees will be selected to participate in the Annual
Incentive plan annually at the discretion of the CEO with the approval of the
Compensation Committee. Target Incentive   

•

  Target incentive ranges have been or will be developed for each participant in
the Plan.   

•

  Management will make recommendations to the Compensation Committee regarding
the target incentive for each participant based on a competitive range.
Performance Measures and
Incentive Determination    CALCULATION OF PERCENTAGE OF TARGET BONUS ELIGIBLE TO
BE EARNED:    •   Each operating unit will be assigned an operating income goal
for the incentive year which will be approved by the Compensation Committee.   
•   For purposes of the plan, operating income will be defined as operating
income before goodwill, after insurance true-up, intercompany interest income or
expense, external interest expense and bad debt expense, and excluding gains or
losses on sales of property and equipment.    •   Subject to the limitations
described below, the percentage of target bonus eligible to be earned will be
determined according to the table below:

 

Percentage of Operating

Income Goal Obtained

   Incentive as a% of
Target Incentive

Less than 75%

       0 %

   75%

       25 %

   80%

       40 %

   85%

       55 %

   90%

       70 %

   95%

       85 %

  100%

       100 %

  120%

       120 %

  125%

       130 %

  130%

       140 %

  140%

       170 %

150% or greater

       200 %

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   •    When performance falls between the designated points in the table, the
incentive will be determined by interpolation.    •    The Potential Incentive
Earned (“PIE”) (expressed in dollars) is defined as the result of multiplying
the “Incentive as a percentage of Target Incentive” (calculated from the above
table) by the participant’s Target incentive (expressed in dollars).   
OPERATING INCOME COMPONENT:    •    Eighty-Five percent of a participant’s PIE
will be based on the above operating income calculation, subject to the
limitations outlined below, for said participant’s operating unit.    STRATEGIC
GOALS DISCRETIONARY COMPONENT:    •    As long as the “Percentage of Operating
Income Goal Obtained” (calculated from the above table) exceeds 100%, the
remaining fifteen percent of the PIE will be a discretionary award for each
participant based on obtaining pre-established operating unit objectives for the
year in support of their respective operating unit’s strategic business plan.   
•    If the “Percentage of Operating Income Goal Obtained” (calculated from the
above table) is less than or equal to 100%, then 15% of the Target Incentive
will be a discretionary award for each participant based on obtaining
pre-established operating unit objectives for the year in support of their
respective operating unit’s strategic business plan.    •    Such goals will be
as specific and measurable as possible and documented in writing.

 

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Limitations   

•

   The annual incentive calculation is subject to the following limitations;
sequenced as follows:       Step 1:       Is target bonus pool > 10% of the
operating income before goodwill, after insurance true-up, intercompany interest
income or expense, external interest expense and bad debt expense, and excluding
gains or losses on sales of property and equipment?      

If Yes, Go to Step 2.

     

If No, use the Incentive Determination chart above. Any bonus earned (for the
aggregate pool) is limited to 10% of operating income (as defined). Further, any
individual bonuses are capped at 200% of the individual target bonus.

      Step 2:       Has the Operating Income Goal been met or exceeded? If Yes,
go to b., If No, go to a.      

a.      Use the Incentive Determination chart above with the following
limitations: Bonuses earned under this section ( for the pool) are limited to
10% of actual operating income (as defined).

     

b.      Use the Incentive Determination chart above with the following
limitations:

     

Up to 10% of the operating income goal (as defined) can be earned by the pool
participants. For every dollar of operating income (as defined) in excess of the
operating income goal, $.25 will be contributed to the bonus pool. Add this
amount to the results of the Incentive Determination chart. The total
contribution under this paragraph b. is limited to 100% of the target bonus for
each of the pool participants.

 

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Clawback Provision    Notwithstanding anything herein to the contrary, any
incentive based compensation, or any other compensation, paid or payable to any
individual other than an executive officer pursuant to this plan which, if
payable to an executive officer, would be subject to recovery under any law,
government regulation, order or stock exchange listing requirement, shall be, in
the discretion of the Compensation Committee, subject to such deductions and
clawback (recovery), including by means of repayment by the individual and/or
withholding of future wages, to the same extent as may be required to be made
pursuant to law, government regulation, order, stock exchange listing
requirement (or any policy of the company adopted pursuant to any such law,
government regulation, order or stock exchange listing requirement) with respect
to an executive officer, but only to the extent that the circumstances requiring
such deductions and clawback (recovery) are attributable in whole or in part to
the functional area or operating unit with whom the recipient of such
compensation is associated.    Acceptance of an award pursuant to this plan
renders a recipient’s future wages subject to withholding by the Company to
permit recovery of any amounts that may become due under this provision. This
provision shall apply beginning with the 2012 performance period and shall
survive to the extent required by law, government regulation, order, stock
exchange listing requirement (or any policy of the company adopted pursuant to
any such law, government regulation, order or stock exchange listing
requirement). Recipients will be required to acknowledge and agree in writing to
the foregoing as a condition to receipt of an award pursuant to this plan.
Incentive Payout    •    Any calculated incentive will be subject to (i)
assessment of overall company performance to ensure that payout of calculated
incentives will not jeopardize the financial stability of the company and (ii)
approval by the Compensation Committee.    •    A participant must be employed
by the company on the date the bonus is paid. Any participant not employed by
the company on the payment date forfeits any and all rights to such bonus. It is
the company’s intention to pay bonuses earned under the plan in March following
the end of the calculation period.

 

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   •    A new participant added to this Plan during the Plan year will be
pro-rated from their date of hire. In any event, a new participant must be
employed by October 1 to be eligible for incentives in the current plan year.   
•    The salary to be used in the incentive calculation will be the base salary
in effect on the December 31 immediately preceding the date of the calculation.
   •    Any incentive earned under the Annual Incentive Plan is intended to be
paid in cash.

 

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Quanta Services, Inc.

Term Sheet

Supplemental Incentive Plan 2012 – Operating Units

 

Participants    •    Employees will be selected to participate in the
Supplemental Incentive Plan annually at the discretion of the CEO with the
approval of the Compensation Committee.    •    For purposes of the supplemental
incentive, operating unit participants will be classified into two categories:
Stock Eligible or Cash-only Eligible participants, at the discretion of the CEO
with the approval of the Compensation Committee. Target Incentive    Each
participant will be assigned a target supplemental incentive expressed as a
dollar value annually.

Performance Measures and

Incentive Determination

   Performance Award:    •    Fifty percent of a participant’s supplemental
incentive value will be based on Modified Return on Asset (MROA) performance
versus target.    •    MROA will be calculated by dividing net operating income
by total assets. Operating Income is defined as operating income before
goodwill, after insurance true-up and bad debt expense (before consideration of
intercompany interest income or expense, interest expense, and gains or losses
on the sale of property and equipment). Total assets will be based on the
quarterly average for the fiscal year excluding inter-company accounts and cash
on hand.

 

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   •    The Performance Award will be determined according to the table below:

 

Percentage of Target /

Objective Obtained

   Incentive as a % of
Target Incentive

Less than 75%

       0 %

 75%

       25 %

 80%

       40 %

 85%

       55 %

 90%

       70 %

 95%

       85 %

100%

       100 %

120%

       120 %

125%

       130 %

130%

       140 %

140%

       170 %

150% or greater

       200 %

 

   When performance falls between the designated points in the table, the
incentive will be determined by interpolation.    Discretionary Award    The
remaining fifty percent of the supplemental incentive will, in lieu of a
discretionary component, be based on the following safety components:      

•      TIIR ( Total Incident Injury Rate) – 37.5% (75% x 50%)

     

•      Safety Leadership – 12.5% (25% x 50%)

   •    Total Incident Injury Rate :    Each Operating Unit has a “Total
Incident Injury Rate” (“TIIR”) calculated for the prior year. Subject to each
participant’s ethical behavior and compliance with the Code of Ethics and
Business Conduct, this portion of the discretionary award will be based on
improvements in TIIR performance. The baseline for measuring current year
performance is the respective actual TIIR for the prior year expressed as a
percentage of hours worked.

 

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   The following Bonus Eligibility Scale will be used to measure the amount of
bonus earned as a result of improvement in the TIIR rate from the prior year to
the current year:

 

If TIIR rate is

Reduced by:

   Bonus earned
will be:  

0% or less

     0 % 

 2.5%

     25 % 

  5%

     50 % 

 7.5%

     75 % 

 10%

     100 % 

Greater than 20%

     125 % 

 

          •    When performance falls between the designated points in the
table, the incentive will be determined by interpolation.           •   
Regardless of the percentage decrease, if an operating unit has a TIIR less than
the respective target identified below at the end of the current year, then a
minimum of 100% of the target bonus is earned, as the calculated reduction from
the prior year could yield a higher percentage:         

•    Electric Power Operating Unit – 2.50

        

•    Nat Gas & Pipeline Operating Unit – 2.25

        

•    Telecom Operating Unit – 1.75

          •    Regardless of the percentage decrease, if an operating unit has a
TIIR above 4.5; it is ineligible for this incentive component.    •    Safety
Leadership:           •    Specific measurable goals will be prepared for each
operating unit management team. Incentives earned under this component of the
Discretionary Award will be directly tied to achievement of these goals.

 

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Limitations    •    Any calculated incentive will be subject to (i) assessment
of overall company performance to ensure that payout of calculated incentives
will not jeopardize the financial stability of the company and (ii) approval by
the Compensation Committee.    •    In any year, stock awarded under this and
all other plans shall not exceed 1% of the outstanding stock. The Compensation
Committee and the Board of Directors will review this limitation annually.    •
   A participant must be employed by the company on the date the bonus is paid.
Any participant not employed by the company on the payment date forfeits any and
all rights to such bonus. It is the company’s intention to pay bonuses earned
under the plan in March following the end of the calculation period.    •    A
new participant added to this Plan during the Plan year will be pro-rated from
their date of hire. In any event, a new participant must be employed by
October 1 to be eligible for incentives in the current plan year.
Clawback Provision    Notwithstanding anything herein to the contrary, any
incentive based compensation, or any other compensation, paid or payable to any
individual other than an executive officer pursuant to this plan which, if
payable to an executive officer, would be subject to recovery under any law,
government regulation, order or stock exchange listing requirement, shall be, in
the discretion of the Compensation Committee, subject to such deductions and
clawback (recovery), including by means of repayment by the individual and/or
withholding of future wages, to the same extent as may be required to be made
pursuant to law, government regulation, order, stock exchange listing
requirement (or any policy of the company adopted pursuant to any such law,
government regulation, order or stock exchange listing requirement) with respect
to an executive officer, but only to the extent that the circumstances requiring
such deductions and clawback (recovery) are attributable in whole or in part to
the functional area or operating unit with whom the recipient of such
compensation is associated.    Acceptance of an award pursuant to this plan
renders a recipient’s future wages subject to withholding by the Company to
permit recovery of any amounts that may become due under this provision. This
provision shall apply beginning with the 2012 performance period and shall
survive to the extent required by law, government regulation, order,

 

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   stock exchange listing requirement (or any policy of the company adopted
pursuant to any such law, government regulation, order or stock exchange listing
requirement). Recipients will be required to acknowledge and agree in writing to
the foregoing as a condition to receipt of an award pursuant to this plan.
Incentive Payout    •    Stock Eligible participants, at the election of the CEO
with approval by the Compensation Committee, may receive any incentive earned
under the Supplemental plan in cash, restricted stock or a combination thereof.
Subject to the above limitations, the portion of the incentive awarded in
restricted stock will be multiplied by 1.10 and then that amount will be divided
by the current stock price to determine the number of shares. Any shares awarded
will vest ratably over a three-year period following the date of grant. A
participant receiving restricted stock must be employed by the company at each
vesting date. If a participant leaves the employment of the company, all
unvested restricted stock awards are forfeited.    •    Cash-only Eligible
participants will receive any incentive earned for the year in cash.

 

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Quanta Services, Inc.

Term Sheet

Annual Incentive Plan 2012 – Corporate

 

Participants    Employees will be selected to participate in the Annual
Incentive Plan at the discretion of the CEO with the approval of the
Compensation Committee. Target Incentive    •    Target incentive ranges have
been or will be developed for each participant in the Plan.    •    Management
will make recommendations to the Compensation Committee regarding the target
incentive for each participant based on a competitive range.
Performance Measures    •    The annual incentive will be based on an operating
income target to be determined annually by the Compensation Committee. This
target will be adjusted, as appropriate, at the discretion of the Compensation
Committee to take into account any business acquisitions or divestitures during
the Plan year.    •    For purposes of the plan, operating income will be
operating income (before goodwill amortization, gain (loss) on sale of assets
and non-cash compensation) less interest expense, net of interest income.    •
   There will be no discretionary portion for the annual incentive.

Incentive Determination

  

 

Percentage of Target /

Objective Obtained

   Incentive as a % of
Target Incentive

  Less than 75%

       0 %

 75%

       25 %

 80%

       40 %

 85%

       55 %

 90%

       70 %

 95%

       85 %

100%

       100 %

110%

       130 %

120%

       175 %

130%

       185 %

140%

       195 %

150% or greater

       200 %

 

   •    The amount of incentive earned will be based on the table above.    •   
The salary to be used in the calculation will be the base salary in effect on
the December 31 immediately preceding the date of the calculation.

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   •    When performance falls between the designated points in the table, the
incentive will be determined by interpolation. Limitations    •    Any
calculated incentive will be subject to (i) assessment of overall company
performance to ensure that payout of calculated incentives will not jeopardize
the financial stability of the company and (ii) approval by the Compensation
Committee.    •    A participant must be employed by the company on the date the
bonus is paid. Any participant not employed by the company on the payment date
forfeits any and all rights to such bonus. It is the company’s intention to pay
bonuses earned under the plan in March following the end of the calculation
period.    •    A new participant added to this Plan during the Plan year will
be pro-rated from their date of hire. In any event, a new participant must be
employed by October 1 to be eligible for incentives in the current plan year
Clawback Provision    Notwithstanding anything herein to the contrary, any
incentive based compensation, or any other compensation, paid or payable to any
executive officer pursuant to this plan which is subject to recovery under any
law, government regulation, order or stock exchange listing requirement, shall
be subject to such deductions and clawback (recovery), including by means of
repayment by the executive officer and/or withholding of future wages, as may be
required to be made pursuant to law, government regulation, order, stock
exchange listing requirement (or any policy of the company adopted pursuant to
any such law, government regulation, order or stock exchange listing
requirement).    In addition, notwithstanding anything herein to the contrary,
any incentive based compensation, or any other compensation, paid or payable to
any individual other than an executive officer pursuant to this plan which, if
payable to an executive officer, would be subject to recovery under any law,
government regulation, order or stock exchange listing requirement, shall be, in
the discretion of the Compensation Committee, subject to such deductions and
clawback (recovery), including by means of repayment by the individual and/or
withholding of future wages, to the same

 

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   extent as may be required to be made pursuant to law, government regulation,
order, stock exchange listing requirement (or any policy of the company adopted
pursuant to any such law, government regulation, order or stock exchange listing
requirement) with respect to an executive officer, but only to the extent that
the circumstances requiring such deductions and clawback (recovery) are
attributable in whole or in part to the functional area or operating unit with
whom the recipient of such compensation is associated.    Acceptance of an award
pursuant to this plan renders a recipient’s future wages subject to withholding
by the Company to permit recovery of any amounts that may become due under this
provision. This provision shall apply beginning with the 2012 performance period
and shall survive to the extent required by law, government regulation, order,
stock exchange listing requirement (or any policy of the company adopted
pursuant to any such law, government regulation, order or stock exchange listing
requirement). Recipients will be required to acknowledge and agree in writing to
the foregoing as a condition to receipt of an award pursuant to this plan.
Incentive Payout    Any incentive earned under the Annual Incentive Plan is
intended to be paid in cash.

 

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Quanta Services, Inc.

Term Sheet

Supplemental Incentive Plan 2012 – Corporate

 

Participants   

•

   Employees will be selected to participate in the Supplemental Incentive Plan
annually at the discretion of the CEO with the approval of the Compensation
Committee.   

•

   For purposes of the supplemental incentive, Corporate participants will be
classified annually into two categories: Stock Eligible or Cash-only Eligible
participants, at the discretion of the CEO with the approval of the Compensation
Committee.

Performance Measures and

Incentive Determination

   Performance Award    Fifty percent of a participant’s supplemental incentive
value will be based on return on equity after eliminating the effects of
goodwill (ROE) versus the target for the year. This target will be determined
annually by the Compensation Committee. The target will be adjusted as
appropriate, at the discretion of the Compensation Committee, to take into
account any business acquisitions or dispositions during the Plan year.    The
Performance Award will be determined according to the following table:

 

Percentage of Target /

Objective Obtained

   Incentive as a % of
Target Incentive

Less than 75%

       0 %

 75%

       25 %

 80%

       40 %

 85%

       55 %

 90%

       70 %

 95%

       85 %

100%

       100 %

110%

       130 %

120%

       175 %

130%

       185 %

140%

       195 %

150% or greater

       200 %

 

   When performance falls between the designated points in the table, the
incentive will be determined by interpolation.

 

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   Individual Performance Award    The remaining fifty percent of a
participant’s supplemental incentive value will be determined on a discretionary
basis. The Individual Performance Award will be based on obtaining pre-set
objectives established for each participant for the year and on exhibiting
ethical behavior and compliance with the Code of Ethics and Business Conduct.
Limitations    •    Any calculated incentive will be subject to (i) assessment
of overall company performance to ensure that payout of calculated incentives
will not jeopardize the financial stability of the company and (ii) approval by
the Compensation Committee.    •    In any year, stock awarded under this and
all other plans shall not exceed 1% of the outstanding stock. The Compensation
Committee and the Board of Directors will review this limitation annually.    •
   A participant must be employed by the company on the date the bonus is paid.
Any participant not employed by the company on the payment date forfeits any and
all rights to such bonus. It is the company’s intention to pay bonuses earned
under the plan in March following the end of the calculation period.    •    A
new participant added to this Plan during the Plan year will be pro-rated from
their date of hire. In any event, a new participant must be employed by
October 1 to be eligible for incentives in the current plan year. Clawback
Provision    Notwithstanding anything herein to the contrary, any incentive
based compensation, or any other compensation, paid or payable to any executive
officer pursuant to this plan which is subject to recovery under any law,
government regulation, order or stock exchange listing requirement, shall be
subject to such deductions and clawback (recovery), including by means of
repayment by the executive officer and/or withholding of future wages, as may be
required to be made pursuant to law, government regulation, order, stock
exchange listing requirement (or any policy of the company adopted pursuant to
any such law, government regulation, order or stock exchange listing
requirement).    In addition, notwithstanding anything herein to the contrary,
any incentive based compensation, or any other compensation, paid or payable to
any individual other than an executive officer pursuant to this plan which, if
payable to an executive officer, would be subject to recovery under any law,

 

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   government regulation, order or stock exchange listing requirement, shall be,
in the discretion of the Compensation Committee, subject to such deductions and
clawback (recovery), including by means of repayment by the individual and/or
withholding of future wages, to the same extent as may be required to be made
pursuant to law, government regulation, order, stock exchange listing
requirement (or any policy of the company adopted pursuant to any such law,
government regulation, order or stock exchange listing requirement) with respect
to an executive officer, but only to the extent that the circumstances requiring
such deductions and clawback (recovery) are attributable in whole or in part to
the functional area or operating unit with whom the recipient of such
compensation is associated.    Acceptance of an award pursuant to this plan
renders a recipient’s future wages subject to withholding by the Company to
permit recovery of any amounts that may become due under this provision. This
provision shall apply beginning with the 2012 performance period and shall
survive to the extent required by law, government regulation, order, stock
exchange listing requirement (or any policy of the company adopted pursuant to
any such law, government regulation, order or stock exchange listing
requirement). Recipients will be required to acknowledge and agree in writing to
the foregoing as a condition to receipt of an award pursuant to this plan.
Incentive Payout    •    Stock Eligible participants, at the election of the CEO
with approval by the Compensation Committee, may receive any incentive earned
under the Supplemental plan in cash, restricted stock or a combination thereof.
Subject to the above limitations, the portion of the incentive awarded in
restricted stock will be multiplied by 1.10 and then that amount will be divided
by the current stock price to determine the number of shares. Any shares awarded
will vest ratably over a three-year period following the date of grant. A
participant receiving restricted stock must be employed by the company at each
vesting date. If a participant leaves the employment of the company, all
unvested restricted stock awards are forfeited.    •    Cash-only Eligible
participants will receive any incentive earned for the year in cash.

 

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Quanta Services, Inc.

Term Sheet

CEO Discretionary Incentive Plan – All

2012

 

Discretionary Payout    Annually, at the recommendation of the CEO,
discretionary awards will be presented to the
Compensation Committee. These awards will be made at the discretion of the CEO,
with the
Compensation Committee’s approval, in cash, restricted stock, or a combination
thereof. A
participant must be employed by the company on the date the bonus is paid. Any
participant not
employed by the company on the payment date forfeits any and all rights to such
bonus. It is the
company’s intention to pay bonuses earned under the plan in March following the
end of the
calculation period.