Exhibit 10.4


 


Name of Executive


 


COMFORT SYSTEMS USA, INC.
  2006 Equity Incentive Plan

Performance Restricted Stock Award Agreement


 


Comfort Systems
USA, Inc.

777 Post Oak Blvd, Suite 500

Houston, Texas 77056


 


Ladies and
Gentlemen:


 


The undersigned (“Employee”) (i) acknowledges
that he or she has received an award (the “Award”) of performance restricted
stock from Comfort Systems USA, Inc., a Delaware corporation (the “Company”),
under the Company’s 2006 Equity Incentive Plan (the “Plan”), subject to the terms
set forth below and in the Plan; (ii) further acknowledges receipt of a
copy of the Plan as in effect on the date hereof; and (iii) agrees with
the Company as follows:


 


1.


Effective
Date
..  This Agreement shall take effect as [Date], which is the date of
grant of the Award.


 


2.


Shares
Subject to Award
..  The Award consists of [Number] shares (the “Shares”) of common
stock of the Company (“Stock”). Employee’s rights to the Shares are subject to
the restrictions described in this Agreement and the Plan (which is
incorporated herein by reference with the same effect as if set forth herein in
full) in addition to such other restrictions, if any, as may be imposed by law.
In the event that any provision of this Agreement is inconsistent with the
terms of the Plan, the terms of the Plan shall govern.


 


3.


Meaning
of Certain Terms
..  Except as otherwise expressly provided in this Agreement, all
terms used herein shall have the same meaning as in the Plan. The term “vest”
as used herein with respect to any Share means the lapsing of the restrictions
described herein and in the Plan with respect to such Share, which entitles
Employee to transfer the Share and to retain such Share after a termination of
employment.


 


4.


Nontransferability
of Shares
..  The Shares acquired by Employee pursuant to this Agreement shall
not be sold, transferred, pledged, assigned or otherwise encumbered or disposed
of until such time as they become vested under Section 7 of this
Agreement.


 


5.


Forfeiture
Risk
..  Except as provided in Section 7(c) of this Agreement, if
Employee ceases to be employed by the Company and its subsidiaries for any
reason, including death, any then unvested Shares acquired by Employee
hereunder shall be immediately forfeited upon such termination with no
consideration due to Employee. Employee hereby (i) appoints the Company as
his or her attorney-in-fact to take such actions as may be necessary or
appropriate to effectuate a transfer of the record ownership of any such Shares
that are unvested and forfeited hereunder, (ii) agrees to deliver to the
Company, as a precondition to the issuance of any certificate or certificates
with respect to unvested Shares hereunder, one or more stock powers, endorsed
in blank, with respect to such Shares, and (iii) agrees to sign such other
powers and take such other actions as the Company may reasonably request to
accomplish the transfer or forfeiture of any unvested Shares that are forfeited
hereunder.


 

















 


6.


Retention
of Certificates
..  Any certificates representing unvested Shares shall be held by the
Company. Employee agrees that the Company may give stop transfer instructions
to the depository to ensure compliance with the provisions hereof.


 


7.


Vesting
of Shares
..  The Shares acquired hereunder shall vest in accordance with the
provisions of this Section 7 and applicable provisions of the Plan, as
follows:


 


(a)


(i)  If the
Committee determines that, for the prior 12-month period preceding the first
scheduled vesting date set forth in Section 7(b) herein, the Company
did not have positive earnings from its continuing operations, all as
determined and reported in accordance with generally accepted accounting
principles in the Company’s regularly-prepared financial statements, excluding
the following non-cash items: (A) good will impairment; (B) write-off
of debt costs; (C) restructuring charges; and (D) any cumulative
effect of a change in accounting principles, Employee shall immediately and
irrevocably forfeit all of the Shares with no consideration due to Employee.


 


(ii)  If the Committee
determines that for the 12-month period prior to the date that such Shares are
scheduled to vest under Section 7(b) herein the Company’s prior
36-month performance did not achieve 60% of the average 3-year trailing EBITDA
or EPS target (whichever the case may be) as set by the Committee under the
average of the Company’s prior 3-year Senior Management Incentive Programs,
then Employee shall immediately and irrevocably forfeit all of the Shares
scheduled to vest on such date with no consideration due to Employee.


 


(b)


Subject to Section 7(a) above
and Sections 7(c) and 7(d) below, and provided that Employee is
then, and since the date of grant has continuously been, employed by the
Company or its subsidiaries, then the Shares shall vest as follows:


 


[1/3 of Number] on May 15, [2010];


 


[1/3 of Number] on April 1, [2011]; and


 


[1/3 of Number] on April 1, [2012].


 


provided,
however, that,
not withstanding anything to the contrary in Section 7(a) above or
this Section 7(b), any unvested Shares that have not earlier been
forfeited shall vest immediately in the event of (i) a “Change in Control,”
as defined in Employee’s change in control agreement, if any, with the Company,
or (ii) if Employee and Company have not entered into a change in control
agreement, in the event the Company experiences a “Change in Control” as
defined herein.


 


(c)


Notwithstanding anything
to the contrary in Section 7(b) above, if Employee retires from the
Company at a time when the sum of his or her age in whole years and his or her
years of service with the Company (as determined in a manner consistent with
the method used for purposes of determining vesting under the Comfort Systems
USA, Inc. 401(k) Plan) is at least 75, Employee shall be deemed to
satisfy the continuous employment condition set forth in Section 7(b) on
each vesting date following retirement. The number of Shares that vest will in
all cases be determined in accordance with the provisions of Section 7(a) above.


 

















 


(d)


Notwithstanding anything
to the contrary in Sections 7(a), 7(b), or 7(c) above, the Committee
may, in its sole discretion, reduce the number of Shares vesting on any date
pursuant to this Award, and may cause any unvested Shares under this Award to
be forfeited, based on the individual performance of Employee as compared with
specific individual goals, which may be based on objective or nonobjective
factors related to Employee’s performance.


 


8.


Legend .  Any certificates
representing unvested Shares shall be held by the Company, and any such
certificate shall contain a legend substantially in the following form:


 


THE TRANSFERABILITY OF
THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE COMPANY’S 2006 EQUITY
INCENTIVE PLAN AND A PERFORMANCE RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO
BETWEEN THE REGISTERED OWNER AND COMFORT SYSTEMS USA, INC. COPIES OF SUCH
PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES OF COMFORT SYSTEMS USA, INC.


 


As soon as practicable
following the vesting of any such Shares the Company shall cause a certificate
or certificates covering such Shares to be delivered to Employee.


 


9.


Voting
Rights; Dividends, etc.  As of the date of grant, Employee shall have the right to
vote the Shares (to the same extent as any other holder of Stock), and the
right, subject to this Section 9, to receive dividends on the Shares,
unless and until the Shares are forfeited as provided for in Section 7 of
this Agreement. Unless the Committee determines otherwise, payment of any cash
dividend, additional shares of Stock, any other securities of the Company and
any other property distributed with respect to the Shares shall be deferred
until the Shares vest and are no longer subject to forfeiture under the terms
of this Agreement (and shall be subject to forfeiture upon forfeiture under Section 7
above of any unvested Shares to which such deferred dividends relate). The
dividends or distributions allocable to the Shares shall be paid or delivered
to the Participant on the vesting date for the Shares to which the dividends or
distributions relate, but only to the extent such Shares vest under the terms
of this Agreement.


 


10.


Sale of
Vested Shares.  Employee
understands that he or she will be free to sell any Share only once it has
vested, subject to (i) satisfaction of any applicable tax withholding
requirements with respect to the vesting or transfer of such Share; (ii) the
completion of any administrative steps (for example, but without limitation,
the transfer of certificates) that the Company may reasonably impose; and (iii) applicable
company policies and the requirements of federal and state securities laws.


 


11.


Certain
Tax Matters
..  Employee expressly acknowledges the following:


 


a.


Employee has been advised
to confer promptly with a professional tax advisor to consider whether Employee
should make a so-called “83(b) election” with respect to the Shares. Any
such election, to be effective, must be made in accordance with applicable
regulations and within thirty (30) days following the grant date of this
Award. The Company has made no recommendation to Employee with respect to the
advisability of making such an election.


 


b.


The award or vesting of
the Shares acquired hereunder, and the payment of dividends with respect to
such shares, may give rise to “wages” subject to withholding. Employee
expressly acknowledges and agrees that his or her rights hereunder are subject
to his or her satisfaction of


 

















 


any applicable tax
withholdings associated with such award, vesting or payment by: (i) delivering
cash (including check, money order or wire transfer made payable to the order
of the Company), (ii) having the Company withhold a portion of the Shares
to be delivered hereunder having a Fair Market Value equal to the minimum tax
withholding amount for such taxes, or (iii) delivering to the Company
shares of Stock having a Fair Market Value equal to the minimum tax withholding
amount for such taxes.


 


12.


Definition:
Change in Control
..  For the purpose of Section 7(b)(ii) herein, a “Change in
Control” shall be deemed to have occurred if:


 


a.


any person (including any
“person” within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended, and more than one person
acting as a group), other than the Company, or an employee benefit plan of the
Company, or any entity controlled by either, acquiring directly or indirectly
the beneficial ownership of any voting security of the Company and if
immediately after such acquisition such person is, directly or indirectly, the
beneficial owner of voting securities representing 50% or more of the total
voting power of all of the then-outstanding voting securities of the Company,
provided that if any one person, or more than one person acting as a group,
owned more than 50% of the total fair market value or total voting power of
Company stock as of the date of this Agreement, the acquisition of additional
stock by the same person or persons shall not be deemed to be a Change in
Control;


 


b.


the date a majority of
the following individuals are replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of
the Company’s Board of Directors before the date of the appointment or
election: (i) the individuals who, as of the date hereof, constitute the
Board of Directors of the Company (the “Original Directors”); (ii) the
individuals who thereafter are elected to the Board of Directors of the Company
and whose election, or nomination for election, to the Board of Directors of
the Company was approved by a vote of at least two-thirds of the Original
Directors then still in office (such directors becoming “Additional Original
Directors” immediately following their election); and (iii) the
individuals who are elected to the Board of Directors of the Company and whose
election, or nomination for election, to the Board of Directors of the Company
was approved by a vote of at least two-thirds of the Original Directors and
Additional Original Directors then still in office (such directors also
becoming “Additional Original Directors” immediately following their election);
or


 


c.


any one person, or more
than one person acting as a group, acquiring (or who has acquired during the
12-month period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total gross fair market
value equal to or more than 50% of the total gross fair market value of the
assets of the Company immediately before such acquisition or acquisitions.


 


13.


Non-Competition
Agreement
..  Employee will not, during the period of employment by or with the
Company, and for a period of twelve (12) months immediately following the
termination of employment, for any reason whatsoever, directly or indirectly,
on his or her own behalf or on behalf of or in conjunction with any other
person, company, partnership, corporation or business of whatever nature:


 

















 


a.


engage, as an officer,
director, shareholder, owner, partner, joint venturer, or in a managerial
capacity, whether as an employee, independent contractor, consultant or
advisor, or as a sales representative, or make guarantee loans or invest, in or
for any business engaged in the business of mechanical contracting services,
including heating, ventilation and air conditioning, plumbing, fire protection,
piping and electrical and related services (“Services”) in competition with the
Company or any of its affiliates within seventy-five (75) miles of where
the Company or any affiliated operation or subsidiary conducts business if
within the preceding two (2) years Employee has had responsibility for, or
material input or participation in, the management or operation of such other
operation or subsidiary;


 


b.


call upon any person who
is, at that time, an employee of the Company or any of its affiliates in a
technical, managerial or sales capacity for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company or any
affiliate;


 


c.


call upon any person or
entity which is at that time, or which has been within two (2) years prior
to that time, a customer of the Company or any affiliate for the purpose of
soliciting or selling Services; or


 


d.


call upon any prospective
acquisition candidate, on Employee’s own behalf or on behalf of any competitor,
which acquisition candidate either was called upon Employee on behalf of the
Company or any affiliate or was the subject of an acquisition analysis made by
Employee on behalf of the Company or any affiliate for the purpose of acquiring
such acquisition candidate.


 


Notwithstanding the
above, the foregoing agreements and covenants shall not be deemed to prohibit
Employee from acquiring as an investment not more than one percent (1%) of the
capital stock of a competing business whose stock is traded on a national
securities exchange or on an over-the-counter or similar market. It is
specifically agreed that the period during which the agreements and covenants
of Employee made in this Section 13 shall be effective shall be computed
by excluding from such computation any time during which Employee is in
violation of any provision of this Section 13.


 


14.


Remedies
in the Event of Breach .  If the Company determines that Employee is not in
compliance with the agreements and covenants set forth in Section 13
above, and such non-compliance has not been authorized in advance in a specific
written waiver from the Company, the Committee may, without limiting other
remedies that may be available to the Company, cause all or any portion of the
Award to be forfeited, whether or not previously vested, and may require
Employee to remit or deliver to the Company the amount of any consideration
received by Employee upon the sale of any Shares delivered under the Award.
Employee acknowledges and agrees that the calculation of damages from a breach
of the foregoing agreements and covenants would be difficult to calculate
accurately and that the remedies provided for herein are reasonable and not a
penalty. Employee further agrees not to challenge the reasonableness of this
provision even if the Company rescinds or withholds the delivery of Shares
hereunder or withholds any amount otherwise payable to Employee as an offset to
effectuate the foregoing.


 


15.


Entire
Agreement
..  The Plan and this Agreement constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements
of the Company and Employee with respect to the subject matter hereof.


 


	
   

  	
  Very truly yours,

  



 

















 


	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME]

  
	
   

  	
   

  
	
  The foregoing Performance Restricted Stock

  Award Agreement is hereby accepted:

  	
   

  
	
   

  	
   

  
	
  COMFORT SYSTEMS USA, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
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  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [NAME]

  	
   

  	
   

  
	
  Its: 

  	
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