Exhibit 10.3


 


Name of Executive


 


COMFORT SYSTEMS USA, INC.

2006 Equity Incentive Plan

Restricted Stock Award Agreement


 


Comfort Systems
USA, Inc.

777 Post Oak Blvd, Suite 500

Houston, Texas 77056


 


Ladies and
Gentlemen:


 


The undersigned (i) acknowledges that he or she
has received an award (the “Award”) of restricted stock from Comfort Systems
USA, Inc., a Delaware corporation (the “Company”) under the 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 of [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”). The undersigned’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.


 


3.


Meaning
of Certain Terms.
 Except as otherwise expressly provided, 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.


 


4.


Nontransferability
of Shares.
 The Shares acquired by the undersigned pursuant to this Agreement shall
not be sold, transferred, pledged, assigned or otherwise encumbered or disposed
of except as provided below and in the Plan.


 


5.


Forfeiture
Risk.
 Except as provided in Section 7(b) of this Agreement, if the
undersigned ceases to be employed by the Company and its subsidiaries for any
reason, including death, any then unvested Shares acquired by the undersigned
hereunder shall be immediately forfeited. The undersigned hereby (i) appoints
the Company as the attorney-in-fact of the undersigned 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. The undersigned 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 Paragraph 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, 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.


 


(ii)                      If the Committee determines that for any
of the 12-month periods prior to the date that such restricted shares are
scheduled to vest under Section 7(b) herein the Company did not
achieve 60% of the average 3-year trailing EBITDA or EPS target (whichever the
case may be) as set by the Compensation 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.


 


(b)


Subject to Section 7(a) above
and Sections 7(c) and 7(d) below, and provided that the
undersigned 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:


 


on


[DATE]; [1/3 of
NUMBER]


 


on


[DATE]; [1/3 of
NUMBER]; and


 


on


[DATE] [1/3 of
NUMBER].


 


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 the undersigned’s change in control agreement, if any, with the
Company, or (ii) if the undersigned 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 the undersigned 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, the undersigned
shall be deemed to satisfy the continuous employment condition set forth in Section 7(b) on
each vesting date 


 

















 


following retirement.


 


(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 the undersigned as
compared with specific individual goals, which may be based on objective or
nonobjective factors related to the performance of the undersigned.


 


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 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 the undersigned.


 


9.


Dividends,
etc.  The
undersigned shall be entitled to (i) receive any and all dividends or
other distributions paid with respect to those Shares of which he is the record
owner on the record date for such dividend or other distribution, and (ii) vote
any Shares of which he is the record owner on the record date for such vote; provided, however , that any property
(other than cash) distributed with respect to a share of Stock (the “associated
share”) acquired hereunder, including without limitation a distribution of
Stock by reason of a stock dividend, stock split or otherwise, or a
distribution of other securities with respect to an associated share, shall be
subject to the restrictions of this Agreement in the same manner and for so
long as the associated share remains subject to such restrictions, and shall be
promptly forfeited to the Company if and when the associated share is so
forfeited; and further provided ,
that the Administrator may require that any cash distribution with respect to
the Shares other than a normal cash dividend be placed in escrow or otherwise
made subject to such restrictions as the Administrator deems appropriate to
carry out the intent of the Plan. References in this Agreement to the Shares
shall refer, mutatis mutandis ,
to any such restricted amounts.


 


10.


Sale of
Vested Shares.
 The undersigned understands that he will be free to sell any Share 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.
 The undersigned expressly acknowledges the following:


 


a.


The undersigned has been
advised to confer promptly with a professional tax advisor to consider whether
the undersigned 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 date of
this award. The Company has made no recommendation to the 


 

















 


undersigned 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. The undersigned
expressly acknowledges and agrees that his rights hereunder are subject to his
paying to the Company in cash (or by such other means as may be acceptable to
the Company in its discretion, including, if the Committee so determines, by
the delivery of previously acquired Stock or shares of Stock acquired hereunder
or by the withholding of amounts from any payment hereunder) all taxes required
to be withheld in connection with such award, vesting or payment.


 


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.
 The undersigned 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 the undersigned 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 the undersigned’s own behalf or on behalf of any
competitor, which acquisition candidate either was called upon the undersigned
on behalf of the Company or any affiliate or was the subject of an acquisition
analysis made by the undersigned 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
the undersigned 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 the undersigned made in this Section 13 shall be effective shall be
computed by excluding from such computation any time during which the
undersigned is in violation of any provision of this Section 13.


 


14.


Remedies
in the Event of Breach . If the Company determines that the undersigned 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 the
undersigned to remit or deliver to the Company the amount of any consideration
received by the undersigned upon the sale of any Shares delivered under the
Award. The undersigned 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. The undersigned 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 the
undersigned as an offset to effectuate the foregoing.


 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  



 

















 


	
   

  	
  [Name
  of Executive]

  
	
   

  	
   

  
	
  The foregoing Restricted Stock

  Award Agreement is hereby accepted:

  	
   

  
	
   

  	
   

  
	
  COMFORT SYSTEMS USA, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Trent McKenna

  	
   

  	
   

  
	
  Its:

  	
  General Counsel and Secretary