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SCHEDULE 14A
SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ x ]
Check the appropriate box:
[ X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Name of Registrant as Specified in Its Charter:
Comfort Systems USA, Inc.
Name of Person(s) Filing Proxy Statement:
Sheet Metal Workers' International Association
Payment of Filing Fee (check the appropriate box)
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
The enclosed form is not a proxy voting card, but only a
voluntary survey.
Released to Shareholders 11/__/01
Sheet Metal Workers International Association
1750 New York Avenue NW
Washington, D.C. 20006
Tel. (800) 457-7694
Fax: (202) 662-0891
NOTICE OF INTENDED PROXY CONTEST AT COMFORT SYSTEMS USA
To Fellow Comfort Systems USA shareholders:
I. WITHOUT SHAREHOLDER APPROVAL, SHOULD THIS COMPANY GRANT
NEW OPTIONS JUST BECAUSE THE STOCK'S MARKET PRICE
DROPPED BELOW THE EXERCISE PRICE OF PRIOR OPTIONS?
Our International owns stock in the Company and also has
interests in the Company going beyond stock ownership, as the
representative of several hundred Company employees.
Stock options are supposed to link executive compensation to a
company's stock performance: if the company's stock goes up, then
the options can be exercised at a price below the new market
price, benefitting company executives because they presumably
helped get the stock price up.
However, this form of compensation gets delinked from stock
performance if options are repriced after executives have failed
to improve the company's stock price. Another way for the Board
of Directors to accomplish basically the same thing as repricing
is to simply issue new options at a lower price because the old
options ended up worthless.
Last year's proxy statement reveals that the Company did exactly
this: "In late 2000, an aggregate of 300,000 options were granted
to five individuals excluding Mr. Murdy with existing options
because the previous options granted to these individuals were at
exercise prices significantly higher than year end 2000 market
value."
We believe that repricing of options (or granting new options
solely because the exercise price is below market value) is
unfair to shareholders. A deal is a deal, or should be.
Repricing or replacing underwater options not only reduces
executives' incentive to work hard for shareholders, but also
tends to mislead shareholders about the true value of an
executive's compensation.
Top executives often justify high-level compensation by claiming
that much of it depends on stock price. That justification
carries little weight if after the stock dives, the executive's
options just get repriced or replaced by new cheaper options. In
our experience, employee morale depends largely on seeing that
everyone -- executive or not -- is in the same boat.
We intend to present a proposal at the next shareholders meeting
asking the Board to adopt a policy of not repricing options or
granting new ones because old ones go underwater. The full text
of the proposal is in Section VI of this proxy statement.
Similar proposals have been made of other companies by the New
York City and State pension funds and other institutional
investors. The proposal at Sprint received 46 percent of the
votes cast at the 2001 annual meeting.
While many shareholders oppose repricing on principle, some
shareholders prefer to support proposals only when management is
underperforming. If you're one of those, please consider the
company's stock closing price on the day of the last four annual
meetings:
- $21.125 in 1998.
- $16.3125 in 1999.
- $6.75 in 2000
- $4.24 in 2001.
This three-year period witnessed an 80% decline in shareholder
value.
II. PROXY VOTING:
The enclosed form is not a proxy voting card, but only a
voluntary survey. We intend to solicit votes for the proposal in
a few months using our own proxy card and proxy statement. These
probably cannot be sent you until after you receive a proxy
statement and card from the Company. The Company's proxy card
may not include our proposal.
IF YOU SUPPORT OUR PROPOSAL, DO NOT SEND BACK A PROXY CARD TO
MANAGEMENT UNLESS IT INCLUDES OUR PROPOSAL. WAIT UNTIL YOU
RECEIVE OUR PROXY CARD.
We intend to solicit at least a majority of the voting power of
the outstanding stock. The Company's annual shareholders meeting
generally occurs the third week of May, generally at a hotel near
the company's office, 777 Post Oak Blvd., Houston, TX 77056.
III. PROXY SOLICITATION:
This solicitation is conducted by Sheet Metal Workers'
International Association (SMWIA), which owns 1,400 shares of
Comfort Systems USA stock and represents several hundred Comfort
Systems employees for collective bargaining purposes. Several
hundred are represented by other unions: a total of approximately
2,795 are unionized, out of approximately 10,000 non-management
personnel. To SMWIA's knowledge, there are no strikes, contract
disputes, picketing, or boycotts going on currently. We do not
seek your support in labor matters. SMWIA will vote each proxy
card it receives in accordance with the shareholder's
instructions. SMWIA will not seek any discretionary voting
authority for the shareholders meeting: rather, it will vote
your stock solely as you direct. SMWIA will bear all solicitation
costs (anticipated at $5000) and will not seek reimbursement from
the Company.
IV. MORE INFORMATION ON EXECUTIVE STOCK OPTIONS AND OTHER
COMPENSATION
We incorporate by reference the information on executive
compensation contained at pp. 8-12 of the Company's prior proxy
statement. This is available at www.sec.gov or upon request from
SMWIA.
V. SHAREHOLDER PROPOSALS:
If a shareholder has owned more than $2000 worth of stock for
more than a year and meets the other criteria of SEC Rule 14a-8,
then he or she has the legal right to have a proposal appear in
management's upcoming proxy statement and proxy card. The
deadline for shareholders to submit proposals for inclusion in
management's proxy materials is December 1, 2001.
VI. TEXT OF OUR PROPOSAL:
Resolved that shareholders urge the Board of Directors to adopt a
policy that the company shall not, without prior approval of the
holders of a majority of stock, reprice stock option already
granted to any executive officer or director to a lower exercise
price, nor terminate and regrant any such option at a lower
price, nor grant new options to such persons on account of the
market price dropping below the exercise price of their prior
options. This proposal shall not be construed as asking the
Board to breach any existing contract nor to amend any option
plan without shareholder approval.
PLEASE RETURN THE ENCLOSED SURVEY TODAY.
For more information, contact Allen Smith at the SMWIA (800)
457-7694.
SURVEY OF SHAREHOLDERS OF COMFORT SYSTEMS USA
This is a voluntary survey, not a proxy card, and cannot be used
to vote on the shareholder proposal. Your identity will be kept
confidential unless you specifically authorize to the contrary.
The information from your response will be used solely for
communicating about matters for shareholder vote.
YOUR VIEW OF THE SHAREHOLDER PROPOSAL AGAINST STOCK OPTION
REPRICING:
____ Strongly support
____ Likely to support
____ Likely to oppose because ______________________
____ Undecided
MORE INFORMATION?
____ Please send me more information about the issues on
which shareholders will be voting:
Mailing address: _________________________________________
_________________________________________
E-mail address: _________________________________________
Telephone: _________________________________________
Fax: _________________________________________
___________________________________________ _______________
PRINT SHAREHOLDER NAME # SHARES(optional)
Please return to SMWIA by November __, 2001 in the enclosed
envelope, or fax to (202)662-0891.