Form: S-1/A

General form of registration statement for all companies including face-amount certificate companies

January 26, 1998

1997 STOCK OPTION PLAN

Published on January 26, 1998



EXHIBIT 10.2

QUANTA SERVICES, INC.
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 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.

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 30
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 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. "Consultant" shall mean any person who is engaged to perform services
for the Company or its Subsidiaries, other than as an Employee or Director.


1997 STOCK OPTION PLAN -- Page 1

g. "Control Person" shall mean any person who, as of the date of 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 stock of the Company or of any parent or Subsidiary.

h. "Company" shall mean Quanta Services, Inc., a Delaware corporation.

i. "Director" shall mean any member of the Board.

j. "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).

k. "Exchange Act" shall mean the Securities Exchange Act of 1934 as it may
be amended from time to time.

l. "Fair Market Value" of the Stock on a given date shall be based upon:
(i) if the 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
Stock on such date (or, if there was no trading or quotation in the 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 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 Stock on the date on which shares of
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.

m. "Grantee" shall mean a person granted an Option under the Plan.

n. "Initial Public Offering" shall mean the initial public offering of
shares of Stock in a firm commitment underwriting registered with the SEC in
compliance with the provisions of the 1933 Act.

o. "ISO" shall mean an Option granted pursuant to the Plan to purchase
shares of the Stock and intended to qualify as an incentive stock option under
Section 422 of the Code, as now or hereafter constituted.

p. "1933 Act" shall mean the Securities Act of 1933, as it may be amended
from time to time.

q. "Nonemployee Director" shall mean a director who:

(i) 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;

(ii) Does not receive compensation, either directly or indirectly,
from the Company or a Subsidiary, for services rendered as a consultant or
in any capacity other than as a director, except for an amount that does
not exceed the dollar amount for which disclosure would be required
pursuant to Item 404(a) of SEC Regulation S-K;

(iii) Does not possess an interest in any other transaction for which
disclosure by the Company would be required pursuant to Item 404(a) of SEC
Regulation S-K; and


1997 STOCK OPTION PLAN -- Page 2

(iv) Is not engaged in a business relationship for which disclosure by
the Company would be required pursuant to Item 404(b) of SEC
Regulation S-K.

r. "NQSO" shall mean an Option granted pursuant to the Plan to purchase
shares of the Stock that is not an ISO.

s. "Option" or "Options" shall refer to one or more NQSOs and ISOs issued
under and subject to the Plan.

t. "Parent" shall mean any parent corporation as defined in Section 424 of
the Code.

u. "SEC" means the United States Securities and Exchange Commission.

v. "Plan" shall mean the Quanta Services, Inc. 1997 Stock Option Plan as
set forth herein and as amended from time to time.

w. "Stock" shall mean shares of the common stock, par value $.00001 per
share, of the Company.

x. "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 STOCK SUBJECT TO THE PLAN. Subject to the provisions
of Section 10 hereof, the total amount of 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 outstanding from time to time.
Notwithstanding the foregoing, the total amount of Stock with respect to which
ISOs may be granted under the Plan shall not exceed 2,380,850 shares. Moreover,
the total amount of 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. Stock issuable under the Plan may be authorized but unissued shares or
reacquired shares of Stock. If, prior to exercise, any Options are forfeited,
lapse, or terminate for any reason, the 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. 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.


1997 STOCK OPTION PLAN -- Page 3

(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 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 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.

(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 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 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 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


1997 STOCK OPTION PLAN -- Page 4

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
person, an NQSO under the Plan relating to the purchase of 10,000 shares of
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
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
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 Stock available
under the Plan.

(b) The exercise price of each share of Stock subject to an Option granted
to a Nonemployee Director shall equal the Fair Market Value of a share of 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 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.

(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 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.


1997 STOCK OPTION PLAN -- Page 5

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 Option which is 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.

(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 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 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 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.


1997 STOCK OPTION PLAN -- Page 6

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 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.

(e) The issuance of shares of 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.


1997 STOCK OPTION PLAN -- Page 7