Sheet Metal Workers International Association – ‘PREC14C’ on 4/8/02 re: Comfort Systems USA Inc

On:  Monday, 4/8/02   ·   Accession #:  1094510-2-3   ·   File #:  1-13011

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Preliminary Proxy Information Statement — Contested Solicitation   —   Schedule 14C
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Document/Exhibit                   Description                      Pages   Size 

 1: PREC14C     Preliminary Proxy                                      5±    19K 

PREC14C
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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                                                             

Name of Person(s) Filing Proxy Statement:                                       

Sheet Metal Workers International Association                                   

Payment of Filing Fee (check the appropriate box)                               

[ ] $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.                                                           

PREC14C
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[PRELIMINARY] PROXY STATEMENT                 

Annual Shareholders Meeting                       
Comfort Systems USA                               
May 2002                                          
Houston TX                                        

For release to Shareholders 4/18/02                                             

Sheet Metal Workers International Association                                   
1750 New York Avenue NW                                                         
Washington, D.C. 20006                                                          
Tel. (800) 457-7694                                                             
Fax: (202) 662-0891                                                             

To Fellow Comfort Systems USA shareholders:                                     

I. PLEASE VOTE FOR OUR PROPOSAL TO MAKE THE BOARD GET SHAREHOLDER               
APPROVAL FIRST BEFORE IT REPRICES ANY STOCK OPTIONS                             

We own stock in the Company and also have interests in the                      
Company going beyond stock ownership as a labor organization.                   

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.  If the stock drops, options end                 
up "underwater" (their exercise price is above market price, so                 
the executive would not profit from exercising them).                           

However, stock options get delinked from stock performance if the               
Board of Directors reprices options downwards after executives                  
fail to improve a company's stock price.   Another way for a                    
board to accomplish basically the same thing as repricing is to                 
react to old options ending up underwater by issuing new options                
at a lower price.                                                               

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 intend to present a proposal at the shareholders meeting                     
asking the Board to adopt a policy of not repricing options or                  
granting new ones because old ones go underwater, unless                        
shareholders approve such action.  The full text of our proposal                
is in Section VI below.                                                         

We believe that repricing of options (or granting new options                   
just because old options end up underwater) is unfair to                        
shareholders.  A deal is a deal (or should be).  In our view                    
repricing or replacing underwater options not only reduces                      
executives' incentive to work hard for shareholders, but also in                
our view 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 in our               
opinion 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.                 

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. Some companies have                      
voluntarily adopted a policy similar to the one we propose, such                
as Earthgrains and Lone Star Steakhouse.                                        

While many shareholders oppose repricing on principle, some                     
investors prefer to support shareholder 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:                                                             

PLEASE USE THE ENCLOSED PROXY CARD TO VOTE FOR THE PROPOSAL. IF                 
YOU SUPPORT IT, DO NOT SEND BACK A CARD TO MANAGEMENT (UNLESS                   
THAT CARD GIVES YOU A CHANCE TO VOTE YES FOR THIS PROPOSAL). ANY                
PROXY CARD IS CANCELLED OUT BY SUBMITTING A LATER-DATED PROXY                   
CARD.                                                                           

We intend to solicit at least a majority of the voting power of                 
the outstanding stock.  Our proposal is a nonbinding                            
recommendation to the Board.  You can revoke any proxy vote                     
prior to the tally at the shareholders meeting by signing and                   
submitting a new proxy card, by sending written notice of                       
revocation to the proxy holder, or by appearing at the meeting                  
and voting in person. The record date for eligibility to vote                   
will be in management's proxy statement.                                        

We seek no discretionary voting authority for the meeting: we                   
will vote your stock as you instruct us. If you return the                      
enclosed card but give us no instructions, we will vote your                    
stock FOR the proposal and not vote the card in the directors                   
election or on any other matter. The board election and this                    
proposal are the only matters listed by management as coming up                 
for a vote at this meeting.  We incorporate by reference all                    
other information concerning the board of directors and voting                  
procedures contained in management's proxy statement at pages __.               

III. INFORMATION ON PARTICIPANTS IN THIS SOLICITATION:                          

This solicitation is conducted by Sheet Metal Workers'                          
International Association (SMWIA), which owns 1,400 shares of                   
Comfort Systems USA stock. Prior to the Company's recent sale of                
several subsidiaries, SMWIA represented about 500 Company                       
employees for collective bargaining purposes.  Several hundred                  
were represented by other unions.  A total of approximately                     
2,795 were unionized, out of approximately 10,000 nonmanagement                 
personnel. Most of the unionized subsidiaries were sold in 2002;                
we do not have the current number of total employees or unionized               
employees.  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 bear all solicitation costs (anticipated at $5000) and               
will not seek reimbursement from the Company. SMWIA will solicit                
proxies by mail, phone, e-mail, fax and in person using its                     
regular staff, who shall not receive any additional compensation,               
but SMWIA may also hire an outside solicitor. SMWIA will                        
reimburse banks, brokers, and other custodians, nominees or                     
fiduciaries for reasonable expenses incurred in forwarding proxy                
material to beneficial owners.                                                  

IV. YOUR RIGHT TO MAKE 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 proxy statement and proxy card.  The deadline for                  
shareholders to submit proposals for inclusion in management's                  
proxy materials for the year 2003 is believed to be in December                 
2002; the exact date will be set forth in management's proxy                    
statement.                                                                      

V. EXECUTIVE COMPENSATION/SECURITY OWNERSHIP OF MANAGEMENT AND                  
5% OWNERS:                                                                      

We incorporate by reference the information contained in                        
management's proxy statement at pages ___.                                      

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 options 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 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 PROXY CARD TODAY.                                    

For more information, contact SMWIA's Research & Education                      
Department at (800)457-7694.                                                    

VOTE FOR THE PROPOSAL TO REQUIRE SHAREHOLDER APPROVAL BEFORE ANY                
STOCK OPTIONS GET REPRICED OR REISSUED DUE TO A DECLINE IN STOCK                
PRICE                                                                           

For more information, contact Allen Smith at SMWIA at (800)                     
457-7694.                                                                       

PREC14C
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PROXY CARD                                                                      
solicited by SMWIA for Annual Shareholders Meeting of                           
Comfort Systems USA,  May __, 2002                                              

The undersigned hereby designates SMWIA Research Director Allen                 
Smith, with full power of substitution, as the proxy of the                     
undersigned for the sole purpose of voting all stock of the                     
undersigned in the manner marked below at the Comfort Systems                   
annual shareholders meeting for 2002. This proxy card grants no                 
discretionary voting authority: if matters come before                          
the meeting other than the items below, the stock of the                        
undersigned will not be voted on such matters.                                  

1. ELECTION OF DIRECTORS                                                        

For: [insert names]                               [  ]                          

To withhold authority for individual candidates, cross out                      
name(s)                                                                         

Withhold Authority as to all above:               [  ]                          

2. SHAREHOLDER PROPOSAL TO PROHIBIT THE BOARD FROM REPRICING OR                 
REPLACING STOCK OPTIONS WITHOUT FIRST GETTING SHAREHOLDER                       
APPROVAL                                                                        

FOR THIS PROPOSAL: [  ]                                                         

AGAINST THIS PROPOSAL: [  ]                                                     

ABSTAIN: [  ]                                                                   

[WE RECOMMEND A VOTE FOR THE PROPOSAL.]                                         

Dated: ________                                                                 

SIGNATURE:_______________________________________                               

PRINT SHAREHOLDER NAME:____________________________________                     

Optional information to help us keep you informed:                              

Telephone _________ Fax ____________ E-mail address:____________                

Mail to us in the enclosed envelope or fax to (202)662-0895.                    

Dates Referenced Herein   and   Documents Incorporated by Reference

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