Exhibit 10.14

 

AMENDED AND RESTATED

 

EMPLOYMENT AGREEMENT
(Richard S. Swartz, Jr.)

 

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of December 31, 2008
(this “Agreement”), is by and between MYR Group Inc., a Delaware corporation
(the “Company”), and Richard S. Swartz, Jr., (the “Key Employee”).

 

W I T N E S S E T H:

 

WHEREAS, the Company has identified Key Employee as an integral part of the
Company’s operation and management; and

 

WHEREAS, the Company recognizes Key Employee’s efforts and desires to reward
those efforts to protect and enhance the best interests of the Company.

 

WHEREAS, the Company and the Key Employee entered into an employment agreement
dated as of December 1, 2007 (the “Original Agreement”); and

 

WHEREAS,  the Original Agreement became effective December 20, 2007, (the
“Effective Date”) which date was the date of closing of the offering and sale of
equity securities by the Company pursuant to a Purchase/Placement Agreement to
be entered into by and between the Company and Friedman, Billings, Ramsey &
Co., Inc. (the “Financing”); and

 

WHEREAS, the Company and the Key Employee desire to amend and restate the
Original Agreement to obtain or preserve compliance with, or exemption from
Section 409A of the Internal Revenue Code of 1986, as amended;

 

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS AND INTERPRETATIONS

 

1.1          Definitions.

 

(a)           “Base Salary” means the Key Employee’s base salary as in effect
from time to time, as described in Section 2.3(a).

 

(b)           “Board” means the Board of Directors of the Company.

 

(c)           “Cause” means:

 

(i)            A material breach by Key Employee of Sections 3.9(d), (e) or
(f) of this Agreement (regarding the noncompetition provisions);

 

(ii)           The commission of a criminal act by Key Employee against the
Company, including but not limited to fraud, embezzlement or theft;

 

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(iii)          The conviction or plea of no contest or nolo contendere of Key
Employee for any felony or any crime involving moral turpitude; or

 

(iv)          Key Employee’s failure or refusal to carry out, or comply with, in
any material respect, any lawful directive of the Board consistent with the
terms of the Agreement which is not remedied within thirty (30) days after Key
Employee’s receipt of written notice from the Company.

 

Notwithstanding the foregoing, Key Employee shall not be deemed to have been
terminated for Cause pursuant to this Section 1.1(c) unless and until there
shall have been delivered to him a copy of a resolution duly adopted by at least
seventy-five percent (75%) of the entire membership of the Board (not including
for this purpose Key Employee if Key Employee is then a member of the Board) at
a meeting of the Board called and held for such purpose (after reasonable notice
to Key Employee and a reasonable opportunity for him, together with his counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board, Key Employee engaged in conduct set forth in this Section 1.1(c).

 

(d)           “Change in Control” means the occurrence of a “change in the
ownership of the Company,” a “change in the effective control of the Company,”
or a “change in the ownership of a substantial portion of the Company’s assets,”
as defined in Treasury Regulation §§1.409A-3(i)(5)(v), (vi) and (vii),
respectively.

 

(e)           “COBRA” means the Consolidated Omnibus Budget Reconciliation Act
of 1986, as amended.

 

(f)            “Code” means the Internal Revenue Code of 1986, as amended.

 

(g)           “Disability” means that, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve months, Key
Employee is unable to engage in any substantial gainful activity or is receiving
income replacement benefits under an accident and health benefit plan covering
employees of the Company for a period of not less than three months.

 

(h)           “Good Reason” means:

 

(i)            a reduction of Key Employee’s Base Salary and/or annual target
bonus opportunity without Key Employee’s consent,

 

(ii)           a material reduction of Key Employee’s duties (without the Key
Employee’s consent) from those in effect as of the Effective Date or as
subsequently agreed to by Key Employee and the Company for which Key Employee
shall have given the Company written notice of such breach and the Company shall
have failed to cure such breach within thirty (30) days after receipt of such
notice,

 

(iii)          the relocation of the Key Employee’s primary work site to a
location greater than fifty (50) miles from the Key Employee’s work site as of
the Effective Date, or

 

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(iv)          any other material breach by the Company of a material provision
of this Agreement for which Key Employee shall have given the Company written
notice of such breach and the Company shall have failed to cure such breach
within thirty (30) days after receipt of such notice.

 

(i)            “Post-Termination Period” means the period beginning on the date
that Key Employee’s employment terminates and ending on the first anniversary of
such date; provided, however, that with respect to a termination without Good
Reason, such period shall begin on the date that Key Employee’s employment
terminates and end on the six-month anniversary of such date.

 

(j)            “Protection Period” means the period beginning on the date of the
occurrence of a Change in Control and ending 12 months following the occurrence
of a Change in Control.

 

(k)           “Severance Pay” means

 

(i)            one-half (1/2) the sum of Key Employee’s annual Base Salary and
Target Bonus as of the date of his termination of employment, in the case of a
termination by Key Employee without Good Reason, whether or not during the
Protection Period;

 

(ii)           two (2) times the sum of Key Employee’s annual Base Salary and
Target Bonus as of the date of his termination of employment, in the case of a
termination Without Cause outside the Protection Period or a termination by Key
Employee with Good Reason outside the Protection Period; and

 

(iii)          three (3) times the sum of Key Employee’s annual Base Salary and
Target Bonus as of the date of his termination of employment, in the case of a
termination Without Cause during the Protection Period or a termination by Key
Employee for Good Reason during the Protection Period.

 

(l)            “Severance Period” means

 

(i)            the six (6) month period following the date of his termination of
employment, in the case of a termination by Key Employee without Good Reason,
whether or not during the Protection Period; and

 

(ii)           the two (2) year period following the date of his termination of
employment, in the case of a termination Without Cause or a termination by Key
Employee for Good Reason, whether or not during the Protection Period.

 

(m)          “Without Cause” means termination by the Company of Key Employee’s
employment at the Company’s sole discretion for any reason, other than by reason
of Key Employee’s death or Disability, and other than a termination based upon
Cause.

 

1.2          Interpretations. In this Agreement, unless a clear contrary
intention appears, (a) the words “herein,” “hereof’ and “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; (b) 

 

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reference to any Article or Section, means such Article or Section hereof; and
(c) the word “including” (and with correlative meaning “include”) means
including, without limiting the generality of any description preceding such
term.

 

ARTICLE II

EMPLOYMENT AND DUTIES

 

2.1          Term. The term of this Agreement shall be three (3) years
commencing on the Effective Date of this Agreement (the “Initial Term”),
provided, however, that the Agreement shall automatically be extended for an
additional one-year period at the end of the Initial Term and each one-year
anniversary thereafter (each a “Renewal Term” and together with the Initial Term
being referred to herein as the “Employment Term”), unless not later than
one-hundred eighty (180) days prior to the end of the then-current period,
either Key Employee or the Company shall have provided written notice to the
other party that it does not wish to extend the Agreement.

 

2.2          Position, Duties and Services. The Key Employee shall serve in the
position of Group Vice President and shall have duties and responsibilities
consistent with an executive serving in such capacity. The Key Employee shall
perform such duties and responsibilities diligently and to the best of his
abilities. The Key Employee’s employment will be subject to the supervision and
direction of the Chief Executive Officer of the Company and the Board.

 

2.3          Compensation.

 

(a)           Base Salary. Key Employee shall receive an initial Base Salary at
the rate of [ ] dollars [($ )] per annum payable in periodic installments in
accordance with the Company’s normal payroll practices and procedures, which
Base Salary may be increased (but not decreased) by the Board or (a committee
thereof) from time to time.

 

(b)           Target Bonus. During the Employment Term, Key Employee shall be
eligible to receive an annual target bonus (the “Target Bonus”) based on the
achievement of annual performance objectives, as determined by the Board (or a
committee thereof) in its discretion.

 

(c)           Incentive, Savings, Profit Sharing, and Retirement Plans. During
the Employment Term, Key Employee shall be entitled to participate in all
incentive, savings, profit sharing and retirement plans, practices, policies and
programs applicable generally, from time to time, to other similarly situated
employees of the Company.

 

(d)           Welfare Benefit Plans. During the Employment Term, Key Employee
and/or Key Employee’s family, as the case may be, shall be eligible for
participation in and will receive all benefits under the welfare benefit plans,
practices, policies and programs applicable generally, from time to time, to
other similarly situated employees of the Company.

 

2.4          Severance Benefit. Key Employee shall be entitled to receive the
severance benefits described in ARTICLE III upon his termination of employment
during the Employment Term, provided he satisfies the requirements outlined in
ARTICLE III.

 

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2.5          Indemnification. The Company shall (i) indemnify, hold harmless and
defend Key Employee to the extent permitted under applicable law from and
against reasonable costs, including reasonable attorneys fees, incurred by him
in connection with or arising out of any acts or decisions made by Key Employee
in the course and scope of his employment hereunder and (ii) pay all reasonable
expenses and reasonable attorney’s fees actually incurred by Key Employee in
connection with or relating to the defense of any claim, action, suit or
proceeding by any third party against Key Employee arising out of or relating to
any acts or decisions made by Key Employee in the course and scope of his
employment hereunder; provided, however, that such indemnification shall not
apply with respect to the commission of a criminal act or any gross misconduct
by Key Employee. This Section 2.5 shall survive the termination or expiration of
this Agreement.

 

ARTICLE III

EARLY TERMINATION

 

3.1          Death. Upon the death of Key Employee during the Employment Term,
the Agreement shall terminate and Key Employee’s estate shall be entitled to
payment of his Base Salary through the date of such termination plus any
compensation and benefits payable pursuant to the terms of the compensation and
benefit plans specified in Section 2.3 in which Key Employee is a participant. 
Payment of Base Salary through the date of termination and the payment of any
other cash compensation to which the Key Employee is entitled under this
Agreement that is not exempt from Code Section 409A shall be made in a lump sum
payment as soon as administratively reasonable but not later than ninety (90)
days following the date of Key Employee’s death.

 

3.2          Disability. In the event of Key Employee’s Disability during the
Employment Term, the Agreement and Key Employee’s employment with the Company
shall terminate and Key Employee shall be entitled to payment of the following
benefits: (a) his Base Salary through the date of such termination;
(b) long-term disability benefits pursuant to the terms of any long-term
disability policy provided to similarly situated employees of the Company in
which Key Employee is a participant; and (c) any compensation and benefits
payable pursuant to the terms of the compensation and benefit plans specified in
Section 2.3 in which Key Employee is a participant.  Subject to Section 3.12(a),
the payment of Base Salary through the date of termination and the payment of
any other cash compensation to which the Key Employee is entitled under this
Agreement that is not exempt from Code Section 409A shall be made in a lump sum
payment as soon as administratively reasonable but not later than ninety (90)
days following the date of Key Employee’s termination.  Subject to
Section 3.12(a) and Section 3.12(b), reimbursements or in-kind benefits to which
the Key Employee is entitled that are not exempt from Code Section 409A shall be
paid as soon as administratively reasonable following the date of payments as
set forth in this Agreement, or the applicable plan, practice, policy or
program.

 

3.3          Termination for Cause by Company. If Key Employee’s employment is
terminated during the Employment Term for Cause, the Company shall pay Key
Employee through the date of termination (a) his Base Salary in effect at the
time notice of termination is given at the applicable payment date under the
Company’s regular and customary payroll

 

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practices and (b) any compensation and benefits payable pursuant to the terms of
the compensation and benefit plans specified in Section 2.3 in which Key
Employee is a participant.

 

3.4          Termination Without Good Reason by Key Employee. If Key Employee
terminates his employment with the Company during the Employment Term without
Good Reason, whether or not during the Protection Period, Key Employee shall be
entitled to (a) his unpaid Base Salary through the date of termination; (b) any
compensation and benefits payable pursuant to the terms of the compensation and
benefit plans specified in Section 2.3 in which Key Employee is a participant;
(c) a lump sum payment equal to his Severance Pay, and (d) during the Severance
Period, Company-paid benefit continuation coverage, on an insured or uninsured
basis as determined by the Company in its sole discretion, concurrent with
COBRA, for Key Employee and his family under the welfare benefit plans specified
in Section 2.3(d) in which Key Employee is a participant, on the same basis as
such benefits are provided to active employees.  Subject to Section 3.12(a), the
payment of Base Salary through the date of termination, the payment of Severance
Pay and the payment of any other cash compensation to which the Key Employee is
entitled under this Agreement that is not exempt from Code Section 409A shall be
made in a lump sum payment as soon as administratively reasonable but not later
than ninety (90) days following the date of Key Employee’s termination.  Subject
to Section 3.12(a) and Section 3.12(b), reimbursements or in-kind benefits to
which the Key Employee is entitled that are not exempt from Code Section 409A
shall be paid as soon as administratively reasonable following the date of
payments as set forth in this Agreement, or the applicable plan, practice,
policy or program.  Provided, however, that if Key Employee breaches the
provisions of Section 3.9(b), (d), (e) or (f) before the end of the Severance
Period, Key Employee shall forfeit the right to benefit continuation coverage
for the remainder of the Severance Period and, within thirty (30) days of such
breach, Key Employee shall be required to remit to the Company a pro-rata
portion of his Severance Pay, calculated as the product of (i) the Severance Pay
received by Key Employee upon his termination, times (ii) a fraction, the
numerator of which shall be the number of months from Key Employee’s termination
to the date of such breach and the denominator of which shall be six (6) (the
number of months in the Severance Period). Notwithstanding anything to the
contrary herein, if Key Employee becomes re-employed by another employer during
the Severance Period, Key Employee shall provide written notice of such
re-employment to the Company within thirty (30) days of the commencement of such
new employment, at which time the Company-paid benefit continuation coverage
described herein shall be terminated and Key Employee shall be required to remit
to the Company a pro-rata portion of his Severance Pay, calculated as the
product of (i) the Severance Pay received by Key Employee upon his termination,
times (ii) a fraction, the numerator of which shall be the number of months from
Key Employee’s termination to the date of such re-employment and the denominator
of which shall be six (6). Subject to Section 3.11, the payment of any Severance
Pay and the continuation of welfare benefit plan coverage, as provided in
Section 2.3(d), shall be made (or commence) in the month immediately following
the month in which the waiver and release of claims described in Section 3.8
becomes non-revocable.

 

3.5          Termination Without Cause or for Good Reason Outside the Protection
Period. If, during the Employment Term and outside the Protection Period, the
Key Employee’s employment is terminated by the Company Without Cause or Key
Employee terminates his employment with the Company for Good Reason, he shall be
entitled to (a) his unpaid Base Salary through the date of termination; (b) any
compensation and benefits payable pursuant to

 

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the terms of the compensation and benefit plans specified in Section 2.3 in
which Key Employee is a participant; (c) a lump sum payment equal to his
Severance Pay; and (d) during the Severance Period, Company-paid benefit
continuation coverage, on an insured or uninsured basis as determined by the
Company in its sole discretion, concurrent with COBRA, for Key Employee and his
family under the welfare benefit plans specified in Section 2.3(d) in which Key
Employee is a participant, on the same basis as such benefits are provided to
active employees. Subject to Section 3.12(a), the payment of Base Salary through
the date of termination, the payment of Severance Pay and the payment of any
other cash compensation to which the Key Employee is entitled under this
Agreement that is not exempt from Code Section 409A shall be made in a lump sum
payment as soon as administratively reasonable but not later than ninety (90)
days following the date of Key Employee’s termination.  Subject to
Section 3.12(a) and Section 3.12(b), reimbursements or in-kind benefits to which
the Key Employee is entitled that are not exempt from Code Section 409A shall be
paid as soon as administratively reasonable following the date of payments as
set forth in this Agreement, or the applicable plan, practice, policy or
program. Notwithstanding anything to the contrary herein, if Key Employee
becomes reemployed by another employer during the Severance Period, Key Employee
shall provide written notice of such re-employment to the Company within thirty
(30) days of the commencement of such new employment, at which time the
Company-paid benefit continuation coverage described herein shall be terminated.
Subject to Section 3.11, the payment of any Severance Pay and the continuation
of welfare benefit plan coverage, as provided in Section 2.3(d), shall be made
(or commence) in the month immediately following the month in which the waiver
and release of claims described in Section 3.8 becomes non-revocable.

 

3.6          Termination Without Cause or for Good Reason During the Protection
Period. If, during the Employment Term and during the Protection Period, Key
Employee’s employment is terminated by the Company Without Cause or Key Employee
terminates his employment with the Company for Good Reason, he shall be entitled
to (a) his unpaid Base Salary through the date of termination; (b) any
compensation and benefits payable pursuant to the terms of the compensation and
benefit plans specified in Section 2.3 in which Key Employee is a participant;
(c) a lump sum payment equal to his Severance Pay; and (d) during the Severance
Period, Company-paid benefit continuation coverage, on an insured or uninsured
basis as determined by the Company in its sole discretion, concurrent with
COBRA, for Key Employee and his family under the welfare benefit plans specified
in Section 2.3(d) in which Key Employee is a participant, on the same basis as
such benefits are provided to active employees. Subject to Section 3.12(a), the
payment of Base Salary through the date of termination, the payment of Severance
Pay and the payment of any other cash compensation to which the Key Employee is
entitled under this Agreement that is not exempt from Code Section 409A shall be
made in a lump sum payment as soon as administratively reasonable but not later
than ninety (90) days following the date of Key Employee’s termination.  Subject
to Section 3.12(a) and Section 3.12(b), reimbursements or in-kind benefits to
which the Key Employee is entitled that are not exempt from Code Section 409A
shall be paid as soon as administratively reasonable following the date of
payments as set forth in this Agreement, or the applicable plan, practice,
policy or program. Notwithstanding anything to the contrary herein, if Key
Employee becomes reemployed by another employer during the Severance Period, Key
Employee shall provide written notice of such re-employment to the Company
within thirty (30) days of the commencement of such new employment, at which
time the Company-paid benefit continuation coverage described herein shall be
terminated. Subject to Section 3.11, the payment of any

 

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Severance Pay and the continuation of welfare benefit plan coverage, as provided
in Section 2.3(d), shall be made (or commence) in the month following the month
in which the waiver and release of claims described in Section 3.8 becomes
non-revocable. In the event of Key Employee’s termination under this
Section 3.6, Key Employee shall not be bound by the provisions of
Section 3.9(b).

 

3.7          Termination of Company’s Obligations. Upon termination of Key
Employee’s employment for any reason, the Company’s obligations under this
Agreement shall terminate and Key Employee shall be entitled to no compensation
and benefits other than that provided in this ARTICLE III. Notwithstanding such
termination, the parties’ obligations under Sections 2.5 and 3.9 of this
Agreement shall remain in full force and effect.

 

3.8          Release. Notwithstanding the foregoing provisions of this ARTICLE
III, Key Employee shall be entitled to the additional benefits specified in
Section 3.4 (regarding termination Without Good Reason whether or not during the
Protection Period), Section 3.5 (regarding termination Without Cause or for Good
Reason outside the Protection Period) and Section 3.6 (regarding termination
Without Cause or for Good Reason during the Protection Period) (i.e., those in
addition to the payment of his Base Salary through the date of termination and
any benefits payable pursuant to the terms of the compensation and benefit plans
specified in Section 2.3 in which Key Employee is a participant), only upon his
execution (and non-revocation) of a waiver and release of all claims
substantially in the form attached hereto, which execution must occur before the
forty-fifth (45th) day immediately following the date of termination.

 

3.9          Non-Competition; Non-Solicitation; Confidentiality.

 

(a)           Key Employee acknowledges and agrees that: (i) the Company is
engaged in the business of power line and commercial/industrial electrical
construction services for electric utilities, telecommunication providers,
commercial/industrial facilities, and government agencies and electrical
construction and maintenance services for industrial and power generation
clients (the “Business”); (ii) the Business is intensely competitive; (iii) Key
Employee’s customer relationships are near permanent and but for Key Employee’s
association with the Company, Key Employee would not have had contact with the
customers; (iv) Key Employee will continue to develop and have access to and
knowledge of non-public information of the Company and its clients; (v) the
direct or indirect disclosure of any such confidential information to existing
or potential competitors of the Company would place the Company at a competitive
disadvantage and would do damage to the Company; (vi) Key Employee has developed
goodwill with the Company’s clients at the substantial expense of the Company;
(vii) but for Key Employee entering into the covenants set forth in this
Section 3.9, the Company would not have entered into the Financing and the
closing of the offering and sale of equity securities by the Company as set
forth above, (viii) Key Employee engaging in any of the activities prohibited by
this Section 3.9, would constitute improper appropriation and/or use of the
Company’s confidential information and/or goodwill, (ix) Key Employee’s
association with the Company has been critical, and Key Employee’s association
with the Company is expected to continue to be critical, to the success of the
Company, (x) the services to be rendered by Key Employee to the Company are of a
special and unique character, (xi) Company conducts the Business throughout the
United States, (xii) the noncompetition and other restrictive covenants

 

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and agreements set forth in this Agreement are fair and reasonable and it would
not be reasonable to enter into the Financing without obtaining such
non-competition and other restrictive covenants and agreements, and (xiii) in
light of the foregoing and of Key Employee’s education, skills, abilities and
financial resources, Key Employee acknowledges and agrees that the Key Employee
will not assert, and it should not be considered, that enforcement of any of the
covenants set forth in this Section 3.9 would prevent Key Employee from earning
a living or otherwise are void, voidable or unenforceable or should be voided or
held unenforceable.

 

(b)           Agreement not to Compete. Key Employee will not, during his
employment and the Post-Termination Period, directly or indirectly, carry on or
conduct, the Business or any business of the nature in which the Company or its
subsidiaries are then engaged in any geographical area in which the Company or
its subsidiaries or affiliates engage in business at the time of such
termination or any new line of business with respect to which Key Employee has
created, received or had access to confidential information (as set forth
below). Key Employee agrees that he will not so conduct or engage in the
Business or any such business in any capacity, including as an individual on his
own account or as a partner or joint venturer or as an employee, agent,
consultant or salesman for any other person or entity, or as an officer or
director of a corporation, provided, that Key Employee may be a shareholder in
any public corporation if he does not own ten percent (10%) or more of any class
of its stock.

 

(c)           Confidential Information. Key Employee will not, directly or
indirectly, at any time following termination of his employment with the Company
for any reason, reveal, divulge or make known to any person or entity, or use
for Key Employee’s personal benefit (including for the purpose of soliciting
business, whether or not competitive with any business of the Company or its
subsidiaries or affiliates), any information acquired during the Employment Term
with regard to the financial, business or other affairs of the Company or its
subsidiaries or affiliates (including any list or record of persons or entities
with which the Company or its subsidiaries or affiliates has any dealings),
other than (i) information already in the public domain; or (ii) information
that Key Employee is required to disclose under the following circumstances:
(A) at the direction of any authorized governmental entity; (B) pursuant to a
subpoena or other court process; (C) as otherwise required by law or the rules,
regulations, or orders of any applicable regulatory body; or (D) as otherwise
necessary, in the opinion of counsel for Key Employee, to be disclosed by Key
Employee in connection with any legal action or proceeding involving Key
Employee in his capacity as an employee, officer, director, or stockholder of
the Company or any subsidiary or affiliate of the Company.

 

(d)           Key Employee will, upon the earlier of (i) any time requested by
the Company or (ii) termination of his employment with the Company for any
reason, promptly deliver to the Company all documents, memoranda, notes,
reports, lists, files, customer lists, mailing lists, software, disks, credit
cards, door and file keys, computer access codes, instructional manuals, and
other physical or personal property which Key Employee received or prepared or
helped to prepare in connection with his relationship with the Company
including, but not limited to, any confidential information (as set forth above)
of the Company or any of its subsidiaries and affiliates which he may then
possess or have under his control, and Key Employee shall not retain any copies,
duplicates, reproductions or excerpts thereof

 

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(e)           Agreement not to Solicit. During the Employment Term and for the
Post-Termination Period, Key Employee shall not (except on behalf of or with the
written consent of the Company), either directly or indirectly, on Key
Employee’s own behalf or in the service or on behalf of others, (i) solicit,
divert, or appropriate, or (ii) attempt to solicit, divert, or appropriate, any
person or entity that is or was a customer of the Company or any of its
affiliates at any time during the twelve (12) months prior to the date of
termination and with whom Key Employee has had material contact.

 

(f)            Agreement not to Recruit. During the Employment Term and for the
Post-Termination Period, Key Employee shall not, either directly or indirectly,
on Key Employee’s behalf or in the service or on behalf of others, (i) solicit,
divert, or hire away, or (ii) attempt to solicit, divert, or hire away, any
employee of or consultant to the Company or its subsidiaries or affiliates.

 

(g)           Reasonableness of Restrictions. Key Employee acknowledges that the
geographic boundaries, scope of prohibited activities, and time duration set
forth in this Section 3.9 are reasonable in nature and are no broader than are
necessary to maintain the goodwill of the Company and the confidentiality of its
confidential information and to protect the legitimate business interests of the
Company, and that the enforcement of such provisions would not cause Key
Employee any undue hardship nor unreasonably interfere with Key Employee’s
ability to earn a livelihood. If any court determines that any portion of this
Section 3.9 is invalid or unenforceable, the remainder of this Section 3.9 will
not thereby be affected and will be given full effect without regard to the
invalid provisions. If any court construes any of the provisions of this
Section 3.9, or any part thereof, to be unreasonable because of the duration or
scope of such provision, such court shall reduce the duration or scope of such
provision and enforce such provision as so reduced.

 

(h)           Enforcement. Upon Key Employee’s employment with an entity that is
not a subsidiary or affiliate of the Company (a “Successor Employer”) during the
period that the provisions of this Section 3.9 remain in effect, Key Employee
will provide such Successor Employer with a copy of this Agreement and will
notify the Company of such employment within thirty (30) days thereof. Key
Employee agrees that in the event of a breach or threatened breach of the terms
and conditions of this Section 3.9 by Key Employee, the Company will be
entitled, if it so elects, to institute and prosecute proceedings, either in law
or in equity, against Key Employee, to obtain damages for any such breach, or to
enjoin (in the form of specific performance, temporary restraining order,
temporary or permanent injunction or otherwise) Key Employee from any conduct in
violation of this Section 3.9, without having to post a bond.

 

3.10        Parachute Payments. Notwithstanding anything to the contrary in this
Agreement, if it is determined (as hereafter provided) that any payment or
distribution to or for Key Employee’s benefit, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program
or arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a
“Payment”), would be subject to the excise tax imposed by Section 4999 of the
Code (or any successor provision thereto) or to any similar tax imposed by state
or local law, or any interest or penalties with respect to such excise tax (such
tax or

 

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taxes, together with any such interest and penalties, are hereafter collectively
referred to as the “Excise Tax”), then Key Employee shall be entitled to receive
an additional payment or payments (a “Gross-Up Payment”) in an amount such that,
after payment by Key Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed upon the
Gross-Up Payment, Key Employee retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments. For purposes of determining whether
any of the Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) all of the Payments shall be treated as “parachute payments”
within the meaning of section 280G(b)(2) of the Code, and all “excess parachute
payments” within the meaning of section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax, unless in the opinion of tax counsel selected by
the Company’s independent auditors and reasonably acceptable to Key Employee
such other payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of section 280G(b)(4)(A) of the Code, or
such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered, within the meaning of section
280G(b)(4)(B) of the Code, in excess of the “base amount” (as such term is
defined in section 280G(b)(3) of the Code) allocable to such reasonable
compensation, or are otherwise not subject to the Excise Tax, (ii) the amount of
the Payments which shall be treated as subject to the Excise Tax shall be equal
to the lesser of (A) the total amount of the Payments or (B) the amount of
excess parachute payments within the meaning of section 280G(b)(1) of the Code
(after applying clause (i), above), and (iii) the value of any non-cash benefits
or any deferred payment or benefit shall be determined by the Company’s
independent auditors in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, Key Employee shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of Key Employee’s
residence on the date of termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of Key Employee’s
termination of employment, Key Employee shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by Key
Employee to the extent that such repayment results in a reduction in Excise Tax
and/or a federal, state or local income tax deduction) plus interest on the
amount of such repayment at the rate provided in section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the
Company shall make an additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by Key Employee with respect
to such excess) at the time that the amount of such excess is finally
determined. Key Employee and the Company shall each reasonably cooperate with
the other in connection with any administrative or judicial proceedings
concerning the existence or amount of liability for Excise Tax with respect to
the Severance Payments. Notwithstanding anything in this Agreement to the
contrary, in no event shall payments under this Section be

 

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made later than the end of Key Employee’s taxable year following the taxable
year in which the related Excise Tax is remitted by or on behalf of the Key
Employee.

 

3.11        Benefit Coverage under Health Benefit Plans.

 

(a)           If providing health benefit coverages through a welfare benefit
plan as required by Section 3.5 or Section 3.6 would cause the plan to violate
section 105(h) of the Code, then the Company shall provide the coverage through
the Company’s welfare benefit plan on an after-tax basis.

 

(b)           In the event the Company provides the coverage to the Key Employee
on an after-tax basis, then the Key Employee shall be entitled to receive an
additional payment or payments (a “Health Plan Gross-Up Payment”) in an amount
such that, after payment by Key Employee of all after-tax amounts paid by the
Key Employee (if any) and all taxes (including any interest or penalties imposed
with respect to such taxes) resulting from such after-tax treatment, Key
Employee is in the same position in respect of such coverages as though such
coverages were provided as required by Section 3.5 or Section 3.6.  For purposes
of determining the amount of the Health Plan Gross-Up Payment, Key Employee
shall be deemed to pay federal income taxes at the highest marginal rate of
federal income taxation in the calendar year in which the Health Care Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of Key Employee’s residence on the
date of termination, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes. Notwithstanding
anything in this Agreement to the contrary, in no event shall payments under
this Section be made later than the end of Key Employee’s taxable year following
the taxable year in which the related taxes are remitted by or on behalf of the
Key Employee.

 

3.12        Payments Subject to Section 409A of the Code.

 

(a)           Notwithstanding the foregoing provisions of this ARTICLE III, to
the extent required by Section 409A of the Code and applicable guidance
thereunder, payments that Key Employee would otherwise be entitled to receive
hereunder during the first six months following the date of Key Employee’s
termination of employment will be accumulated and paid on the date that is six
months and one day after the date of Key Employee’s termination of employment
(or if such payment date does not fall on a business day of the Company, the
next following business day of the Company), or such earlier date upon which
such amount can be paid without adverse tax consequences to Key Employee under
Section 409A of the Code; provided, however, that no such delay shall apply with
respect to payments to which Key Employee is entitled in the event of his death.

 

(b)           Any reimbursement of expenses or in-kind benefits provided under
this Agreement, that is subject to and not exempt from Section 409A, shall be
subject to the following additional rules:  (i) any reimbursement of eligible
expenses shall be paid as they are incurred (but not prior to the end of the
six-month delay period set forth in Section 3.12(a); provided that the Key
Employee first provides documentation thereof in reasonable detail not later
than sixty (60) days following the end of the calendar year in which the
eligible expenses were incurred; (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits

 

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provided, during any calendar year shall not affect the amount of expenses
eligible for reimbursement, or in-kind benefits to be provided, during any other
calendar year; and (iii) the right to reimbursement or in-kind benefits shall
not be subject to liquidation or exchange for another benefit.

 

(c)           For purposes of determining a Key Employee’s entitlement to
payment of any cash or other remuneration which is deferred compensation under
Section 409A, any provision of this Agreement providing for payment of any such
cash or remuneration upon “termination,” “termination of employment” or other
event which is a termination of an employment relationship with the Company
means that such payment is to be made upon a “Separation from Service” (as such
term is defined in Treasury regulations issued under Code Section 409A), with
the Company and all of its subsidiaries and affiliates, for any reason,
including without limitation, quit, discharge and retirement, and the Company
and the Key Employee reasonably anticipate that no further services will be
performed after such date or that the level of bona fide services performed
after such date (whether as an employee or as an independent contractor) will
permanently decrease to no more than twenty percent (20%) of the average level
of bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month period (or the full period
of services if the Key Employee has been providing services for less than 36
months).

 

(d)           It is intended that the payments and benefits provided under this
Agreement shall either be exempt from application of, or comply with, the
requirements of Section 409A of the Code.  This Agreement shall be construed,
administered, and governed in a manner that affects such intent, and the Company
shall not take any action that would be inconsistent with such intent.  Without
limiting the foregoing, the payments and benefits provided under this Agreement
may not be deferred, accelerated, extended, paid out, or modified in a manner
that would result in the imposition of an additional tax under Section 409A of
the Code.  Although the Company shall use its best efforts to avoid the
imposition of taxation, interest and penalties under Section 409A of the Code,
the tax treatment of the benefits provided under this Plan is not warranted or
guaranteed.  The Company shall not be held liable for any taxes, interest,
penalties, or other monetary amounts owed by you or other taxpayers as a result
of the Agreement.

 

ARTICLE IV

MISCELLANEOUS

 

4.1          Governing Law. This Agreement is governed by and will be construed
in accordance with the laws of the State of Illinois, without regard to the
conflicts of law principles of such State.

 

4.2          Amendment and Waiver. The provisions of this Agreement may be
amended, modified or waived only with the prior written consent of the Company
and Key Employee, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement will be construed as a waiver of such provisions or
affect the validity, binding effect or enforceability of this Agreement or any
provision hereof.

 

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4.3          Severability. Any provision in this Agreement which is prohibited
or unenforceable in any jurisdiction by reason of applicable law will, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction will
not invalidate or render unenforceable such provision in any other jurisdiction.

 

4.4          Entire Agreement. Except as provided in the written benefit plans
and programs referenced in Section 2.3(c) and Section 2.3(d), this Agreement
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.

 

4.5          Withholding of Taxes and Other Employee Deductions. The Company may
withhold from any benefits and payments made pursuant to this Agreement all
federal, state, city, and other taxes as may be required pursuant to any law or
governmental regulation or ruling and all other normal employee deductions made
with respect to the Company’s employees generally.

 

4.6          Legal Fees. The Company shall reimburse Key Employee for all
reasonable legal fees and expenses incurred by the Executive in a dispute
regarding the Key Employee’s rights under this Agreement, within forty-five (45)
day of when such fees and expenses are incurred, but in no event later than the
end of the taxable year in which such fees and expenses are incurred, unless a
court of competent jurisdiction determines the Key Employee’s position in such
dispute not to be bona fide.

 

4.7          Headings. The paragraph headings have been inserted for purposes of
convenience and will not be used for interpretive purposes.

 

4.8          Actions by the Board. Any and all determinations or other actions
required of the Board (or a committee thereof) hereunder that relate
specifically to Key Employee’s employment by the Company or the terms and
conditions of such employment will be made by the members of the Board or such
committee other than Key Employee (if Key Employee is a member of the Board or
such committee), and Key Employee will not have any right to vote or decide upon
any such matter.

 

4.9          Construction. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party.

 

[Signature Page Follows]

 

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INTENDING TO BE BOUND, the parties hereto have executed this Agreement as of the
date first set forth above.

 

 

COMPANY:

 

 

 

MYR GROUP INC.

 

 

 

 

 

By:

/s/ GERALD B. ENGEN, JR.

 

 

 

 

Name:

Gerald B. Engen, Jr.

 

Title:

Vice President, Chief Legal Officer and Secretary

 

 

 

 

 

KEY EMPLOYEE:

 

 

 

 

 

/s/ RICHARD S. SWARTZ, JR.

 

 

 

Richard S. Swartz, Jr.

 

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[FORM OF RELEASE]

 

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