Exhibit 10.1

 

MYR Group Inc.

Senior Management Incentive Plan

 

1.     Purpose. The purpose of the MYR Group Inc. Senior Management Incentive
Plan is to promote the interests of the Company and its shareholders by
strengthening the Company’s ability to attract, motivate and retain key
employees upon whose judgment, initiative and efforts the financial success and
growth of the business of the Company largely depend and to provide an
additional incentive for key employees through cash incentive payments that
promote and recognize the financial success and growth of the Company.

 

2.     Definitions. The following terms, as used herein, shall have the
following meanings:

 

(a)   “Affiliate” shall mean, with respect to the Company or any of its
subsidiaries, any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company.

 

(b)   “Award” shall mean an incentive compensation award, granted pursuant to
the Plan, which shall be designated as either an “Annual Award” or a “Long-Term
Award.”

 

(c)   “Board” shall mean the Board of Directors of the Company.

 

(d)   “Change in Control” shall mean (i) for the purposes of vesting of any
Award, the occurrence of a Change in Control as defined in the Company’s 2007
Long-Term Incentive Plan (or as set forth in the applicable award agreement
under such plan); and (ii) for purposes of payment of any Award that would be
deferred compensation within the meaning of Section 409A of the Code, a change
in the ownership or effective control of the Company, or in the ownership of a
substantial portion of the Company’s assets, within the meaning of Section 409A
of the Code.

 

(e)   “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended.

 

(f)    “Committee” shall mean the Compensation Committee of the Board of
Directors, the composition of which shall at all times consist solely of two or
more “outside directors” within the meaning of Section 162(m) of the Code.

 

(g)   “Company” shall mean MYR Group Inc. and its successors.

 

(h)   “Covered Employee” shall mean a Participant who is, or is determined by
the Board to be likely to become, a “covered employee” within the meaning of
Section 162(m) of the Code (or any successor provision).

 

(i)    “Disability” shall mean 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, the
Participant 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.

 

(j)    “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

 

(k)   “Negative Discretion” shall mean discretion exercised by the Committee to
cancel or reduce the amount of payment under an Award; provided that the
exercise of such discretion shall not cause the affected Award to fail to
qualify as “performance-based compensation” under Section 162(m) of the Code.

 

(l)    “Participant” shall mean any employee of the Company or an Affiliate who
is, pursuant to Section 4 of the Plan, selected to participate in the Plan.

 

1

--------------------------------------------------------------------------------

 

(m)  “Performance Goals” shall mean performance goals based on one or more of
the following criteria, where applicable: (i) total shareholder return;
(ii) stock price appreciation; (iii) return on equity; (iv) return on assets;
(v) modified return on assets; (vi) return on capital; (vii) earnings per share;
(viii) earnings before interest and taxes; (ix) earnings before interest, taxes,
depreciation and amortization; (x) ongoing earnings; (xi) cash flow (including
operating cash flow, free cash flow, discounted cash flow return on investment,
and cash flow in excess of costs of capital); (xii) economic value added;
(xiii) net operating profit after tax, less a cost of capital charge;
(xiv) shareholder value added; (xv) revenues; (xvi) net income; (xvii) pre-tax
income; (xviii) operating income; (xix) pre-tax profit margin; (xx) performance
against business plan; (xxi) backlog; (xxii) customer service; (xxiii) corporate
governance quotient or rating; (xxiv) market share; (xxv) employee satisfaction;
(xxvi) employee engagement; (xxvii) supplier diversity; (xxviii) workforce
diversity; (xxix) operating margins; (xxx) credit rating; (xxxi) dividend
payments; (xxxii) expenses; (xxxiii) fuel cost per million BTU; (xxxiv) costs
per kilowatt hour; (xxxv) retained earnings; (xxxvi) completion of acquisitions,
divestitures and corporate restructurings; (xxxvii) safety (including total OSHA
recordable rate, OSHA lost time accident rate, lost workday severity rate,
restricted workday severity rate, restricted workday incident rate, days away
and restricted time, first aid cases, general liability cases, and auto
accidents); (xxxix) strategic business criteria, consisting of one or more
objectives based on meeting goals in the areas of litigation, human resources,
information services, production, inventory, safety, support services, site
development, plant development, building development, facility development,
government relations, product market share or management. Where applicable, the
Performance Goals may be expressed in terms of attaining a specified level of
the particular criterion or the attainment of a percentage increase or decrease
in the particular criterion, and may be applied to the Company, one or more of
the Company’s subsidiaries, divisions or strategic business units, all as
determined by the Committee. The Performance Goals may include a threshold level
of performance below which no payment will be made (or no vesting will occur),
levels of performance at which specified payments will be paid (or specified
vesting will occur) and a maximum level of performance above which no additional
payment will be made (or at which full vesting will occur).

 

(n)   “Performance Period” shall mean, unless the Committee determines
otherwise, a period of no longer than (i) 12 months with respect to an Annual
Award and (ii) 36 months with respect to a Long-Term Award.

 

(o)   “Person” shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof.

 

(p)   “Plan” shall mean MYR Group Inc. Senior Management Incentive Plan, as
amended from time to time.

 

(q)   “Qualified Performance-Based Award” means any Award, or portion of such
Award, to a Covered Employee that is intended to satisfy the requirements for
“qualified performance-based compensation” under Section 162(m) of the Code.

 

(r)    “Retirement” means a Participant’s retirement from active employment with
the Company and each of its Affiliates after having attained “normal retirement
age” (as such term is defined in the Social Security Act of 1935, as amended).

 

3.     Administration. The Plan shall be administered by the Committee. The
Committee shall have the authority in its sole discretion, subject to and not
inconsistent with the express provisions of the Plan, to administer the Plan and
to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Awards; to determine the
persons to whom and the time or times at which Awards shall be granted; to
determine the terms, conditions, restrictions and

 

2

--------------------------------------------------------------------------------

 

performance criteria, including Performance Goals, relating to any Award; to
determine whether, to what extent, and under what circumstances an Award may be
settled, cancelled, forfeited, or surrendered; to construe and interpret the
Plan and any Award; to prescribe, amend and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of Awards; and to
make all other determinations deemed necessary or advisable for the
administration of the Plan. The Committee shall have the authority to make
equitable adjustments to the Performance Goals in recognition of unusual or
non-recurring events affecting the Company or any parent or subsidiary of the
Company or the financial statements of the Company or any parent or subsidiary
of the Company, in response to changes in applicable laws or regulations or to
account for items of gain, loss or expense determined to be extraordinary or
unusual in nature or infrequent in occurrence or related to the disposal of a
segment of a business or related to a change in accounting principles; provided
that with respect to any Qualified Performance-Based Awards such adjustment
shall be only to the extent it does not result in the loss of the otherwise
available exemption of such award under Section 162(m) of the Code.

 

All decisions, determinations and interpretations of the Committee shall be
final and binding on all persons, including the Company and the Participant (or
any person claiming any rights under the Plan from or through any Participant).

 

Subject to Section 162(m) of the Code or as otherwise required for compliance
with other applicable law, the Committee may delegate all or any part of its
authority under the Plan to any officer or officers of the Company.

 

4.     Eligibility. Awards may be granted to Participants in the sole discretion
of the Committee. In determining the persons to whom Awards shall be granted and
the Performance Goals relating to each Award, the Committee shall take into
account such factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan.

 

5.     Terms of Awards. Awards granted pursuant to the Plan shall be
communicated to Participants in such form as the Committee shall from time to
time approve and the terms and conditions of such Awards shall be set forth
therein.

 

(a)   In General. On or prior to the earlier of the 90th day after the
commencement of a Performance Period or the date on which 25% of a Performance
Period has elapsed, the Committee shall specify in writing, by resolution of the
Committee or other appropriate action, the Participants for such Performance
Period and the Performance Goals applicable to each Award for each Participant
with respect to such Performance Period. Unless otherwise provided by the
Committee in connection with specified terminations of employment, payment in
respect of Awards shall be made only if and to the extent the Performance Goals
with respect to such Performance Period are attained.

 

(b)   Performance Goals. The Committee may grant Awards subject to Performance
Goals that are either Qualified Performance-Based Awards or are not Qualified
Performance-Based Awards. If the Committee determines that a change in the
business, operations, corporate structure or capital structure of the Company,
or the manner in which it conducts its business, or other events or
circumstances render the Performance Goals unsuitable, the Committee may in its
discretion modify such Performance Goals or the related level or levels of
achievement, in whole or in part, as the Committee deems appropriate and
equitable, except in the case of a Qualified Performance-Based Award (other than
in connection with a Change in Control) where such action would result in the
loss of the otherwise available exemption of the award under Section 162(m) of
the Code. In such case, the Committee will not make any modification of the
Performance Goals or the level or levels of achievement with respect to such
Covered Employee.

 

3

--------------------------------------------------------------------------------

 

(c)   Special Provisions Regarding Qualified Performance-Based Awards.
Notwithstanding anything to the contrary contained in this Section 5, the
maximum amount that may be paid to a Covered Employee under the Plan with
respect to a Qualified Performance-Based Award is $5 million. Notwithstanding
anything to the contrary herein, in determining the amount of payment under a
Qualified Performance-Based Award in respect of a Performance Period, the
Committee may cancel a Qualified Performance-Based Award or reduce the amount
payable under a Qualified Performance-Based Award that was otherwise earned
during a Performance Period through the use of Negative Discretion if, in the
Committee’s sole discretion, such cancellation or reduction is appropriate. In
no event shall any discretionary authority granted to the Committee by the Plan
including, but not limited to, Negative Discretion, be used to (i) grant or
provide payment in respect of Qualified Performance-Based Awards for a
Performance Period if the Performance Goals for such Performance Period have not
been attained or (b) increase a Qualified Performance-Based Award above the
maximum amount payable under this Section 5(c).

 

(d)   Time and Form of Payment. All payments in respect of Awards granted under
this Plan shall be made in cash on or before March 15 of the year following the
year in which the Performance Period ends.

 

6.     Section 409A of the Code. Awards under the Plan are intended to comply
with Section 409A of the Code and all Awards shall be interpreted in accordance
with Section 409A of the Code and Department of Treasury regulations and other
interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the effective date of the
Plan. Notwithstanding any provision of the Plan or any Award to the contrary, in
the event that the Committee determines that any Award may or does not comply
with Section 409A of the Code, the Company may adopt such amendments to the Plan
and the affected Award (without Participant consent) or adopt other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, that the Committee determines are necessary
or appropriate to (i) exempt the Plan and any Award from the application of
Section 409A of the Code and/or preserve the intended tax treatment of the
benefits provided with respect to Award, or (ii) comply with the requirements of
Section 409A of the Code.

 

Notwithstanding any provisions of this Plan to the contrary, if a Participant is
a “specified employee” (within the meaning of Section 409A of the Code and
determined pursuant to policies adopted by the Company) on his date of
separation from service and if any portion of an Award to be received by the
Participant upon his or her separation from service would be considered deferred
compensation under Section 409A of the Code, amounts of deferred compensation
that would otherwise be payable pursuant to this Plan during the six-month
period immediately following the Participant’s separation from service will
instead be paid or made available on the earlier of (i) the first day of the
seventh month following the date of the Participant’s separation from service
and (ii) the Participant’s death.

 

7.     General Provisions.

 

(a)   Compliance with Legal Requirements. The Plan and the granting and payment
of Awards and the other obligations of the Company under the Plan shall be
subject to all applicable federal and state laws, rules and regulations, and to
such approvals by any regulatory or governmental agency as may be required.

 

(b)   Nontransferability. Awards shall not be transferable by a Participant
except upon the Participant’s death following the end of the Performance Period
but prior to the date payment is made, in which case the Award shall be
transferable in accordance with any beneficiary designation made by the
Participant in accordance with Section 7(l) below or, in the absence thereof, by
will or the laws of descent and distribution.

 

4

--------------------------------------------------------------------------------

 

(c)   No Right To Continued Employment. Nothing in the Plan or in any Award
granted pursuant hereto shall confer upon any Participant the right to continue
in the employ of the Company or to be entitled to any remuneration or benefits
not set forth in the Plan or to interfere with or limit in any way whatever
rights otherwise exist of the Company to terminate such Participant’s employment
or change such Participant’s remuneration.

 

(d)   Withholding Taxes. Where a Participant or other person is entitled to
receive a payment pursuant to an Award hereunder, the Company shall have the
right either to deduct from the payment, or to require the Participant or such
other person to pay to the Company prior to delivery of such payment, an amount
sufficient to satisfy any federal, state, local or other withholding tax
requirements related thereto.

 

(e)   Amendment, Termination and Duration of the Plan. The Board or the
Committee may at any time and from time to time alter, amend, suspend, or
terminate the Plan in whole or in part; provided that, no amendment that
requires shareholder approval in order for the Plan to continue to comply with
Section 162(m) of the Code shall be effective unless the same shall be approved
by the requisite vote of the shareholders of the Company. The Board or the
Committee may amend the terms of any Award theretofore granted under this Plan
prospectively or retroactively, except in the case of a Qualified
Performance-Based Award (other than in connection with the Participant’s death
or Disability, or a Change in Control) where such action would result in the
loss of the otherwise available exemption of the award under Section 162(m) of
the Code. In such case, the Board will not make any modification of the
Performance Goals or the level or levels of achievement with respect to such
Qualified Performance-Based Award. Notwithstanding the foregoing, no amendment
shall affect adversely any of the rights of any Participant under any Award
following the end of the Performance Period to which such Award relates.

 

(f)    Participant Rights. No Participant shall have any claim to be granted any
Award under the Plan, and there is no obligation for uniformity of treatment for
Participants.

 

(g)   Termination of Employment.

 

(i)    Unless otherwise provided by the Committee, and except as set forth in
subparagraph (ii) of this Section 7(g), a Participant must be actively employed
by the Company or one of its Affiliates at the end of the Performance Period in
order to be eligible to receive payment in respect of such Award.

 

(ii)   Unless otherwise provided by the Committee, if a Participant’s employment
is terminated as result of death or Disability prior to the end of the
Performance Period, the Participant’s Award shall be cancelled and in respect of
his or her cancelled Award the Participant shall receive a pro rata portion of
the Award as determined by the Committee.

 

(h)   Change in Control. Notwithstanding any provision in the Plan to the
contrary, upon a Change in Control, unless otherwise determined by the Committee
with respect to an Award at the time of its grant, each outstanding Award shall
be cancelled and in respect of his or her cancelled Award a Participant shall
receive a pro rata portion of the Award. Such portion shall be calculated by
multiplying the target amount of the Award by a fraction, the numerator of which
is the number of days completed in the Performance Period prior to the Change in
Control and the denominator of which is the total number of days in the
Performance Period. The pro rata portion of the Award shall be paid in cash as
soon as practicable following the Change in Control. In addition, if any Award
which a Participant earned under the Plan during any Performance Period which
ended prior to a Change in Control has neither been paid to the Participant nor
credited to such Participant under a deferred compensation plan

 

5

--------------------------------------------------------------------------------

 

maintained or sponsored by the Company or an Affiliate prior to the Change in
Control, such Award shall be paid to the Participant within thirty (30) days
following such Change in Control and in no event later than the date specified
in Section 5(d).

 

(i)    Unfunded Status of Awards. The Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company.

 

(j)    Governing Law. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware without
giving effect to the conflict of laws principles thereof.

 

(k)   Effective Date. The Plan shall take effect upon its adoption by the Board;
provided, however, that the Plan shall be subject to the requisite approval of
the shareholders of the Company in order to comply with Section 162(m) of the
Code. In the absence of such approval, any Qualified Performance-Based Awards
made pursuant to the Plan shall be null and void.

 

(l)    Beneficiary. A Participant may file with the Committee a written
designation of a beneficiary on such form as may be prescribed by the Committee
and may, from time to time, amend or revoke such designation; provided, that, in
the event the Participant does not designate a beneficiary with respect to a
particular Award, the Participant’s most recent beneficiary designation form on
file with the Company shall control. If no designated beneficiary survives the
Participant and an Award is payable to the Participant’s beneficiary pursuant to
Section 7(b), the Participant’s estate shall be deemed to be the grantee’s
beneficiary.

 

(m)  Interpretation. The Plan is designed and intended to comply, to the extent
applicable, with Section 162(m) of the Code, and all provisions hereof shall be
construed in a manner to so comply.

 

6

--------------------------------------------------------------------------------