Exhibit 10.2

 

 

 

MYR GROUP INC.

 

PERFORMANCE SHARES AWARD AGREEMENT

 

(Executive Officer)

 

This AGREEMENT (this “Agreement”) is made as of March ___, 20___, by and between
MYR Group Inc., a Delaware corporation (the “Company”), and [                  ]
(the “Participant”).

 

1.Grant of Performance Shares. Pursuant to the MYR Group Inc. 2017 Long-Term
Incentive Plan (the “Plan”) and subject to the terms and conditions thereof and
the terms and conditions hereinafter set forth, the Company has granted to the
Participant, as of March ___, 20___ (the “Date of Grant”), [                   ]
target Performance Shares, a percentage of which may be earned in accordance
with the terms of this Agreement and contingent on the Company’s Return On
Invested Capital (“ROIC”) over the ROIC Performance Period (such target amount,
the “ROIC Target Performance Shares”), and [ ] Performance Shares, a percentage
of which may be earned in accordance with the terms of this Agreement and
contingent on the Company’s relative Total Stockholder Return (“TSR”) over the
TSR Performance Period (such target amount, the “TSR Target Performance
Shares”). The Performance Shares are not intended to be a Qualified-Performance
Based Award under the Plan.

 

2.Earning of Target Performance Shares.

 

(a)Performance Measure: The Participant’s right to receive all of, any portion
of, or more than, the number of ROIC Target Performance Shares or TSR Target
Performance Shares generally will be contingent upon the achievement of
specified levels of the Company’s ROIC and relative TSR, as set forth in the
“Statement of Performance Goals” established by the Committee in connection with
the Awards granted by this Agreement, and will be measured over the period from
January 1, 20___ through December 31, 20___ for ROIC performance (the “ROIC
Performance Period”) and the Date of Grant through December 31, 20___ for TSR
performance (the “TSR Performance Period”, and together with the ROIC
Performance Period, the “Performance Periods”).

 

(b)Below Threshold:

 

(i)ROIC: If, upon the conclusion of the ROIC Performance Period, ROIC for the
ROIC Performance Period falls below the threshold level, as set forth in the
ROIC Performance Matrix contained in the Statement of Performance Goals, no
Performance Shares for ROIC performance shall become earned.

 

(ii)TSR: If, upon conclusion of the TSR Performance Period, the Company’s
relative TSR for the TSR Performance Period falls below the 25th percentile of
TSR for the TSR Peer Group Companies (as defined below), no Performance Shares
for TSR performance shall become earned.

 

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(c)Threshold:

 

(i)ROIC: If, upon the conclusion of the ROIC Performance Period, ROIC for the
ROIC Performance Period equals the threshold level, as set forth in the ROIC
Performance Matrix contained in the Statement of Performance Goals, 50% of the
ROIC Target Performance Shares shall become earned.

 

(ii)TSR: If, upon conclusion of the TSR Performance Period, the Company’s
relative TSR for the TSR Performance Period is at the 25th percentile of TSR for
the TSR Peer Group Companies, 25% of the TSR Target Performance Shares shall
become earned.

 

(d)Between Threshold and Target:

 

(i)ROIC: If, upon the conclusion of the ROIC Performance Period, ROIC exceeds
the threshold level, but is less than the target level, as set forth in the ROIC
Performance Matrix contained in the Statement of Performance Goals, the
percentage of ROIC Target Performance Shares that shall become earned shall be
determined by mathematical straight-line interpolation between 50% of the ROIC
Target Performance Shares and 100% of the ROIC Target Performance Shares, with a
fractional share rounded down to the next whole share.

 

(ii)TSR: If, upon the conclusion of the TSR Performance Period, the Company’s
relative TSR exceeds the 25th percentile, but is less than the 50th percentile
of TSR of the TSR Peer Group Companies, the percentage of TSR Target Performance
Shares that shall become earned shall be determined by mathematical
straight-line interpolation between 25% of the TSR Target Performance Shares and
100% of the TSR Target Performance Shares, with a fractional share rounded down
to the next whole share.

 

(e)Target:

 

(i)ROIC: If, upon the conclusion of the ROIC Performance Period, ROIC for the
Performance Period equals the target level, as set forth in the ROIC Performance
Matrix contained in the Statement of Performance Goals, 100% of the ROIC Target
Performance Shares shall become earned.

 

(ii)TSR: If, upon conclusion of the TSR Performance Period, the Company’s
relative TSR for the TSR Performance Period is at the 50th percentile of TSR for
the TSR Peer Group Companies, 100% of the TSR Target Performance Shares shall
become earned.

 

(f)Between Target and Maximum:

 

(i)ROIC: If, upon the conclusion of the ROIC Performance Period, ROIC exceeds
the target level, but is less than the maximum level, as set forth in the ROIC
Performance Matrix contained in the Statement of Performance Goals, the
percentage of ROIC Target Performance Shares that shall become earned shall be
determined by mathematical straight-line interpolation between 100% of the ROIC
Target Performance Shares and 200% of the ROIC Target Performance Shares, with a
fractional share rounded down to the next whole share.

 

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(ii)TSR: If, upon the conclusion of the TSR Performance Period, the Company’s
relative TSR exceeds the 50th percentile, but is less than the 75th percentile
of TSR for the TSR Peer Group Companies, the percentage of TSR Target
Performance Shares that shall become earned shall be determined by mathematical
straight-line interpolation between 100% of the TSR Target Performance Shares
and 200% of the TSR Target Performance Shares, with a fractional share rounded
down to the next whole share.

 

(g)Equals or Exceeds Maximum:

 

(i)ROIC: If, upon the conclusion of the ROIC Performance Period, ROIC for the
ROIC Performance Period equals or exceeds the maximum level, as set forth in the
ROIC Performance Matrix contained in the Statement of Performance Goals, 200% of
the ROIC Target Performance Shares shall become earned.

 

(ii)TSR: If, upon conclusion of the TSR Performance Period, the Company’s
relative TSR for the TSR Performance Period equals or exceeds the 75th
percentile of TSR for the TSR Peer Group Companies, 200% of the TSR Target
Performance Shares shall become earned.

 

(h)Conditions; Determination of Earned Award: Except as otherwise provided
herein, the Participant’s right to receive any Performance Shares is contingent
upon his or her remaining in the continuous employ of the Company or a
Subsidiary through the end of the Performance Periods. Following the Performance
Periods, the Committee shall determine whether and to what extent the goals
relating to ROIC and TSR have been satisfied for the Performance Periods and
shall determine the percent of ROIC Target Performance Shares and TSR Target
Performance Shares, if any, that may have become earned hereunder.

 

(i)Determination Regarding ROIC: All determinations involving ROIC set forth in
this Section 2 shall be the arithmetic average of the ROIC for the ROIC
Performance Period calculated by dividing the sum of the Company’s ROIC for each
fiscal year in the ROIC Performance Period by the number of years in the ROIC
Performance Period, where ROIC for each fiscal year in the ROIC Performance
Period is defined as net income plus net interest net of taxes (net income plus
net interest, less net interest times the effective tax rate), less dividends
divided by invested capital (funded debt less cash and marketable securities
plus total stockholders’ equity) at the beginning of each fiscal year,

 

ROIC = Net Income + (Net Interest x (1 – Tax Rate)) – Dividends Funded Debt –
Cash And Marketable Securities + Total Stockholders’ Equity

 

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with all financial measures as determined from the Company’s consolidated
financial statements for each year in the ROIC Performance Period, subject to
any adjustment as determined by the Committee.

 

(j)Determination Regarding TSR: At the end of the TSR Performance Period, the
percentile rank of the Company’s TSR in respect to the TSR of the TSR Peer
Companies will be calculated. TSR with respect to the Company and each of the
TSR Peer Companies means the change in the fair market value of common stock of
the Company and the TSR Peer Companies, assuming reinvestment of dividends, over
the TSR Performance Period. The measurement of change in fair market value over
the Performance Period shall be based on the average closing prices of the
common stock for the last 20 trading days preceding the Date of Grant and the
last 20 trading days preceding the end of the TSR Performance Period (December
31, 20___), assuming reinvestment of dividends in common stock. Any TSR Peer
Company that is no longer publicly traded at any time during or at the end of
the TSR Performance Period shall be excluded from this calculation.

 

(k)TSR Peer Companies: The public companies against which the Company’s TSR
performance will be compared (the “TSR Peer Group Companies”) are identified in
the Statement of Performance Goals.

 

3.Pro Rata Earning of Target Performance Shares.

 

(a)Termination without Cause or Good Reason, Death, Disability or Retirement:
Notwithstanding Section 2(h), if, during the Performance Period, but before the
payment of any Performance Shares as set forth in Section 5, the Participant’s
employment is terminated without “Cause” or with “Good Reason” (as each term is
defined in the Participant’s current Employment Agreement with the Company, as
may be amended from time to time (the “Employment Agreement”)), the Participant
dies or in the event of his “Disability” (as such term is defined in the
Employment Agreement) while in the employ of the Company or in the event of the
retirement of the Participant after having attained “normal retirement age” (as
such term is defined in the Social Security Act of 1935, as amended), then the
Participant shall be entitled to receive such percent of the ROIC Target
Performance Shares and TSR Target Performance Shares, if any, as is determined
pursuant to Section 2 at the conclusion of the Performance Periods as if the
Participant had remained in the continuous employ of the Company through the end
of the Performance Periods, based on the Company’s ROIC and TSR performance
during the Performance Periods, prorated, based on the number of whole months
that the Participant was employed by the Company during the Performance Periods.

 

(b)Change in Control: Notwithstanding Section 2(h), if, during the Performance
Periods, but before the payment of any Performance Shares as set forth in
Section 5, a Change in Control occurs while the Participant is an employee of
the Company, then the Participant shall be entitled to receive the number of
ROIC Target Performance Shares and the number of TSR Target Performance Shares
set out in Section 1.

 

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4.Forfeiture of Award. Except to the extent the Participant has earned the right
to receive Performance Shares pursuant to Section 2 or 3 hereof, the
Participant’s right to receive Performance Shares shall be forfeited
automatically and without further notice on the date that the Participant ceases
to be an employee of the Company or a Subsidiary prior to the last day of the
Performance Periods or, in the event that Section 3(b) applies, the date on
which the Change in Control occurs.

 

5.Payment of Performance Shares.

 

(a)Subject to Section 5(c), Performance Shares earned as provided in Section 2
or pursuant to Section 3(a) shall be paid to the Participant or his or her
executor or administrator, as the case may be, in shares of Common Stock in the
calendar year immediately following the close of the Performance Period to which
the award relates, but in no event later than two and one-half (2 1/2) months
after the close of the Performance Period.

 

(b)The ROIC Target Performance Shares and TSR Target Performance Shares earned
pursuant to Section 3(b) shall be paid to the Participant in shares of Common
Stock as soon as practicable following the Change in Control, but in no event
later than two and one-half (2 1/2) months following the end of the year in
which the Change in Control occurs.

 

(c)Notwithstanding anything in this Agreement to the contrary, if the
Participant is a “specified employee” as determined pursuant to procedures
adopted by the Company in compliance with Section 409A of the Code, the ROIC
Target Performance Shares and TSR Target Performance Shares become payable on
the Participant’s “separation from service” with the Company and its
Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code, and the
amount payable hereunder constitutes a “deferral of compensation” (within the
meaning of Section 409A of the Code), then payment of the ROIC Target
Performance Shares and TSR Target Performance Shares shall be made on the
earlier of the first day of the seventh month after the date of the
Participant’s “separation from service” with the Company and its Subsidiaries
within the meaning of Section 409A(a)(2)(A)(i) of the Code or the Participant’s
death.

 

6.Transferability. Transferability shall be as set forth in the Plan.

 

7.No Employment Contract. Nothing contained in this Agreement shall (a) confer
upon the Participant any right to be employed by or remain employed by the
Company, or (b) limit or affect in any manner the right of the Company to
terminate the employment of the Participant at any time.

 

8.Taxes and Withholding. To the extent that the Company is required to withhold
any federal, state, local or foreign taxes in connection with the payment of any
Performance Shares, it shall be a condition to the payment of any Performance
Shares that the Participant shall pay such taxes by the Company’s retention of a
portion of the shares of Common Stock otherwise payable to the Participant. The
shares so retained shall be credited against such withholding requirement at the
Fair Market Value on the date of such delivery. In no event, however, shall the
Company accept shares for payment of taxes in excess of minimum required tax
withholding rates; therefore, the Participant agrees to a payroll deduction for
the amount of the withholding requirement that may be greater than the value of
the whole number of shares retained for such purpose.

 

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9.Rights of a Stockholder. The Participant shall not have any rights of a
stockholder with respect to the Performance Shares prior to the date such shares
are earned.

 

10.Payment of Dividends. No dividends or dividend equivalents shall be accrued
or earned with respect to any Performance Shares until such Performance Shares
are earned by the Participant as provided in this Agreement.

 

11.Adjustments. Notwithstanding any other provision hereof, the number of
Performance Shares subject to this Agreement, and the other terms and conditions
of this award, are subject to mandatory adjustment as provided in Section 3.2 of
the Plan.

 

12.Restrictive Covenants. If the Participant engages in any conduct in breach of
any noncompetition, nonsolicitation or confidentiality obligations to the
Company under any agreement, policy or plan, then such conduct shall also be
deemed to be a breach of the terms of the Plan and this Agreement. Upon such
breach, the Participant’s right to receive Performance Shares covered by this
Agreement shall be forfeited automatically and without further notice and to the
extent that the Participant has received shares of Common Stock pursuant to
Section 5 within a period of 18 months prior to such breach, the Participant
shall be required to return to the Company, upon demand, such shares or the net
proceeds of any sales. For purposes of this Section 12, net proceeds shall mean
the net amount realized upon the disposition of the shares. Notwithstanding
anything in this Agreement to the contrary, nothing in this Agreement prevents
the Participant from providing, without prior notice to the Company, information
to governmental authorities regarding possible legal violations or otherwise
testifying or participating in any investigation or proceeding by any
governmental authorities regarding possible legal violations, and for purpose of
clarity the Participant is not prohibited from providing information voluntarily
to the Securities and Exchange Commission pursuant to Section 21F of the
Exchange Act.

 

13.Recovery of Performance Shares. If (a) the Company restates any part of its
financial statements for any fiscal year or years covered by the Performance
Periods due to material noncompliance with any financial reporting requirement
under the U.S. securities laws applicable to such fiscal year or years (a
“Restatement”) and (b) the Committee determines that the Participant is
personally responsible for causing the Restatement as a result of the
Participant’s personal misconduct or any fraudulent activity on the part of the
Participant, then the Committee has discretion to, based on applicable facts and
circumstances and subject to applicable law, cause the Company to recover all or
any portion (but no more than 100%) of the shares of Common Stock paid or
payable to the Participant for the Performance Periods. The amount of any cash
or shares recovered by the Company under this Section 13 shall be limited to the
amount by which such shares payment exceeded the amount that would have been
paid to or received by the Participant had the Company’s financial statements
for the applicable restated fiscal year or years been initially filed as
restated, as reasonably determined by the Committee. Notwithstanding anything
herein to the contrary, the Participant’s consent shall not be required for an
amendment to this Agreement that is deemed necessary by the Company to ensure
compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act
(the “Dodd-Frank Act”) or any regulations promulgated thereunder, including as a
result of the implementation of any recoupment policy the Company adopts to
comply with the requirements set forth in the Dodd-Frank Act.

 

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14.Relation to Plan. This Agreement is subject to the terms and conditions of
the Plan. In the event of any inconsistency between the provisions of this
Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to
the Plan, as constituted from time to time, shall, except as expressly provided
otherwise herein or in the Plan, have the right to determine any questions that
arise and to exercise its discretionary authority under the Plan in connection
with the grant of ROIC Target Performance Shares and TSR Target Performance
Shares.

 

15.Miscellaneous. All decisions or interpretations of the Committee with respect
to any question arising under the Plan or this Agreement shall be binding,
conclusive and final. The waiver by the Company of any provision of this
Agreement shall not operate as or be construed to be a subsequent waiver of the
same provision or of any other provision of this Agreement. The Participant
agrees to execute such other agreements, documents or assignments as may be
necessary or desirable to effect the purposes of this Agreement.

 

16.Capitalized Terms. All capitalized terms used in this Agreement that are not
defined herein shall have the meanings given them in the Plan or resolutions
adopted by the Committee authorizing grants made under this Agreement, unless
the context clearly requires otherwise.

 

17.Section 409A of the Code. To the extent applicable, it is intended that this
Agreement and the Plan comply with, or be exempt from, the provisions of Section
409A of the Code. This Agreement and the Plan shall be administered in a manner
consistent with this intent, and any provision that would cause this Agreement
or the Plan to fail to satisfy Section 409A of the Code shall have no force or
effect until amended to comply with Section 409A of the Code (which amendment
may be retroactive to the extent permitted by Section 409A of the Code and may
be made by the Company without the consent of the Participant). Any reference in
this Agreement to Section 409A of the Code will also include any proposed,
temporary or final regulations, or any other guidance, promulgated with respect
to such section by the U.S. Department of the Treasury or the Internal Revenue
Service.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officer and the Participant has executed this
Agreement, as of the day and year first above written.

 

  MYR GROUP INC.         By:               Name:     Title: Chairman of the
Board

 

The undersigned Participant hereby acknowledges receipt of an executed copy of
this Agreement and accepts the right to receive any Performance Shares or other
securities covered hereby, subject to the terms and conditions of the Plan and
the terms and conditions herein above set forth.

  

         Participant         Date:                

 

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