Exhibit 10.16

 

MYR GROUP INC.

 

PERFORMANCE SHARES AWARD AGREEMENT

 

(Named Executive Officer)

 

This AGREEMENT (this “Agreement”) is made as of March 24, 2014 (the “Date of
Grant”), by and between MYR Group Inc., a Delaware corporation (the “Company”),
and [                         ] (“Grantee”).

 

1.                                      Grant of Performance Shares.  Pursuant
to the MYR Group Inc. 2007 Long-Term Incentive Plan (Amended and Restated as of
May 5, 2011) (the “Plan”) and subject to the terms and conditions thereof and
the terms and conditions hereinafter set forth, the Company hereby grants to
Grantee [               ] Performance Shares that may be earned in accordance
with the terms of this Agreement and contingent on the Company’s Return On
Invested Capital (“ROIC”) over the Performance Period (the “ROIC Target
Performance Shares”), and [                ] Performance Shares that may be
earned in accordance with the terms of this Agreement and contingent on the
Company’s Total Stockholder Return (“TSR”) over the Performance Period (the “TSR
Target Performance Shares”).

 

2.                                      Earning of Target Performance Shares.

 

(a)                                 Performance Measure:  The Grantee’s right to
receive all of, any portion of, or more than, the number of ROIC Target
Performance Shares or TSR Target Performance Shares will be contingent upon the
achievement of specified levels of the Company’s ROIC and 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, 2014 through December 31, 2016 (the “Performance Period”).

 

(b)                                 Below Threshold:

 

(i)                                     ROIC:  If, upon the conclusion of the
Performance Period, ROIC for the Performance Period falls below the threshold
level, as set forth in the “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
Performance Period, the Company’s TSR for the Performance Period falls below the
25th percentile of TSR for the TSR Peer Companies (as defined below), no
Performance Shares for TSR performance shall become earned.

 

(c)                                  Threshold:

 

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

 

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

 

(d)                                 Between Threshold and Target:

 

(i)                                     ROIC:  If, upon the conclusion of the
Performance Period, ROIC exceeds the threshold level, but is less than the
target level, as set forth in the 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

 

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between 50% of the ROIC Target Performance Shares and 100% of the ROIC Target
Performance Shares.

 

(ii)                                  TSR:  If, upon the conclusion of the
Performance Period, the Company’s TSR exceeds the 25th percentile, but is less
than the 50th percentile of TSR of the TSR Peer 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.

 

(e)                                  Target:

 

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

 

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

 

(f)                                   Between Target and Maximum:

 

(i)                                     ROIC:  If, upon the conclusion of the
Performance Period, ROIC exceeds the target level, but is less than the maximum
level, as set forth in the 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.

 

(ii)                                  TSR:  If, upon the conclusion of the
Performance Period, the Company’s TSR exceeds the 50th percentile, but is less
than the 75th percentile of TSR for the TSR Peer 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.

 

(g)                                  Equals or Exceeds Maximum:

 

(i)                                     ROIC:  If, upon the conclusion of the
Performance Period, ROIC for the Performance Period equals or exceeds the
maximum level, as set forth in the 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
Performance Period, the Company’s TSR for the Performance Period equals or
exceeds the 75th percentile of TSR for the TSR Peer Companies, 200% of the
Target Performance Shares shall become earned.

 

(h)                                 Conditions; Determination of Earned Award: 
Except as otherwise provided herein, the Grantee’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
Period.  Following the Performance Period, the Committee shall determine whether
and to what extent the goals relating to ROIC and TSR have been satisfied for
the Performance Period and shall determine the percent of ROIC Target
Performance Shares and TSR Target Performance Shares that may have become earned
hereunder.

 

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(i)                                     Determination Regarding ROIC:  All
determinations involving ROIC set forth in this Section 2 shall be the
arithmetic average of the ROIC for the Performance Period calculated by dividing
the sum of the Company’s ROIC for each fiscal year in the Performance Period by
the number of years in the Performance Period. ROIC for each fiscal year in the
Performance Period will be calculated by taking After Tax Net Income (ATNI) and
subtracting Dividends and then dividing this number by Total Capital, adjusted
for Net Debt (ROIC = ATNI - Dividends / Total Capital (adjusted for Net Debt))
with all financial measures as determined from the Company’s consolidated
financial statements, net of extraordinary events which may affect the
calculation, where such extraordinary events would generally be events that
impact the Company’s results or financial position in a manner that the
Committee, in its discretion, determines produce results that are not indicative
of the Company’s ongoing operations, except where such action would result in
the loss of the otherwise available exemption of the Performance Shares under
Section 162(m) of the Internal Revenue Code.  All determinations involving ROIC
set forth in this Section 2 shall be calculated based on U.S. Generally Accepted
Accounting Principles in effect at the time ROIC goals are established without
regard to any change in accounting standards that may be required by the
Financial Accounting Standards Board after the goals are established.

 

(j)                                    Determination Regarding TSR:  At the end
of the 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 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 January 1, 2014 and the last 20 trading days preceding the end of the
Performance Period (December 31, 2016), assuming reinvestment of dividends in
common stock.  Any TSR Peer Company that is no longer publicly traded at the end
of the 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
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 Grantee’s employment is terminated without “Cause” or
with “Good Reason” (as each term is defined in the Grantee’s Amended and
Restated Employment Agreement with the Company, dated March 11, 2010, as may be
amended from time to time (the “Employment Agreement”)), the Grantee 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 Grantee after having attained “normal retirement age” (as such term is
defined in the Social Security Act of 1935, as amended), then the Grantee shall
be entitled to receive such percent of the ROIC Target Performance Shares and
TSR Target Performance Shares as is determined pursuant to Section 2 at the
conclusion of the Performance Period as if the Grantee had remained in the
continuous employ of the Company through the end of the Performance Period,
based on the Company’s ROIC and TSR performance during the Performance Period,
prorated, based on the number of whole months that Grantee was employed by the
Company during the Performance Period.

 

(b)                                 Change in Control:  Notwithstanding
Section 2(h), if, during the Performance Period, but before the payment of any
Performance Shares as set forth in Section 5, a Change in Control occurs while
Grantee is an employee of the Company, then the Grantee 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 Grantee has earned the right to receive Performance Shares pursuant to
Sections 2 or 3 hereof, Grantee’s right to receive Performance Shares shall be
forfeited automatically and without further notice on the date that Grantee
ceases to be an employee of the Company or a Subsidiary prior to the last day of
the Performance Period or, in the event that Section 3(b) applies, the date on
which the Change in Control occurs.

 

5.                                      Payment of Performance Shares.

 

(a)                                 Performance Shares earned as provided in
Section 2 or pursuant to Section 3(a) shall be paid to Grantee 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
Grantee 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.

 

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

 

7.                                      No Employment Contract.  Nothing
contained in this Agreement shall (a) confer upon Grantee 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 Grantee 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, and the amounts
available to the Company for such withholding are insufficient, it shall be a
condition to the payment of any Performance Shares that the Grantee shall pay
such taxes or make arrangements that are satisfactory to the Company for the
payment thereof.  The Grantee may elect that all or any part of such withholding
requirement be satisfied by retention by the Company of a portion of the shares
of Common Stock paid to the Grantee.  If such election is made, 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 required tax withholding
rates.

 

9.                                      Rights of a Stockholder.  The Grantee
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 shall be
accrued or earned with respect to any Performance Shares until such Performance
Shares are earned by the Grantee as provided in this Agreement.

 

11.                              Adjustments.  Notwithstanding any other
provision hereof, the Committee shall have authority to make adjustments in the
terms and conditions of, and the criteria included in, Performance Shares
granted hereunder, as set forth in the Plan.

 

12.                               Restrictive Covenants.  If the Grantee 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, Grantee’s right to receive Performance
Shares covered by this Agreement shall be forfeited automatically and without
further notice and to the extent that the Grantee has received shares of Common
Stock pursuant to Section 5 within a period of 18 months prior to such breach,
the Grantee 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 amount realized upon the disposition of the shares, less any
applicable taxes withheld by the Company.

 

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 Period due to material noncompliance with any
financial reporting requirement under the U.S. securities laws applicable to
such fiscal year or years (a

 

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“Restatement”) and (b) the Committee determines that Grantee is personally
responsible for causing the Restatement as a result of Grantee’s personal
misconduct or any fraudulent activity on the part of Grantee, 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 Grantee for the
Performance Period.  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 Grantee
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, Grantee’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.

 

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.  Grantee 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 unless the context clearly requires otherwise.

 

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

 

 

 

MYR GROUP INC.

 

 

 

By:

 

 

 

Name: William A. Koertner

 

 

Title: President and Chief Executive Officer

 

The undersigned Grantee 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.

 

 

 

 

 

Grantee

 

Date:

 

 

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