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.


 


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(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


 


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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.


 


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(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.


 


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(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


 


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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.


 


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