Exhibit 10.12
CHANGE OF CONTROL AGREEMENT
AGREEMENT by and between MYR Group, Inc. (the "Company") and
Xxxxxxx X. Xxxxxxxx (the "Employee"), dated as of the 21st day of
December, 1999.
The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its stockholders to
assure that the Company will have the continued dedication of the
Employee, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined below) of the Company. The Board
believes it is imperative to diminish the distraction of the Employee
by virtue of the personal uncertainties and risks created by a pending
or threatened Change of Control and to encourage the Employee's full
attention and dedication to the Company currently and in the event of
any threatened or pending Change of Control, and to provide the
Employee with compensation and benefits arrangements upon a Change of
Control which ensure that the compensation and benefits expectations of
the Employee will be satisfied and which are competitive with those of
other corporations. Therefore, in order to accomplish these objectives
the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Term of Agreement. This Agreement shall terminate
if a Change of Control Date (as hereinafter defined) does not occur on
or before December 31, 2001.
2. Change of Control. For purposes of this Agreement, a
"Change of Control" shall be defined as the occurrence of any of the
following events:
(a) There is a report filed on Schedule 13D (or any
successor schedule, form or report) as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
generally in effect on the date hereof, disclosing that any person (as
the term "person" is used in Section 13(d)(3) of the Exchange Act),
other than Xxxxxxx X. Xxxxxxx III, has become the beneficial owner (as
the term "beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act) of 20%
or more of the issued and outstanding shares of voting securities of
the Company; or
(b) The acquisition of 20% or more of the issued and
outstanding shares of voting securities of the Company by any person
which would otherwise require the filing of a report as described in
(a) above.
3. Change of Control Date. For purposes of this Agreement, the
"Change of Control Date" shall mean the first date during the term of
this Agreement on which a Change of Control occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control
occurs and if the Employee's employment with the Company is terminated
prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Employee that such termination of
employment (i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (ii) otherwise
arose in connection with or in anticipation of a Change of Control,
then for all purposes of this Agreement the "Change of Control Date"
shall mean the date immediately prior to the date of such termination
of employment.
4. Termination of Employment
(a) Good Cause. For purposes of this Agreement,
"Good Cause" shall mean (i) the Employee's commission of a felony, (ii)
the Employee's material breach of any of his obligations or duties,
including the Employee's willful failure to substantially perform his
duties other than as a result of his incapacity due to illness or
injury, or (iii) the Employee's commission of a willful act, such as
embezzlement, against the Company intended to enrich the Employee at
the expense of the Company. No termination for Good Cause may be
effected under clause (ii) of the preceding sentence unless (a) the
Company shall have given written notice to the Employee specifying with
particularity the basis for the Company's decision to terminate the
Employee's employment, and (b) the Employee shall have failed to cease
or correct the performance (or nonperformance) which forms the basis
for the Company's decision within 30 days following the date of the
Company's written notice.
(b) Good Reason. For purposes of this Agreement,
"Good Reason" shall mean any of the following which occurs without the
written consent of the Employee:
(i) Any significant change in the nature of
Employee's principal duties or any significant
diminution in the Employee's status or responsibilities;
(ii) Any decrease in the Employee's salary or cash
incentive opportunity below the level the Employee was
earning at the time of a Change of Control;
(iii) The Company's failure to obtain the agreement
of a successor entity to assume the obligations under
this Agreement; or
(iv) The Company's requiring the Employee to be
based in any location which would materially increase
the Employee's commuting time.
(c) Disability. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for 180
consecutive days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and reasonably acceptable to
the Executive or the Executive's legal representative.
5. Notice of Termination. Any termination by the Company for
Good Cause, or by the Employee for Good Reason, shall be communicated
by a Notice of Termination to the other party hereto given in
accordance with Section 12(b) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of the Employee's employment under the provision so indicated and (iii)
if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date
shall be not more than thirty days after the giving of such notice).
The failure by the Employee or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing
of Good Reason or Good Cause shall not waive any right of the Employee
or the Company, respectively, hereunder or preclude the Employee or the
Company, respectively, from asserting such fact or circumstance in
enforcing the Employee's or the Company's rights hereunder.
6. Date of Termination. For purposes of this Agreement, "Date
of Termination" means (a) if the Employee's employment is terminated
by the Company for Good Cause, or by the Employee for Good Reason, the
date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (b) if the Employee's employment
is terminated by the Company other than for Good Cause, death or
Disability, the date on which the Company notifies the Employee of such
termination and (c) if the Employee's employment is terminated by
reason of death or Disability, the date of death of the Employee or the
date of the determination that the Employee's Disability is determined
to be total and permanent, as the case may be.
7. Obligations of the Company upon Termination.
(a) Termination by Company Not for Good Cause; Resignation
by Employee for Good Reason. If, on or within two years after a Change
of Control Date , the Company shall terminate the Employee's employment
other than for Good Cause, Disability or death, or the Employee shall
terminate employment for Good Reason within two years after the Change
of Control Date, the Employee will receive, in addition to all benefits
to which the Employee is legally entitled:
(i) Acceleration of all unvested MYR stock option grants and
MYR restricted stock awards or, at the sole discretion
of MYR's Board of Directors, their cash equivalent;
(ii) Any earned but unpaid bonus for the year preceding the
year in which termination occurs;
(iii) A pro-rated target bonus for the worked portion of the
year in which termination occurs;
(iv) Two years of current salary (not lower than the
Employee's salary on the Change of Control Date,
increased by the supplemental payments and relocation
payments described in Exhibit A due during the two-year
period following the employment termination) and two
years of target bonus;
(v) Two years of post-termination medical coverage on the
same basis as if the Employee was a current employee;
(vi) Reimbursement of legal expenses incurred, in accordance
with Section 9, to enforce this Agreement;
(vii) The benefits of the "Put Option" as described
in that certain letter agreement dated June 30, 1999
between Employee and the Company; and
(viii) In the event that the foregoing provisions of this
Section 7 result in the receipt by the Employee
of a parachute payment (as defined in Section 280G of
the Internal Revenue Code of 1986, as amended), then the
Company shall make an additional payment to the Employee
in an amount in cash such that the amount of the after-
tax proceeds of the Employee from the payments provided
for in this Agreement, taking into account federal and
state income and excise taxes, is equal to the amount of
the after-tax proceeds the Employee would have received
from the payments provided for in this Agreement had
such payments not resulted in the receipt by the
Employee of a parachute payment. The Employee agrees to
give the Company prompt written notice of any claim by
the Internal Revenue Service that any payments made
pursuant to this Agreement result in the receipt by the
Employee of a parachute payment. In such event the
Company shall have the right to assume and control the
defense of an such claim with counsel of its own
selection. The Employee agrees to cooperate with the
Company in connection with any defense of such claim.
If the Employee is terminated from employment more than two years but
less than four years after a Change of Control Date for other than Good
Cause, Disability or death, the Employee will receive items (i), (ii),
(iii), (vi), (vii) and (viii) above, plus one year of current salary
(not lower than the Employee's salary on the Change of Control Date,
increased by the supplemental payments and relocation payments
described in Exhibit A due during the one-year period following the
employment termination), one year of target bonus and one year of
medical coverage.
In addition, for a period of 90 days following the second anniversary
of a Change of Control Date, the Employee may elect to terminate
employment at the Employee's discretion provided that the Employee
offers to continue employment at the request of the Company for a
period of up to six months. In the event of such termination at the
discretion of the Employee, the Employee shall receive items (i)
through (vii) above. The Employee will also be entitled to receive all
other benefits to which the Employee is entitled under the Company's
various policies or plans or to which the Employee is otherwise legally
entitled. Solely for purposes of the computation of benefits under
this Agreement, payments made by the Company as the result of such a
termination at the discretion of the Employee that are required to be
taken into account with respect to the Employee under Section
280G(b)(2)(A)(ii) of the Code shall not, in the aggregate, exceed 2.99
times the Employee's "base amount" as that term is defined in Section
280G(b)(3) of the Code. If the limitation contained in the immediately
preceding sentence applies, any reduction in payments will in no event
affect the computation of payments hereunder which do not constitute
"excess parachute payments" within the meaning of Section 280G(b) of
the Code.
(b) Death. If the Employee dies during the term of this
Agreement prior to the Change in Control Date, this Agreement shall
terminate without further obligation of the Company to the Employee or
his estate other than the obligation to pay any compensation or
benefits that have been earned but not paid on the Date of Termination,
and any post-termination, life insurance or death benefits that are
provided under the Company's normal benefit plans and policies.
(c) Disability. If the Employee's employment shall be
terminated during the term of this Agreement prior to the Change in
Control Date by reason of the Employee's Disability, this Agreement
shall terminate without further obligation of the Company to the
Employee other than the obligation to pay any compensation or benefits
that have been earned but not paid on the Date of Termination, and any
post-termination benefits or disability benefits that are provided
under the Company's normal benefit plans and policies.
(d) Good Cause; Other than for Good Reason. If, whether
before or after a Change of Control Date, the Employee's employment
shall be terminated for Good Cause, or if the Employee shall resign
other than for Good Reason, this Agreement shall terminate without
further obligation to the Employee other than the obligation to pay any
compensation or benefits that have been earned but not paid on the Date
of Termination, and any post-termination benefits that are provided
under the Company's normal benefit plans and policies.
8. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in
any plan, program, policy or practice provided by the Company and for
which the Employee may qualify, nor, subject to Section 12(g), shall
anything herein limit or otherwise affect such rights as the Employee
may have under any contract or agreement with the Company. Amounts
which are vested benefits or which the Employee is otherwise entitled
to receive under any plan, policy, practice or program of or any
contract or agreement with the Company at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement.
9. Full Settlement; Legal Fees. The Company's obligation to
make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Employee or others. In no event shall
the Employee be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Employee
under any of the provisions of this Agreement and such amounts shall
not be reduced whether or not the Employee obtains other employment.
In the event the Employee incurs legal fees and expenses in seeking to
obtain any benefit under this Agreement and it is ultimately determined
by a court of competent jurisdiction that the Employee is entitled to
receive all or any part of such benefit, then the Company shall pay to
the Employee the reasonable legal fees and expenses so incurred by the
Employee.
10. Confidential Information. The Employee shall hold in a
fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company,
and their respective businesses, which shall have been obtained by the
Employee during the Employee's employment by the Company and which
shall not be or become public knowledge (other than by acts by the
Employee or representatives of the Employee in violation of this
Agreement). After termination of the Employee's employment with the
Company, the Employee shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event
shall an asserted violation of the provisions of this Section 10
constitute a basis for deferring or withholding any amounts otherwise
payable to the Employee under this Agreement.
11. Successors.
(a) This Agreement is personal to the Employee and without
the prior written consent of the Company shall not be assignable by the
Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes this
Agreement by operation of law, or otherwise.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois without reference to
principles of conflict of laws. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors
and legal representatives.
(b) All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Employee: Xxxxxxx X. Xxxxxxxx
00 X. Xxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
If to the Company: MYR Group, Inc.
Three Continental Towers
0000 X. Xxxx Xxxx, Xxxxx 0000
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Secretary
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
(a) This Agreement represents the entire agreement
between the parties hereto with respect to the subject matter hereof,
and supersedes all prior or contemporaneous oral or written
negotiations, understandings and agreements between the parties hereto.
(e) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(f) The Employee's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure
to assert any right the Employee or the Company may have hereunder,
including, without limitation, the right of the Employee to terminate
employment for Good Reason pursuant to Section 4(b) of this Agreement,
shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
(g) The Employee and the Company acknowledge that, except as
may otherwise be provided under any other written agreement between the
Employee and the Company, the employment of the Employee by the Company
is "at will" and, prior to the Change of Control Date, the Employee's
employment may be terminated by either the Employee or the Company at
any time prior to the Change of Control Date, in which case the
Employee shall have no further rights under this Agreement. From and
after the Change of Control Date this Agreement shall supersede any
other agreement between the parties with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the Employee has hereunto set the Employee's
hand and, pursuant to the authorization from its Board of Directors,
the Company has caused this Agreement to be executed in its name on its
behalf, all as of the day and year first above written.
________________________________________
Xxxxxxx X. Xxxxxxxx
MYR GROUP, INC.
By: ___________________________________
Its: ___________________________________
EXHIBIT A
Date Payable Supplemental Payment Relocation Payment
------------ -------------------- ------------------
February-00 3,750
May 3,750
July 11,104
August 3,750
November 2,500
February-01 2,500
May 2,500
July 8,328
August 2,500
November 1,250
February-02 1,250
May 1,250
July 5,552
August 1,250
July-03 2,776
