Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-8325
MYR GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3158643
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
2550 W. Golf Road, Suite 200 Rolling Meadows, Illinois 60008
(Address of principal executive offices)
(Zip Code)
(847) 290-1891
Registrant's telephone number, include area code
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
and Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the distribution
of securities under a plan confirmed by a court.
Yes No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of July 22, 1996: 3,232,046
MYR GROUP INC.
I N D E X
PART I. Financial Information Page No.
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
June 30, 1996 and December 31, 1995 2
Condensed Consolidated Statements of Operations -
Three and Six Months Ended June 30, 1996 and 1995 3
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1996 and 1995 4
Notes to Condensed Consolidated Financial Statements 5-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II. Other Information
Item 1. Legal Proceedings 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURE 11
Part I, Item 1
Financial
Information
MYR Group Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30 Dec. 31
1996 1995
ASSETS (Unaudied) *
Current assets:
Cash and cash equivalents $ 849 $ 703
Contract receivables including retainage 41,764 51,114
Costs and estimated earnings in excess of
billings on uncompleted contracts 18,078 14,851
Deferred income taxes 4,602 4,602
Other current assets 1,836 1,594
Total current assets 67,129 72,864
Property and equipment: 60,614 61,625
Less accumulated depreciation 38,325 38,481
22,289 23,144
Intangible assets 2,519 2,681
Other assets 3,408 3,145
Total assets $ 95,345 $ 101,834
LIABILITIES
Current liabilities:
Current maturities of long-term debt $ 10,964 $ 9,178
Accounts payable 6,317 13,886
Billings in excess of costs and estimated
earnings on uncompleted contracts 4,433 5,042
Accrued insurance 13,021 13,053
Other current liabilities 16,645 16,215
Total current liabilities 51,380 57,374
Deferred income taxes 2,861 2,861
Other liabilities 396 391
Long-term debt:
Revolver and other debt 3,000 3,021
Term loan 3,750 5,000
Industrial revenue bond 890 890
Subordinated convertible debentures 5,679 5,679
Total long-term debt 13,319 14,590
SHAREHOLDERS' EQUITY
Common stock and additional paid-in capital 9,293 9,248
Retained earnings 20,081 19,326
Treasury stock (1,276) (1,548)
Unearned stock awards (301) 0
Shareholders' notes receivable (408) (408)
Total shareholders' equity 27,389 26,618
Total liabilities and shareholders' equity $ 95,345 $ 101,834
*Condensed from audited financial statements
The "Notes to Condensed Consolidated Financial Statements" are an integral
part of this statement.
MYR Group Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)
(Unaudited)
Periods Ended June 30 Three Months Six Months
1996 1995 1996 1995
Contract revenue $ 69,052 $ 64,015 $ 133,428 $120,066
Contract cost 61,024 56,677 118,970 106,075
Gross profit 8,028 7,338 14,458 13,991
Selling, general and
administrative expenses 5,597 5,224 11,315 10,937
Income from operations 2,431 2,114 3,143 3,054
Other income (expense)
Interest income 4 13 35 10
Interest expense (467) (430) (877) (895)
Gain on sale of property and
equipment 261 80 392 107
Miscellaneous (113) (102) (276) (206)
Income from continuing
operations before income taxes 2,116 1,675 2,392 2,095
Income tax expense 847 670 957 838
Income from continuing operations 1,269 1,005 1,435 1,257
Loss from discontinued operations (360) - (360) -
Net income $ 909 $ 1,005 $ 1,075 $ 1,257
Earnings per share - Primary
Income from continuing
operations $ .37 $ .30 $ .42 $ .38
Loss from discontinued
operations (.11) - (.11) -
Net Income .26 .30 .31 .38
Earnings per share - Fully Diluted:
Income from continuing operations .33 .26 .38 .34
Loss from discontinued operations (.09) - (.09) -
Net Income .24 .26 .29 .34
Dividends per common share .050 .047 .100 .088
Weighted average common shares and
common share equivalents outstanding
Primary 3,439 3,372 3,423 3,368
Fully Diluted 4,057 3,972 4,050 3,968
The "Notes to Condensed Consolidated Financial Statements" are an integral
part of this statement.
MYR Group Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six Months Ended June 30 1996 1995
CASH FLOWS FROM OPERATIONS
Income from continuing operations $ 1,435 $ 1,257
Adjustments to reconcile income from
continuing operations to cash flows from
continuing operations
Depreciation and amortization 3,100 2,856
Amortization of intangibles 162 158
Gain from disposition of assets (392) (107)
Changes in current assets and liabilities(2,163) 480
Cash flows from continuing operations 2,142 4,644
Cash flows from discontinued operations (360) -
cash flows from operations 1,782 4,644
CASH FLOWS FROM INVESTMENTS
Expenditures for property and equipment (2,396) (1,734)
Proceeds from disposition of assets 546 200
Cash used in acquisition, net of cash acquired - (12,995)
Cash flows from investments (1,850) (14,529)
CASH FLOWS FROM FINANCING
Proceeds (repayments) of long term debt 516 (15,068)
Proceeds from issuance of debt - 19,500
Proceeds from exercise of stock options 13 5
Increase (decrease) in deferred compensation 5 (15)
Dividends paid (320) (277)
Cash flows from financing 214 4,145
Increase (decrease) in cash and cash equivalents 146 (5,740)
Cash and cash equivalents at beginning of year 703 6,115
Cash and cash equivalents at end of period $ 849 $ 375
The "Notes to Condensed Consolidated Financial Statements" are an integral
part of this statement.
MYR Group Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1 - Basis of Presentation
The condensed consolidated balance sheets, statements of
operations and statements of cash flows include the accounts of
the Company and its subsidiaries. All material intercompany
balances and transactions have been eliminated.
The financial information included herein is unaudited;
however, such information reflects all adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion
of management, necessary for a fair presentation of results for
the interim period.
The results of operations for the six month period ended
June 30, 1996 are not necessarily indicative of the results to be
expected for the full year.
In December 1995, the Company effected a four-for-three
stock split in the form of a stock dividend. The $838,000 par
value of the additional shares issued was transferred from
additional paid-in capital to common stock. Amounts relating to
number of shares and amounts per share have been adjusted for
1995 to reflect the stock split.
2 - Acquisition
On January 3, 1995, the Company completed the acquisition of
all the stock of Harlan Electric Company (``Harlan''), pursuant
to an Agreement and Plan of Merger dated October 5, 1994. Harlan
and its wholly-owned subsidiaries, Sturgeon Electric Company,
Inc. and Power Piping Company, are engaged primarily in the
installation and maintenance of electrical equipment and lighting
systems for commercial, industrial and electrical utility
customers and in the erection and maintenance of high and low
pressure piping systems for electrical utilities and steel
industry customers.
All the shares of Harlan were exchanged for $13,612,000 in
cash and $5,679,000 of 7% convertible subordinates notes. The
principal of each note will be due in three equal installments on
January 3, 2000, 2001 and 2002, with interest payable
semiannually each year. The notes are convertible into 600,000
shares of the Company's common stock at a price per share of
$9.4659. The Company also refinanced $8,756,000 of Harlan debt.
The transaction was financed through cash on hand and borrowings
under a new $25,000,000 revolving and term credit facility with
Harris Trust and Savings Bank and Comerica Bank. The transaction
has been accounted for using the purchase method of accounting.
3 - Discontinued Operations
As part of the sale in 1988 of its former engineering
subsidiary, the Company retained certain rights and obligations
in connection with the OMU lawsuits (as defined in Note 4). In
1996, the Company recorded additional amounts, primarily legal
expenses related to the OMU lawsuits, which resulted in
additional losses of $360,000 (net of income tax benefits of
$240,000). The additional provision includes anticipated cost
for the trial and appeal since it now appears there is no
opportunity for the Company to settle its dispute with the
insurance carrier.
4 - Contingencies
The Company has been involved in two lawsuits as a result of
errors in the design of four transmission towers by the Company's
former engineering subsidiary for City Utilities Commission of
Owensboro, Kentucky (OMU). The engineering subsidiary has been
sold but the Company retained the rights and obligations related
to these lawsuits as part of the sale agreement.
One lawsuit (the Kentucky lawsuit) alleged that the
engineering subsidiary negligently designed and engineered the
towers, and that OMU incurred damages as a result of the redesign
and replacement of the four towers. During 1993, OMU agreed to a
settlement of the case pursuant to which it accepted payment of
$1,300,000 from the Company.
The other lawsuit (the New York lawsuit) concerns the
insurance coverage of the engineering subsidiary related to the
design errors. The Company notified its primary and excess
umbrella insurance carriers at the time of the discovery of the
design errors. The Company's excess umbrella carrier denied
insurance coverage for the damages above the primary carrier's
policy limits and filed an action against the Company seeking a
declaratory judgment that the umbrella insurance coverage did not
apply to the loss on several theories. The Company
counterclaimed against the umbrella carrier and, in addition, in
a third party action, brought suit against three former insurance
brokers which had procured the insurance for the Company. The
Company is seeking to recover $550,000 of unreimbursed costs it
incurred in the disassembly, redesign and replacement of the
towers, the amount of payments it made to OMU, the legal and
related expenses it incurred in the Kentucky lawsuit, legal and
related expenses it has and will incur in the New York lawsuit,
and interest.
The approximately $550,000 of unreimbursed costs as well as
the $1,300,000 paid to OMU during 1993 is recorded on the
Company's books as a non-current asset. Management is of the
opinion that the amounts so recorded will be recovered in the New
York lawsuit from its excess umbrella insurance carrier and its
brokers, individually or collectively.
The Company is also involved in various other legal matters
which arise in the ordinary course of business, none of which is
expected to have a material adverse effect.
5 - Earnings Per Share
Primary earnings per share are based on the weighted average
number of common shares and common share equivalents outstanding
during the period. Stock options are considered to be common share
equivalents. Fully diluted earnings per share also reflects the
potential dilution which would result from the conversion of the
convertible subordinated notes.
6 - Changes in Accounting Policy
In October 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) No.
123, ``Accounting for Stock-Based Compensation,'' which will be
effective for the Company beginning January 1, 1996. SFAS No.
123 requires expanded disclosures of stock-based compensative
arrangements with employees and encourages (but does not require)
compensation cost to be measured based on the fair value of the
equity instrument awarded. Companies are permitted, however, to
continue to apply APB Opinion No. 25, which recognizes
compensation cost based on the intrinsic value of the equity
instrument awarded. The Company will continue to apply APB
Opinion No. 25 to its stock based compensation awards to
employees and will disclose the required pro forma effect on net
income and earnings per share on an annual basis.
7 - Supplemental Quarterly Financial Information (Unaudited)
(Dollars in thousands, except per share amounts)
1996
Mar. 31 June 30 Sept. 30 Dec. 31 Year
Contract revenue 64,376 69,052 133,428
Gross profit 6,430 8,028 14,458
Income from continuing operations 166 1,269 1,435
Net income 166 909 1,075
Earnings per share - Primary:
Income from continuing operations 0.05 0.37 0.42
Net Income 0.05 0.26 0.31
Earnings per share - Fully diluted:
Income from continuing operations 0.05 0.33 0.38
Net Income 0.05 0.24 0.29
Dividends paid per share 0.050 0.050 0.100
Market Price:
High 11.00 11.75 11.75
Low 10.00 10.25 10.00
1995
Mar. 31 June 30 Sept. 30 Dec. 31 Year
Contract revenue 56,051 64,015 66,638 80,261 266,965
Gross profit 6,653 7,338 7,968 7,588 29,547
Income from continuing operations 252 1,005 1,248 924 3,429
Net income 252 1,005 1,248 924 3,429
Net income per share:
Primary 0.08 0.30 0.37 0.27 1.01
Fully diluted 0.08 0.26 0.32 0.25 0.91
Dividends paid per share 0.041 0.047 0.047 0.047 0.182
Market Price:
High 9.66 10.31 11.91 11.81 11.91
Low 7.79 8.53 9.19 10.00 7.97
Part I Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
for the Three and Six Months Ending June 30, 1996
(Dollars in thousands)
Results of Operations
Continuing Operations
Revenue for the three and six month periods was $69,052 and $133,428,
compared to $64,015 and $120,066 in 1995. This is an increase of 7.9%
and 11.1% for the three and six month periods, primarily due to an
increase in our line construction revenues, offset by decreases in our
commercial/industrial revenues. The line construction revenue increase
was a result of our electric utility alliances and storm work. The
commercial/industrial revenues are down from the prior year levels due
to cut backs in the semi-conductor industry's capital spending plans
and a slow start in work for our mining business clients.
Gross profit for the three and six month periods was $8,028 and
$14,458, compared to $7,338 and $13,991 in 1995. Gross profit as a
percentage of revenue was 11.6% and 10.8% for the three and six month
periods, respectively, compared to 11.5% and 11.7% in 1995. The 1996
six month percentage was lower than the current quarter and prior
year primarily due to less productive winter working conditions in the
first quarter of 1996.
Revenue and gross profit comparisons from quarter to quarter and
comparable quarters of different periods may be impacted by variables
beyond the control of the Company due to the nature of the Company's
work as an outside electrical contractor. Such variables include
unusual or unseasonable weather and delays in receipt of construction
materials which are typically results in lower revenues and lower
margins in the first quarter when compared to other quarters. As a
general rule, the better construction weather in the second, third and
fourth quarters usually results in higher revenues and margins from
those quarters. Competitive bidding pressures may cause these general
trends to vary. Additionally, since the company's revenues are derived
principally from providing construction labor services, insurance
costs, particularly for workers compensation, are a significant factor
in the Company's contract cost structure. Fluctuations in insurance
reserves for claims under the retrospective rated insurance programs
can have significant impact on gross margins, either upward or
downward, in the period in which such insurance reserve adjustments are
made.
Selling, general and administrative expenses for the three and six
month periods were $5,597 and $11,315, compared to $5,224 and $10,937
in 1995. This represents 8.1% and 8.5% of consolidated revenues for
the three and six month periods of 1996, compared to 8.2% and 9.1% for
1995. The increase in 1996 over 1995 relates to additional personnel
related costs for expanded operations.
Net interest expense for the three and six month periods was $464 and
$867, compared to $417 and $860 in 1995.
Gain on sale of property and equipment for the three and six month
periods was $261 and $392, compared to $80 and $107 in 1995. The
increase was due to the increased number of units sold in conjunction
with upgrading our fleet.
Net other expense for the three and six month periods was $113 and
$276, compared to $102 and $206 in 1995. Other expense primarily
includes the amortization of non-competition agreements and goodwill,
cash discounts and bank fees.
Income tax expense for the three and six month periods was $847 and
$957, compared to $670 and $838 in 1995. As a percentage of income,
the effective rate was 40% in 1996 and 1995.
The Company's backlog at June 30, 1996 was $89,600, compared to
$69,100 at December 31, 1995, and $69,400 at June 30, 1995.
Substantially all the current backlog will be completed within twelve
months and approximately 95% is expected to be completed by
December 31, 1996.
Discontinued Operations
During 1988, the Company sold two subsidiaries. As part of the sale
of the engineering subsidiary, the Company retained certain rights
and obligations in connection with two lawsuits. In the three and
six month periods, the Company recorded additional amounts, primarily
legal expenses related to these lawsuits, which resulted in an
additional loss from discontinued operations of $360 ($600 pre-tax).
The additional provision includes anticipated cost for the trial and
appeal since it now appears there is no opportunity for the Company to
settle its dispute with the insurance carrier.
Liquidity and Capital Resources
Cash flows provided from operations for the six months amounted to
$1,782, net proceeds from short term borrowing amounted to $516, and
proceeds from the disposition of property and equipment amounted to
$546. The cash flows were primarily used for net capital expenditures
of $2,396 and dividend payments of $320. The Company's financial
condition continues to be strong at June 30, 1996 with working capital
of $15,749, compared to $15,490 at December 31, 1995. The Company's
current ratio was 1.31:1 at June 30, 1996, compared to 1.27:1 at
December 31, 1995.
As of June 30, 1996, the Company had $11,150 outstanding under a
$15,000 revolving credit facility and $6,250 outstanding under a term
loan. On July 23, 1996, the Company entered into an additional line of
credit agreement with its bank for up to $5,000 to support its
growth in operating revenues. The Company has outstanding letters of
credit with Banks totaling $12,956. The Company anticipates that its
credit facility, cash balances and internally generated cash flows will
continue to be sufficient to fund operations, capital expenditures and
debt service requirements. The Company is also confident that its
financial condition will allow it to meet long-term capital
requirements.
Capital expenditures for the six months were $2,396, compared to
$1,734 in 1995. Capital expenditures during these periods were used
for normal property and equipment additions, replacements and upgrades.
Proceeds from the disposal of property and equipment for the six months
were $546 and $200 in 1995. The Company plans to spend approximately
$5,000 on capital improvements during 1996.
PART II
Item 1. Legal Proceedings
The trial date of April 15, 1996 was reset by the Court to
September 24, 1996 for the previously reported National Union Fire
Insurance Company of Pittsburgh, Pennsylvania v. The L. E. Myers Co.
Group, The L. E. Myers Co. and LEMCO Engineers, Inc., 84 Cib. 7481,
United States District Court, Southern District of New York
(See Note 4 to the Financial Statements).
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders of the Company was held on
May 15, 1996. The stockholders elected William G. Brown and
John M. Harlan as Class I directors for a term expiring at the 1999
annual meeting of stockholders. The stockholders approved an amendment
to the Company's Certificate of Incorporation increasing the number of
authorized shares of common stock, $1.00 par value, from 6,000,000 to
10,000,000 shares. The vote on the amendment was 2,768,735 shares in
favor, 60,205 against and 13,921 abstain. The stockholders also
approved the adoption of the Company's 1996 Non-Employee Director
Stock Ownership Plan. The vote on the approval of the plan was
2,710,434 shares in favor, 102,182 against and 11,836 abstain. The
stockholders also approved an amendment and restatement of the
Company's 1989, 1990, 1992 and 1995 Stock Option Plans. The vote on
the approval of the plan was 2,710,434 shares in favor, 102,182 against
and 11,836 abstain.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits filed herewith are listed in the Exhibit Index
filed as a part hereof and incorporated herein by reference.
b. No reports on Form 8-K were filed by the Company for the second
quarter of 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MYR Group Inc.
Date: July 30, 1996 By: /s/
Elliott C. Robbins, Sr. Vice President,
Treasurer, and Chief Financial Officer
(duly authorized representative of registrant
and principal financial officer)
MYR Group Inc.
Quarterly Report on Form 10Q
for the Quarter Ended June 30, 1996
Exhibit Index
Number Description Page (or Reference)
3.1 Certificate of Amendment 13
10.1 1996 Nonemployee Director Stock Ownership Plan 14-17
11 Computation of Net Income Per Share 18
27 Financial Data Schedules 19
Exhibit 3.1
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MYR GROUP INC.
MYR Group Inc., a corporation organized and existing under the laws
of the State of Delaware, hereby certifies as follows:
FIRST: That the first paragraph of ARTICLE FOURTH of the Amended and
Restated Certificate of Incorporation of the Company is amended to read
in its entirety as follows:
``FOURTH: The number of shares of all classes of stock which the
corporation shall have authority to issue is eleven million (11,000,000),
of which ten million (10,000,000) shares of par value of $1.00 each are
to be a class designated as Common Stock and one million (1,000,000)
shares of par value of $1.00 each are to be of a class designated
Preferred Stock. The Preferred Stock is issuable in series.''
SECOND: That such amendment has been duly adopted by the Board of
Directors and approved by the holders of a majority of the corporation's
shares of in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, MYR Group Inc. has caused its corporate seal to
be hereunto affixed and this certificate to be signed by its Senior Vice
President this 23rd day of May, 1996.
MYR Group Inc.
(Seal)
By /s/ Elliott C. Robbins
Elliott C. Robbins
Senior Vice President
Attest:
/s/ Byron D. Nelson
Byron D. Nelson
Secretary
MYR GROUP INC. 1996 NONEMPLOYEE DIRECTOR Exhibit 10.1
STOCK OWNERSHIP PLAN
ARTICLE I - Purpose of the Plan
The purpose of the MYR Group Inc. Nonemployee Director Stock
Ownership Plan is to further the growth, development, and financial
success of the Company by strengthening the Company's ability to
attract and retain the services of experienced and knowledgeable
Nonemployee Directors by enabling them to participate in the
Company's growth and by linking the personal interests of Nonemployee
Directors to those of the Company's shareholders.
ARTICLE II - Certain Definitions
Unless the context clearly indicates otherwise, the following terms
shall have the following meanings:
2.1 "Award" means a grant of Restricted Stock under the Plan.
2.2 "Board" means the Board of Directors of MYR Group Inc.
2.3 "Change of Control" shall have the meaning set forth in
Section 7.2.
2.4 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
2.5 "Company" means MYR Group Inc.
2.6 "Disability" means total disability within the meaning of
Section 22(e)(3) of the Code.
2.7 "Employee" means any full time worker, paid hourly or by salary,
in the employment of the Company or any of its subsidiaries.
2.8 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.9 "Nonemployee Director" means any individual who is a member of
the Board of the Company, but who is not otherwise an Employee
of the Company.
2.10 "Participant" means a Nonemployee Director who has been awarded
stock under the Plan.
2.11 "Plan" means the MYR Group Inc. 1996 Nonemployee Director Stock
Ownership Plan.
2.12 "Restricted Stock" or "Restricted Shares" means shares of common
stock of the Company granted to a Nonemployee Director under
the Plan.
2.13 "Retirement" means cessation of membership on the Board of the
Company for any reason other than death, disability or for
cause.
2.14 "Stock" or "Shares" means common stock of the Company.
ARTICLE III - Administration
3.1 Administration of Plan. The Plan shall be administered by the
Board, subject to the restrictions set forth in the Plan.
3.2 Authority of the Board. The Board shall have the full power,
discretion, and authority to interpret and administer the Plan in a
manner which is consistent with the Plan's provisions. Any action
taken by the Board with respect to the administration of the Plan
which would result in any Nonemployee Director ceasing to be a
"disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act shall be null and void.
3.3 Effect of Board Determinations. All determinations and
decisions made by the Board pursuant to the provisions of the Plan
and all related orders or resolutions of the Board shall be final,
conclusive, and binding on all persons, including the Company, its
shareholders, Employees, Participants and their estates and
beneficiaries.
ARTICLE IV - Eligibility
4.1 Persons eligible to participate in the Plan shall be
limited to the Nonemployee Directors of the Company.
ARTICLE V - Shares Subject to the Plan
5.1 Number of Shares. Subject to adjustment as provided herein, the
total number of Shares available for Award under the Plan may not
exceed 50,000. If any Shares awarded under the Plan shall be
forfeited, such Shares shall again become available for future Awards
under the Plan.
5.2 Adjustments in Authorized Shares. In the event of any merger,
reorganization, consolidation, recapitalization, liquidation, stock
dividend, split up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, the Board
may make such adjustments to outstanding Awards to prevent dilution
or enlargement of rights.
ARTICLE VI - Restricted Stock
6.1 Awards of Restricted Stock. Each Nonemployee Director shall
have the right to elect to receive all or part of his or her annual
retainer fee which would otherwise be payable quarterly in cash, in
Shares of Restricted Stock. The Restricted Shares will be awarded
pursuant an election made by the Participant in writing and filed
with the Secretary of the Company prior to December 31 of the year
prior to the year for which such election is made. The number of
Restricted Shares will be awarded pursuant to such election on the
date of the annual meeting of stockholders in the year for which such
election has been made. The number of Restricted Shares so awarded
shall be determined by dividing the amount of the retainer to be paid
in Restricted Shares by the average of the closing sales prices of
the Company's common stock on the New York Stock Exchange (as
reported in The Wall Street Journal, Midwest Edition) on each of the
ten trading days immediately preceding the date of the award and
rounding to the nearest whole number. A Participant's election
shall remain in effect for the year for which such election has been
made and may not be changed by the Participant.
6.2 Transferability and Custody. The Restricted Shares awarded to
a Nonemployee Director may not be sold, pledged, assigned,
transferred, gifted or otherwise alienated or hypothecated until such
time as the restrictions with respect to such Shares have lapsed as
provided herein. At the time Restricted Shares are awarded to a
Participant, stock certificates representing the Restricted Stock
shall be issued in the name of the Participant. Thereupon the
Participant shall become a stockholder of the Company with respect to
such Restricted Stock and shall be entitled to vote the shares and be
entitled to receive all dividends. If all or part of a dividend is
paid in Stock, the Stock shall be held by the Company subject to the
same restrictions as the Restricted Stock that is the basis for the
dividend. All stock certificates representing Restricted Shares
shall be held in custody by the Company for the account of the
Participant, together with stock powers executed by the Participant
in favor of the Company.
6.3 Other Restrictions. The Company may impose such other
restrictions on Shares granted pursuant to the Plan as it may deem
necessary or advisable including, without limitation, imprinting a
legend on the certificates and restrictions to achieve compliance
with Securities laws and stock exchange requirements.
6.4 Lapse of Restrictions. The restrictions provided in Sections
6.2 and 6.3 shall remain in effect until, and shall lapse only upon,
the earlier of (a) five years from the date of the Award or (b) the
termination of a Participant's service as a Director by reason of
death, Disability, or Retirement from the Board. Upon lapse of the
restrictions, the certificates representing the Shares shall
thereafter be delivered to the Participant, or in the case of
Participant's death or Disability, to the Participant's personal
representative or to the person to whom such shares are transferred
by will or by the applicable laws of descent and distribution.
6.5 Termination for Cause. In the event the Participant's service
as a Director is terminated on account of (a) fraud or intentional
misrepresentation, or (b) embezzlement, misappropriation, or
conversion of assets or opportunities of the Company, all Restricted
Shares awarded to such Participant prior to the date of termination
shall be immediately forfeited.
6.6 Withholding of Taxes. The Company shall have the right to
collect cash from Participants in an amount necessary to satisfy any
Federal, state or local withholding tax requirements.
ARTICLE VII - Change in Control
7.1 Effect of Change of Control. Notwithstanding the provisions of
Article VI herein, upon the occurrence of an event of Change of
Control:
(a) the Restrictions imposed on the Restricted Stock shall lapse,
and the Restricted Stock shall vest in the Participant, and
(b) within ten (10) business days after the occurrence of a Change
of Control, the certificates representing the Restricted Stock
so vested, without any restriction or legend thereon, shall be
delivered to the Participant.
7.2 The term "Change of Control" shall mean the occurrence of any of
the following events:
(a) The acquisition, by a person or group of persons acting in
concert, of a beneficial ownership interest in the Company,
resulting in the total beneficial ownership of such persons or
group of persons (excluding C. M. Brennan III so long as he is
a director of the Company) equaling or exceeding 30% of the
outstanding common stock of the Company; provided, however, that
no such person or group of persons shall be deemed to
beneficially own (I) any common stock acquired directly from the
Company or (ii) any common stock held by the Company or any of
its subsidiaries or any employee benefit plan (or any related
trust) of the Company or its subsidiaries. The Change in
Control shall be deemed to occur on the date the beneficial
ownership of the acquiring person or group of persons first
equals or exceeds 30% of the outstanding common stock of the
Company.
(b) A change, within any period of thirty-six (36) months or less,
in the composition of the Board such that at the end of such
period a majority of the directors who are then serving were
not serving at the beginning of such period, unless at the end
of such period the majority of the directors in office were
nominated upon the recommendation of a majority of the Board at
the beginning of such period. The Change in Control shall be
deemed to occur on the date the last director necessary to
result in a Change in Control takes office or resigns from
office, as applicable.
(c) Approval by stockholders of the Company of a merger,
consolidation or other reorganization having substantially the
same effect, or the sale of all or substantially all the
consolidated assets of the Company in each case, with respect
to which the persons or group of persons (excluding C. M.
Brennan III so long as he is a director of the Company) who were
the respective beneficial owners of the common stock or warrants
immediately prior to such even do not, following such event,
beneficially own, directly or indirectly, more than 30% of,
respectively the then outstanding voting securities of the
Company resulting from such event or the Company purchasing or
receiving assets pursuant to such event. The Change in Control
shall be deemed to occur on the date on which the transaction is
approved by the Company's stockholders.
ARTICLE VII - Amendment, Modification and Termination
8.1 Amendment, Modification and Termination. Subject to the terms
set forth in this Section 8.1, the Board may terminate, amend, or
modify the Plan at any time and from time to time; provided, however,
that the provisions set forth in the Plan regarding the amount, the
price or the timing of Awards to Nonemployee Directors may not be
amended, other than to comport with changes in the Code, the Employee
Retirement Income Security Act, or the rule thereunder. The Plan
shall terminate when all of the Shares subject to it have been
awarded according to the provisions of the Plan. However, in no
event shall an award be made under the Plan on or after December 31,
2005.
Without the approval of the voting stockholders of the Company
as may be required by the rules of Section 16 of the Exchange Act,
by any national securities exchange or system on which the Shares are
then listed or reported, or by a regulatory body having jurisdiction
with respect thereto, no such termination, amendment or modification
may:
(a) Materially increase the total number of Shares which may be
available for grants of Awards under the Plan, except as
provided in Section 5.2 herein; or
(b) Materially modify the requirements with respect to eligibility
to participate in the Plan; or
(c) Materially increase the benefits accruing to Nonemployee
Directors under the Plan.
8.2 Awards Previously Granted. Unless required by law, no
termination, amendment or modification of the Plan shall materially
affect, in an adverse manner, any Award previously granted under the
Plan, without the consent of the Nonemployee Director holding the
Award.
ARTICLE IX - No Right of Nomination
9.1 Nothing in the Plan shall be deemed to create any obligation on
the part of the Board to nominate any Participant for reelection by
the Company's stockholders.
ARTICLE X - Requirements of Law
10.1 The granting of Awards under the Plan and the issuance of stock
certificates shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
ARTICLE XI - Effective Date
11.1 The Plan shall become deemed to be effective as of March 20,
1996, the date which the Plan was adopted by the Board, upon approval
by the holders of a majority of the shares of common stock at a
meeting of stockholders of the Company.
MYR Group Inc.
Exhibit 11
SCHEDULE OF COMPUTATION OF NET INCOME PER SHARE
(In thousands, except per share data)
Period Ended June 30 Three Months Six Months
1996 1995 1996 1995
Primary income per share
Net income $ 909 $ 1,005 $ 1,075 $ 1,257
Weighted average number of common shares
outstanding during the period 3,198 3,173 3,191 3,173
Add - common equivalent shares (determined
using the "treasury stock" method)
representing shares issuable upon
exercise of the common stock equivalents 241 199 232 195
Weighted average number of shares
for income per common share 3,439 3,372 3,423 3,368
Income per common share - primary $ 0.26 $ 0.30 $ 0.31 $ 0.38
Fully diluted income per share
Net income $ 909 $ 1,005 $ 1,075 $ 1,257
Add interest on subordinated convertible
debentures, net of tax 59 58 119 116
$ 968 $ 1,063 $ 1,194 $ 1,373
Weighted average number of common shares
outstanding during the period 3,198 3,173 3,191 3,173
Add
-Common equivalent shares (determined
using the "treasury stock" method)
representing shares issuable upon
exercise of the common stock equivalents 259 199 259 195
-Shares assumed converted from subordinated
convertible debentures 600 600 600 600
4,057 3,972 4,050 3,968
Income per common share - fully diluted $ .24 $ .26 $ .29 $ .34
5
1,000
3-MOS
DEC-31-1996
JUN-30-1996
849
0
42,313
549
0
67,129
60,614
38,325
95,345
51,380
13,319
0
0
2,512
24,877
95,345
69,052
69,052
61,024
66,621
113
0
479
2,116
847
1,269
360
0
0
909
.26
.24
