Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management, together with our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective and provided reasonable assurance related to the matters stated in the above paragraph as of December 31, 2022.
We completed our acquisition of the Powerline Plus Companies on January 4, 2022 and have not yet included the Powerline Plus Companies in our assessment of the effectiveness of our internal control over financial reporting. We are currently integrating the Powerline Plus Companies into our operations, compliance programs and internal control processes. Accordingly, pursuant to the SEC's general guidance that an assessment of a recently acquired business may be omitted from the scope of an assessment in the year of acquisition, the scope of our assessment of the effectiveness of our disclosure controls and procedures does not include the Powerline Plus Companies. As of December 31, 2022, the Powerline Plus Companies represented a total of approximately 3.2% and 1.1% of out of scope total assets and net assets, respectively, and 2.6% and 6.7% of contract revenues and out of scope income before income taxes, respectively, for the year then ended.
Management’s Evaluation of Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective, as of December 31, 2022, in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP. Management’s annual report on internal control over financial reporting is included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
For the year ended December 31, 2022, management’s assessment of our internal control over financial reporting excluded the internal control over financial reporting of the Powerline Plus Companies, which was acquired on January 4, 2022. Pursuant to the SEC’s general guidance that a recently acquired business may be omitted from the scope of an assessment in the year of the acquisition, the scope of our assessment does not include the Powerline Plus Companies. As of December 31, 2022, the Powerline Plus Companies represented a total of approximately 3.2% and 1.1% of out of scope total assets and net assets, respectively, and 2.6% and 6.7% of contract revenues and out of scope income before income taxes, respectively, for the year then ended.
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In addition, Crowe LLP, an independent registered public accounting firm, audited and reported on the 2022 Financial Statements included in this Annual Report on Form 10-K, and has issued an attestation report on our internal control over financial reporting. The report is included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the fourth quarter ended December 31, 2022 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will detect or prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information required by this Item 10 related to our directors is incorporated by reference to the information to be included under “Proposal 1. Election of Three Class I Director Nominees for Three-Year Terms” of our definitive Proxy Statement for our Annual Meeting of Shareholders scheduled expected to be held April 20, 2023 (the “2023 Proxy Statement”). Information regarding the procedures by which our shareholders may recommend nominees to our Board of Directors is incorporated by reference to the information to be included under the heading “Nominating, Environmental, Social and Corporate Governance Committee Matters and “2024 Annual Meeting of Shareholders” in the 2023 Proxy Statement. There were no material changes to the procedures by which security holders may recommend nominees to our board of directors in 2022. Information about our Audit Committee, including its members, and our Audit Committee financial experts, is incorporated by reference to the information to be included under the headings “Corporate Governance—Committee Membership and Meeting Attendance” and “Audit Committee Matters” in the 2023 Proxy Statement. Information related to our executive officers is contained in the section entitled “Information about our Executive Officers” in Part I of this Annual Report on Form 10-K.
We have a code of ethics that applies to all of our directors, officers and other employees, including our principal executive officer, principal financial officer and principal accounting officer. This code is publicly available on our website at www.myrgroup.com . Amendments to the code of ethics or any grant of a waiver from a provision of the code that applies to our principal executive officer, principal financial officer and principal accounting officer requiring disclosure under applicable SEC and Nasdaq Stock Market rules will be disclosed on our website. The information on our website is not a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.
Item 11. Executive Compensation
The information required by this Item 11 is incorporated by reference to the information to be included in the 2023 Proxy Statement under the headings “Proposal 1. Election of Three Class I Director Nominees for Three-Year Terms - Non Employee Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation Tables” and “Compensation Committee Matters”.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
Equity Compensation Plan Information
The following table sets forth certain information regarding our 2007 Long-Term Incentive Plan (Amended and Restated as of May 1, 2014) (the “2007 Plan”) and our 2017 Long-Term Incentive Plan (Amended and Restated as of April 23, 2020) (the “LTIP”) as of December 31, 2022. At December 31, 2022, our only active equity compensation plan was the LTIP.
Equity Compensation Plan Information
Plan Category Number of securities
to be issued upon
exercise of
outstanding
options, warrants
and rights
(a) Weighted-average
exercise price
of outstanding
options, warrants
and rights
(b) Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding shares
reflected in
column(a))
(c)
Equity compensation plans approved by security holders 407,869 (1)
$ 24.68 (2)
591,881 (3)
Equity compensation plans not approved by security holders — — —
Total 407,869 (1)
24.68 (2)
591,881 (3)
___________________________________________
(1) Includes (i) 869 shares subject to outstanding option awards granted under the 2007 Plan, (ii) 304,384 shares subject to outstanding performance share awards granted in 2020, 2021 and 2022 under the LTIP (actual performance for 2020 which vested on December 31, 2022 and were issued on February 15, 2023 and assumes maximum performance for 2021 and 2022) and (iii) 102,616 shares subject to outstanding restricted stock units granted under the LTIP.
(2) The weighted-average exercise price in this column includes only option awards because the shares underlying other outstanding awards will be issued upon vesting or satisfaction of relevant performance criteria or time-based conditions without any cash consideration payable for those shares.
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(3) Reflects securities remaining available for future issuance under our LTIP. No further awards will be granted under the 2007 Plan.
Other information required by this Item 12 is incorporated by reference to the information to be included in the 2023 Proxy Statement under the headings “Ownership of Equity Securities.”
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 is incorporated by reference to the information to be included in the 2023 Proxy Statement under the headings “Certain Relationships and Related Person Transactions” and “Corporate Governance — Director Independence.”
Item 14. Principal Accountant Fees and Services
The information required by this Item 14 is incorporated by reference to the information to be included in the 2023 Proxy Statement under the heading “Audit Committee Matters.”
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PART IV
Item 15. Exhibit and Financial Statement Schedules
i) Documents filed as part of this Report
(1) The following Financial Statements are filed herewith in Item 8 of Part II above.
(a) Report of Management
(b) Report of Independent Registered Public Accounting Firms
(c) Consolidated Balance Sheets
(d) Consolidated Statements of Operations
(e) Consolidated Statements of Comprehensive Income
(f) Consolidated Statements of Shareholders’ Equity
(g) Consolidated Statements of Cash Flows
(h) Notes to Financial Statements
ii) Financial Statement Schedules
All other supplemental schedules are omitted because of the absence of conditions under which they are required, or the required information is shown in the notes to the Financial Statements.
iii) Exhibit List
Number Description
3.1
Restated Certificate of Incorporation, incorporated by reference to exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on May 7, 2014
3.2
Amended and Restated By-Laws, incorporated by reference to exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on December 22, 2015
4.1
Specimen Common Stock Certificate, incorporated by reference to exhibit 4.2 of the Company’s Registration Statement on Form S-1/A (File No. 333-148864), filed with the SEC on July 14, 2008
4.2
Description of Securities incorporated by reference to exhibit 4.2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-08325), filed with the SEC on March 4, 2020
10.1
MYR Group Inc. 2007 Long-Term Incentive Plan (Amended and Restated as of May 1, 2014), incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on May 7, 2014+
10.2
Form of Named Executive Officer Nonqualified Stock Option Award under the 2007 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (File No. 001-08325), filed with the SEC on May 10, 2010+
10.3
Form of Employment Agreement, dated March 11, 2010, between the Registrant and Executive Officer, incorporated by reference to exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (File No. 001-08325), filed with the SEC on May 10, 2010+
10.4
Form of Indemnification Agreement for Directors and Officers, incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on May 11, 2011+
10.5
MYR Group Senior Management Incentive Plan, Amended and Restated as of May 1, 2014, incorporated by reference to exhibit 10.2 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on May 7, 2014+
10.6
Employment agreement with Betty R. Johnson, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (File No. 001-08325), filed with the SEC on November 4, 2015+
10.7
Employment Agreement, dated April 29, 2015 between the Company and Tod Cooper, incorporated by reference to exhibit 10.21 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001- 08325), filed with the SEC on March 3, 2016+
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Number Description
10.8
Agreement, dated March 22, 2016, by and among MYR Group Inc., Engine Capital Management, LLC, Engine Capital, L.P., Engine Jet Capital, L.P., Engine Airflow Capital, L.P., Engine Investments, LLC, Engine Investments II, LLC, Arnaud Ajdler and John P. Schauerman, incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on March 23, 2016
10.9
Amendment to the Employment Agreement, dated January 1, 2017, between the Company and Richard S. Swartz, Jr., incorporated by reference to exhibit 10.25 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 001-08325), filed with the SEC on March 9, 2017+
10.10
Amendment to the Employment Agreement, dated January 1, 2017, between the Company and Tod M. Cooper, incorporated by reference to exhibit 10.26 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 001-08325), filed with the SEC on March 9, 2017+
10.11
Employment Agreement, dated January 1, 2017, between the Company and Jeffrey J. Waneka, incorporated by reference to exhibit 10.27 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 001-08325), filed with the SEC on March 9, 2017+
10.12
Agreement, dated January 30, 2017, by and among MYR Group Inc., Engine Capital Management, LLC, Engine Capital, L.P., Engine Jet Capital, L.P., Engine Airflow Capital, L.P., Engine Investments, LLC, Engine Investments II, LLC and Bradley Favreau, incorporated by reference to exhibit 10.28 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 001-08325), filed with the SEC on March 9, 2017
10.13
Form of Restricted Stock Units Award Agreement (Non-Employee Director) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.3 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on April 28, 2017+
10.14
Form of Restricted Stock Units Award Agreement (Director) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.4 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on April 28, 2017+
10.15
Amendment to the Amended and Restated Employment Agreement, dated April 11, 2017, between the Company and Richard S. Swartz, Jr., incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on May 3, 2017+
10.16
Form of Restricted Stock Unit Award Agreement (Named Executive Officer) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on May 2, 2018+
10.17
Form of Performance Shares Award Agreement (Named Executive Officer) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on May 2, 2018+
10.1 8
Employment Agreement, dated January 21, 2019, between the Company and William F. Fry, incorporated by reference to exhibit 10.33 of the Company’s Annual Report on Form 10-K (File No. 001-08325), filed with the SEC on March 6, 2019+
10.1 9
Form of Performance Shares Award Agreement (Named Executive Officer) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on May 1, 2019+
10. 20
Form of Non-Employee Directors Restricted Stock Unit Award Agreement under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on July 31, 2019+
10. 21
Asset Purchase Agreement, dated as of July 15, 2019, by and among MYR Group, Inc., certain subsidiaries of MYR Group, Inc., as purchasers, and CSI Electrical Contractors, Inc., incorporated by reference to exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on July 31, 2019
10.2 2
Second Amended and Restated Credit Agreement, dated September 13, 2019, by and among MYR Group Inc., the lenders party thereto, Bank of Montreal and Wells Fargo Bank, National Association, as Co-Documentation Agents, Bank of America, N.A., as Syndication Agent and JPMorgan Chase Bank, N.A., as Administrative Agent, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on October 30, 2019
10.2 3
MYR Group Inc. 2017 Long-Term Incentive Plan (Amended and Restated as of April 23, 2020), incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on April 27, 2020+
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Number Description
10.2 4
Form of Performance Shares Award Agreement (Named Executive Officer) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on April 28, 2021+
10.2 5
Form of Restricted Stock Unit Award Agreement (Named Executive Officer) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on April 27, 2022+
10.2 6
Form of Performance Shares Award Agreement (Named Executive Officer) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on April 27, 2022+
10.2 7
Employment Agreement, dated January 9, 2023 between the Company and Kelly M. Huntington† +
21.1
List of Subsidiaries†
23.1
Consent of Crowe LLP†
24.1
Power of Attorney†
31.1
Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a)†
31.2
Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a)/15d-14(a)†
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350†
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350†
101.INS Inline XBRL Instance Document*
101.SCH Inline XBRL Taxonomy Extension Schema Document*
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document*
104 Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)
___________________________________________
† Filed herewith.
+ Indicates management contract or compensatory plan or arrangement.
* Electronically filed.
Item 16. Form 10-K Summary
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
(Registrant)
/s/ BETTY R. WYNN (NÉE JOHNSON)
February 22, 2023
Name:
Betty R. Wynn (née Johnson)
Title:
Senior Vice President and Chief Financial
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
* President, Chief Executive Officer and Director (Principal Executive Officer) February 22, 2023
Richard S. Swartz
/s/ BETTY R. WYNN (NÉE JOHNSON) Senior Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) February 22, 2023
Betty R. Wynn (née Johnson)
* Chairman of the Board of Directors February 22, 2023
Kenneth M. Hartwick
* Director February 22, 2023
Bradley T. Favreau
* Director February 22, 2023
Ajoy H. Karna
* Director February 22, 2023
Jennifer E. Lowry
* Director February 22, 2023
Donald C.I. Lucky
* Director February 22, 2023
Shirin S. O'Connor
* Director February 22, 2023
Maurice E. Moore
* Director February 22, 2023
William D. Patterson
*By:
/s/ BETTY R. WYNN (NÉE JOHNSON) February 22, 2023
(Betty R. Wynn (née Johnson))
(Attorney-in-fact)
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