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PIKE ELECTRIC CORP S-1/A Filing

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PIKE ELECTRIC CORP S-1/A Filing Powered By Docstoc
					                                       As filed with the Securities and Exchange Commission on July 22, 2005
                                                                                                                                           Registration No. 333-124117


                                        SECURITIES AND EXCHANGE COMMISSION
                                                                    Washington, D.C. 20549

                                                                   Amendment No. 4 to the
                                                                            Form S-1
                                                                   Registration Statement
                                                                           Under
                                                                  The Securities Act of 1933


                            PIKE ELECTRIC CORPORATION
                                                             (Exact name of registrant as specified in its charter)

                      Delaware                                                        1731                                                      20-3112047
            (State or other jurisdiction of                              (Primary Standard Industrial                                         (I.R.S. Employer
          incorporation or organization)                                 Classification Code Number)                                         Identification No.)
                                                                            100 Pike Way
                                                                        Mount Airy, NC 27030
                                                                           (336) 789-2171
                             (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)


                                                                          Mark Castaneda
                                                                       Chief Financial Officer
                                                                      Pike Electric Corporation
                                                                            100 Pike Way
                                                                       Mount Airy, NC 27030
                                                                           (336) 789-2171
                                  (Name and address, including zip code, and telephone number, including area code, of agent for service)


                                                                                 Copies to:
                          W. Clayton Johnson, Esq.                                                                       Arthur D. Robinson, Esq.
                        Cravath, Swaine & Moore LLP                                                                   Simpson Thacher & Bartlett LLP
                              Worldwide Plaza                                                                              425 Lexington Avenue
                             825 Eighth Avenue                                                                          New York, New York 10017
                         New York, New York 10019                                                                              (212) 455-2000
                               (212) 474-1000                                                                               Fax: (212) 455-2502
                             Fax: (212) 474-3700
    Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
    If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. 
    If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. 
    If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same offering. 
    If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. 




                                                         CALCULATION OF REGISTRATION FEE
                                                                                        Proposed                   Proposed
                                                                                       Maximum                    Maximum
              Title of Each Class of                        Amount to be              Offering Price              Aggregate                   Amount of
            Securities to be Registered                      Registered                 per Unit              Offering Price(1)(2)         Registration Fee(2)

Common Stock, par value $0.001 per share                     15,525,000                  $16.00                  $248,400,000                  $29,237(3)


(1)   Includes shares to be sold upon exercise of the underwriters’ over-allotment option. See “Underwriting.”

(2)   Estimated solely for the purposes of calculating the registration fee pursuant to Rule 457(o) of Regulation C under the Securities Act of 1933, as
      amended.

(3)   Previously paid.



    The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting an offer to
buy these securities in any state where the offer or sale is not permitted.


                                           SUBJECT TO COMPLETION, DATED JULY 22, 2005



                                                         13,500,000 Shares




                               Pike Electric Corporation
                                                           Common Stock

       This is the initial public offering of our common stock. We are offering 10,000,000 of the shares to be sold in the offering. The selling
stockholders identified in this prospectus are offering an additional 3,500,000 shares. We will not receive any of the proceeds from the sale of
the shares being sold by the selling stockholders. The estimated initial public offering price is between $14.00 and $16.00 per share.
   Prior to this offering, there has been no public market for our common stock. Our common stock has been approved for listing on the New
York Stock Exchange under the symbol “PEC”.
     Investing in our common stock involves risks. See “Risk Factors” beginning on page 12 to read about
factors you should consider before buying shares of our common stock.


    Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
passed on the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.


                                                                                                Proceeds, Before                  Proceeds, Before
                                     Initial Public              Underwriting                  Expenses, to Pike                   Expenses, to the
                                     Offering Price                Discount                   Electric Corporation               Selling Stockholders

Per Share
                                           $                          $                                $                                  $
Total
                                           $                          $                                $                                  $
    One of the selling stockholders has granted the underwriters an option to purchase from it up to an additional 2,025,000 shares to cover
over-allotments at the initial public offering price less underwriting discounts and commissions.


    The underwriters expect to deliver the shares to purchasers on                 , 2005.

Citigroup                                                                                                                      JPMorgan

                Robert W. Baird & Co.                                               Friedman Billings Ramsey
The date of this prospectus is   , 2005.
Ice Storm Damage Emergency Power Restoration Underground Distribution Duct Bank Repair Maintenance Overhead Distribution Power Pole Replacement w/Helicopter Assist Overhead Transmission Helicopter Assist
                                                       TABLE OF CONTENTS
                                                                                        Page

Prospectus Summary                                                                          1
Risk Factors                                                                               12
Forward-Looking Statements                                                                 21
Use of Proceeds                                                                            22
Dividend Policy                                                                            22
Capitalization                                                                             23
Dilution                                                                                   24
Unaudited Pro Forma Condensed Financial Data                                               25
Selected Historical Financial Data                                                         33
Management’s Discussion and Analysis of Financial Condition and Results of Operations      36
Industry Overview                                                                          57
Business                                                                                   60
Management                                                                                 71
Related Party Agreements                                                                   87
Principal and Selling Stockholders                                                         89
Description of Capital Stock                                                               92
Description of Senior Credit Facility                                                      96
Shares Eligible for Future Sale                                                            98
Material United States Federal Tax Consequences for Non-U.S. Stockholders                 100
Certain ERISA Considerations                                                              103
Underwriting                                                                              104
Legal Matters                                                                             108
Experts                                                                                   108
Additional Information                                                                    109
Index to Financial Statements                                                             F-1



                                                                   i
                                                         PROSPECTUS SUMMARY
    The following is a summary of some of the information contained in this prospectus. It may not contain all the information that is
important to you. To understand this offering fully, you should read carefully the entire prospectus, including the risk factors and the
financial statements.
    In this prospectus, the terms “Pike,” “we,” “us” and “our” refer to Pike Electric Corporation and its subsidiaries and their respective
predecessors in interest, unless the context otherwise requires.
    In this prospectus, unless we specifically state otherwise, the financial data we present are our actual consolidated historical financial
data, which include Red Simpson, Inc., or Red Simpson, only from July 1, 2004, the date we acquired that company; references to our pro
forma financial data for the year ended June 30, 2004 are to our pro forma financial data for that year, which include Red Simpson on a pro
forma basis as if the acquisition had been consummated on July 1, 2003 for income statement purposes and June 30, 2004 for balance sheet
purposes; and the operating data for all periods that we present represent the combined operations of Pike and Red Simpson.


                                                                     Business
    We are one of the largest third-party providers of outsourced electric distribution and transmission services in the United States. Our core
activities consist of the maintenance, upgrade and extension of electric distribution and sub-500 kilovolt, or kV, transmission powerlines for
more than 150 electric utilities, cooperatives and municipalities. We service a contiguous 19-state region that stretches from Pennsylvania in
the north to Florida in the southeast and to Texas in the southwest. Historically, our growth has been almost entirely organic, driven by the
steady addition of new customers and the further expansion of existing customer relationships. Through our fiscal year ended June 30, 2004,
our revenues grew at a ten-year compounded annual growth rate, or CAGR, of 10.6%, almost exclusively on an organic basis. On July 1,
2004, we acquired Red Simpson, which significantly expanded our service territory and operating scale and added multiple long-term
customer relationships. For the year ended June 30, 2004, our pro forma revenues, after giving effect to the Red Simpson acquisition, were
$552.5 million.
     We focus on the distribution and sub-500 kV transmission sector of the electric infrastructure services industry, which we believe to be
the largest and most attractive sector in the industry. Based on data from Edison Electric Institute, distribution spending represented
$11.4 billion of the $15.5 billion of total spending by investor-owned utilities on electric distribution and transmission in 2003. Moreover,
expenditures on distribution are generally more stable than those for heavy transmission infrastructure, which tend to be characterized by
distinct, large, one-time projects. We derive over 90% of our revenues under master service arrangements, under which we are paid either on
an hourly basis or for each unit of work completed, rather than under the competitively-bid, fixed-price contracts typically associated with
large-scale transmission construction projects. In addition to our core distribution and transmission services, we also offer storm restoration
services and a variety of value-added ancillary services.
    The breadth and quality of our service offering, combined with our ability to mobilize and deliver emergency restoration services on a
large scale, have resulted in long-standing relationships with many of our customers. We have maintained relationships of 30 years or longer
with nine of our top 15 customers.
   As of May 15, 2005, we employed a non-union workforce of over 6,700 employees, many of whom occupy highly skilled positions. Our
workforce is supported by a large, modern fleet consisting of over 6,000 pieces of specialized vehicles and equipment.


    Competitive Strengths
    We believe our significant competitive strengths are as follows:

    • Leading Pure-Play Provider of Electric Distribution and Transmission Infrastructure Services. We are one of the largest providers of services
      to electric utilities, cooperatives and municipalities; and, after the completion of the rebranding of the Red Simpson business to Pike, we will
      be one of the

                                                                        1
       few service providers of scale in our industry that operates under a single, well-recognized brand over a contiguous geographic area.

    • Outsourced Services-Based Business Model. We provide vital services to electric utilities, cooperatives and municipalities, which have
      increased their reliance on outsourcing the maintenance and improvement of their distribution and transmission systems to third-party service
      providers. Over 90% of our revenues are derived under master service arrangements. We do not derive a significant portion of our revenues
      from fixed-price agreements relating to large-scale capital improvement projects.

    • Attractive, Contiguous End Markets. We operate in a contiguous geographic market that includes the southeastern and south central United
      States. Our markets have exhibited strong population growth and increases in electricity consumption, which have increased demand for our
      services. Moreover, the contiguous nature of our service territory provides us with significant benefits by increasing our operating efficiency
      and our flexibility to respond to our customers’ needs.



    • Recognized Leader in Storm Restoration Capabilities. Our 19-state market includes the prime “storm territories” of the southeastern and south
      central United States. Throughout our market, we are a leading provider of emergency services for storm restoration.



    • Long-Standing Relationships Across a High-Quality Customer Base. We have a diverse, well capitalized customer base that includes over 150
      electric companies throughout our service territory. We employ a customer-focused philosophy that has resulted in long-standing customer
      relationships. After giving effect to the Red Simpson acquisition, our relationships with our top 15 customers average approximately 33 years.

    • Experienced Management Team with Demonstrated Operational Excellence. Our strong management has led us to operational excellence, as
      demonstrated by our continuing success in effectively growing our business, managing our costs, supervising our workforce, deploying our
      fleet and integrating Red Simpson. Members of our senior management have been with us for an average of approximately 19 years and
      obtained significant operating experience prior to being promoted to their current positions.

    • Major Investments in Fleet and Safety. We have made significant investments in our business to support our continued growth. In addition to
      investing in our fleet, substantially all of which we own, we have invested in our employee safety and development programs, establishing
      training and safety programs certified by the Department of Labor.


    Business Strategy
    We strive to be our customers’ service provider of choice and to expand our leadership position in the outsourced services sector of the
electric infrastructure industry, while continuing to increase our revenues and profitability. In order to accomplish these goals, we intend to
pursue the following strategies:

    • Increased Penetration Within Our Existing Service Territory. We intend to continue to increase our penetration and market share within our
      existing service territory, by expanding our existing customer relationships, attracting new customers and pursuing selective acquisitions. We
      believe our quality service, modern fleet, regional presence, storm restoration capabilities and strong safety record will enable us to develop
      our business with both existing and prospective customers as they continue to further outsource their servicing needs.

    • Expand Our Service Territory. We intend to continue to grow our business by seeking new opportunities from our existing customers that have
      operations outside our current service territory, capturing new customers in other geographic markets and pursuing selective acquisitions. We
      also have been successful in acquiring new customers after providing storm restoration services to them.

    • Continued Focus on Distribution and Sub-500 kV Transmission. We will continue to focus on the maintenance, upgrade and extension of
      electric distribution and sub-500 kV transmission

                                                                        2
       powerlines. By focusing on the distribution and sub-500 kV transmission sector of the industry and providing high quality services to our
       customers, we believe that we will be in a position to capture a significant share of the expected increased amount of work in this market
       sector.

    • Capitalize on Favorable Long-Term Industry Trends. We believe that we are well positioned to benefit from expected long-term industry
      trends, which are described in more detail in “Industry Overview.”


       • Growth in demand for electricity. We believe that demand for our services will be driven in part by increased demand for electricity due to
         expected growth in electricity consumption and population in the southeastern and south central United States, which have grown at higher
         rates in recent years than the rest of the country.

       • Increased outsourcing of infrastructure services. We intend to actively pursue opportunities provided by the continuing trend by electric
         companies to increase their reliance on outsourcing the maintenance and improvement of their electric distribution and transmission systems.


       • Inadequacy of current electric infrastructure. To the extent spending on the current electric infrastructure increases as expected, we believe
         we will have increased opportunities to provide sub-500 kV transmission and distribution upgrade and ongoing maintenance services.



    • Continued Focus on Operating Efficiency and Customer Service. We intend to use the scale and scope of our capabilities to achieve higher
      levels of operating efficiency and productivity while further enhancing our customer service. Additionally, we intend to use our modern fleet,
      repair and maintenance capabilities and skilled workforce to increase our cost competitiveness so that we may profitably win new business.


Risks Related to Our Business

    Although we believe that focusing on the key areas set forth above will provide us with opportunities to reach our goals, you should
consider a number of risks and uncertainties that may affect our financial and operating performance that are discussed under “Risk Factors”
and elsewhere in this prospectus.


Red Simpson Acquisition

    On July 1, 2004, we acquired all of the outstanding stock of Red Simpson. Founded in 1963, Red Simpson was an electric transmission
and distribution services provider in the south central United States. The total cash purchase price was $194.2 million, net of cash acquired.
We financed the acquisition through the issuance of $71.0 million in new common equity to some of our existing stockholders and
$123.2 million of new indebtedness under our senior credit facility, which we refinanced in connection with the transaction.

    Our acquisition of Red Simpson represented a significant contiguous expansion for us. Prior to the acquisition, we had a limited presence
in Texas and Louisiana. By acquiring Red Simpson, we were able to achieve our strategic goal of expanding into the south central United
States. In addition, although our market slightly overlapped with Red Simpson’s, only two of our top 10 customers overlapped. Accordingly,
the acquisition of Red Simpson not only added new customers but also decreased our combined exposure to our largest customer.


2004 Recapitalization

    In December 2004, we undertook a recapitalization. As part of this recapitalization, we borrowed an additional $150.0 million under our
existing senior credit facility, $127.5 million of which was used to

                                                                         3
repurchase shares of our common stock and options in December 2004 and $20.0 million of which was used to redeem all of the outstanding
shares of our Series A preferred stock in January 2005. We refer to this transaction as the “2004 recapitalization.”




    We were incorporated in North Carolina in 1968 and reincorporated in Delaware on July 1, 2005. To effect the reincorporation, Pike
Holdings, Inc., our predecessor, merged with and into a newly created wholly owned subsidiary, Pike Electric Corporation, which was
formed in Delaware for the sole purpose of effecting the reincorporation. Our principal executive offices are located at 100 Pike Way, Mount
Airy, NC 27030. Our telephone number is 336-789-2171. Our World Wide Web site address is www.pike.com. Information contained on
our Web site or that can be accessed through our Web site is not incorporated by reference in this prospectus. You should not consider
information contained on our Web site or that can be accessed through our Web site to be part of this prospectus.

                                                                    4
                                                                 The Offering

Common stock offered by us                10,000,000 shares

Common stock offered by the selling       3,500,000 shares
stockholders

Common stock to be outstanding after the 31,832,864 shares
offering

Use of proceeds                           We estimate that our net proceeds from this offering, after deducting underwriting discounts and
                                          commissions and estimated offering expenses, will be approximately $137.5 million, assuming the shares
                                          are offered at $15.00 per share, which is the midpoint of the estimated offering price range set forth on the
                                          cover page of this prospectus.

                                          We intend to use $4.0 million of the net proceeds of the common stock offered by us to terminate the
                                          management advisory services agreement described in “Related Party Agreements” and the balance of the
                                          net proceeds to ratably repay a portion of the outstanding borrowings under the Tranche B term loan and
                                          Tranche C term loan that form a part of our senior credit facility. See “Use of Proceeds” for more
                                          information about our use of the proceeds from this offering.

                                          We will not receive any proceeds from the sales of our common stock by the selling stockholders in the
                                          offering.

New York Stock Exchange symbol            PEC
    The number of shares of common stock to be outstanding after this offering is based on the 21,484,454 shares outstanding as of
March 31, 2005, plus 348,410 shares we intend to issue to a selling stockholder upon exercise of options and the 10,000,000 shares offered
by us in this offering. In this prospectus, references to the number of shares of common stock offered and to be outstanding after the
completion of this offering do not include:

    •        2,025,000 additional shares of common stock that the underwriters have a right to purchase from one of the selling stockholders within
             30 days after the date of this prospectus to cover over-allotments;

    •        1,477,125 shares issuable upon the exercise of stock options granted pursuant to our 2002 Stock Option Plan A and outstanding as of
             March 31, 2005 and having a weighted average exercise price of $4.85 per share; and

    •        1,080,406 shares issuable upon the exercise of stock options granted pursuant to our 2002 Stock Option Plan B and outstanding as of
             March 31, 2005 and having a weighted average exercise price of $4.85 per share.
    The number of shares of common stock outstanding as of March 31, 2005 and the other share and per share information in this
prospectus have been adjusted to give effect to the conversion of each of our shares into 14.76 common shares in connection with our
reincorporation.

                                                                       5
                                            Summary Historical and Pro Forma Financial Data
    The table below provides a summary of our historical financial data for each of the three years in the period ended June 30, 2004 and for
the nine-month periods ended March 31, 2004 and 2005. We derived the statement of operations data and other data for the three years in the
period ended June 30, 2004 from our audited financial statements included elsewhere in this prospectus. We derived the statement of
operations data and other data for the nine-month periods ended March 31, 2004 and 2005 and the balance sheet data as of March 31, 2005
from our unaudited financial statements included elsewhere in this prospectus.
     Our unaudited financial statements have been prepared on the same basis as our audited financial statements and, in our opinion, reflect
all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of this data in all material respects.
The results for any interim period are not necessarily indicative of the results that may be expected for a full year.
     The table below also includes our pro forma as adjusted statement of operations data for the year ended June 30, 2004 and the nine
months ended March 31, 2005 and our as adjusted balance sheet data as of March 31, 2005. The information included in the “Pro Forma As
Adjusted” column of the statement of operations and other data for the year ended June 30, 2004 has been adjusted to give effect to the
following as if they had occurred on July 1, 2003:
    • the acquisition of Red Simpson;

    • the 2004 recapitalization;

    • the sale of 10,000,000 shares of our common stock in this offering and the use of the net proceeds from this offering as described in “Use of
      Proceeds”; and

    • the expected issuance of 348,410 shares to a selling stockholder upon exercise of options.
    The information included in the “Pro Forma As Adjusted” column of the statement of operations and other data for the nine months
ended March 31, 2005 has been adjusted to give effect to the 2004 recapitalization, the sale of 10,000,000 shares of our common stock in this
offering, the 348,410 shares that we expect to issue to a selling stockholder upon exercise of options and the use of the net proceeds from this
offering as described in “Use of Proceeds” as if they had occurred on July 1, 2004.
    The balance sheet data presented in the “As Adjusted” column of the table below reflect the sale of 10,000,000 shares of our common
stock in this offering, the 348,410 shares that we expect to issue to a selling stockholder upon exercise of options and the use of the net
proceeds from this offering as described in “Use of Proceeds” as if they had occurred on March 31, 2005.
    The unaudited pro forma as adjusted and as adjusted financial data do not purport to present what our actual financial position or results
would have been if the events described above had occurred as of the dates indicated and are not necessarily indicative of our future financial
position or results.
    You should read this summary financial data together with “Use of Proceeds,” “Capitalization,” “Unaudited Pro Forma Condensed
Financial Data,” “Selected Historical Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and our financial statements and accompanying notes included elsewhere in this prospectus.

                                                                       6
                                                                                                                                                                                  Pro Forma
                                                                                                           Pro Forma                                                             As Adjusted
                                                                                                           As Adjusted                     Nine Months Ended                     Nine Months
                                                          Year Ended June 30,                              Year Ended                          March 31,                            Ended
                                                                                                            June 30,                                                              March 31,
                                          2002                     2003                2004                   2004                   2004                    2005(1)               2005(1)

                                                                 (audited)                                 (unaudited)                         (unaudited)                       (unaudited)
                                                                                     (in thousands, except share and per share amounts)
Statement of operations data:
Revenues                              $   273,235            $     297,514       $     356,697         $       552,495          $    263,058           $       524,247       $       524,247
Cost of operations                        225,280                  247,204             300,313                 468,013               223,520                   428,073               428,073

Gross profit                               47,955                    50,310              56,384                 84,482                    39,538                 96,174               96,174
General and administrative
  expenses(2)                              14,176                    16,783              18,812                 32,452                    14,050                 33,506               28,164
Recapitalization expenses(3)               10,893                       386                  —                      —                         —                      —                    —
(Gain) loss on sale of property and
  equipment                                        (4 )                   539                 265                   265                     105                        256                256

Income from operations                     22,890                    32,602              37,307                 51,765                    25,383                 62,412               67,754
Other expense (income):
   Interest expense(4)                      2,802                    11,862               9,192                 15,145                     6,754                 34,265               32,600
   Other, net(5)                             (267 )                     (46 )               (19 )                 (428 )                     (17 )                  (94 )                (94 )

Total other expense                         2,535                    11,816               9,173                 14,717                     6,737                 34,171               32,506
Income tax expense                          9,519                     8,335              11,276                 14,671                     7,588                 17,429               20,204

Income from continuing
  operations                               10,836                    12,451              16,858        $        22,377                    11,058                 10,812               15,044


   Loss from discontinued
     operations, net of taxes(6)                 324                      621                 330                                           384                        —                   —

Net income                            $    10,512            $       11,830      $       16,528                                 $         10,674       $         10,812      $        15,044


Decrease in redemption value of
 mandatorily redeemable
 preferred stock(7)                               —                  12,071                    —                                              —                        —                   —

Net income available to common
 stockholders                         $    10,512            $       23,901      $       16,528                                 $         10,674       $         10,812      $        15,044


   Basic net income per share
    available to common
    stockholders(8)                   $          0.18        $            0.98   $            0.68                              $           0.44       $           0.36      $           0.48


   Diluted net income per share
     available to common
     stockholders(8)                  $          0.18        $            0.98   $            0.68                              $           0.44       $           0.36      $           0.47


Other data:
Net cash from continuing
 operations provided by (used
 in):
  Operating activities                $    33,155            $       33,878      $       31,460                                 $      21,763          $        50,717
  Investing activities                    (15,287 )                 (15,131 )           (41,771 )                                     (37,011 )               (233,393 )
  Financing activities                    (24,742 )                 (14,258 )             9,985                                        10,000                  177,812
Capital expenditures                       20,184                    21,227              35,678                                        30,638                   40,769
EBITDA from continuing
 operations(9)                             40,319                    50,273              56,783        $        87,815                    39,742                90,706       $        96,048
Adjusted EBITDA(9)                         51,412                    51,659              57,783                 96,126                    40,492               104,291               104,291
Employees (at period end)                   3,742                     3,951               4,847                                            4,512                 6,397

                                                                                         7
                                                                                                                    As of March 31, 2005

                                                                                                           Actual                        As Adjusted

                                                                                                                          (unaudited)
                                                                                                                        (in thousands)
Balance sheet data:
Cash and cash equivalents                                                                              $           73              $                 73
Working capital                                                                                                86,747                            86,747
Property and equipment, net                                                                                   282,417                           282,417
Total assets                                                                                                  586,356                           585,036
Total debt, including current portion                                                                         408,000                           274,500
Total stockholders’ equity                                                                                     14,408                           138,922


(1)    For the nine months ended March 31, 2005, our statement of operations data reflect (i) the acquisition of Red Simpson on July 1, 2004 and (ii) a
       substantial increase in our storm restoration revenues as compared to historical levels. See “Management’s Discussion and Analysis of Financial
       Condition and Results of Operation — Overview — Services.”

(2)    General and administrative expenses include the management fees paid to an affiliate of Lindsay Goldberg & Bessemer L.P. under our
       management advisory services agreement. In connection with this offering, we agreed to terminate the management advisory services agreement
       for aggregate consideration of $4.0 million, to be paid at the closing of this offering.

(3)    Recapitalization expenses represent costs incurred in connection with the 2002 sale of approximately 88% of the equity ownership in our
       company to Lindsay Goldberg & Bessemer and its affiliates. We refer to this transaction as the “2002 recapitalization.”

(4)    Interest expense includes the mark-to-market gains or losses on our interest rate derivatives and amortization of deferred loan costs. In addition,
       in fiscal 2004 and 2005, interest expense includes the changes in the redemption value of our Series A preferred stock and the write-off of
       unamortized deferred loan costs resulting from prepayments of debt.

(5)    Other, net consists primarily of interest income.

(6)    Loss from discontinued operations, net of taxes, represents losses from our industrial division, which ceased operations during the year ended
       June 30, 2004.

(7)    The $12.1 million decrease in the redemption value of our Series A preferred stock during fiscal 2003 occurred because we adjusted the carrying
       value of the Series A preferred stock to $5.4 million from its original carrying value of $17.5 million at issuance in accordance with the terms of
       the Series A preferred stock. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of
       Operations — Year Ended June 30, 2004 Compared to Year Ended June 30, 2003.”

(8)    Per share numbers have been adjusted to give effect to the conversion of each of our common shares into 14.76 common shares in connection
       with our reincorporation in Delaware on July 1, 2005.

(9)    “EBITDA from continuing operations” represents net income before interest, taxes, depreciation, amortization and loss from discontinued
       operations, net of taxes. “Adjusted EBITDA” represents EBITDA from continuing operations before other unusual and/or nonrecurring charges.
       The majority of these charges relate to our acquisition of Red Simpson or our 2004 recapitalization. The charges are described in more detail in
       the footnotes below. EBITDA from continuing operations and Adjusted EBITDA do not represent and should not be considered as alternatives
       to net income or cash flow from operations, as determined under U.S. generally accepted accounting principles, or GAAP. We use EBITDA
       from continuing operations and Adjusted EBITDA to facilitate operating performance comparisons from period to period. We believe EBITDA
       from continuing operations facilitates company to company operating performance comparisons by backing out potential differences caused by
       variations in capital structures (affecting net interest expense), taxation and the age and book depreciation of facilities and equipment (affecting
       relative depreciation expense), which

                                                                          8
     may vary for different companies for reasons unrelated to operating performance. We further believe that EBITDA from continuing operations
     is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an
     EBITDA measure when reporting their results. We use Adjusted EBITDA as a supplemental measure to assess our performance because it
     excludes unusual and/or nonrecurring charges that are included in EBITDA. We present Adjusted EBITDA because we believe that it is useful
     for investors to analyze disclosures of our operating results on the same basis as that used by our management. EBITDA from continuing
     operations and Adjusted EBITDA are not necessarily comparable to other similarly titled financial measures of other companies due to the
     potential inconsistencies in the method of calculation. In addition, EBITDA, as defined under our senior credit facility, is not calculated in the
     same manner as the EBITDA from continuing operations and Adjusted EBITDA figures presented in this table. For a description of our senior
     credit facility, see “Description of Senior Credit Facility.”
     EBITDA from continuing operations and Adjusted EBITDA have limitations as analytical tools, and you should not consider them either
in isolation or as substitutes for analyzing our results as reported under GAAP. Some of these limitations are:
    • EBITDA from continuing operations and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital
      expenditures or contractual commitments;

    • EBITDA from continuing operations and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

    • EBITDA from continuing operations and Adjusted EBITDA do not reflect our interest expense, or the cash requirements necessary to service
      interest or principal payments, on our debt;

    • EBITDA from continuing operations and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes;

    • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the
      future, and EBITDA from continuing operations and Adjusted EBITDA do not reflect any cash requirements for such replacements;

    • as described above, Adjusted EBITDA does not reflect certain charges related to our acquisition of Red Simpson or our 2004 recapitalization,
      including discontinued deferred compensation, discontinued performance bonuses, recapitalization expenses, option buyback expense and
      restricted stock expense. It is possible, however, that we could incur similar charges in the future if we were to complete future acquisitions or
      recapitalizations. In addition, the management fees that we exclude from our calculation of Adjusted EBITDA have been incurred in each of
      the periods presented; and

    • other companies in our industry may calculate EBITDA from continuing operations and Adjusted EBITDA differently, limiting their
      usefulness as comparative measures.

                                                                         9
     Because of these limitations, EBITDA from continuing operations and Adjusted EBITDA should not be considered as the primary
measures of our operating performance or as measures of discretionary cash available to us to invest in the growth of our business. The
following is a reconciliation of EBITDA from continuing operations and Adjusted EBITDA to net income, the most directly comparable
GAAP performance measure:
                                                                                                                                                        Pro Forma
                                                                                             Pro Forma                                                 As Adjusted
                                                                                             As Adjusted             Nine Months Ended                 Nine Months
                                                        Year Ended June 30,                  Year Ended                  March 31,                        Ended
                                                                                              June 30,                                                  March 31,
                                           2002                 2003              2004          2004              2004               2005                  2005

                                                                                             (in thousands)
Net income                             $   10,512           $    11,830       $   16,528     $    22,047      $    10,674        $        10,812   $        15,044
   Add:
      Interest expense                       2,802               11,862            9,192          15,145            6,754                 34,265            32,600
      Income tax expense                     9,519                8,335           11,276          14,671            7,588                 17,429            20,204
      Depreciation and
        amortization(a)                    17,162                17,625           19,457          35,622           14,342                 28,200            28,200
      Loss from discontinued
        operations, net of taxes                  324               621                330            330                384                 —                   —

EBITDA from continuing operations          40,319                50,273           56,783          87,815           39,742                 90,706            96,048
  Add:
     Discontinued deferred
       compensation(b)                            —                    —                 —          6,629                —                 4,768              4,768
     Discontinued performance
       bonus(c)                                   —                    —                 —          1,682                —                 1,116              1,116
     Discontinued management
       fees(d)                                200                 1,000            1,000                —                750               1,125                 —
     Recapitalization expenses(e)          10,893                   386               —                 —                 —                   —                  —
     Option buyback expense(f)                 —                     —                —                 —                 —                4,217                 —
     Restricted stock expense(g)               —                     —                —                 —                 —                2,359              2,359

Adjusted EBITDA                        $   51,412           $    51,659       $   57,783     $    96,126      $    40,492        $       104,291   $       104,291




(a)    Amortization represents the amortization of intangible assets (for example, customer contracts, customer relationships and non-compete
       agreements) acquired through our purchase of Red Simpson. This amortization is included in both cost of operations and general and
       administrative expenses.

(b)    Discontinued deferred compensation represents amounts accrued for deferred compensation we agreed to pay certain Red Simpson supervisors
       and managers in connection with the Red Simpson acquisition. We recently amended the agreements regarding these deferred compensation
       payments and, as a result, we will record a one-time compensation expense of approximately $18.0 million in the fourth quarter of the year
       ended June 30, 2005 and will not accrue deferred compensation charges in future periods. See “Management’s Discussion and Analysis of
       Financial Condition and Results of Operations — Other Events — Deferred Compensation in Connection with Our Acquisition of Red
       Simpson.”

(c)    Discontinued performance bonus reflects bonuses that were paid to certain members of Red Simpson’s management and were discontinued in
       connection with the Red Simpson acquisition.

(d)    Reflects the management fees paid to an affiliate of Lindsay Goldberg & Bessemer under our management advisory services agreement. In
       connection with this offering, we agreed to terminate the management advisory services agreement for aggregate consideration of $4.0 million,
       to be paid at the closing of this offering.

(e)    Recapitalization expenses refers to transaction costs incurred in 2002 and 2003 in connection with the 2002 recapitalization.

(f)    Option buyback expense refers to a $4.2 million charge recorded in the nine months ended March 31, 2005 arising from the repurchase of
       common stock options as part of our 2004

                                                                                  10
      recapitalization. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Other Events — 2004
      Recapitalization.”

(g)   In connection with the acquisition of Red Simpson, we agreed to permit two members of Red Simpson’s management to convert an aggregate of
      approximately $3.3 million of unvested deferred compensation into shares of restricted common stock valued at approximately $2.0 million. In
      connection with this transaction, we recognized compensation expense of approximately $1.3 million in the nine-month period ending
      March 31, 2005 equal to the excess of the accelerated deferred compensation amount over the fair value of the stock acquired by those persons.
      We accelerated an amount of deferred compensation in excess of the value of the restricted stock purchased by such individuals to pay the
      individuals’ income taxes arising from such transaction. The restricted stock expense adjustment consists of this $1.3 million of compensation
      expense, a $0.8 million charge arising from the repurchase of a portion of this restricted stock as a part of our 2004 recapitalization and a
      $0.3 million non-cash compensation expense resulting from the vesting of a portion of the remaining restricted stock.

                                                                      11
                                                               RISK FACTORS
     You should carefully consider the following risks and other information in this prospectus before deciding to invest in shares of our
common stock. The following risks and uncertainties could materially adversely affect our business, financial condition or operating results. In
this event, the trading price of our common stock could decline and you could lose part or all of your investment.

Risks Related to Our Business
    We derive a significant portion of our revenues from a small group of customers. The loss of one or more of these customers could
    negatively impact our business and results of operations.
    Our customer base is highly concentrated. Our top ten customers accounted for approximately 56.8% and 47.4% of our revenues for the
nine months ended March 31, 2005 and the year ended June 30, 2004, respectively, and approximately 49.9% of our total revenues for the year
ended June 30, 2004 on a pro forma basis after giving effect to the acquisition of Red Simpson. Sales to Duke Power Company, our largest
customer, accounted for approximately 19.5% of our total revenues for the year ended June 30, 2004 and approximately 12.6% of our total
revenues for the year ended June 30, 2004 on a pro forma basis after giving effect to the acquisition of Red Simpson. For the nine months
ended March 31, 2005, sales to Duke Power accounted for 11.3% of our total revenues. However, the decline in the percentage of our total
revenues attributable to Duke Power for the nine months ended March 31, 2005 as compared to the year ended June 30, 2004 on a pro forma
basis was due to our unusually high level of storm restoration revenue in the nine months ended March 31, 2005.
    We believe that we will continue to rely on a relatively small group of customers, including Duke Power, for a substantial portion of our
revenues for the foreseeable future. We may not be able to maintain our relationships with our significant customers. The loss of, or reduction
of our sales to, any of our major customers could materially and adversely affect our business and results of operations.


    Our customers often have no obligation to assign work to us and many of our arrangements may be terminated on short notice. As a
    result, we are at risk of losing significant business on short notice.
    Most of our customers assign work to us under master service arrangements. Under these arrangements, our customers generally have no
obligation to assign work to us and do not guarantee service volumes. Most of our customer arrangements, including our master service
arrangements, may be terminated by our customers on short notice. In addition, many of our customer arrangements, including our master
service arrangements, are open to competitive bidding at the expiration of their terms. As a result, we may be displaced on these arrangements
by competitors from time to time. Our business and results of operations could be materially and adversely affected if our customers do not
assign work to us or if they cancel a number of significant arrangements and we cannot replace them with similar work.


    We may not be able to successfully integrate Red Simpson with our operations or to realize the anticipated benefits of the acquisition.
     We acquired Red Simpson on July 1, 2004. This was a significant acquisition for us and substantially expanded our business, service
territory, workforce and scope of operations. We are in the process of integrating the operations of Red Simpson into our business, including
rebranding Red Simpson’s business under the Pike Electric brand and transitioning Red Simpson’s operations into our accounting and
information systems. We may not be able to complete the integration of Red Simpson successfully or institute the necessary systems and
procedures, including accounting and information systems, to manage the combined enterprise on a profitable basis. In addition, our
management may not be able to successfully manage the combined entity and effectively implement our operating or growth strategies.
Furthermore, the future operations of the combined company may pose different and greater challenges than our management has experienced
in the past and may require substantial attention from our management, which may limit the amount of time available to be devoted to our
day-to-day operations or to the execution of our business strategy. Our pro forma financial results included in this prospectus cover periods

                                                                       12
during which Red Simpson and Pike were not under common control or management and, therefore, may not be indicative of our future
consolidated financial or operating results. Any failure to successfully complete the integration of Red Simpson or to realize the anticipated
benefits of the acquisition could have a material adverse effect on our business, results of operations and financial condition.


    Our storm restoration services are highly volatile and unpredictable, which could result in substantial variations in, and uncertainties
    regarding, the levels of our financial results from period to period.
    Our storm restoration services are highly volatile and uncertain due to the unpredictable nature of weather-related events. For the years
ended June 30, 2000, 2001, 2002, 2003 and 2004, our revenues generated from storm restoration services were $21.6 million, $25.3 million,
$7.0 million, $46.6 million and $43.0 million, respectively, and our average annual storm restoration service revenues for the five years ended
June 30, 2004 were $28.7 million. For the nine months ended March 31, 2005, our storm restoration revenues increased substantially to
$146.9 million due to the extraordinary Florida hurricane season. This unusually high level of storm restoration revenues in the nine months
ended March 31, 2005 is not indicative of the amount of storm restoration revenue that we can be expected to earn in any future period. Our
historical results of operations have varied between periods due to the volatility of our storm restoration revenues. The levels of our future
revenues and net income may be subject to significant variations and uncertainties from period to period due to the volatility of our storm
restoration revenues. In addition, our storm revenues are offset in part by declines in our core powerline services because we staff storm
restoration mobilizations in large part by diverting resources from our powerline services.


    Our business is subject to numerous hazards that could subject us to substantial monetary and other liabilities. If accidents occur, they
    could materially and adversely affect our business and results of operations.
    Our business is subject to numerous hazards, including electrocutions, fires, natural gas explosions, mechanical failures, weather-related
incidents, transportation accidents and damage to equipment we work on. These hazards can cause personal injury and loss of life, severe
damage to or destruction of property and equipment and other consequential damages and could lead to suspension of operations, large damage
claims and, in extreme cases, criminal liability.
    Our safety record is an important consideration for our customers. If serious accidents or fatalities occur, we may be ineligible to bid on
certain work, and existing service arrangements could be terminated. In addition, if our safety record were to deteriorate, our ability to bid on
certain work could be adversely impacted. Further, regulatory changes implemented by the Occupational Safety and Health Administration, or
OSHA, could impose additional costs on us. Adverse experience with hazards and claims could have a negative effect on our reputation with
our existing or potential new customers and our prospects for future work.


    Our current insurance coverage may not be adequate, and we may not be able to obtain insurance at acceptable rates, or at all.
     We maintain various insurance policies, including general liability, automotive liability and workers’ compensation. We are partially
self-insured under all of our policies, and our insurance does not cover all types or amounts of liabilities. Our insurance policies are subject to
substantial deductibles of $1,000,000 per occurrence. We are not required to, and do not, specifically set aside funds for our self-insurance
programs. At any given time, we are subject to multiple workers’ compensation and personal injury claims. We maintain substantial loss
accruals for workers’ compensation claims, and our workers’ compensation and insurance costs have been rising for several years
notwithstanding our emphasis on safety. Our insurance policies may not be adequate to protect us from liabilities that we incur in our business.
   In addition, due to a variety of factors such as increases in claims, a weak economy and projected significant increases in medical costs and
wages, insurance carriers may be unwilling to provide the current levels of coverage without a significant increase in collateral requirements to
cover our deductible

                                                                        13
obligations. Furthermore, our insurance premiums may increase in the future and we may not be able to obtain similar levels of insurance on
reasonable terms, or at all. Any such inadequacy of, or inability to obtain, insurance coverage at acceptable rates, or at all, could have a material
adverse effect on our business, financial condition and results of operations.


    Demand for some of our services is cyclical and vulnerable to industry and economic downturns, which could materially and adversely
    affect our business and results of operations.
    The demand for infrastructure services has been, and will likely continue to be, cyclical in nature and vulnerable to general downturns in
the U.S. economy. If the general level of economic activity deteriorates, our customers may delay or cancel expansions, upgrades, maintenance
and repairs to their systems. A number of other factors, including the financial condition of the industry, could adversely affect our customers
and their ability or willingness to fund capital expenditures in the future. We are also dependent on the amount of work that our customers
outsource. During downturns in the economy, our customers may determine to outsource less work resulting in decreased demand for our
services. Furthermore, the historical trend toward outsourcing of infrastructure services may not continue as we expect. In addition,
consolidation, competition or capital constraints in the electric power industry may result in reduced spending by, or the loss of, one or more of
our customers. These fluctuations in demand for our services could materially and adversely affect our business and results of operations,
particularly during economic downturns. Economic downturns may also adversely affect the pricing of our services.


    In March 2004, Grant Thornton LLP, or Grant Thornton, Red Simpson’s independent registered public accounting firm, reported a
    material weakness in Red Simpson’s internal control over financial reporting that, if not remedied, could adversely affect our internal
    controls and have a negative effect on the trading price of our stock.
     In March 2004, in connection with the audit of Red Simpson’s financial statements for the year ended December 31, 2003, Grant Thornton,
the independent registered public accounting firm for Red Simpson, reported to Red Simpson’s management a matter that is a “significant
deficiency” and a “material weakness” in Red Simpson’s internal control over financial reporting. Under the current standards of the Public
Company Accounting Oversight Board, a significant deficiency is a control deficiency, or combination of control deficiencies, that adversely
affects the company’s ability to initiate, authorize, record, process or report external financial data reliably in accordance with generally
accepted accounting principles such that there is more than a remote likelihood that a misstatement of the company’s annual or interim
financial statements that is more than inconsequential will not be prevented or detected. A material weakness in internal control is a significant
deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or
interim financial statements will not be prevented or detected.
     The material weakness reported by Grant Thornton in March 2004 is the difficulty Red Simpson’s management experienced in applying
accounting principles and recording journal entries, as well as preparing its financial statements and financial disclosure related to its annual
report. Specifically, Red Simpson’s management experienced difficulty in providing accurate, timely and sufficient disclosure and/or
documentation of the following: accrued insurance claim liabilities, amortization of goodwill and intangible assets, deferred compensation
liability, income tax accruals and financial statement footnote disclosure. As a result, Red Simpson recorded numerous prior period and current
year adjustments to properly state current year activity and balances. Grant Thornton recommended that greater emphasis be placed on
reviewing and assessing the issues that may arise in connection with applicable accounting and financial reporting, and encouraged
management to understand applicable accounting principles and review all disclosures that are included in Red Simpson’s financial statements
to ensure proper understanding of the accounting issues and disclosures.
    As described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Other Events — Internal
Control Over Financial Reporting at Red Simpson,” since the acquisition, we have begun to augment our controls over the Red Simpson
business, and we have

                                                                         14
implemented procedures for monthly account reconciliations and reviews of accounting estimates at Red Simpson. However, upon the
completion of this offering, we will have had only limited operating experience with the improvements we have made to date. Although we
believe we have addressed the material weakness with the remedial measures we have implemented, the measures we have taken to date and
any future measures may not remediate the material weakness reported by Grant Thornton, and we may not be able to implement and maintain
effective internal control over financial reporting in the future. Ernst & Young LLP, our independent registered public accounting firm, has not
evaluated the measures we have taken to address the material weakness described above and has not evaluated the effectiveness of our internal
controls. In addition, additional material weaknesses or significant deficiencies in our internal controls may be discovered in the future.
     Any failure to remediate the material weakness reported by Grant Thornton or to implement required new or improved controls, or
difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet our reporting obligations or result in
material misstatements in our financial statements. Any such failure also could affect the ability of our management to certify that our internal
controls are effective when it provides an assessment of our internal control over financial reporting pursuant to rules of the Securities and
Exchange Commission, or the SEC, under Section 404 of the Sarbanes-Oxley Act of 2002, when they become applicable to us beginning with
our Annual Report on Form 10-K for the year ending June 30, 2007, and could affect the results of our independent registered public
accounting firm’s attestation report regarding our management’s assessment pursuant to those rules. Inferior internal controls could also cause
investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.


    Failure to establish and maintain effective internal control over financial reporting could have a material adverse effect on our
    business, operating results and stock price.
     Maintaining effective internal control over financial reporting is necessary for us to produce reliable financial reports and is important in
helping to prevent financial fraud. If we are unable to achieve and maintain adequate internal controls, our business and operating results could
be harmed. We are also beginning to evaluate how to document and test our internal control procedures to satisfy the requirements of
Section 404 of the Sarbanes-Oxley Act of 2002 and the related rules of the SEC, which require, among other things, our management to assess
annually the effectiveness of our internal control over financial reporting and our independent registered public accounting firm to issue a
report on that assessment beginning with our Annual Report on Form 10-K for the year ending June 30, 2007. During the course of this
documentation and testing, we may identify significant deficiencies or material weaknesses that we may be unable to remediate before the
requisite deadline for those reports. If our management or our independent registered public accounting firm were to conclude in their reports
that our internal control over financial reporting was not effective, investors could lose confidence in our reported financial information and the
trading price of our stock could drop significantly.


    To be successful, we need to attract and retain qualified personnel, and any inability to do so would adversely affect our business.
    Our ability to provide high-quality services on a timely basis requires an adequate supply of skilled electricians, linemen and managers.
Accordingly, our ability to increase our productivity and profitability will be limited by our ability to employ, train and retain skilled personnel
necessary to meet our requirements. Many companies in our industry are currently experiencing shortages of qualified personnel, and we may
not be able to maintain an adequate skilled labor force necessary to operate efficiently. Our labor expenses may also increase as a result of a
shortage in the supply of skilled personnel, or we may have to curtail our planned internal growth as a result of labor shortages. We may also
spend considerable resources training employees who may then be hired by our competitors, forcing us to spend additional funds to attract
personnel to fill those positions. If we are unable to hire and retain qualified personnel in the future, there could be a material adverse effect on
our business, operating results or financial condition.

                                                                         15
    We are dependent on our senior management and other key personnel, the loss of which could have a material adverse effect on our
    business.
    Our operations, including our customer relationships, are dependent on the continued efforts of our senior management and other key
personnel including, in particular, our chief executive officer, J. Eric Pike. Although we have entered into or intend to enter into employment
agreements with our chief executive officer and certain other key employees, we cannot be certain that any individual will continue in such
capacity for any particular period of time. We do not maintain key person life insurance policies on any of our employees. The loss of any
member of our senior management or other key personnel, or the inability to hire and retain qualified management and other key personnel,
could have a material adverse effect on our business, financial condition and results of operations.


    Our industry is highly competitive and we may be unable to compete effectively, retain our customers or win new customers, which
    could result in reduced profitability and loss of market share.
    We face intense competition from subsidiaries or divisions of five national companies, approximately eight regional companies and
numerous small, owner-operated private companies. We also face competition from the in-house service organizations of our existing or
prospective customers, some of which employ personnel who perform some of the same types of services we provide. We compete primarily
on the basis of our reputation and relationships with customers, safety and execution record, geographic presence and the breadth of service
offerings, pricing and the availability of qualified personnel. Certain of our competitors may have lower cost structures and may, therefore, be
able to provide their services at lower rates than we can provide. Many of our current and potential competitors, especially our competitors with
national scope, also may have significantly greater financial, technical and marketing resources than we do. In addition, our competitors may
succeed in developing the expertise, experience and resources to compete successfully and in marketing and selling new services better than we
can. Furthermore, our existing or prospective customers may not continue to outsource services in the future or we may not be able to retain our
existing customers or win new customers. The loss of existing customers to our competitors or the failure to win new customers could
materially and adversely affect our results of operations, margins and cash flow.


    We may be unsuccessful at acquiring companies or at integrating companies that we may acquire, and as a result, we may not achieve
    the expected benefits and our profitability could materially suffer.
     One of our growth strategies is to consider acquisitions of additional electrical distribution and transmission services providers, both within
and outside of our current service territory, when attractive opportunities arise. We expect to face competition for acquisition candidates, which
may limit the number of acquisition opportunities and may lead to higher acquisition prices. We may not be able to identify, acquire or
profitably manage additional businesses or to integrate successfully any acquired businesses without substantial costs, delays or other
operational or financial problems. Further, acquisitions involve a number of special risks, including failure of the acquired business to achieve
expected results, diversion of management’s attention, failure to retain key personnel of the acquired business and risks associated with
unanticipated events or liabilities, some or all of which could have a material adverse effect on our business, financial condition and results of
operations. In addition, we may not be able to obtain the necessary acquisition financing or we may have to increase our indebtedness in order
to finance an acquisition. If we finance acquisitions by issuing convertible debt or equity securities, our existing stockholders may be diluted,
which could affect the market price of our stock. Our future business, results of operations and financial condition could suffer if we fail to
implement successfully our acquisition strategy.


    We have a substantial amount of indebtedness incurred under a senior credit facility, which may restrict our business and operations,
    adversely affect our cash flow, and restrict our future access to sufficient funding to finance desired growth.
    As of March 31, 2005, after giving effect to this offering and the intended use of proceeds, we would have had outstanding indebtedness of
approximately $274.5 million, which would have represented

                                                                        16
approximately 68.2% of our total capitalization. As of March 31, 2005, we also had availability of $46.9 million under the $70.0 million
revolving portion of our senior credit facility (after giving effect to outstanding standby letters of credit of approximately $23.1 million). We
estimate that our debt service will be $15.2 million for the year ended June 30, 2006, consisting solely of interest payments. After giving effect
to this offering and our existing interest rate swap and cap agreements, a hypothetical change in the interest rate of 100 basis points on our
indebtedness as of March 31, 2005 would have changed annual cash interest expense by approximately $2.2 million.
    Having this substantial amount of indebtedness (i) makes us more vulnerable to adverse changes in general economic, industry and
competitive conditions, (ii) limits our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service
requirements, execution of our strategy or other purposes and (iii) places us at a disadvantage compared to our competitors who have less debt.
Furthermore, our interest expense could increase if interest rates rise because our debt under our senior credit facility bears interest at floating
rates. We dedicate a substantial portion of our cash flow to pay principal and interest on our debt. If we do not have sufficient earnings to
service our debt, we would need to refinance all or part of our existing debt, sell assets, borrow more money or sell securities, which we may
not be able to do on commercially reasonable terms or at all.
    As of March 31, 2005, all of our total indebtedness consisted of a senior credit facility with a group of financial institutions secured by
substantially all of our assets. The terms of the credit facility include customary events of default and covenants that limit us from taking
certain actions without obtaining the consent of the lenders. In addition, our credit facility requires us to maintain certain financial ratios, as
described in “Description of Senior Credit Facility,” and restricts our ability to incur additional indebtedness. These restrictions and covenants
limit our ability to respond to changing business and economic conditions and may prevent us from engaging in transactions that might
otherwise be considered beneficial to us, including strategic acquisitions.
     A breach of our senior credit facility, including any inability to comply with the required financial ratios, could result in a default under
that credit facility. In the event of any default under our credit facility, the lenders thereunder would be entitled to accelerate the repayment of
amounts outstanding, plus accrued and unpaid interest. Moreover, these lenders would have the option to terminate any obligation to make
further extensions of credit under our credit facility. In the event of a default under our credit facility, the lenders thereunder could also proceed
to foreclose against the assets securing such obligations. In the event of a foreclosure on all or substantially all of our assets, we may not be
able to continue to operate as a going concern.


    During the ordinary course of our business, we may become subject to lawsuits or indemnity claims, which could materially and
    adversely affect our business and results of operations.
     We have in the past been, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings during the
ordinary course of our business. These actions may seek, among other things, compensation for alleged personal injury, workers’
compensation, employment discrimination, breach of contract, property damage, punitive damages, civil penalties or other losses,
consequential damages or injunctive or declaratory relief. In addition, pursuant to our service arrangements, we generally indemnify our
customers for claims related to the services we provide thereunder. Furthermore, our services are integral to the operation and performance of
the electric distribution and transmission infrastructure. As a result, we may become subject to lawsuits or claims for any failure of the systems
that we work on, even if our services are not the cause for such failures. In addition, we may incur civil and criminal liabilities to the extent that
our services contributed to any property damage or blackout. With respect to such lawsuits, claims, proceedings and indemnities, we have and
will accrue reserves in accordance with generally accepted accounting principles. In the event that such actions or indemnities are ultimately
resolved unfavorably at amounts exceeding our accrued reserves, or at material amounts, the outcome could materially and adversely affect our
reputation, business and results of operations. In addition, payments of significant amounts, even if reserved, could adversely affect our
liquidity position.

                                                                         17
    Our failure to comply with, or the imposition of liability under, environmental laws and regulations could result in significant costs.
     Our facilities and operations, including fueling and truck maintenance, repair, washing and final-stage manufacturing, are subject to
various environmental laws and regulations relating principally to the use, storage and disposal of solid and hazardous wastes and the discharge
of pollutants into the air, water and land. Violations of these requirements, or of any permits required for our operations, could result in
significant fines or penalties. We are also subject to laws and regulations that can impose liability, sometimes without regard to fault, for
investigating or cleaning up contamination, as well as for damages to property or natural resources and for personal injury arising out of such
contamination. Such liabilities may also be joint and several, meaning that we could be held responsible for more than our share of the liability
involved, or even the entire amount. The presence of environmental contamination could also interfere with ongoing operations or adversely
affect our ability to sell or lease our properties. In addition, we perform work in wetlands and other environmentally sensitive areas, as well as
in different types of underground environments. In the event we fail to obtain or comply with any permits required for such activities, or such
activities cause any environmental damage, we could incur significant liability. We have incurred costs in connection with environmental
compliance, remediation and/or monitoring, and we anticipate that we will continue to do so. Discovery of additional contamination for which
we are responsible, the enactment of new laws and regulations, or changes in how existing requirements are enforced, could require us to incur
additional costs for compliance or subject us to unexpected liabilities.


    The electric infrastructure servicing business is subject to seasonal variations, which may cause our operating results to vary
    significantly from period to period and could cause the market price of our stock to fall.
    Due to the fact that a significant portion of our business is performed outdoors, our results of operations are subject to seasonal variations.
These seasonal variations affect our core activities of maintaining, upgrading and extending electrical distribution powerlines and not only our
storm restoration services. Generally, during the winter months, demand for new work and maintenance services may be lower due to reduced
construction activity during inclement weather, while demand for electrical service and repairs may be higher due to damage caused by such
weather conditions. As a result, operating results may vary significantly from period to period. If our operating results fall below the public’s or
analysts’ expectations in some future period or periods, the market price of our common stock will likely fall in such period or periods.


    We will incur increased costs as a result of being a public company.
     As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In
addition, the Sarbanes-Oxley Act of 2002, as well as related rules adopted by the SEC and the New York Stock Exchange, have imposed
substantial requirements on public companies, including requiring changes in corporate governance practices and requirements relating to
internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act. We expect these rules and regulations to increase our
legal and financial compliance costs and to make some activities more time-consuming and costly.

Risks Related to Investing in Our Stock
    No market currently exists for our common stock, and an active trading market for our common stock may not develop.
     Prior to this offering, there has been no public market for shares of our common stock. We cannot predict the extent to which investor
interest in our company will lead to the development of a trading market on the New York Stock Exchange or otherwise or how liquid that
market might become. The initial public offering price for the shares of our common stock is or will be determined by negotiations among us,
the selling stockholders and the underwriters and may not be indicative of prices that will prevail in the open market following this offering.

                                                                        18
    If our stock price fluctuates after this offering, you could lose a significant part of your investment.
   The market price of our stock may be influenced by many factors, some of which are beyond our control, including those described above
under “— Risks Related to Our Business” and the following:

    • the failure of securities analysts to cover our common stock after this offering or changes in financial estimates by analysts;

    • announcements by us or our competitors of significant contracts, acquisitions or capital commitments;

    • changes in market valuation or earnings of our competitors;

    • variations in quarterly operating results;

    • availability of capital;

    • general economic conditions;

    • terrorist acts;

    • legislation;

    • future sales of our common stock; and

    • investor perception of us and the electric utility industry.
    As a result of these factors, investors in our common stock may not be able to resell their shares at or above the initial offering price. Even
factors that do not specifically relate to our company may materially reduce the market price of our common stock, regardless of our operating
performance.


    Shares eligible for future sale may cause the market price of our common stock to drop significantly, even if our business is doing well.
     The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market
after this offering or the perception that these sales could occur. These sales, or the possibility that these sales may occur, also might make it
more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
    After the consummation of this offering, there will be 31,832,864 shares of our common stock outstanding. Of this amount, the
13,500,000 shares of common stock sold in this offering (15,525,000 shares if the underwriters exercise their over-allotment option in full) will
be freely tradeable without restriction or further registration under the Securities Act of 1933, as amended, by persons other than our affiliates
within the meaning of Rule 144 under the Securities Act.
     Certain selling stockholders or entities controlled by them or their permitted transferees will, subject to the lock-up agreements described
below, be able to sell their shares in the public market from time to time without registering them, subject to certain limitations on the timing,
amount and method of those sales imposed by regulations promulgated by the SEC. Lindsay Goldberg & Bessemer, our principal stockholder
and certain of its affiliates, will also have the right to cause us to register the sale of shares of common stock beneficially owned by them. In
addition, certain selling stockholders on the closing date will have the right to include shares of common stock beneficially owned by them in
certain future registration statements relating to our securities. If any of these selling stockholders, the affiliated entities controlled by them or
their respective permitted transferees were to sell a large number of their shares, the market price of our common stock could decline
significantly. In addition, the perception in the public markets that sales by them might occur could also adversely affect the market price of our
common stock.
     We, the selling stockholders, our directors and executive officers have agreed to lock-up agreements that restrict us, these stockholders and
our directors and executive officers, subject to specified exceptions, from selling or otherwise disposing of any shares for a minimum period of
180 days after the date of this prospectus without the prior consent of Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. on behalf
of the underwriters. Although there is no present intention to do so, the underwriters may, in their sole discretion and without notice, release all
or any portion of the shares from the restrictions in any of

                                                                         19
the lock-up agreements described above. In addition, these lock-up agreements are subject to the exceptions described in “Underwriting.”
    Also, in the future, we may issue our securities in connection with investments and acquisitions. The amount of our common stock issued
in connection with an investment or acquisition could constitute a material portion of our then outstanding common stock.


    A significant stockholder controls the direction of our business. The concentrated ownership of our common stock will prevent you and
    other stockholders from influencing significant corporate decisions.
    Following completion of this offering:

    • Lindsay Goldberg & Bessemer and its affiliates will own 47.5% of the outstanding shares of our common stock, which represents
      47.5% of the total voting power of our voting stock, or 41.2% of the total voting power of our voting stock if the underwriters exercise
      their over-allotment option in full; and



    • Management and its affiliates, excluding Lindsay Goldberg & Bessemer and its affiliates, will own 10.7% of the outstanding shares of
      our common stock, which represents 10.7% of the total voting power of our voting stock. Management and its affiliates, excluding
      Lindsay Goldberg & Bessemer and its affiliates, will also own 10.7% of the outstanding shares of our common stock if the underwriters
      exercise their overallotment option.

As a result, Lindsay Goldberg & Bessemer, or entities controlled by it, have the ability to effectively control all matters requiring stockholder
approval, including the nomination and election of directors, the determination of our corporate and management policies and the determination
of the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including potential mergers or
acquisitions, asset sales and other significant corporate transactions.
     The interests of Lindsay Goldberg & Bessemer, or entities controlled by it, may not coincide with the interests of the holders of our
common stock. In addition, you will not be able to prevent Lindsay Goldberg & Bessemer, or entities controlled by it, from selling shares,
including all of the shares of our common stock it holds. For example, Lindsay Goldberg & Bessemer, or entities controlled by it, could cause
us to make acquisitions that increase the amount of our indebtedness or outstanding shares of common stock or sell revenue-generating assets.
Lindsay Goldberg & Bessemer or entities controlled by it may also pursue acquisition opportunities that may be complementary to our
business, and as a result, those acquisition opportunities may not be available to us. So long as Lindsay Goldberg & Bessemer, or entities
controlled by it, continue to own a substantial number of shares of common stock, Lindsay Goldberg & Bessemer, or entities controlled by it,
will effectively control all our corporate decisions.


    As a new investor, you will experience immediate and substantial dilution in the net tangible book value of your shares.
   The initial public offering price of our common stock is considerably more than the net tangible book value per share of our outstanding
common stock. Accordingly, investors purchasing shares of common stock in this offering will:

    • pay a price per share that substantially exceeds the value of our tangible assets after subtracting liabilities; and

    • based on an assumed public offering price of $15.00 per share, which is the midpoint of the estimated offering price range set forth on
      the cover page of this prospectus, contribute 75.3% of the total amount invested to fund our company, but will own only 31.4% of the
      shares of common stock outstanding after this offering.
    If the underwriters exercise their over-allotment option, there will be further dilution to new investors. See “Dilution” for more
information.

                                                                         20
    We currently do not intend to pay dividends on our common stock and, consequently, your only opportunity to achieve a return on your
    investment is if the price of our common stock appreciates.
    We currently do not plan to declare dividends on shares of our common stock in the foreseeable future. Further, the payment of dividends
by us is restricted by our senior credit facility. See “Dividend Policy” for more information. Consequently, your only opportunity to achieve a
return on your investment in our company will be if the market price of our common stock appreciates and you sell your shares at a profit.


    Anti-takeover provisions of our charter and bylaws may reduce the likelihood of any potential change of control or unsolicited
    acquisition proposal that you might consider favorable.
    The anti-takeover provisions of Delaware law create various impediments to the ability of a third party to acquire control of us, even if a
change in control would be beneficial to our existing stockholders. Additionally, provisions of our charter and bylaws could deter, delay or
prevent a third-party from acquiring us, even if doing so would benefit our stockholders. These provisions include:

    • the authority of the board to issue preferred stock with terms as the board may determine;

    • the absence of cumulative voting in the election of directors;

    • limitations on who may call special meetings of stockholders; and

    • advance notice requirements for stockholder proposals.


                                                  FORWARD-LOOKING STATEMENTS
     This prospectus contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about the
industry in which we operate and management’s beliefs and assumptions. Such statements include, in particular, statements about our plans,
strategies and prospects under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Business.” Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,”
variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees
of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results
may differ materially from what is expressed or forecasted in such forward-looking statements. These forward-looking statements include, but
are not limited to, statements relating to:

    • our ability to retain customers and win new customers in a highly competitive industry;

    • our integration of Red Simpson’s business; and

    • our beliefs about future trends in population and electricity consumption in our market, outsourcing to companies like our company and
      investment in electrical distribution and transmission.
    Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to
update publicly any forward-looking statements after we distribute this prospectus, whether as a result of new information, future events or
otherwise.

                                                                       21
                                                            USE OF PROCEEDS
     We estimate that we will receive approximately $137.5 million in net proceeds from this offering, after deducting underwriting discounts
and commissions and estimated offering expenses, assuming the shares are offered at $15.00 per share, which is the midpoint of the estimated
offering price range set forth on the cover page of this prospectus. We will not receive any proceeds from shares of our common stock sold by
the selling stockholders.
     We intend to use $4.0 million of the net proceeds from the common stock offered by us to terminate the management advisory services
agreement described in “Related Party Agreements” and the balance of the net proceeds to ratably repay a portion of the outstanding
borrowings under the Tranche B term loan and Tranche C term loan that form part of our senior credit facility. We estimate that we will repay
approximately $85.1 million and $48.4 million of principal under the Tranche B term loan and the Tranche C term loan, respectively. As of
March 31, 2005, we had outstanding indebtedness of approximately $260.0 million under the Tranche B term loan and $148.0 million under
the Tranche C term loan. The borrowings under the Tranche B term loan mature on July 1, 2012 and the borrowings under the Tranche C term
loan mature on December 10, 2012. The borrowings under both Tranche B and C currently bear interest at LIBOR plus 2.25% per annum
(5.37% as of March 31, 2005). The borrowings under the Tranche B term loan were used to finance our acquisition of Red Simpson, to
refinance our then-existing indebtedness, to pre-fund some of our deferred compensation obligations and pay related transaction fees and
expenses. The borrowings under the Tranche C term loan were used to finance our 2004 recapitalization and pay related transaction fees and
expenses.


                                                            DIVIDEND POLICY
    We currently intend to retain all of our earnings to finance the growth and development of our business. We do not anticipate paying any
dividends on our common stock in the foreseeable future. Any future change in our dividend policy will be made at the discretion of our board
of directors and will depend on contractual restrictions contained in our senior credit facility or other agreements, our financial condition,
results of operations, capital requirements and other factors considered relevant by our board of directors.

                                                                      22
                                                               CAPITALIZATION
      The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2005:

      • on an actual basis; and

      • on an adjusted basis to give effect to the completion of this offering and our receipt and application of the estimated net proceeds.
     See “Use of Proceeds.” You should read this table together with our financial statements and the accompanying notes included elsewhere
in this prospectus. All the information in the table below gives effect to our reincorporation in Delaware on July 1, 2005 and the related
conversion of each of our common shares into 14.76 common shares.
                                                                                                               As of March 31, 2005

                                                                                                      Actual                       As Adjusted

                                                                                                                  (in thousands)
Cash and cash equivalents                                                                        $             73            $                   73

Total debt(1)                                                                                           408,000                          274,500
Stockholders’ equity:
    Common stock, par value $0.001 per share, 100,000,000 shares authorized;
      21,484,454 shares issued and outstanding, actual; 31,832,864 shares issued and
      outstanding, as adjusted                                                                             6,415                           6,425
    Additional paid-in capital                                                                               105                         139,129
    Unearned compensation — restricted stock(2)                                                             (952 )                          (952 )
    Retained earnings(3)                                                                                   8,840                          (5,680 )

          Total stockholders’ equity                                                                     14,408                          138,922

              Total capitalization                                                               $      422,408              $           413,422



(1)    As of March 31, 2005, we have no outstanding borrowings under the $70.0 million revolving portion of our senior credit facility. We
       currently have availability of $46.9 million under the revolving portion of our senior credit facility (after giving effect to outstanding
       standby letters of credit of approximately $23.1 million).

(2)    Represents the unvested portion of restricted stock.

(3)    The as adjusted retained earnings reflects the impact of the following nonrecurring expenses, net of income tax effects: (i) the
       $2.2 million write-off of unamortized debt fees related to the prepayment of a portion of our senior credit facility with proceeds of this
       offering, (ii) $4.0 million related to the termination of our management advisory services agreement in connection with this offering and
       (iii) a one-time compensation expense of approximately $18.0 million related to the recent amendment of our deferred compensation
       plan recorded in our fiscal quarter ended June 30, 2005.

                                                                          23
                                                                   DILUTION
   Your interest in our common stock will be diluted to the extent of the difference between the initial public offering price per share of our
common stock in the offering and the net tangible book value per share of our common stock after the offering.
     Our net tangible book value at March 31, 2005 was approximately $(131.8) million, or $(6.13) per share of common stock. We determined
net tangible book value per share at March 31, 2005 by dividing our net tangible book value (total book value of tangible assets less total
liabilities) by 21,484,454, which is the number of shares of common stock outstanding at March 31, 2005 after giving effect to the conversion
of each of our common shares into 14.76 common shares in connection with our reincorporation.
     After giving effect to (1) the sale of 10,000,000 shares of our common stock at an assumed initial public offering price of $15.00 per share,
the midpoint of the price range set forth on the front cover of this prospectus, (2) the expected issuance of 348,410 shares of our common stock
to a selling stockholder upon exercise of options and (3) the use of the net proceeds of the offering as set forth in “Use of Proceeds,” after
deducting underwriting discounts and commissions and estimated offering expenses payable by us in connection with the offering, our net
tangible book value at March 31, 2005 would have been $(11.3) million, or $(0.35) per share. This represents an immediate increase in net
tangible book value per share of $5.78 to existing stockholders and immediate dilution in net tangible book value per share of $15.35 to new
stockholders who receive shares in the offering. The following table illustrates this per share dilution:
Assumed initial public offering price per share                                                                                       $         15.00
   Net tangible book value per share at March 31, 2005                                                      $      (6.13 )
   Increase in net tangible book value per share attributable to this offering                              $       5.78
Net tangible book value per share after giving effect to this offering                                                                $          (0.35 )

Dilution per share to new investors                                                                                                   $         15.35


     The following table sets forth on an adjusted basis as of March 31, 2005 the number of shares of our common stock purchased from us, the
total consideration paid to us, and the average price per share paid to us by existing stockholders and to be paid by new investors purchasing
shares of our common stock in this offering, based on a public offering price of $15.00 per share, the midpoint of the price range set forth on
the front cover of this prospectus, after giving effect to the conversion of each of our common shares into 14.76 common shares in connection
with our reincorporation and before deducting underwriting discounts and commissions and estimated offering expenses on shares sold by us
and other expenses related to the offering.
                                                        Shares Purchased                         Total Consideration                          Average
                                                                                                                                              Price Per
                                                    Number                 Percent            Amount                   Percent                 Share

Existing stockholders(1)                              21,832,864                 68.6 %   $     49,166,457                   24.7 %       $        2.25
New investors                                         10,000,000                 31.4          150,000,000                   75.3                 15.00
        Total                                         31,832,864                100.0 %   $    199,166,457               100.0 %

(1)   Shares purchased by the existing stockholders give effect to the expected issuance of 348,410 shares of our common stock to a selling
      stockholder upon exercise of options. Total consideration and average price per share paid by the existing stockholders give effect to the
      $123.3 million cash payment that was paid to the existing stockholders for the repurchase of shares of common stock pursuant to our
      2004 recapitalization.
     The discussion and tables in this section assume no exercise of outstanding stock options other than the 348,410 shares we expect to issue
to a selling stockholder upon exercise of options. As of March 31, 2005, there were options outstanding to purchase a total of 2,557,531 shares
of our common stock at a weighted average price of $4.85 per share. To the extent that these options are exercised, there will be dilution to new
investors of $14.97 per share. See “Management — Stock Option Plans.”

                                                                           24
                                      UNAUDITED PRO FORMA CONDENSED FINANCIAL DATA
    The following unaudited pro forma condensed consolidated financial data are based on our historical financial statements included
elsewhere in this prospectus.
    The information included in the “Actual” column of the unaudited pro forma condensed consolidated financial data below sets forth our
historical financial data for the year ended June 30, 2004, which is derived from our audited consolidated financial statements included
elsewhere in this prospectus.
    The information included in the “Red Simpson, Inc.” column of the unaudited pro forma condensed consolidated financial data below sets
forth Red Simpson’s historical financial data for the twelve-month period ended June 30, 2004, which are derived from Red Simpson’s audited
consolidated financial statements included elsewhere in this prospectus.
     The information included in the “Pro Forma Acquisition” column of the unaudited pro forma condensed consolidated statement of
operations for the year ended June 30, 2004 has been adjusted to give effect to our acquisition of Red Simpson as if it had occurred on July 1,
2003. The information included in the “Pro Forma 2004 Recapitalization” column of the unaudited pro forma condensed consolidated
statement of operations for the year ended June 30, 2004 has been adjusted to give effect to the following as if they had occurred on July 1,
2003:

    • our acquisition of Red Simpson; and

    • our 2004 recapitalization.
    The information in the “Pro Forma as Adjusted” column of the unaudited pro forma condensed consolidated statement of operations for the
year ended June 30, 2004 has been adjusted to give effect to the following as if they had occurred on July 1, 2003:

    • our acquisition of Red Simpson;

    • our 2004 recapitalization;

    • the sale of 10,000,000 shares of our common stock in this offering and the use of the net proceeds from this offering as described in
      “Use of Proceeds”; and

    • the expected issuance of 348,410 shares to a selling stockholder upon exercise of options.
    The information included in the “Pro Forma 2004 Recapitalization” column of the unaudited pro forma condensed consolidated statement
of operations for the nine months ended March 31, 2005 has been adjusted to give effect to our 2004 recapitalization as if it had occurred on
July 1, 2004. The information included in the “Pro Forma As Adjusted” column of the unaudited pro forma condensed consolidated statement
of operations for the nine months ended March 31, 2005 has been adjusted to give effect to our 2004 recapitalization, the sale of
10,000,000 shares of our common stock in this offering, the 348,410 shares that we expect to issue to a selling stockholder upon exercise of
options and the use of the net proceeds from this offering as described in “Use of Proceeds” as if they had occurred on July 1, 2004.
    The unaudited pro forma and pro forma as adjusted financial data do not purport to present what our actual financial position or results
would have been if the events described above had occurred as of the dates indicated and are not necessarily indicative of our future financial
position or results.
      The allocation of the purchase price for the acquisition of Red Simpson reflected in the unaudited pro forma condensed financial data is
still preliminary. In connection with the continuing integration of Red Simpson, we are still in the process of determining the value of certain
other current assets and evaluating estimates of certain accrued expense liabilities that could affect the allocation of the purchase price through
an adjustment to the valuation of goodwill. We believe that any adjustment will not have a

                                                                        25
material impact on our net income. See Note 3 to our unaudited condensed consolidated financial statements included elsewhere in this
prospectus.
    The pro forma condensed financial data do not include estimated integration costs of approximately $2.0 to $3.0 million relating to our
acquisition of Red Simpson to be incurred in the years ending June 30, 2005 and 2006. In addition, the pro forma condensed financial data do
not include the additional costs of operating as a public company or certain nonrecurring expenses described in note (b) to the unaudited pro
forma condensed consolidated statement of operations for the year ended June 30, 2004 and note (a) to the unaudited pro forma condensed
consolidated statement of operations for the nine months ended March 31, 2005.
    The per share numbers included in the pro forma condensed financial data have been adjusted to give effect to the conversion of each of
our common shares into 14.76 common shares in connection with our reincorporation in Delaware on July 1, 2005.
   You should read this summary financial data together with “Prospectus Summary — Summary Historical and Pro Forma Financial Data,”
“Use of Proceeds,” “Capitalization,” “Selected Historical Financial Data,” “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and our financial statements and accompanying notes included elsewhere in this prospectus.

                                                                      26
                                                                              PIKE ELECTRIC CORPORATION
                                          UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
                                                          For the year ended June 30, 2004
                                                                Pro Forma                                             Pro Forma                        Pro Forma
                                                Red
                                                                Acquisition             Pro Forma                2004 Recapitalization                    2004                  Offering          Pro Forma As
                                              Simpson,
                            Actual(a)          Inc.(a)      Adjustments                 Acquisition                  Adjustments                     Recapitalization       Adjustments           Adjusted(b)

                                                                                             (in thousands, except per share amounts)
Revenues                $ 356,697         $ 195,798                                 $       552,495                                              $             552,495                            $    552,495
Cost of operations        300,313           171,498         $         (3,798 )(c)           468,013                                                            468,013                                 468,013

Gross profit                   56,384            24,300               3,798                  84,482                                                              84,482                                 84,482
General and
  administrative
  expenses                     18,812            14,063                  577 (c)             33,452                                                              33,452     $       (1,000 )(i)         32,452
Transaction expenses                              5,573               (5,573 )(d)
Loss on sale
  of property
  and equipment                   265                                                           265                                                                 265                                    265

Income from
  operations                   37,307             4,664               8,794                  50,765                                                              50,765              1,000              51,765
Other expense
  (income):
    Interest expense            9,192               222               5,244 (e)              14,658          $                      4,969 (h)                    19,627             (4,482 )(j)         15,145
    Other, net                    (19 )            (409 )                                      (428 )                                                              (428 )                                 (428 )

        Total other
          expense               9,173              (187 )             5,244                  14,230                                 4,969                        19,199             (4,482 )            14,717
    Income before
      income taxes
      from continuing
      operations               28,134             4,851               3,550                  36,535                                (4,969 )                      31,566              5,482              37,048
    Income tax
      expense
      (benefit)                11,276               318               2,874 (f)              14,468                                (1,968 )(f)                   12,500              2,171              14,671

Income from
  continuing
  operations(a)         $      16,858     $       4,533     $           676         $        22,067          $                     (3,001 )      $               19,066     $        3,311        $     22,377


Basic and diluted
  earnings (loss) per
  common share:
    Weighted average
      basic and diluted
      common shares
      outstanding:             24,437                                11,207                  35,644 (g)                           (14,758 )                      20,886             10,348              31,234
    Income from
      continuing
      operations        $         0.69                                              $           0.62                                             $                 0.91                           $       0.72




                                                                                                        27
(a)    Historical financial data for Pike Electric Corporation for the year ended June 30, 2004 are derived from our audited consolidated
       financial statements. The historical financial data for Red Simpson are derived from adding the amounts in the audited consolidated
       financial statements for the six months ended June 30, 2004 to the amounts in the audited consolidated financial statements for the year
       ended December 31, 2003 and subtracting the amounts in the audited consolidated financial statements for the six months ended June 30,
       2003 included elsewhere in this prospectus.



       The income from continuing operations data does not include the results of our industrial division that ceased operations in the year
       ended June 30, 2004.

(b)    The pro forma as adjusted earnings do not reflect the following nonrecurring expenses, net of income tax effects: (i) the $2.2 million
       write-off of unamortized debt fees related to the prepayment of a portion of our senior credit facility with proceeds of this offering, (ii)
       $4.0 million related to the termination of our management advisory services agreement in connection with this offering and (iii) a
       one-time compensation expense of approximately $18.0 million related to the recent amendment of our deferred compensation plan
       recorded in our fiscal quarter ended June 30, 2005.

(c)    Reflects the following:


      • Cost of operations adjustments consist of the following (in millions):
Depreciation expense                                                                                                               $        (10.6 )
Amortization of customer relationships and customer arrangements                                                                              4.5
Deferred compensation                                                                                                                         5.5
Red Simpson discontinued deferred compensation plan                                                                                          (3.2 )

Total pro forma cost of operations adjustments                                                                                     $         (3.8 )


        • The following table presents data related to the depreciation expense adjustment, in millions:
                                                                     Red Simpson, Inc.                   As Adjusted                Pro Forma
                                                                       June 30, 2004                         for                   Depreciation
                                                                         Historical                      Acquisition               Adjustments

Asset cost                                                          $            176.5               $           76.6
Net book value                                                      $             56.0               $           76.6
Annual depreciation expense                                         $             21.1               $           10.5          $            (10.6 )
Weighted average useful life                                                     5.7
                                                                                years                       7.2 years


          The decrease in depreciation expense results when we apply purchase accounting to the assets of Red Simpson and apply our
          depreciation policies to the fair value and the estimated remaining useful lives of Red Simpson’s vehicles, machinery and equipment.
          We determined the fair value of the fixed assets acquired from Red Simpson in accordance with our accounting policies. As a result,
          we adjusted the acquired assets to their fair value of $76.6 million and recorded an increase of $20.6 million from historical net book
          value of $56.0 million. We calculated the remaining useful life of each individual asset by comparing the age and condition of each
          asset to the useful life we use for similar assets, which resulted in an increase of the weighted average useful life of the acquired fixed
          assets to 7.2 years as compared to Red Simpson’s historical weighted average useful life of 5.7 years. Finally, we increased the
          average salvage value of the assets acquired to approximately 20%, which is based upon our historical experience in the disposal of
          similar assets, as compared to Red Simpson’s historical salvage values, which ranged from 0% to 10%.


        • The amortization of customer relationships valued at $43.2 million and customer arrangements valued at $7.0 million arises from the
          application of purchase accounting to the assets of Red Simpson, which results in an annual increase in amortization of $4.5 million
          in fiscal 2005.

                                                                          28
           Annual amortization expense will decrease in fiscal 2006 and thereafter as these intangible assets are amortized over their estimated
           useful lives.

        • The deferred compensation expense relates to $29.1 million of deferred compensation payable to certain Red Simpson supervisors
          and managers in connection with the Red Simpson acquisition. Prior to the April 2005 amendment, this amount was to be expensed
          as earned over four years. The annual expense would have been $6.6 million, of which $5.5 million was allocated to cost of
          operations. As a result of the amendment, we instead recorded a one-time compensation expense of approximately $18.0 million in
          the fourth quarter of the year ended June 30, 2005. See “Management’s Discussion and Analysis of Financial Condition and Results
          of Operations — Other Events — Deferred Compensation in Connection with Our Acquisition of Red Simpson.”

        • The $3.2 million of Red Simpson discontinued deferred compensation expense relates to a Red Simpson plan that was terminated as
          a result of our acquisition of Red Simpson. See “Management’s Discussion and Analysis of Financial Condition and Results of
          Operations — Other Events — Deferred Compensation in Connection with Our Acquisition of Red Simpson.”


      • General and administrative expenses adjustments consist of the following (in millions):
Amortization of non-compete agreements                                                                                           $          1.2
Deferred compensation                                                                                                                       1.1
Red Simpson discontinued deferred compensation plan                                                                                       (0.2)
Prior owner compensation                                                                                                                  (1.5)

Total pro forma general and administrative expenses adjustments                                                                  $         0.6


        • The amortization adjustment relates to the amortization of non-compete agreements acquired in the Red Simpson transaction. The
          non-compete agreements are valued at $10.6 million and create $1.2 million in annual amortization.

        • The deferred compensation expense represents the difference between the total $6.6 million deferred compensation expense
          described above and the $5.5 million allocated to the cost of operations. See the discussion above regarding the amendment to these
          deferred compensation obligations.

        • The $0.2 million of Red Simpson discontinued deferred compensation expense relates to a Red Simpson plan that was terminated as
          a result of our acquisition of Red Simpson.

        • Prior owner compensation represents amounts paid to Red Simpson’s prior owner before the Red Simpson acquisition.


(d)    Reflects transaction expenses of $5.6 million incurred by Red Simpson as a result of our acquisition of Red Simpson in July 2004. The
       expenses are comprised primarily of a $4.5 million transaction bonus to the prior owner and $1.0 million in legal and accounting fees.

(e)    Reflects interest expense (calculated at an average rate of 3.4%) associated with borrowings under our senior credit facility of
       $156.2 million. The incremental interest expense is $5.2 million.

(f)    Reflects the application of an effective tax rate of 39.6% to the Red Simpson earnings as well as to the aforementioned adjustments. Red
       Simpson was an S-corporation prior to the acquisition and was subject to minimal income taxes. As a result of the acquisition, earnings
       from Red Simpson will be subject to an effective tax rate of 39.6%.

                                                                        29
(g)   The weighted average basic and diluted common shares outstanding increased because we sold shares of our common stock to partially
      fund our acquisition of Red Simpson.

(h)   Reflects incremental interest expense (calculated at an average rate of 3.3%) under our senior credit facility as a result of $150.0 million
      of additional borrowings in connection with our recapitalization.

(i)   Reflects management fees paid to an affiliate of Lindsay Goldberg & Bessemer under our management advisory services agreement. In
      connection with this offering, we agreed to terminate the management advisory services agreement for aggregate consideration of $4.0
      million, to be paid at the closing of this offering.

(j)   Reflects a decrease of $4.5 million in interest expense relating to our senior credit facility (calculated at an average rate of 3.4%), due to
      the use of proceeds of this offering to repay a portion of our senior credit facility. This amount does not reflect the write-off of
      unamortized debt fees of $2.2 million related to such repayment.

                                                                         30
                                                     PIKE ELECTRIC CORPORATION
                             UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
                                         For the nine months ended March 31, 2005
                                                      Pro Forma
                                                         2004                             Pro Forma
                                                    Recapitalization                         2004                      Offering           Pro Forma As
                                  Actual             Adjustments                        Recapitalization              Adjustments          Adjusted(a)

                                                                       (in thousands, except per share amounts)
Revenues                      $    524,247                                          $             524,247                                 $    524,247
Cost of operations                 428,073                                                        428,073                                      428,073

Gross profit                        96,174                                                         96,174                                       96,174
General and
 administrative expenses            33,506                      (4,217 )(b)                        29,289                   (1,125 )(d)         28,164
Loss on property and
 equipment                             256                                                             256                                         256

Income from operations              62,412                      4,217                              66,629                   1,125               67,754
Other expense (income):
    Interest expense                34,265                      2,841 (c)                          37,106                   (4,506 )(e)         32,600
    Other, net                         (94 )                                                          (94 )                                        (94 )

        Total other
          expense                   34,171                      (2,841 )                           37,012                   (4,506 )            32,506
Income before income
  taxes                             28,241                      1,376                              29,617                   5,631               35,248
Income tax expense                  17,429                        545                              17,974                   2,230               20,204

Net income                    $     10,812      $                  831              $              11,643         $         3,401         $     15,044

Basic earnings per
 common share:
    Weighted average
      basic common
      shares outstanding:           29,753                                                         21,015                                       31,363
Net income                    $       0.36                                          $                0.55                                 $       0.48

Diluted earnings per
 common share:
    Weighted average
      diluted common
      shares outstanding:           30,196                                                         21,458                                       31,806
Net income                    $       0.36                                          $                0.54                                 $       0.47




(a)   The pro forma as adjusted earnings do not reflect the following nonrecurring expenses, net of income tax effects: (i) the $2.2 million
      write-off of unamortized debt fees related to the prepayment of a portion of our senior credit facility with proceeds of this offering,
      (ii) $4.0 million related to the termination of our management advisory services agreement in connection with this offering and (iii) a
      one-time compensation expense of approximately $18.0 million related to the recent amendment of our deferred compensation plan
      recorded in our fiscal quarter ended June 30, 2005.

(b)   The general and administrative expenses adjustment consists of an option buyback expense of $4.2 million arising from the repurchase
      of common stock options as part of our 2004 recapitalization. This represents a nonrecurring charge directly attributable to the 2004
      recapitalization. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Other Events — 2004
      Recapitalization.”

                                                                            31
(c)   Includes an incremental $2.8 million in interest expense (calculated at an average rate of 3.8%) as a result of increased debt from the
      2004 recapitalization.

(d)   Reflects management fees paid to an affiliate of Lindsay Goldberg & Bessemer under our management advisory services agreement. In
      connection with this offering, we agreed to terminate the management advisory services agreement for aggregate consideration of $4.0
      million, to be paid at the closing of this offering.

(e)   Reflects a decrease of $4.5 million in interest expense relating to our senior credit facility (calculated at an average rate of 4.5%) due to
      the use of proceeds of this offering to repay a portion of our senior credit facility and excludes the write-off of unamortized debt fees of
      $2.2 million related to such repayment.

                                                                         32
                                              SELECTED HISTORICAL FINANCIAL DATA
    The table below presents our selected historical financial data for each of the five years in the period ended June 30, 2004 and for the
nine-month periods ended March 31, 2004 and 2005. We derived the statement of operations data and other data for the years ended June 30,
2002, 2003 and 2004 and the balance sheet data as of June 30, 2003 and 2004 from our audited consolidated financial statements included
elsewhere in this prospectus. We derived the statement of operations data and other data for the years ended June 30, 2000 and 2001 and the
balance sheet data as of June 30, 2000, 2001 and 2002 from our audited consolidated financial statements for those years, which are not
included in this prospectus. We derived the statement of operations data for the nine-month periods ended March 31, 2004 and 2005 and the
balance sheet data as of March 31, 2005 from our unaudited condensed consolidated financial statements included elsewhere in this prospectus.
    Our unaudited financial statements have been prepared on the same basis as our audited financial statements and, in our opinion, reflect all
adjustments necessary, consisting only of normal and recurring adjustments, for a fair presentation of this data. The results for any interim
period are not necessarily indicative of the results that may be expected for a full year.
    Amounts for the nine months ended March 31, 2005 include the results of operations of Red Simpson, which was acquired on July 1, 2004.
See Note 3 to our unaudited condensed consolidated financial statements for the nine months ended March 31, 2004 and 2005.
    The per share numbers included in the pro forma condensed financial data have been adjusted to give effect to the conversion of each of
our common shares into 14.76 common shares in connection with our reincorporation in Delaware on July 1, 2005.
   You should read the selected historical financial data in conjunction with “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and the financial statements and accompanying notes included elsewhere in this prospectus.

                                                                       33
                                                                                                                                  Nine Months Ended
                                                               Year Ended June 30,                                                    March 31,

                                   2000               2001              2002                2003             2004                2004                 2005

                                                                    (audited)                                                           (unaudited)
                                                                      (in thousands, except per share amounts)
Statement of Operations
  Data:
Revenues                       $   263,691        $   287,305       $    273,235        $   297,514      $       356,697     $   263,058        $     524,247
Cost of operations                 214,917            241,199            225,280            247,204              300,313         223,520              428,073

Gross profit                        48,774             46,106             47,955             50,310               56,384          39,538               96,174
General and administrative
  expenses(1)                       13,251             14,881             14,176             16,783               18,812          14,050               33,506
Recapitalization expenses(2)            —                  —              10,893                386                   —               —                    —
(Gain) loss on sale of
  property and equipment              (526 )             (150 )                  (4 )              539              265                 105                  256

Income from operations              36,049             31,375             22,890             32,602               37,307          25,383               62,412
Other expense (income):
    Interest expense(3)                   997           1,260              2,802             11,862                9,192           6,754               34,265
    Other, net(4)                         (43 )           157               (267 )              (46 )                (19 )           (17 )                (94 )

         Total other expense              954           1,417              2,535             11,816                9,173           6,737               34,171
Income before income taxes
  from continuing operations        35,095             29,958             20,355             20,786               28,134          18,646               28,241
Income tax expense                  13,216             11,208              9,519              8,335               11,276           7,588               17,429

Income from continuing
  operations                        21,879             18,750             10,836             12,451               16,858          11,058               10,812
    Income (loss) from
      discontinued
      operations, net of
      taxes(5)                            222                383            (324 )             (621 )               (330 )          (384 )                    —

Net income                     $    22,101        $    19,133       $     10,512        $    11,830      $        16,528     $    10,674        $      10,812


Decrease in redemption value
 of mandatorily redeemable
 preferred stock(6)                        —                  —                 —            12,071                   —                  —                    —

Net income available to
 common stockholders           $    22,101        $    19,133       $     10,512        $    23,901      $        16,528     $    10,674        $      10,812

Basic earnings from
 continuing operations per
 common share:
    Weighted average basic
       common shares
       outstanding                  69,202             68,432             59,633             24,437               24,437          24,437               29,753
    Income from continuing
       operations              $      0.32        $      0.27       $          0.18     $      0.51      $          0.69     $          0.45    $            0.36


Diluted earnings from
 continuing operations per
 common share:
     Weighted average
       diluted common shares
       outstanding                  69,202             68,432             59,633             24,437               24,437          24,437               30,196
     Income from continuing
       operations              $      0.32        $      0.27       $          0.18     $      0.51      $          0.69     $          0.45    $            0.36



                                                                            34
                                                                        As of June 30,                                              As of
                                                                                                                                   March 31,
                                           2000               2001              2002                  2003          2004             2005

                                                                              (audited)                                            (unaudited)
                                                                                     (in thousands)
Balance Sheet Data:
Cash and cash equivalents              $      1,911       $     5,578     $           99         $      3,637   $     4,937    $             73
Working capital                              34,795            41,819             36,048               41,372        41,497              86,747
Property and equipment, net                 164,523           176,371            174,500              171,488       190,600             282,417
Total assets                                228,620           243,975            245,032              245,248       287,096             586,356
Total current liabilities                    24,355            20,822             21,515               20,810        38,502              57,441
Total long-term liabilities                  50,412            52,320            198,807              192,103       199,311             514,507
Mandatorily redeemable preferred
  stock                                          —                 —              17,500                5,429         5,810                  —
Total stockholders’ equity                  153,853           170,833              7,210               32,335        49,283              14,408


(1)   General and administrative expenses include the management fees paid to an affiliate of Lindsay Goldberg & Bessemer under our
      management advisory services agreement. In connection with this offering, we agreed to terminate the management advisory services
      agreement for aggregate consideration of $4.0 million, to be paid at the closing of this offering.

(2)   Recapitalization expenses represent costs incurred in connection with the 2002 recapitalization.

(3)   Interest expense includes the mark-to-market gains or losses on our interest rate derivatives and amortization of deferred loan costs. In
      addition, in fiscal 2004 and 2005, interest expense includes the changes in the redemption value of our Series A preferred stock and the
      write-off of unamortized deferred loan costs resulting from prepayments of debt.

(4)   Other, net consists primarily of interest income.

(5)   Income (loss) from discontinued operations, net of taxes, represents losses from our industrial division, which ceased operations during
      the year ended June 30, 2004.

(6)   The $12.1 million decrease in the redemption value of our Series A preferred stock during fiscal 2003 occurred because we adjusted the
      carrying value of the Series A preferred stock to $5.4 million from its original carrying value of $17.5 million at issuance in accordance
      with the terms of the Series A preferred stock. See “Management’s Discussion and Analysis of Financial Condition and Results of
      Operations — Results of Operations — Year Ended June 30, 2004 Compared to Year Ended June 30, 2003.”

                                                                        35
                                  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
                                        CONDITION AND RESULTS OF OPERATIONS
    You should read the following discussion in conjunction with the audited and unaudited historical financial statements and our unaudited
pro forma financial statements included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various
factors, including but not limited to those listed under “Risk Factors” and “Forward-Looking Statements” and those included in other
portions of this prospectus.

Overview
     We are one of the largest third-party providers in the United States of outsourced services for electric distribution and transmission
companies. Our core activities consist of the maintenance, upgrade and extension of electric distribution and sub-500 kV transmission
powerlines. Our customers include more than 150 electric utilities, cooperatives and municipalities across a contiguous 19-state region that
stretches from Pennsylvania in the north to Florida in the southeast and to Texas in the southwest. On July 1, 2004, we acquired Red Simpson,
Inc., which expanded our service territory and operating scale. For the fiscal year ended June 30, 2004, our pro forma revenues, after giving
effect to the Red Simpson acquisition, were $552.5 million.


    Business Drivers and Measures
     Industry trends impact our results of operations. In operating our business and monitoring its performance, we also pay attention to a
number of performance measures and operational factors. The statements in this section are based on our current expectations. These
statements are forward-looking, and actual results may differ materially from our expectations. Please refer to “Risk Factors” and
“Forward-Looking Statements” for more information on what may cause our actual results to differ.
     Industry Trends. Our performance is impacted by maintenance, upgrade and extension spending on distribution and transmission
powerlines by our customers. Distribution and transmission spending is impacted by several important trends affecting our industry, including
the following:

    • Growth in demand for electricity. Electricity demand is a direct driver of maintenance, upgrade and extension spending on the
      distribution and transmission infrastructure, and electricity demand has historically been a function of population growth and increases
      in electricity consumption. We believe that continued demand for our services will be driven in part by expected growth in electricity
      consumption and population in the southeastern and south central regions of the United States, which have grown at higher rates in
      recent years than the rest of the country.

    • Increased outsourcing of infrastructure services. There has been an increase in outsourcing of electrical infrastructure maintenance and
      system improvements by electric companies over the last decade as they have increasingly focused on their core competencies. We
      believe outsourcing enables electric companies to manage their labor costs more flexibly, improve the reliability of their systems and
      deploy their capital more efficiently, and we expect the outsourcing trend to continue.

    • Inadequacy of current electric infrastructure. The current electric infrastructure is increasingly viewed as inadequate, as more
      electricity is being transported over longer distances utilizing a system that was designed for limited power sharing among neighboring
      utilities. We expect spending on electrical transmission infrastructure to increase in order to cure historical underinvestment, and we
      expect this increase to drive further work for us.
    Operational Factors. Although we benefit from several industry trends, we are subject to various factors that can affect our results of
operations. To mitigate these factors, we focus on elements of the business we can control, including excellent customer service, safety and
employee development, cost

                                                                       36
control and return on invested capital. The operational factors that affect our business include the following:


    • When we add new customers and contracts, we generally experience an increase in start-up costs, including the costs of training and
      outfitting our crews and spending on equipment and vehicles, resulting in lower gross margins and higher capital expenditures at the
      beginning of a contract’s term. We added approximately 300 employees to our operating crews in the six-month period ended June 30,
      2005, for example. Once the crews and equipment are fully utilized, our margins generally increase over the life of the contract.



    • Industry-wide insurance costs for workmen’s compensation, medical and general liability have risen in the past several years and are
      expected to continue to rise at a rate faster than our revenues. We have implemented several safety initiatives designed to reduce
      incident rates and corresponding insurance costs as well as introduced an insurance bonus in 2005 that has initially increased our costs.

    • There are a limited number of skilled workers that can perform our work, and during historic periods of increased demand, labor rates
      have tended to increase. We have been experiencing an improved economic cycle, and we are currently experiencing shortages of
      skilled personnel in certain markets. These shortages have caused our labor costs to increase, although we historically have been able to
      obtain increases when we renegotiate rates to offset these cost increases.

    • We expect an increase in our general and administrative expenses related to the cost of operating as a public company of $2.0 million to
      $3.0 million per year and additional implementation costs in fiscal 2007 relating to compliance with Section 404 of the Sarbanes-Oxley
      Act of 2002 of $1.0 million to $2.0 million.

    • Fuel costs have risen in the past several years, with significant increases as of late, and are expected to continue to rise at a rate faster
      than our revenues. We have a large fleet of vehicles and equipment that primarily use diesel fuel. We have implemented bulk
      purchasing in certain areas and may seek other alternatives to hedge fuel costs.
    Other Factors. Other factors that will affect our results of operations in future periods include the following:

    • In connection with our acquisition of Red Simpson, we allocated a portion of the purchase price to definite-lived intangible assets that
      will be amortized over their estimated lives of 3 to 30 years, resulting in annual amortization charges of $5.7 million and $4.9 million in
      fiscal 2005 and 2006, respectively.

    • In connection with our adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123(R), Share-Based Payment, as of
      July 1, 2005, we will be required to account for share-based payments, including grants of employee stock options, based on fair
      values, which means that we will begin to recognize compensation expenses in connection with employee stock options. We expect to
      incur such costs in the amount of approximately $2.9 million to $4.2 million in fiscal 2006. This includes our estimate of the fiscal
      2006 portion of the expense relating to the restricted stock and stock options we expect to grant upon consummation of this offering, as
      described in “— Other Events — IPO Grants” below. We cannot precisely predict future expenses because they depend on employee
      stock options we may grant in the future. See “— Recent Accounting Pronouncements.”


    Services
    We monitor our revenues by the two categories of services we provide: powerline and storm restoration. We use this breakdown because
powerline services represent our ongoing service revenues, most of which are generated by our customers’ recurring maintenance needs. Storm
restoration revenues represent additional revenue opportunities that depend on weather conditions.

                                                                         37
    Our powerline services are our core business because these services generate more stable revenues than storm restoration work. These
powerline services have benefited from the industry trends described above. Although storm restoration services can generate significant
revenues, their unpredictability is demonstrated by comparing our revenues from those services in the nine months ended March 31, 2005 and
2004. During August and September of 2004, we experienced the largest storm restoration activity in our history as four hurricanes hit Florida
and the surrounding Gulf states, resulting in storm revenues of $146.9 million for the nine months ended March 31, 2005 compared to
$36.1 million for the nine months ended March 31, 2004. We cannot predict what our future revenues from storm restoration work will be.
      The following table sets forth our revenues by category of service for the periods indicated:
                                                 Year Ended June 30,                                                         Nine Months Ended March 31,

                                2002                      2003                              2004                         2004                          2005(1)

                                                                         (in millions, except percentages)
Powerline services      $   266.2       97.4 %   $   250.9              84.3 %    $   313.7             87.9 %   $   226.9           86.3 %    $   377.3          72.0 %
Storm restoration
  services                    7.0        2.6          46.6              15.7           43.0             12.1          36.1           13.7          146.9          28.0

      Total             $   273.2      100.0 %   $   297.5             100.0 %    $   356.7            100.0 %   $   263.0          100.0 %    $   524.2         100.0 %


(1)     Our revenues for the nine months ended March 31, 2005 reflect our acquisition of Red Simpson.


      Integration of Red Simpson
    We acquired Red Simpson on July 1, 2004. Since then, we have incorporated the entire Red Simpson fleet into our tracking systems and
rebranded substantially all of the Red Simpson fleet with the “Pike” emblem. In addition, we have accelerated our integration of Red
Simpson’s crews and as of June 30, 2005, we completed the transition to reporting Red Simpson’s transactions through our financial systems.
We expect the total integration costs for fiscal 2005 to be approximately $3.0 to $4.0 million. We expect to incur an additional estimated
$1.0 million in integration costs in fiscal 2006 for the completion of the fleet transition and continued training of the Red Simpson crews.


      Seasonality; Fluctuations of Results
    Our services are performed outdoors, causing our results of operations to be subject to seasonal variations due to weather conditions. These
seasonal variations affect both our powerline and storm restoration services. Extended periods of rain affect the deployment of our powerline
crews, particularly with respect to underground work. In April 2005, we experienced significant rainfall in many parts of our service territory.
During the winter months, demand for powerline work is generally lower due to inclement weather, while demand for electrical repairs is
generally higher due to damage caused by such weather conditions. In addition, demand for powerline work generally increases during the
spring months due to improved weather conditions and is typically the highest during the summer due to better weather conditions. Demand for
electrical repairs is generally higher during the fall months due to damage caused by weather conditions, such as hurricanes. In addition, our
results of operations are subject to significant variations related to storm restoration services. Due to the unpredictable nature of storms, the
level of our storm restoration revenues fluctuates from period to period. See “Risk Factors — Risks Related to Our Business — Our storm
restoration services are highly volatile and unpredictable, which could result in substantial variations in, and uncertainties regarding, the levels
of our financial results from period to period.”


      Basis of Reporting
    Revenues. We derive our revenues from one reportable segment through two service categories — powerline and storm restoration. Our
core powerline services consist of the maintenance, upgrade and extension of electric distribution and transmission power lines and various
ancillary services. Our storm restoration services involve the rapid deployment of our highly trained crews and related equipment to

                                                                                 38
restore power on distribution and transmission systems during crisis situations, such as hurricanes or ice or wind storms.
    Over 90% of our services, including substantially all of our powerline and a majority of our storm restoration services, are provided under
master service arrangements, or MSAs, which are based on a price per hour worked or a price per unit of service. Less than 5% of our annual
revenues are from fixed-price agreements. In addition, we do not derive significant revenues from large-scale capital projects, which typically
involve competitive bidding, fixed price agreements and substantial performance bond requirements. The mix of hourly and per unit revenues
changes during periods of high storm restoration services, as these services are all billed on an hourly basis. We determine our revenue
generated on an hourly basis based on actual labor and equipment time completed and on materials billed to our customers. Revenue based on
hours worked is recognized as hours are completed. We recognize revenue on unit-based services as the units are completed.
    The terms of our MSAs are typically between one to three years for cooperatives and municipalities and three to five years for
investor-owned utilities, with periodic pricing reviews. Our customers typically designate geographic regions for us to perform necessary
services but are not required to use us exclusively and do not guarantee service volumes. Most of our customer arrangements, including MSAs,
may be terminated by our customers on short notice. Initial contract awards usually are made on a competitive bid basis, but often are renewed
on a negotiated basis. As a result of our track record of quality work and customer service, we estimate that a majority of our MSAs are
renewed at or before the expiration of their terms.
    Cost of Operations. Our cost of operations consists primarily of compensation and benefits to employees, insurance, fuel, rental, operating
and maintenance expenses relating to vehicles and equipment, materials and parts and supplies. Our costs of operations also includes
depreciation, primarily relating to our vehicles and heavy equipment.
    General and Administrative Expenses. General and administrative expenses include costs not directly associated with performing work for
our customers. These costs consist primarily of compensation and related benefits of management and administrative personnel, facilities
expenses, management fees, professional fees and administrative overhead. We paid management fees under an agreement with an affiliate of
Lindsay Goldberg & Bessemer for advisory services that is described in “Related Party Agreements.” We agreed to terminate this management
advisory services agreement in connection with this offering.
    Other Expense. Other expense primarily includes interest expense, recapitalization expenses and other nonoperating expenses. In addition
to cash interest expense, interest expense includes amortization of deferred loan costs and mark-to-market gains and losses on interest rate
derivatives. In addition, in fiscal 2004 and 2005, interest expense includes the changes in the redemption value of our Series A preferred stock
and the write-off of unamortized deferred loan costs resulting from prepayments of debt. The recapitalization expenses consist of nonrecurring
expenses relating to our 2002 and 2004 recapitalizations.
     Discontinued Operations. Discontinued operations include our operations associated with our industrial division, which ceased operations
during the year ended June 30, 2004. Our industrial division primarily focused on installation of electrical wiring and the manufacture and
installation of air conditioning units and ductwork in industrial and commercial properties. This business was not a material contributor to
earnings, and we do not expect to incur any material costs or liabilities related to these operations in the future.

Critical Accounting Policies
    The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these
consolidated financial statements requires the use of estimates, assumptions, judgments and subjective interpretations of accounting

                                                                       39
principles that have an impact on the assets, liabilities, revenues and expenses reported. We believe our uses of estimates and underlying
accounting assumptions adhere to GAAP and are consistently applied. Valuations based on estimates are reviewed for reasonableness on a
consistent basis. Actual results may differ materially from these estimates. We believe the following to be our most important accounting
policies, including those that use significant judgments and estimates in the preparation of our consolidated financial statements.
    Revenue Recognition. Revenues from service arrangements are recognized when services are performed. Over 90% of our services are
provided under master service arrangements, which are based on a price per hour worked or a price per unit of service. We recognize revenue
from hourly services based on actual labor and equipment time completed and on materials billed to our customers. We recognize revenue on
unit-based services as the units are completed, and the price for each unit is determined under the service arrangement. For unit-based services,
any estimated loss is recognized when the actual costs to complete each unit exceed original estimates. Costs typically include both direct labor
and material costs and indirect costs related to performance, such as indirect labor, supplies, tools, repairs and depreciation costs. We
immediately recognize the full amount of any estimated loss on these projects if estimated costs to complete the remaining units for the project
exceed the revenue to be received from such units. For each of the periods presented, we did not have a material amount of loss accruals.
    Work completed and not billed represents service revenues earned under hourly and unit service arrangements and recognized in the period
performed but not billed until a subsequent period and work performed under certain unit service arrangements and not yet billed to customers
in accordance with individual terms regarding the timing of billing.
     Accounts Receivable. Historically, due to the high credit quality of our customers, we have not incurred material bad debts. We evaluate
the collectibility of our trade accounts receivable based on analysis of specific customers, historical experience and current economic trends.
Accounts are written off after all means of collectibility, including legal action, are exhausted. In some instances, a portion of the total revenues
billed under the customer arrangement are held by the customer as a “retainage” until the job is complete, and we record these amounts as
accounts receivable.
     Impairment of Long-Lived Assets. We review our long-lived assets for impairment when events or changes in business conditions indicate
the carrying value of the assets may not be recoverable, as required by SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets . An impairment on assets classified as “held and used” exists if the sum of the undiscounted estimated cash flows expected
is less than the carrying value of the assets. If this measurement indicates a possible impairment, we compare the estimated fair value of the
asset to the net book value to measure the impairment charge, if any. If the criteria for classifying an asset as “held for sale” has been met, we
record the asset at the lower of carrying value or fair value, less selling costs.
     Valuation of Goodwill and Other Intangible Assets. In accordance with SFAS 141, Business Combinations, we identify and value
intangible assets that we acquire in business combinations, such as customer arrangements, customer relationships and non-compete
agreements, that arise from contractual or other legal rights or that are capable of being separated or divided from the acquired entity and sold,
transferred, licensed, rented or exchanged. The fair value of identified intangible assets is based upon an estimate of the future economic
benefits expected to result from ownership, which represents the amount at which the assets could be bought or sold in a current transaction
between willing parties, that is, other than in a forced or liquidation sale. For customers with whom we have an existing relationship prior to the
date of the transaction, we utilize assumptions that a marketplace participant would consider in estimating the fair value of customer
relationships that an acquired entity had with our pre-existing customers in accordance with EITF 02-17, Recognition of Customer Relationship
Intangible Assets Acquired in a Business Combination .
    In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, we test our goodwill and indefinite-lived intangibles for
impairment annually or more frequently if events or circumstances indicate impairment may exist. Examples of such events or circumstances
could include a significant change in business climate or a loss of significant customers. We generally complete our annual analysis of our

                                                                         40
reporting unit on the first day of our fourth fiscal quarter. We apply a two-step fair value-based test to assess goodwill for impairment. The first
step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds
its fair value, the second step is then performed. The second step compares the carrying amount of the reporting unit’s goodwill to the fair value
of the goodwill. If the fair value of the goodwill is less than the carrying amount, an impairment loss would be recorded in our income from
operations. Intangible assets with definite lives are amortized over their estimated useful lives and are also reviewed for impairment if events or
changes in circumstances indicate that their carrying amount may not be realizable.
    Our management makes certain estimates and assumptions in order to determine the fair value of net assets and liabilities, including,
among other things, an assessment of market conditions, projected cash flows, cost of capital and growth rates, which could significantly
impact the reported value of goodwill and other intangible assets. Estimating future cash flows requires significant judgment, and our
projections may vary from cash flows eventually realized. When necessary, we engage third-party specialists to assist us with our valuations.
The valuations employ a combination of present value techniques to measure fair value, corroborated by comparisons to estimated market
multiples. These valuations are based on a discount rate determined by our management to be consistent with industry discount rates and the
risks inherent in our current business model.
    We cannot predict the occurrence of certain future events that might adversely affect the reported value of goodwill and other intangible
assets that totaled $146.2 million at March 31, 2005. Such events include strategic decisions made in response to economic and competitive
conditions, the impact of the economic environment on our customer base or material negative changes in our relationships with material
customers.
    Insurance and Claim Accruals. In the ordinary course of our business, we are subject to workers’ compensation, vehicle, general liability
and health insurance claims. We maintain insurance for individual workers’ compensation and vehicle and general liability claims exceeding
$1,000,000 for claims subsequent to October 1, 2004 and $500,000 for claims prior to October 1, 2004. We also maintain insurance for health
insurance claims exceeding $225,000 per person on an annual basis. We determine the amount of our loss reserves and loss adjustment
expenses based on third-party actuarial analyses prepared semi-annually that use both company-specific and industry data, as well as general
economic information. Our estimates for insurance loss exposures require us to monitor and evaluate our insurance claims throughout their life
cycles. Using this data and our assumptions about the emerging trends, we estimate the size of ultimate claims. Our most significant
assumptions in forming our estimates include the trend in loss costs, the expected consistency with prior year claims of the frequency and
severity of claims incurred but not yet reported, changes in the timing of the reporting of losses from the loss date to the notification date, and
expected costs to settle unpaid claims. We also monitor the reasonableness of the judgments made in the prior year’s estimates and adjust
current year assumptions based on that analysis. See Note 2 to our audited consolidated financial statements.
    While the final outcome of claims may vary from estimates due to the type and severity of the injury, costs of medical claims and
uncertainties surrounding the litigation process, we believe that none of these items, when finally resolved, will have a material adverse effect
on our financial condition or liquidity. However, should a number of these items occur in the same period, it could have a material adverse
effect on the results of operations in a particular quarter or fiscal year.
    Stock-Based Compensation. Prior to July 1, 2005, we accounted for employee stock-based compensation in accordance with the
provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related interpretations,
which require us to recognize compensation cost for the excess of the fair value of the stock at the grant date over the exercise price, if any. No
stock-based employee compensation cost resulting from the granting of stock options has been recorded in net income, as all options granted
under the plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The share, exercise price
and fair value information below have been adjusted

                                                                        41
to give effect to the conversion of each of our common shares into 14.76 common shares in connection with our reincorporation in Delaware on
July 1, 2005.
    Given the lack of an active public market for our common stock, we determined the fair value for our common stock as well as for options
to acquire shares of our common stock using the market approach described below. Information on stock option grants is as follows:
                                                                                                               Fair Value of
                                                                Number of                     Exercise           Common                 Intrinsic
Grant Date                                                    Options Granted                  Price               Stock                Value (1)

April 18, 2002                                                        2,565,819           $        3.80       $        3.80                    —
April 18, 2003                                                          253,400           $        3.80       $        3.80                    —
October 21, 2004                                                      1,503,483           $        6.51       $        6.51                    —


(1)     Intrinsic value reflects the amount by which the value of the shares as of the grant date exceeds the exercise price of the options.
    Members of our board of directors possessing the requisite experience in stock valuation estimated the fair value of common stock
underlying the options granted at the time of each grant date noted above. The determinations of fair value were primarily based on a market
approach, under which we compare ourselves to a peer group and develop an estimated value for our common stock based principally on
consummated transactions that were negotiated with third parties, as well as on estimates of revenues, earnings and enterprise values.


       Stock Options Granted in 2002
    The fair value of the common stock underlying the options granted to employees on April 18, 2002 was determined to be $3.80 per share.
This value was determined under the market approach contemporaneously with the 2002 recapitalization. See Note 1 to our audited
consolidated financial statements included elsewhere in this prospectus. This value was the same as the price at which Lindsay Goldberg &
Bessemer purchased shares in the 2002 recapitalization, which was the result of an arms’-length negotiation with our company.

      Stock Options Granted in 2003
    The fair value of our common stock underlying the options granted to employees in April 2003 was determined by our board of directors to
be $3.80 per share. The board of directors evaluated a number of factors and determined that there was no change in the fair value of our
common stock since the 2002 recapitalization. These factors included the following:

       • the price per share paid in the 2002 recapitalization for our common stock in an arms’-length transaction;

       • the trailing revenues, gross profit, cost structure and earnings;

       • the total amount of debt;

       • the earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, as adjusted;

       • the management team; and

       • the prospects for continuing and improving the above factors.


       Stock Options Granted in 2004
   The fair value of the common stock underlying the options granted to employees in October 2004 was determined to be $6.51 per share.
The value was the same as that at which certain shareholders of Red Simpson and our company purchased shares of our common stock in
connection with the Red Simpson

                                                                             42
acquisition, which value was determined based on arms’-length negotiations with a third party. No stock options have been issued since
October 2004. See Note 3 to our unaudited condensed consolidated financial statements included elsewhere in this prospectus.


    Intrinsic Value of Stock Options
     Based upon our assumed initial public offering price of $15.00 per share, representing the midpoint of the estimated offering price range
set forth on the cover page of this prospectus, the intrinsic value of the options outstanding at May 31, 2005, as adjusted to give effect to this
offering, was $29.6 million, of which $20.5 million related to vested options and $9.1 million related to unvested options.


    Employee Stock Purchase Plan
     In January 2005, we sold common stock to various members of management and other employees through our Employee Stock Purchase
Plan. See Note 5 to our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The fair value was
determined to be $8.35 per share based upon applying the market approach. The increase in value was primarily due to the increase in
operating results from the significant storm revenue for the six months ended December 31, 2004 and significant debt prepayments using the
cash generated by that storm work. In addition, the positive operating results from the recent acquisition of Red Simpson contributed to the
increase in value. In May 2005, we received a third-party valuation as of January 2005, which confirmed a value substantially similar to the
value at which the common stock was sold in January 2005. Our board of directors has historically used consummated transactions, combined
with their knowledge of the value of other similar companies, as principal indicators of the value of our common stock. Members of our board
of directors possessing the requisite experience in stock valuation estimated the fair value of our common stock sold in January 2005. Our
board of directors did not obtain a third-party valuation in January 2005 because we completed our 2004 recapitalization in January 2005, and,
therefore, our board of directors decided to use the same equity valuation used in that recapitalization. We decided to obtain the additional
valuation (which was completed in May 2005 but valued our company as of January 2005) due to our progress in our initial public offering
process at a value that would be greater than the value of our common stock originally determined by our board of directors. The third-party
valuation used a combination of three approaches to arrive at the fair value of our stock. The first approach, a guideline company market
approach, relies upon using the stock prices of publicly traded companies to develop valuation multiples. In the second method, the guideline
transaction method, purchase prices paid in the acquisition of guideline companies are used to develop an indication of value through the
development of relationships between the purchase price paid and a financial measure of the company, usually revenue, earnings, or a measure
of cash flow such as EBITDA, which was used in our valuation. The final method used was a discounted future cash flow model, under which
our future cash flows were projected and then discounted to present value. In determining the initial public offering price range, we, the selling
stockholders and the representatives of the underwriters considered a number of factors, including valuations of generally comparable publicly
traded companies, the history and prospects for the industry in which we compete, the capital structure of our company and the general
condition of the securities markets, and of the initial public offering market in particular, at the time of this offering. See “Underwriting.” We
believe that the differences in value between our third-party valuation as of January 2005 and the initial offering price range principally
resulted from the developments described below relating to the period between January and the end of June 2005 and the higher multiples that
would apply to our financial measures as a public company. Our January 2005 valuation used an Adjusted EBITDA multiple of approximately
6.0 times. In determining the initial offering price range, we estimated that the comparable multiple for public companies would generally
range from 7.0 to 11.0 times.
    Management believes that the difference between the estimated fair value of our common stock as of January 2005, the date we sold stock
through our Employee Stock Purchase Plan, and the value of our common stock based on the midpoint of the estimated price range of this
offering set forth on the cover

                                                                         43
page of this prospectus, which was determined at the end of June 2005, is attributable to the following events that occurred after January 2005:

    • Our debt payments continued to have a positive effect on our equity value. We reduced our debt by approximately $13 million from
      January 2005 to March 31, 2005 and will further reduce our debt through the application of the net proceeds of this offering of
      approximately $133.5 million, assuming the shares are offered in this offering at the midpoint of the estimated price range of the
      offering. These debt reductions have the impact of improving the equity value of our common stock.

    • We continued to expand our operations by adding approximately 300 revenue-generating employees and by continuing our successful
      integration of Red Simpson, and our revenues for the six-month period ended June 30, 2005 were strong (with strong powerline
      revenues offsetting lower storm revenues than in the comparable period in 2004). We also hired certain management personnel with
      public company experience, including a new Chief Financial Officer, a new Controller, a new Vice President of Information Systems
      and a new Investor Relations Manager.

    • Although we began discussions with our underwriters in the second half of 2004, our first organizational meeting for this offering was
      in January 2005. Since that time, we have made significant progress in the initial public offering process, creating an increase in the
      value of our common stock arising from the expectation of becoming a public company.

    • The redemption of our preferred stock in January 2005 simplified our capital structure and eliminated the effect on future earnings from
      annual adjustments to the redemption value of the preferred stock.

Other Events
    Red Simpson Acquisition. On July 1, 2004, we acquired all of the outstanding stock of Red Simpson. The total cash purchase price was
$194.2 million, net of cash acquired. We also assumed existing net liabilities in the amount of $17.2 million. We financed the acquisition
through the issuance of $71.0 million in new common equity to some of our existing stockholders and $123.2 million of new indebtedness
under our senior credit facility, which we refinanced in connection with the transaction. The acquisition was accounted for as a purchase in
accordance with SFAS No. 141, Business Combinations . See Note 3 to our unaudited condensed consolidated financial statements for
additional information regarding the allocation of the purchase price we paid for Red Simpson.
     2004 Recapitalization. In December 2004, we undertook a recapitalization in which we borrowed an additional $150.0 million under our
existing senior credit facility, which we used as follows: (i) $123.3 million to repurchase shares of our common stock in December 2004;
(ii) $4.2 million to repurchase employee options to purchase 1,185,981 shares of common stock in December 2004; and (iii) $20.0 million to
redeem all of the outstanding shares of our Series A preferred stock in January 2005. In connection with the repurchased stock options, we
incurred compensation expense of $4.2 million during the nine months ended March 31, 2005. In addition, we incurred a charge of
approximately $14.0 million in the nine months ended March 31, 2005 related to the redemption of the Series A preferred stock. The 2004
recapitalization did not affect the percentage of outstanding shares of common stock owned by any of our existing shareholders. We negotiated
the redemption value of the Series A preferred stock with the Series A preferred stockholders in an arms’-length transaction. This transaction
allowed us to simplify our capital structure and eliminate the effect on future earnings from annual adjustments to the redemption value of the
preferred stock. The preferred stock agreement provided for increases in the redemption value based on our future performance plus a 7%
accretion. The original valuation of the preferred stock was $17.5 million, as determined by a third party. Based on that original valuation and
the potential negative impact on net income due to annual adjustments to the redemption value, we determined that the $20 million redemption
value was fair and reasonable.

                                                                       44
    Employee Stock Purchase Plan. In January 2005, we adopted an employee stock purchase plan. Pursuant to this plan, we sold
approximately $5.0 million of common stock to various employees and members of management.
    Deferred Compensation in Connection with Our Acquisition of Red Simpson. In connection with our acquisition of Red Simpson, we
have entered into certain transactions involving employee compensation expenses that have impacted and, in some cases, will continue to
impact our results of operations.
     Prior to our acquisition of Red Simpson, certain Red Simpson supervisors and managers were entitled to payments of deferred
compensation. In connection with our acquisition of Red Simpson, we agreed to pay $26.0 million in base deferred compensation, which was
fully vested, as part of the purchase price over two years. In addition, we agreed to pay $29.1 million in bonus deferred compensation, which
originally vested over four years if the employees continued their employment with us. However, we recently amended the agreements
regarding deferred compensation so that if any employee is not employed by us on a payment date for certain reasons, as described in the
amendments, he no longer forfeits the unpaid deferred compensation. Instead, the employee will receive the payment plus accrued interest in
2020. Prior to the amendment, we would have recognized the deferred compensation expense as earned over a four-year period. As a result of
these amendments, we recorded a one-time compensation expense of approximately $18.0 million in the fourth quarter of the fiscal year ended
June 30, 2005. This amount reflects the accrual of the present value of the portion of deferred compensation not already paid or accrued as of
May 2005.
    For the nine months ended March 31, 2005, we recognized $4.8 million of deferred compensation expense related to the vesting of the
bonus deferred compensation. Going forward, as a result of the amendments, we will no longer record an accrual for deferred compensation.
Instead, we will recognize interest expense over the next four years related to the accretion of this liability from its present value of
$23.0 million to its face value of $25.4 million.
    The following table sets forth the activity in the deferred compensation liability account for the base and bonus deferred compensation for
the nine months ended March 31, 2005:
                                                                                    Base                       Bonus
                                                                                   Deferred                   Deferred
                                                                                 Compensation               Compensation                  Total

                                                                                                      (in millions)
Amounts payable in connection with the acquisition of Red Simpson           $              26.0        $               29.1       $          55.1
Payments                                                                                  (13.9 )                      (3.0 )               (16.9 )
Forfeitures                                                                                  —                         (0.7 )                (0.7 )

Face value at March 31, 2005                                                $              12.1        $               25.4       $          37.5


   The following table sets forth the total amount of base and bonus deferred compensation remaining to be paid in cash for the fourth quarter
ended June 30, 2005 and each of the four fiscal years ended June 30, 2009, based upon the recent amendment.
                                                                                    Base                       Bonus
                                                                                   Deferred                   Deferred
                                                                                 Compensation               Compensation                  Total

                                                                                                       (in millions)
2005                                                                         $                  4.7     $                  1.5        $       6.2
2006                                                                                            7.4                        5.0               12.4
2007                                                                                             —                         7.2                7.2
2008                                                                                             —                         6.3                6.3
2009                                                                                             —                         5.4                5.4

Total                                                                        $             12.1         $               25.4          $      37.5


                                                                       45
    Last year, Congress enacted tax legislation regarding deferred compensation that became effective on January 1, 2005. We expect that the
Internal Revenue Service will issue regulations on this legislation in mid-2005. However, we do not anticipate that these regulations will have
adverse tax consequences for the employees to be paid deferred compensation.
    In connection with our acquisition of Red Simpson, we also agreed to permit two members of Red Simpson’s management to accelerate an
aggregate of $3.3 million of deferred compensation and to apply the proceeds to acquire shares of our restricted common stock that we valued
at $2.0 million. In connection with this transaction, we recognized compensation expense of $1.3 million in the nine months ended March 31,
2005 equal to the excess of the deferred compensation amount over the fair value of the stock acquired by those persons.
     Internal Control Over Financial Reporting at Red Simpson. In connection with the audit of Red Simpson’s financial statements for the
year ended December 31, 2003, in March 2004, Grant Thornton, Red Simpson’s independent registered public accounting firm, reported to Red
Simpson’s management a “significant deficiency” and a “material weakness” in Red Simpson’s internal control over financial reporting. Under
the current standards of the Public Company Accounting Oversight Board, a significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the company’s ability to initiate, authorize, record, process or report external financial data reliably
in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the
company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected. A material weakness in
internal control is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a
material misstatement of the annual or interim financial statements will not be prevented or detected.
    The material weakness reported by Grant Thornton was the difficulty that Red Simpson’s management experienced in applying accounting
principles and recording journal entries, as well as preparing its financial statements and financial disclosures related to its annual report.
Specifically, management experienced difficulty in providing accurate, timely and sufficient disclosure and/or documentation of the following:
accrued insurance claim liabilities, amortization of goodwill and intangible assets, deferred compensation liability, income tax accruals and
financial statement footnote disclosure. As a result, Red Simpson recorded numerous prior period and current year adjustments to properly state
current year activity and balances. Grant Thornton recommended that greater emphasis be placed on reviewing and assessing the issues that
may arise in connection with applicable accounting and financial reporting.
     Since the acquisition, we have begun to augment systems and controls over the Red Simpson business, and we have implemented
procedures for monthly account reconciliations and reviews of accounting estimates at Red Simpson. While we are still using Red Simpson’s
accounting system, we increasingly record transactions in the Red Simpson business on our own systems, and we expect to complete the
transition of Red Simpson’s accounting into our systems during calendar 2005. In addition, Pike personnel already have assumed direct
responsibility for recording accrued insurance claim liabilities, amortization of intangible assets, deferred compensation liabilities and income
tax accruals relating to the Red Simpson business, as well as for preparing financial statement footnote disclosures. For a description of risks
associated with the issues identified by Grant Thornton, see “Risk Factors — Risks Related to Our Business — In March 2004, Grant Thornton
LLP, or Grant Thornton, Red Simpson’s independent registered public accounting firm, reported a material weakness in Red Simpson’s
internal control over financial reporting that, if not remedied, could adversely affect our internal controls and have a negative effect on the
trading price of our stock.”
    IPO Grants. Upon consummation of this offering, we expect to grant restricted stock and stock options to certain members of our
management, as described in “Management — IPO Grants.” The value of these grants will be calculated in accordance with SFAS No. 123
(revised 2004), Share-Based Payment . See “— Recent Accounting Pronouncements.” We currently estimate that the value of these grants will
be approximately $7.0 million to $11.0 million, which will be expensed over five years.

                                                                         46
Results of Operations
    The following table sets forth selected statement of operations data as percentages of revenues for the periods indicated:


                                                  Pike Electric Corporation and Subsidiaries
                                                      Consolidated Statements of Income
                                                                                                                              Nine Months
                                                                                                                                 Ended
                                                                                  Year Ended June 30,                          March 31,

                                                                      2002                2003          2004           2004                 2005

Revenues:
   Powerline services                                                    97.4 %              84.3 %       87.9 %         86.3 %                72.0 %
   Storm restoration services                                             2.6                15.7         12.1           13.7                  28.0

         Total                                                          100.0 %            100.0 %       100.0 %        100.0 %              100.0 %

Cost of operations                                                       82.4                83.1         84.2           85.0                  81.7
Gross profit                                                             17.6                16.9         15.8           15.0                  18.3
General and administrative expenses                                       5.2                 5.6          5.3            5.3                   6.4
Other operating expense, net                                              4.0                 0.3           —              —                     —

Income from operations                                                      8.4 %            11.0 %       10.5 %           9.7 %               11.9 %

Other expense:
   Interest expense, net                                                  1.0                 4.0          2.6             2.6                     6.5
   Other nonoperating (gain) expense, net                                (0.1 )                —            —               —                       —

Income tax expense                                                          3.5               2.8          3.2             2.9                     3.3

Income from continuing operations                                           4.0               4.2          4.7             4.2                     2.1

Loss from discontinued operations, net of taxes                          (0.1 )              (0.2 )       (0.1 )          (0.1 )                   —

Net income                                                                  3.9 %             4.0 %        4.6 %           4.1 %                   2.1 %




    Nine Months Ended March 31, 2005 Compared to Nine Months Ended March 31, 2004
    Revenues. Revenues increased $261.1 million to $524.2 million for the nine months ended March 31, 2005 from $263.1 million for the
nine months ended March 31, 2004. This increase was primarily attributable to the acquisition of Red Simpson in July 2004. Red Simpson
contributed $167.0 million of incremental revenue while Pike accounted for the remaining $94.1 million of the increase.
    Our powerline services revenue increased $150.4 million, or 66.3%, to $377.3 million in the nine months ended March 31, 2005 from
$226.9 million in the nine months ended March 31, 2004. The Red Simpson acquisition accounted for approximately $128.2 million of this
increase while Pike accounted for the remaining growth. Excluding the Red Simpson acquisition, total powerline man-hours increased, due
primarily to an increased workload from our existing customers, while revenue per man-hour increased slightly.
    Additionally, storm restoration revenues increased $110.8 million to $146.9 million for the nine months ended March 31, 2005 from
$36.1 million for the nine months ended March 31, 2004. This increase in storm restoration revenue included $38.8 million in storm restoration
revenue from Red Simpson and $72.0 million of additional storm restoration revenue from Pike, excluding Red Simpson. The increase was
primarily the result of the largest storm restoration event in our history when four hurricanes affected Florida and the surrounding Gulf states
during August and September of 2004.

                                                                       47
     Gross Profit. Gross profit increased $56.6 million to $96.2 million for the nine months ended March 31, 2005 from $39.5 million for the
nine months ended March 31, 2004, primarily due to the increase in revenues described above. As a percentage of revenues, gross profit
increased to 18.3% in the nine months ended March 31, 2005 from 15.0% in the nine months ended March 31, 2004. This increase in gross
margin was primarily attributable to an increase in higher margin storm restoration services as a percentage of total revenues to 28.0% in the
nine months ended March 31, 2005 from 13.7% in the nine months ended March 31, 2004. We expect our storm restoration revenues to return
to historical levels in future periods.
     General and Administrative Expenses. General and administrative expenses increased $19.5 million to $33.5 million for the nine months
ended March 31, 2005 from $14.1 million for the nine months ended March 31, 2004. This increase was primarily attributable to $8.6 million
in additional ongoing expenses as a result of our acquisition of Red Simpson on July 1, 2004, a $4.2 million compensation expense for
common stock options repurchased from our management in connection with our 2004 recapitalization and a compensation charge of
$2.6 million related to the purchase by members of Red Simpson’s management of restricted shares of common stock in connection with the
acquisition of Red Simpson, due to the acceleration of deferred compensation benefits and the subsequent repurchase of a portion of that
restricted stock in the 2004 recapitalization. The remaining increase in general and administrative expenses of $4.1 million was primarily due to
increased administrative costs related to the increase in revenues in the nine months ended March 31, 2005 as compared to the nine months
ended March 31, 2004.
    Other Expense. Other expense increased $27.5 million to $34.2 million for the nine months ended March 31, 2005 from $6.7 million for
the nine months ended March 31, 2004. This increase was due to an increase of $27.5 million in interest expense. The increase in interest
expense was due to: (i) a $14.0 million charge to interest expense resulting from the redemption of our Series A preferred stock at a redemption
price greater than its carrying value, (ii) a write-off of $5.6 million in deferred loan costs in connection with the refinancing of our then-existing
credit facility in July 2004, (iii) a $6.5 million increase in interest expense primarily as a result of increased borrowings related to the
acquisition of Red Simpson and the 2004 recapitalization, (iv) a $0.7 million increase in the amortization of deferred loan costs compared to the
prior period and (v) a $0.7 million decrease in the mark-to-market gains on interest rate derivatives.
     Income Tax Expense. Income tax expense increased $9.8 million to $17.4 million for the nine months ended March 31, 2005 from
$7.6 million for the nine months ended March 31, 2004, primarily due to the increase in income before income taxes. The effective tax rates for
the two periods were 40.7% and 61.7% for the nine month periods ended March 31, 2004 and 2005, respectively. The increase in the effective
tax rate is primarily due to the $14.0 million charge to interest expense resulting from the redemption of the Series A preferred stock, which is
not deductible for income tax purposes.
    Discontinued Operations. Our industrial division ceased operations in the prior fiscal year and did not record any expenses attributable to
discontinued operations in the current fiscal period. In the nine months ending March 31, 2004, we recognized a loss, net of taxes, of
$0.4 million for discontinued operations.
   Net Income. As a result of the factors discussed above, net income increased $0.1 million to $10.8 million for the nine months ended
March 31, 2005 from $10.7 million for the nine months ended March 31, 2004.


    Year Ended June 30, 2004 Compared to Year Ended June 30, 2003
    Revenues. Revenues increased $59.2 million, or 19.9%, to $356.7 million for the year ended June 30, 2004 from $297.5 million for the
year ended June 30, 2003. This increase was attributable to growth in our powerline services. Powerline revenues increased $62.8 million, or
25.0%, to $313.6 million in fiscal 2004 from $250.9 million in fiscal 2003. Total powerline man-hours increased, due primarily to an increased
workload from our existing customers, while revenue per man-hour remained nearly identical. The results for fiscal 2004 also include nine
months of revenues from a small service provider in Tennessee, which we acquired on September 26, 2003. This acquisition accounted for
$6.5 million of the increase in powerline

                                                                         48
revenues. Slightly offsetting this increase in the powerline services was a decrease in storm restoration revenues to $43.0 million in fiscal 2004
from $46.6 million in fiscal 2003.
    Gross Profit. Gross profit increased $6.1 million, or 12.1%, to $56.4 million for the year ended June 30, 2004 from $50.3 million for the
year ended June 30, 2003, primarily due to the increase in revenues described above. As a percentage of revenues, gross profit decreased to
15.8% in fiscal 2004 from 16.9% in fiscal 2003. This decrease in gross margin was attributable in part to a decrease in revenues from storm
restoration services as a percentage of total revenues to 12.1% in fiscal 2004 from 15.7% in fiscal 2003. Other contributing factors included
increases in equipment rental and tool expenses, which increased to 3.0% of revenues in fiscal 2004 from 0.7% of revenues in fiscal 2003. This
increase was due to start-up costs related to outfitting and training crews that were added as a result of new customers and contract additions
with existing customers.
     General and Administrative Expenses. General and administrative expenses increased $2.0 million, or 12.1%, to $18.8 million for the year
ended June 30, 2004 from $16.8 million for the year ended June 30, 2003. As a percentage of revenues, these expenses decreased to 5.3% in
fiscal 2004 from 5.6% in fiscal 2003 due to revenue growth. The most significant factor in this increase was an increase of $1.4 million for
additional administrative staff and other costs to support growth.
    Other Expense. Other expense decreased $2.6 million, or 22.4%, to $9.2 million for the year ended June 30, 2004 from $11.8 million for
the year ended June 30, 2003. The decrease in expense was primarily due to interest rate derivatives related to our senior credit facility that
resulted in a gain of $1.4 million in fiscal 2004 as compared to a loss of $1.5 million in fiscal 2003. This improvement is related to market
changes and is not expected to recur.
    Income Tax Expense. Income tax expense increased $3.0 million, or 35.3%, to $11.3 million for the year ended June 30, 2004 from
$8.3 million for the year ended June 30, 2003, primarily due to the increase in income before income taxes. The effective tax rate for both
periods was 40.1%.
    Discontinued Operations. We recognized a loss, net of taxes, of $0.3 million for fiscal 2004 as compared to a loss, net of taxes, of
$0.6 million for fiscal 2003 attributable to our industrial division, which ceased operations during the year ended June 30, 2004.
    Net Income. As a result of the factors discussed above, net income increased $4.7 million, or 39.7%, to $16.5 million for the year ended
June 30, 2004 from $11.8 million for the year ended June 30, 2003.
    Net Income Available to Common Stockholders. Net income available to common stockholders for the year ended June 30, 2004
decreased to $16.5 million from $23.9 million from the year ended June 30, 2003. This decrease occurred primarily because net income
available to common stockholders in fiscal 2003 was higher due to a $12.1 million decrease in the redemption value of our Series A preferred
stock during that year. This decrease in the redemption value occurred because we adjusted the carrying value of the Series A preferred stock to
$5.4 million from its original carrying value of $17.5 million at issuance in accordance with the terms of the Series A preferred stock.


    Year Ended June 30, 2003 Compared to Year Ended June 30, 2002
     Revenues. Revenues increased $24.3 million, or 8.9%, to $297.5 million for the year ended June 30, 2003 from $273.2 million for the year
ended June 30, 2002. Storm restoration revenues increased to $46.6 million in fiscal 2003 from $7.0 million in fiscal 2002, primarily as a result
of an increase in storm activity. This increase offset a decrease of $15.3 million, or 5.7%, in our powerline services, which resulted from
reduced utility spending and the reallocation of crews to storm restoration services in response to sharply increased storm activity. The reduced
utility spending resulted from a decrease in spending by several of our significant customers due to an industry-wide downturn. In spite of a
decrease in total powerline man-hours, total man-hours and revenue per man-hour increased slightly due to the increased storm restoration
work, primarily because our storm service work yields higher revenue per man-hour than our powerline work.

                                                                        49
     Gross Profit. Gross profit increased $2.3 million, or 4.9%, to $50.3 million for the year ended June 30, 2003 from $48.0 million for the
year ended June 30, 2002. The increase was primarily attributable to the revenue improvement described above but was largely offset by a
decrease in gross margins to 16.9% in fiscal 2003 from 17.6% in fiscal 2002. This change in gross margins was primarily attributable to an
increase in payroll expenses to 40.7% of revenues in fiscal 2003 from 39.2% of revenues in fiscal 2002. Our payroll expenses as a percentage
of revenues increased primarily because we maintained our core skilled labor force in spite of a decrease in powerline man-hours, which, in
turn, resulted in greater labor costs per dollar of revenue and a corresponding reduction in gross margins.
     General and Administrative Expenses. General and administrative expenses increased $2.6 million, or 18.4%, to $16.8 million for the year
ended June 30, 2003 from $14.2 million for the year ended June 30, 2002, primarily due to the inclusion of management fees paid to an affiliate
of Lindsay Goldberg & Bessemer for the full fiscal year and increased administrative costs related to increased total revenues. As a percentage
of revenues, these expenses slightly increased to 5.6% in fiscal 2003 from 5.2% in fiscal 2002.
    Recapitalization Expenses. Recapitalization expenses incurred in connection with our 2002 recapitalization decreased $10.5 million to
$0.4 million for the year ended June 30, 2003 from $10.9 million for the year ended June 30, 2002. For a description of our 2002
recapitalization, see Note 1 to our audited consolidated financial statements.
    Other Expense. Other expense increased to $11.8 million for the year ended June 30, 2003 from $2.5 million for the year ended June 30,
2002. Interest expense increased $9.1 million to $11.9 million in fiscal 2003 from $2.8 million in fiscal 2002. The increase resulted from a
$6.5 million increase in cash interest expense due to the addition of our senior credit facility in late 2002, a $1.1 million increase in the
amortization of deferred loan costs and a $1.5 million increase resulting from the mark-to-market loss on our interest rate derivatives.
    Income Tax Expense. Income tax expense decreased $1.2 million, or 12.4%, to $8.3 million for the year ended June 30, 2003 from
$9.5 million for the year ended June 30, 2002, primarily due to the non-deductibility of a portion of our recapitalization expenses in fiscal 2002.
The effective tax rates for fiscal 2003 and 2002 were 40.1% and 46.8%, respectively.
    Discontinued Operations. We recognized a loss, net of taxes, of $0.6 million for the year ended June 30, 2003 as compared to a loss, net of
taxes, of $0.3 million for the year ended June 30, 2002 attributable to our plan to cease operations of our industrial division in the year ended
June 30, 2004.
    Net Income. As a result of the factors discussed above, net income increased $1.3 million, or 12.5%, to $11.8 million for the year ended
June 30, 2003 from $10.5 million for the year ended June 30, 2002.
    Net Income Available to Common Stockholders. Net income available to common stockholders for the year ended June 30, 2003
increased to $23.9 million in the year ended June 30, 2003 from $10.5 million from the year ended June 30, 2002 primarily due to a
$12.1 million decrease in the redemption value of our Series A preferred stock.

Liquidity and Capital Resources
     Our primary cash needs have been capital expenditures, working capital, payments under our senior credit facility, our acquisition of Red
Simpson and the redemption of our Series A preferred stock. Our primary sources of cash have been borrowings under our senior credit
facility, issuances of stock and cash flow from operations. As of March 31, 2005, our cash totaled $73,000 and we had $46.9 million available
under the $70.0 million revolving portion of our senior credit facility (after giving effect to outstanding standby letters of credit of
approximately $23.1 million).
     We believe that our cash flow from operations, available cash and cash equivalents, and borrowings available under our senior credit
facility will be adequate to meet our future liquidity needs through at least the year ended June 30, 2006. However, our ability to make
scheduled payments of principal, to pay the interest on or refinance our indebtedness, or to fund planned capital expenditures will depend on
our future

                                                                        50
performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are
beyond our control.
     We need working capital to support seasonal variations in our business, primarily due to the impact of weather conditions on the electric
infrastructure, and the corresponding spending by our customers on electric service and repairs. We may experience seasonal working capital
needs from approximately August through February in connection with our storm restoration services. The increased service activity causes an
excess of customer billings over customer collections, leading to increased accounts receivable during those periods. In the past, we have
utilized borrowings under the revolving portion of our senior credit facility to satisfy normal operating costs during these periods.
    We evaluate fluctuations in our accounts receivable by comparing revenue days outstanding between periods. Due to the seasonality of our
business, we calculate revenue days outstanding as of the end of any period by utilizing the preceding three months of revenues to determine
revenue per day. We then divide accounts receivable at the end of the period by revenue per day to calculate revenue days outstanding.
    For the years ended June 30, 2003 and 2004, our revenue days outstanding in billed accounts receivable were 27 and 28 days, respectively,
and our revenue days outstanding in work completed not billed increased from 30 to 35 days. The increase in revenue days outstanding in work
completed not billed is a result of an increase in work completed not billed in June 2004 as compared to June 2003, which caused an increase in
unbilled services. For the nine months ended March 31, 2004 and 2005, the revenue days outstanding in billed accounts receivable increased
from 30 to 40 days, and the revenue days outstanding in work completed not billed decreased from 29 to 27 days, primarily as a result of the
acquisition of Red Simpson, which generally experienced longer customer payment cycles and had shorter unbilled cycles.
    Although we have no specific current plans to do so, to the extent we decide to pursue one or more significant strategic acquisitions, we
will likely need to incur additional debt or sell additional equity to finance the purchase of those businesses.


    Changes in Cash Flows: Nine Months Ended March 31, 2005 Compared to Nine Months Ended March 31, 2004
                                                                                                                   Nine Months Ended
                                                                                                                       March 31,

                                                                                                            2004                       2005

                                                                                                                      (in millions)
Net cash provided by operating activities from continuing operations                                    $       21.8             $          50.7
Net cash used in investing activities from continuing operations                                        $      (37.0 )           $        (233.4 )
Net cash provided by financing activities from continuing operations                                    $       10.0             $         177.8
    Net cash provided by operating activities from continuing operations increased $28.9 million to $50.7 million for the nine months ended
March 31, 2005 from $21.8 million for the nine months ended March 31, 2004. For the nine months ended March 31, 2005, the net cash
provided by operating activities primarily consisted of income from continuing operations of $10.8 million, depreciation expense of $23.9
million, amortization expense related to intangible assets of $4.3 million, non-cash interest expense of $21.6 million and deferred income tax
expense of $10.4 million, offset in part by an increase in accounts receivable and work completed not billed of $7.9 million and a decrease in
deferred compensation of $12.1 million. The non-cash interest expense of $21.6 million is primarily due to the $14.0 million charge resulting
from the redemption of the Series A preferred stock and $7.6 million in amortization of deferred loan costs. For the nine months ended
March 31, 2004, net cash provided by operating activities primarily consisted of income from continuing operations of $11.1 million,
depreciation expense of $14.3 million and deferred income tax expense of $6.7 million, offset in part by an increase in accounts receivable and
work completed not billed of $13.3 million.

                                                                         51
    Net cash used in investing activities from continuing operations in the nine months ended March 31, 2005 consisted primarily of
$194.2 million for the acquisition of Red Simpson and $40.8 million for capital expenditures. Net cash used in investing activities in the nine
months ended March 31, 2004 consisted primarily of capital expenditures of $30.6 million. Capital expenditures for both periods consisted
primarily of purchases of vehicles and equipment used to service our customers.
    Net cash provided by financing activities from continuing operations in the nine months ended March 31, 2005 primarily reflected cash
borrowings and the proceeds of a stock placement to finance the Red Simpson acquisition and our 2004 recapitalization. In connection with the
Red Simpson acquisition, we borrowed $300.0 million under our senior credit facility. We funded the Red Simpson acquisition with
$71.0 million from a stock placement and $123.2 million from borrowings under our senior credit facility. Of the remaining $176.8 million of
borrowings, we used $150.0 million to refinance then-existing indebtedness, $12.9 million to pre-fund the first payment under our deferred
compensation obligations and the balance to pay transaction fees and expenses. The 2004 recapitalization was financed with a $150.0 million
term loan issued under our senior credit facility, which was used to repurchase $127.5 million in shares of common stock and options
($123.3 million of which was paid in cash to the holders of common stock and $4.2 million of which was used to repurchase options) and to
pay the redemption price of our Series A preferred stock of $20.0 million. We incurred approximately $12.3 million in 2005 in deferred loan
costs in connection with obtaining this indebtedness. Net cash used in financing activities in the nine months ended March 31, 2004 reflects the
borrowing of $13.0 million under the revolving portion of our senior credit facility and a $3.0 million repayment of debt.


    Changes in Cash Flows: 2004 Compared to 2003
                                                                                                               Year Ended June 30,

                                                                                                        2003                           2004

                                                                                                                   (in millions)
Net cash provided by operating activities from continuing operations                              $             33.9               $       31.5
Net cash used in investing activities from continuing operations                                  $            (15.1 )             $      (41.8 )
Net cash provided by (used in) financing activities from continuing operations                    $            (14.3 )             $       10.0
     Net cash provided by operating activities from continuing operations decreased $2.4 million to $31.5 million for the year ended June 30,
2004 from $33.9 million for the year ended June 30, 2003. For the year ended June 30, 2004, net cash provided by operating activities
primarily consisted of income from continuing operations of $16.9 million, depreciation expense of $19.5 million, deferred income tax expense
of $5.6 million and an increase in accounts payable and other liabilities of $5.1 million, offset in part by an increase in accounts receivable and
work completed not billed of $20.5 million. For the year ended June 30, 2003, the net cash provided by operating activities primarily consisted
of income from continuing operations of $12.5 million, depreciation expense of $17.6 million and deferred income tax expense of $3.3 million,
offset in part by a decrease in insurance and claim accruals of $3.3 million.
    Net cash used in investing activities from continuing operations was $41.8 million for the year ended June 30, 2004 and $15.1 million for
the year ended June 30, 2003. Net cash used in investing activities in 2004 consisted primarily of capital expenditures of $35.7 million for
purchases of vehicles and equipment and the acquisition of a small service provider in Tennessee for $7.0 million. Net cash used in investing
activities in 2003 consisted primarily of capital expenditures of $21.2 million consisting of purchases of vehicles and equipment, partially
offset by proceeds from the sale of property and equipment of $6.1 million consisting of sales of specialty vehicles and equipment retired from
our fleet.
     Net cash provided by (used in) financing activities of continuing operations was $10.0 million for fiscal 2004 and $(14.3) million for fiscal
2003. Net cash provided by financing activities in 2004 reflected borrowings of $13.0 million under the revolving portion of our senior credit
facility, offset in part by principal payments on long-term debt of $3.0 million related to our senior credit facility. Net cash used in financing
activities in 2003 primarily reflected payments of long-term debt of $15.0 million relating to our senior credit facility.

                                                                        52
    Capital Expenditures
    We routinely invest in vehicles, equipment and technology. The timing and volume of such capital expenditures in the future will be
affected by the addition of new customers or expansion of existing customer relationships. We expect capital expenditures to range from
$40.0 million to $60.0 million in the years ended June 30, 2005 and 2006, which could vary depending on the addition of new customers or
increased work on existing customer relationships. We intend to fund those expenditures primarily from operating cash flow. Our capital
expenditures in the nine months ended March 31, 2005 were $40.8 million. As of March 31, 2005, we had outstanding commitments for capital
expenditures of $3.3 million.


    Senior Credit Facility
     On July 1, 2004, in connection with our acquisition of Red Simpson, we refinanced our senior credit facility. On December 10, 2004, in
connection with our 2004 recapitalization, we amended our senior credit facility to permit the recapitalization and obtain additional liquidity
and operating flexibility. As of March 31, 2005, we had $408.0 million of term loan indebtedness outstanding under our senior credit facility.
As of March 31, 2005, our borrowing availability under the revolving portion of our senior credit facility was $46.9 million (after giving effect
to $23.1 million of outstanding standby letters of credit). The obligations under our senior credit facility are unconditionally guaranteed by us
and each of our existing and subsequently acquired or organized subsidiaries (other than Pike Electric, Inc., which is the borrower under the
facility) and secured on a first-priority basis by security interests (subject to permitted liens) in substantially all assets owned by us, Pike
Electric, Inc. and each of our other domestic subsidiaries, subject to limited exceptions.
    Our credit agreement contains a number of affirmative and restrictive covenants including limitations on mergers, consolidations and
dissolutions, sales of assets, investments and acquisitions, indebtedness and liens, and dividends and other restricted payments. Under the credit
agreement, we are permitted to incur maximum capital expenditures of $60.0 million in each of the fiscal years ending June 30, 2005, 2006 and
2007 and $70.0 million in any fiscal year thereafter, subject to a one year carry-forward of 50% of the unused amount from the previous fiscal
year. In addition, the credit agreement provides that we are required to meet the following financial covenants, which are tested quarterly:

    • a minimum cash interest coverage ratio, based upon the ratio of consolidated EBITDA to consolidated cash interest expense, which will
      require us to maintain a ratio of 3.50 to 1.00; and

    • a maximum leverage ratio, based upon the ratio of consolidated funded debt to consolidated EBITDA, of 4.75 to 1.00 through the
      quarter ending March 31, 2006, and declining ratios thereafter.
    Our senior credit facility, including the definition of EBITDA, is described in more detail under “Description of Senior Credit Facility.”
For a description of risks associated with our senior credit facility, see “Risk Factors — Risks Related to Our Business — We have a
substantial amount of indebtedness incurred under a senior credit facility, which may restrict our business and operations, adversely affect our
cash flow, and restrict our future access to sufficient funding to finance desired growth.”
     We intend to use proceeds from this offering to repay approximately $133.5 million of term loans outstanding under our senior credit
facility. See “Use of Proceeds.”


    Preferred Stock
    In January 2005, in connection with the 2004 recapitalization, we redeemed all outstanding shares of Series A preferred stock for $20 per
share for an aggregate amount of $20.0 million. See “— Other Events — 2004 Recapitalization.”

                                                                       53
Contractual Obligations and Other Commitments
      As of June 30, 2004, our contractual obligations and other commitments were as follows:
                                                                                             Payments Due by Period

                                                                                  Less Than                  1-3           3-5         More Than
                                                                   Total           1 Year                   Years         Years         5 Years

                                                                                                  (in millions)
Long-term debt obligations(1)                                  $     138.9       $          —          $        —     $       —    $         138.9
Interest payment obligations(2)                                       51.9                 6.9                15.8          16.6              12.6
Operating lease obligations                                            6.4                 1.1                 1.6           1.1               2.6
Purchase obligations(3)                                                2.8                 2.8                  —             —                 —
Employment agreements                                                  0.6                 0.6                  —             —                 —
         Total                                                 $     200.6       $        11.4         $      17.4    $     17.7   $         154.1



(1)    Includes only obligations to pay principal not interest expense.

(2)    Represents estimated interest payments to be made on our variable rate debt. All interest payments assume that principal payments are
       made as originally scheduled. Interest rates utilized to determine interest payments for variable rate debt are based upon our estimate of
       future interest rates.

(3)    Consists of obligations to purchase trucks and other equipment.
      As of March 31, 2005, our contractual obligations and other commitments were as follows:
                                                                                             Payments Due by Period

                                                                                     Less Than               1-3           3-5          More Than
                                                                   Total              1 Year                Years         Years          5 Years

                                                                                                  (in millions)
Long-term debt obligations(1)                                  $     408.0       $          —           $      2.5    $      3.0    $        402.5
Interest payment obligations(2)                                      164.3                22.6                47.9          48.5              45.3
Operating lease obligations                                            6.1                 1.0                 1.6           1.0               2.5
Purchase obligations(3)                                                3.3                 3.3                  —             —                 —
Deferred compensation(4)                                              37.5                15.0                22.5            —                 —
Employment agreements                                                  0.6                 0.6                  —             —                 —
         Total                                                 $     619.8       $        42.5          $     74.5    $     52.5    $        450.3



(1)    Includes only obligations to pay principal not interest expense.

(2)    Represents estimated interest payments to be made on our variable rate debt. All interest payments assume that principal payments are
       made as originally scheduled. Interest rates utilized to determine interest payments for variable rate debt are based upon our estimate of
       future interest rates. Interest payment obligations for the periods shown above, after giving effect to the reduction in interest expense due
       to the use of proceeds of this offering to repay a portion of our senior credit facility, would be $15.2 million, $32.2 million, $32.5 million
       and $20.7 million, respectively, for a total of $100.6 million.

(3)    Consists of obligations to purchase trucks and other equipment.

(4)    For a description of the deferred compensation obligation, see “— Other Events — Deferred Compensation in Connection with Our
       Acquisition of Red Simpson.”

Off-Balance Sheet Arrangements
    Other than letters of credit issued under the $70.0 million revolving portion of our senior credit facility and our obligations under the surety
and performance bonds described below, we do not have any other transactions, obligations or relationships that could be considered material
off-balance sheet arrangements.

                                                                        54
   As of March 31, 2005, we had $23.1 million of standby letters of credit issued under our senior credit facility primarily for insurance and
bonding purposes.
    In the ordinary course of business, we occasionally are required by our customers to post surety or performance bonds in connection with
services that we provide to them. These bonds have face amounts ranging from $48,000 to $5.4 million. As of March 31, 2005, we have
approximately $26.5 million in surety bonds outstanding. In addition, we have provided collateral in the form of a letter of credit to sureties in
the amount of $3.0 million, which is included in the total letters of credit outstanding above.

Recent Accounting Pronouncements
    In May 2003, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 150, Accounting for Certain Financial Instruments
with Characteristics of Both Liabilities and Equity . SFAS No. 150 requires issuers to classify as liabilities (or assets in some circumstances)
three classes of financial instruments that represent obligations for the issuer. SFAS No. 150 is effective for financial instruments entered into
or modified after May 31, 2003 and is otherwise effective at the beginning of the first interim period beginning after June 15, 2003.
     We adopted SFAS No. 150, effective July 1, 2003. Upon the adoption of SFAS No. 150, we reclassified our Series A preferred stock, with
a carrying value of $5.4 million as of July 1, 2003 ($5.8 million as of June 30, 2004), as a long-term liability on our consolidated balance sheet
because it is redeemable on a fixed and determinable date, April 18, 2022. Changes in the redemption value related to the Series A preferred
stock, which previously had been recorded after net income as a charge in determining net income available to common stockholders, are
reflected in interest expense in the consolidated statement of income for the year ended June 30, 2004 and amounted to $0.4 million for the
2004 fiscal year and $14.2 million for the nine months ended March 31, 2005. In accordance with SFAS No. 150, changes in the redemption
value the Series A preferred stock recorded prior to July 1, 2003 have not been reclassified to interest expense. Prior to the adoption of
SFAS No. 150, accretion on the Series A preferred stock was accounted for as a direct reduction to stockholders’ equity, and the Series A
preferred stock was presented between liabilities and stockholders’ equity on our consolidated balance sheet.
   On December 16, 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment, which is a revision of SFAS No. 123,
Accounting for Stock-Based Compensation . SFAS No. 123(R) supersedes APB 25, Accounting for Stock Issued to Employees, and amends
SFAS No. 95, Statement of Cash Flows . However, SFAS No. 123(R) requires all share-based payments to employees, including grants of
employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.
   We adopted SFAS No. 123(R) on July 1, 2005. SFAS No. 123(R) permits public companies to adopt its requirements using one of two
methods:
    • A “modified prospective” method in which compensation cost is recognized beginning with the effective date (1) based on the
      requirements of SFAS No. 123(R) for all share-based payments granted after the effective date and (2) based on the requirements of
      SFAS No. 123 for all awards granted to employees prior to the effective date of SFAS No. 123(R) that remain unvested on the effective
      date.

    • A “modified retrospective” method that includes the requirements of the modified prospective method described above but also permits
      entities to restate based on the amounts previously recognized under SFAS No. 123 for purposes of pro forma disclosures either (1) all
      prior periods presented or (2) prior interim periods of the year of adoption.
    We adopted SFAS No. 123(R) using the modified prospective method. Prior to adopting SFAS No. 123(R), we accounted for share-based
payments to employees using the intrinsic value method and therefore generally recognize no compensation cost for employee stock options, as
permitted by SFAS No. 123. Accordingly, the adoption of SFAS No. 123(R)’s fair value method will have a significant impact on our results of
operations, although it will have no impact on our overall financial position. We

                                                                        55
cannot predict the impact of adoption of SFAS No. 123(R) at this time because it will depend in part on levels of share-based payments granted
in the future. However, had we adopted SFAS No. 123(R) in prior periods, the impact of that standard would have approximated the impact of
SFAS No. 123 as described in the disclosure of pro forma net income and earnings per share in Note 2 to our audited consolidated financial
statements. SFAS No. 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as cash flow
from financing activities, rather than as cash flow from operating activities as required under current accounting literature. This requirement
will reduce our net cash flows from operating activities and increase our net cash flows from financing activities in periods after adoption.

Quantitative and Qualitative Disclosures about Market Risk
    As of March 31, 2005, all of the outstanding debt under our senior credit facility was subject to floating interest rate risk. In January 2005,
we entered into an interest rate swap agreement covering $50.0 million of our indebtedness and an interest rate cap agreement covering $45.0
million of our indebtedness, each with a term of two years, to manage our interest rate risk. For further information on these agreements, see
Note 8 to our unaudited consolidated financial statements. Even after giving effect to these agreements, we are exposed to risks due to
fluctuations in the market value of these agreements and changes in interest rates with respect to the portion of our senior credit facility that is
not covered by these agreements. A hypothetical change in the interest rate of 100 basis points would have changed annual cash interest
expense by approximately $3.6 million (or, after giving effect to this offering, $2.2 million).

                                                                         56
                                                           INDUSTRY OVERVIEW
    The electric power market in the United States is an over $250 billion industry with electricity consumption having grown at an average
compound annual growth rate, or CAGR, of 2.5% from 1975 to 2004, according to the Energy Information Administration, or EIA. The
industry is comprised of investor-owned utilities, municipal utilities, cooperatives, federally-owned utilities, independent power producers and
independent transmission companies with three distinct functions: generation, distribution and transmission. The electric distribution and
transmission infrastructure is the critical network that connects power from generators to residential, commercial and industrial end users.
Electric transmission refers to powerlines through which electricity is transmitted over long distances at high voltages (over 230 kilovolts, or
kV) and the lower voltage lines that connect the high voltage transmission infrastructure to local distribution networks. Electric distribution
refers to the local municipal, cooperative or utility distribution network, including associated substations, that provides electricity to end users
over shorter distances. Within this electric network, there are over a million miles of distribution lines, more than 150,000 miles of high-voltage
transmission lines and an estimated 60,000 high-voltage substations that monitor, control, stabilize and modify voltage levels throughout the
network.


                                          Overview of Distribution & Transmission Infrastructure




     Electric distribution and transmission infrastructure requires ongoing maintenance, upgrades and extensions to manage powerline
congestion, avoid delivery failures and connect distribution lines to new end users. It further requires emergency repairs whenever unexpected
power outages or damage to infrastructure occur. The required maintenance, upgrades and extensions, as well as the emergency repairs, are
performed by the utility companies that own the relevant powerlines and by third-party service providers, such as our company, to which
utilities, cooperatives and municipalities outsource some of their needs.

                                                                        57
    We provide maintenance, upgrade and extension services for electrical distribution and sub-500 kV transmission powerlines. We believe
these two areas of focus are the most attractive sector within the electric infrastructure industry for several reasons. First, distribution and
sub-500 kV transmission work generally do not involve large, fixed-price contracts subject to one-time competitive bids and large performance
bonding requirements. Instead, substantially all our distribution work and most of our sub-500 kV transmission work is performed under master
service arrangements, under which we are paid either for each hour or each unit of work completed. Our sub-500kV transmission work
performed under fixed price bids represents relatively small jobs (typically less than $5.0 million) with modest (i.e., approximately $500,000 on
average) bonding requirements.
     Second, we believe distribution and sub-500 kV transmission work is a highly attractive area because demand for these services is
relatively stable. As compared to large, high voltage transmission projects, distribution and sub-500 kV transmission work is primarily driven
by population growth and increased power usage, and it cannot be deferred as easily as larger transmission projects, as effective distribution is
crucial to service reliability and customer satisfaction. In addition, decisions regarding spending on the services we perform are generally
controlled by our customers, in contrast to larger transmission construction projects, which often span multiple service areas and may involve
multiple parties. As a result, unlike larger transmission construction projects, our services generally involve less uncertainty concerning
ownership and regulation. Also, many of our customers are regulated utilities and seek to recover the costs of our services through regulated
rates. Amounts our customers spend on these services are typically included in their operating budgets and are therefore subject to less
regulatory uncertainty regarding cost recovery than large, one-time transmission construction projects.
     Finally, distribution and sub-500 kV transmission services represent the largest segment of the overall distribution and transmission
market. Due to the larger size of the distribution network and constantly changing end user connectivity demands, spending on the electric
power distribution infrastructure is significantly higher than spending on the transmission infrastructure. According to the Edison Electric
Institute, or EEI, distribution spending represented $11.4 billion of the $15.5 billion of spending by investor-owned utilities on electric
distribution and transmission in 2003.

Industry Trends
    Long-term demand for infrastructure services is primarily driven by the continuous need to maintain the electric distribution and
transmission infrastructure. In addition, future growth in demand for infrastructure services will generally be driven by increased demand for
electricity, increased outsourcing by power suppliers and the need to correct the inadequacy of the current electric infrastructure.
     Growth in Demand for Electricity. Demand for electricity is a direct driver of spending on electric distribution and transmission
infrastructure. According to the EIA, electricity consumption in the United States increased 103% between 1975 and 2004, driven by
population growth, economic expansion and the proliferation of electrical devices. In addition, electricity consumption is expected to continue
to increase by an additional 43% between 2005 and 2025 according to the EIA. The southeastern and south central regions of the United States,
which form the largest part of our market, have exhibited greater population growth than the rest of the country, driving both increased
investment in the distribution and transmission infrastructure and the related increase in maintenance requirements. According to the EIA,
electric power consumption in the south central and southeastern United States is projected to grow 36% and 53%, respectively, from 2005 to
2025. We believe that demand for our services by electric utilities will be driven by these favorable factors in the southeastern and south central
United States over the next several years.
    Increased Outsourcing of Infrastructure Services. As a result of an increased focus on profitability within the power industry, utilities,
cooperatives and municipalities are continuously seeking ways to improve cost efficiencies. Over the last decade, electric utilities and
cooperatives have increased their reliance on outsourcing the maintenance and improvement of their electric distribution and transmission
systems to third-party service providers. Outsourcing benefits utilities by enabling them to focus on their core competencies, more flexibly
manage their labor costs and more efficiently deploy their capital. We

                                                                        58
estimate, based on third-party industry inquiries, that utilities and cooperatives outsource approximately one-third of their total infrastructure
servicing needs, providing room for continued growth for third-party service providers such as our company.
     Inadequacy of Current Electric Infrastructure. Today, significantly more electricity is being transported over longer distances utilizing a
system that was initially designed for limited power sharing among neighboring utilities. Despite changes in the wholesale electricity market,
however, transmission investment has not kept pace with the growth in electricity consumption, which, according to the EIA, has nearly
doubled since 1975. Such underinvestment, coupled with ever-increasing load demand, has led to critical congestion problems within the
national power grid, which resulted in the rolling blackouts in California in 2001, the August 2003 blackout (which left 50 million people in the
midwest and northeast United States and Canada without electricity) and the dramatic increase over the past several years in emergency relief
procedures needed to avoid overloading lines. We believe that our business will benefit from any increase in spending in the transmission
infrastructure due to the associated increases in maintenance, extension and upgrade of distribution and sub-500 kV transmission lines.

                                                                         59
                                                                   BUSINESS

Overview
    We are one of the largest third-party providers of outsourced electric distribution and transmission services in the United States. Our core
activities consist of the maintenance, upgrade and extension of electric distribution and sub-500 kV transmission powerlines for more than 150
electric utilities, cooperatives and municipalities. We service a contiguous 19-state region that stretches from Pennsylvania in the north to
Florida in the southeast and to Texas in the southwest. Historically, our growth has been almost entirely organic, driven by the steady addition
of new customers and the further expansion of existing customer relationships. We have maintained relationships of 30 years or longer with
nine of our top 15 customers. Through our fiscal year ended June 30, 2004, our revenues grew at a ten-year compounded annual growth rate, or
CAGR, of 10.6%, almost exclusively on an organic basis. On July 1, 2004, we acquired Red Simpson, which significantly expanded our
service territory and operating scale and added multiple long-term customer relationships. For the year ended June 30, 2004, our pro forma
revenues, after giving effect to the Red Simpson acquisition, were $552.5 million.


                                                            Pike’s Service Territory




     We focus on the distribution and sub-500 kV transmission sector of the electric infrastructure services industry, which we believe is the
largest and most attractive sector in the industry. Based on data from EEI, distribution spending represented $11.4 billion of the $15.5 billion of
total spending by investor-owned utilities on electric distribution and transmission in 2003. Moreover, expenditures on distribution are
generally more stable than those for heavy transmission infrastructure, which tend to be characterized by large, one-time projects. We also
provide over 90% of our services under master service arrangements, whereby we are paid either on an hourly basis or for each unit of work
completed, rather than under the competitively-bid, fixed-price contracts typically associated with large-scale transmission construction
projects. In addition to our core distribution and transmission services, we also offer storm restoration services and a variety of value-added
ancillary services.
    The breadth and quality of our service offering, combined with the ability to mobilize and deliver emergency restoration services on a large
scale, has resulted in a loyal customer base. Over our 59-year history, we have developed strong and long-standing relationships with our
customers, which include major electric cooperatives, municipalities and utilities, such as American Electric Power Company, Inc., Cobb
EMC, Duke Power Company, Entergy Corporation, Florida Power & Light Company, Georgia Power Company and TXU Corp., a Red
Simpson customer.
   As of May 15, 2005, we employed a non-union workforce of over 6,700 employees, many of whom occupy highly skilled positions. Our
workforce is supported by a large, modern fleet of specialty vehicles

                                                                        60
and equipment. Our fleet, substantially all of which we own, consists of over 6,000 pieces of specialized equipment with an average age of
approximately five years (measured as of May 2005) as compared to their average useful lives of eight to 12 years. We utilize our own skilled
mechanics and garage facilities to service and maintain the majority of our fleet.

History
     We were founded by Floyd S. Pike in 1945 with a single truck salvaged from the bottom of an inland waterway. Over our 59-year history,
we have grown from six employees servicing one customer in North Carolina to over 6,700 employees servicing over 150 customers spread
across a 19-state region at May 15, 2005. On July 1, 2004, we acquired Red Simpson. Founded in 1963, Red Simpson was an electric
distribution and transmission services provider in the south central United States prior to the acquisition. Our service territory was contiguous
with Red Simpson’s, and the acquisition added new customers and diversified our customer base, as demonstrated by the fact that only two of
our top 10 customers overlapped with Red Simpson’s customer base. The acquisition of Red Simpson also substantially increased our
operating scale and resources, which enhanced our flexibility in serving our customers’ critical needs. We are now one of the largest third-party
providers of outsourced distribution and sub-500 kV transmission services in the United States.
    Many members of our senior management team, including our chief executive officer, J. Eric Pike, have spent their entire careers with us,
beginning as linemen and occupying various other jobs prior to their current positions. We believe that our management continuity provides
our company with several benefits, including customer relationships that span three generations of our management and an organizational
culture marked by operational excellence.

Competitive Strengths
    We believe our significant competitive strengths are as follows:
    Leading Pure-Play Provider of Electric Distribution and Transmission Infrastructure Services. We are one of the largest providers of
services to electric utilities, cooperatives and municipalities. In addition, after the completion of the rebranding of the Red Simpson business to
Pike, we will be one of the few service providers of scale in our industry that operates under a single, well-recognized brand over a contiguous
geographic area. We do not provide services to telecommunications, natural gas or fiber optics companies, except for incidental work in
connection with our core powerline services. Over the past 59 years, our business has grown almost entirely on an organic basis with the
exception of our acquisition of Red Simpson, which itself grew primarily on an organic basis.
     Outsourced Services-Based Business Model. We provide vital services to electric utilities, cooperatives and municipalities, which have
increased their reliance on outsourcing the maintenance and improvement of their distribution and transmission systems to third-party service
providers. In addition, we enable our customers to react to short-term changes in demand without significant capital expenditures or changes in
the size of their workforces.
    Over 90% of our services are provided under master service arrangements. We do not derive a significant portion of our revenues from
fixed-price agreements relating to large-scale capital improvement projects, which generally involve competitive bidding and substantial
performance bond requirements. Under our master service arrangements, we typically perform services based on a price per hour worked or per
unit of service. The terms of the majority of our service arrangements range from three to five years. As a result of our track record of quality
work and services, we estimate that a majority of our arrangements are renewed at or before the expiration of their terms.
     Attractive, Contiguous End Markets. We operate in a contiguous geographic market that includes the southeastern and south central areas
of the United States. Since 1990, the southeastern and south central regions have exhibited strong population growth which we believe, when
combined with increased electricity consumption, have driven both increased investment in electric distribution and transmission

                                                                        61
infrastructure and the need for increased maintenance and upgrading of existing systems. From 1990 through 2003, for example, electricity
consumption in the United States as a whole increased 29% according to the EIA, while electricity consumption in our geographic market
increased 34%. Moreover, the contiguous nature of our service territory provides us with significant benefits by increasing our operating
efficiency and our flexibility to respond to our customers’ needs.
    Recognized Leader in Storm Restoration Capabilities. Our 19-state market includes the prime “storm territories” of the southeastern and
south central United States. Throughout our market, we are a leading provider of emergency services for storm restoration. We maintain a
dedicated 24-hour Storm Center that acts as the single hub of command prior to and during crisis situations, such as hurricanes or ice or wind
storms. We have deployed more than 2,000 employees within 24 hours to respond to weather crises in one or more affected regions.
     Our storm restoration services can generate significant revenues. In addition, these services provide us with opportunities to attract new
customers for our core electric distribution and transmission infrastructure services. We also have been successful in acquiring new customers
after providing storm restoration services to them.
     Long-Standing Relationships Across a High-Quality Customer Base. We focus on developing strong, long-term relationships with major
electric utilities, cooperatives and municipalities. We have a diverse, well-capitalized customer base that includes over 150 electric companies
throughout our service territory. We maintain our customer relationships through multiple points of contact between our company and our
customers, from senior management to field crews. We have employed a customer-focused philosophy that has resulted in long-standing
customer relationships, as exemplified by our 59-year relationship with our first customer, Duke Power Company, our 48-year relationship
with American Electric Power Company, Inc. and Red Simpson’s 30-year relationship with TXU Corp. After giving effect to the Red Simpson
acquisition, our relationships with our top 15 customers average approximately 33 years. We believe that these long-term customer
relationships are a distinct competitive advantage for our company.
     Experienced Management Team with Demonstrated Operational Excellence. Our strong management has led us to operational
excellence, as demonstrated by our continuing success in effectively growing our business, managing our costs, supervising our workforce,
deploying our fleet and integrating Red Simpson. Our chief executive officer, J. Eric Pike, began his career with us 18 years ago as a lineman
installing and repairing powerlines. In addition, the other members of our senior management have been with us for an average of
approximately 19 years, and almost all of them began their careers with us as linemen and obtained significant operating experience prior to
being promoted to their current positions. Due to firsthand experience at different levels of our corporate structure, members of our
management team have a deep understanding of our employees’ needs and strive to maintain good relations with our employees. Our
management has fostered a culture of corporate loyalty, which in turn has given rise to high employee retention rates.
     Major Investments in Fleet and Safety. We have made significant investments in our business to support our continued growth. During the
five years ended June 30, 2004, pro forma for the Red Simpson acquisition, we invested approximately $250 million in our fleet and
centralized garage and maintenance facilities, resulting in a large, modern fleet. Our fleet, substantially all of which we own, currently consists
of over 6,000 pieces of specialized equipment with an average age of approximately five years (measured as of May 2005) as compared to their
average useful lives of eight to 12 years. We service the majority of our fleet and are a final-stage manufacturer for several configurations of
our specialty vehicles. In addition to investing in our fleet, we have invested in our employee safety and development programs, establishing
training and safety programs certified by the Department of Labor, or the DOL, and 28 training facilities located in 11 states. Our continued
focus on safety and workforce development has resulted in year-over-year improvements in our recordable and lost-time incidence rates, which
we calculated in accordance with methodologies prescribed by the Occupational Safety and Health Administration, at Pike stand-alone in each
of the five years ended June 30, 2004.

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Business Strategy
    We strive to be our customers’ service provider of choice and to expand our leadership position in the outsourced services sector of the
electric infrastructure industry, while continuing to increase our revenues and profitability. In order to accomplish these goals, we intend to
pursue the following strategies:
     Increased Penetration Within Our Existing Service Territory. We intend to continue to increase our penetration and market share within
our existing service territory by expanding our existing customer relationships, attracting new customers and pursuing selective acquisitions.
We estimate, based on third-party customer inquiries, that electric companies currently outsource approximately one-third of their distribution
and transmission infrastructure service requirements. We believe our modern fleet, quality service, regional presence, storm restoration
capabilities and strong safety record will enable us to develop our business with both existing and prospective customers as they continue to
further outsource their servicing needs. Furthermore, our acquisition of Red Simpson provides us with an opportunity to market additional Pike
services, including underground distribution services and storm restoration services, to existing customers that primarily obtained overhead
distribution services from Red Simpson.
     Expand Our Service Territory. We intend to continue to grow our business by seeking new opportunities from our existing customers that
have operations outside our current service territory, capturing new customers in other geographic markets and pursuing selective acquisitions.
In the last several years, we have successfully expanded our services into Mississippi, Pennsylvania, Louisiana and Texas. In addition, our
acquisition of Red Simpson enabled us to achieve our strategic objective of penetrating the south central market, which includes Texas and
Louisiana. We also have been successful in acquiring new customers after providing storm restoration services to them.
     Continued Focus on Distribution and Sub-500 kV Transmission. We focus on the maintenance, upgrade and extension of electric
distribution and sub-500 kV transmission powerlines. We believe that the distribution sector will continue to be the most attractive sector of the
electric infrastructure services industry because expenditures on distribution are significantly greater and are generally more stable than those
for transmission, and the transmission services that we provide typically tend to be more recurring than those for heavy transmission
infrastructure due to the necessary maintenance and service requirements of sub-500 kV transmission lines. The south central and southeastern
United States have a growing population and, according to the EIA, electric power consumption in those regions is projected to grow 36% and
53%, respectively, from 2005 to 2025. By focusing on the distribution and sub-500 kV transmission sectors of the industry and providing high
quality services to our customers, we believe that we will be in a position to capture a significant share of the expected increased amount of
work in this market sector.
    Capitalize on Favorable Long-Term Industry Trends. We believe that we are well positioned to benefit from expected long-term industry
trends, which are described in more detail in “Industry Overview.”

    • Growth in demand for electricity. We believe that demand for our services will be driven in part by increased demand for electricity
      due to expected growth in population and electricity consumption in the southeastern and south central United States, which have
      grown at higher rates in recent years than the rest of the country.

    • Increased outsourcing of infrastructure services. We intend to actively pursue opportunities provided by the continuing trend by
      electric companies to increase their reliance on outsourcing the maintenance and improvement of their electric distribution and
      transmission systems.

    • Inadequacy of current electric infrastructure. To the extent spending on the current electric infrastructure increases as expected, we
      believe we will have increased opportunities to provide distribution and sub-500 kV transmission upgrade and ongoing maintenance
      services.
    Continued Focus on Operating Efficiency and Customer Service. We intend to use the scale and scope of our capabilities to achieve
higher levels of operating efficiency and productivity while further

                                                                        63
enhancing our customer service. For example, we use our skilled mechanics and up-to-date garage equipment to increase our efficiency in
equipment maintenance, repair and overhaul operations, which we believe is a significant advantage over competitors that outsource the
majority of their maintenance requirements. In addition, by managing our fleet through our sophisticated central facility located in Mount Airy,
North Carolina, as well as five maintenance facilities located throughout our service territory, we efficiently deploy resources to provide high
levels of customer service. Our fleet support allows us to repair or replace a Pike vehicle or piece of equipment within 24 hours, which
improves utilization and customer service. We intend to use our extensive modern fleet, repair and maintenance capabilities and skilled
workforce to increase our cost competitiveness so that we may profitably win new business.

Our Services
    We provide services to the electric power distribution and transmission market. We focus primarily on the maintenance, upgrade and
extension of overhead and underground powerlines. We also offer storm restoration services and various ancillary services. We provide a
breakdown of our revenues by type of service in “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Overview.”
    Powerline Services. We began as a provider of distribution infrastructure services, and these services continue to be our primary revenue
generator. Today, using over 6,000 pieces of specialized equipment, we provide overhead and underground maintenance, upgrade and
extension services in a 19-state region. Overhead services consist of the construction and repair of wire and components in energized overhead
electric distribution systems. Underground services range from simple residential installations, directional boring, duct bank and manhole
installation to the construction of complete underground distribution facilities. We also perform routine maintenance work consisting of
repairing or replacing damaged or defective components, inspecting distribution systems for safety hazards and upgrading outdated or low
capacity infrastructure.
    We also offer maintenance, upgrade and extension services for transmission lines with voltages of up to and including 230 kV and perform
energized maintenance work for voltages up to 500 kV. These applications are predominantly single-pole and H-frame structures utilizing
wood, concrete or steel poles. Given the current load on regional electricity grids, our ability to perform energized maintenance work is a
significant competitive advantage because the work can be performed without interrupting the electric network. Transmission services
accounted for approximately 6.0% of our revenues for the year ended June 30, 2004.
    We also provide ancillary services, including the construction of power substations, right-of-way clearance and maintenance and the
installation of street lighting and fiber optic lines to meet the needs of certain of our distribution customers. While we do not actively pursue
these ancillary services as stand-alone services, they add significant value for our customers who prefer to utilize a single electric distribution
and transmission infrastructure service provider for all of their needs. Our various ancillary services have generated less than 10% of our total
revenue for each year during the past five years.
    Storm Restoration Services. Storm restoration involves the repair or reconstruction of any part of a distribution or sub-500 kV transmission
network, including substations, powerlines, utility poles or other components, damaged during snow, ice or wind storms, flash floods,
hurricanes, tornados or other natural disasters. We believe that our crews have earned a reputation as a storm restoration leader in the southeast
and south central United States due to our ability to mobilize rapidly the necessary employees and equipment while maintaining a functional
force for our unaffected customers. In crisis situations, we have deployed over 2,000 employees within 24 hours to respond to our customers’
emergency needs. We maintain a dedicated 24-hour Storm Center that acts as the single hub of command. We also perform these services
outside our existing geographic service area.
     Storm restoration services do not require that we keep a dedicated team on call. Rather, we rely on our customers in unaffected areas with
less time-sensitive work to release our crews in the event of a

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severe storm. This deferred work is addressed after the storm restoration work has been completed. This method of staffing storm crews has
proven both cost-efficient and effective.
     Our storm restoration services provide us with opportunities to attract new customers for our core electric distribution and transmission
infrastructure services. We also have been successful in acquiring new customers after providing storm restoration services to them. In
addition, our storm restoration services are more profitable than our ongoing infrastructure services work. For the years ended June 30, 2000,
2001, 2002, 2003 and 2004, our revenues generated from storm restoration services were $21.6 million, $25.3 million, $7.0 million,
$46.6 million and $43.0 million, respectively. For the five-year period ended June 30, 2004, our average annual storm restoration revenues
were $28.7 million and, for each of the five years, ranged between 2.6% and 15.7% of our total revenues.
    During August and September of 2004, we experienced the largest storm restoration event of our history as four hurricanes impacted
Florida and the surrounding Gulf states. At the peak of our restoration activity, we dedicated approximately 3,000 field, supervisory and
support staff to storm restoration services. As a result of these storms, we generated approximately $146.9 million of revenues from storm
restoration services for the nine months ended March 31, 2005. Due to the unpredictable nature of storms, the level of our storm restoration
revenue fluctuates from period to period. Our storm restoration revenue for the nine months ended March 31, 2005 is not indicative of the
revenues that we typically generate in any period or can be expected to generate in any future period.
    The following table sets forth certain information related to some of our selected significant mobilizations:
                                                        Selected Storm Mobilizations

                                                                                                      Approximate
                                                                                                       Number of
                                                                                                       Employees              Restoration
Storm                                                                           Date                   Mobilized                Period

Hurricanes or Tropical Storms
  Hurricane Frances                                                            September
                                                                               2004                           1,800                15 days
      (FL/GA/NC/SC)
   Hurricane Ivan                                                              September
                                                                               2004                           1,700                 9 days
      (AL/FL/GA/MS/SC/NC/VA)
   Tropical Storm Jeanne                                                       September
                                                                               2004                           1,300                12 days
      (FL/GA)
   Hurricane Charley                                                           August
                                                                               2004                           2,000                16 days
      (FL/NC)
   Hurricane Isabelle                                                          September
                                                                               2003                           1,800                21 days
      (VA/MD/NC)
   Hurricane Lily                                                              October
                                                                               2002                             900                 8 days
        (LA)
Ice Storms
    Ice Storm                                                                  January
                                                                               2005                             880                11 days
       (OH)
   Ice Storm                                                                   December
                                                                               2004                             440                 9 days
       (IN)
   Ice Storm                                                                   February
                                                                               2003                           1,200                14 days
       (KY/WV)
   Ice Storm                                                                   February
                                                                               2003                           2,300                11 days
        (NC/SC)

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Customers
    We have focused on developing strong, long-term relationships with major electric utilities, cooperatives and municipalities. We have a
diverse, well-capitalized customer base that includes over 150 electric companies throughout our service territory. We have employed a
customer-focused philosophy that has resulted in customer loyalty, as exemplified by our 59-year relationship with our first customer, Duke
Power Company, our 47-year relationship with American Electric Power Company, Inc. and Red Simpson’s 30-year relationship with TXU
Corp. After giving effect to the Red Simpson acquisition, our relationships with our top 15 customers average approximately 33 years. We
preserve these relationships by providing top-quality service and maintaining advanced equipment.
    The following table lists selected long-standing customer relationships as of March 31, 2005:
                                           Selected Long-Standing Customer Relationships

                                                                                                          Length of Relationship
Customer                                                                                                        (in years)

Duke Power Company                                                                                                                 59
Cobb EMC                                                                                                                           48
American Electric Power Company, Inc.                                                                                              47
Snapping Shoals EMC                                                                                                                43
Greystone Power Corp.                                                                                                              42
Entergy Corporation                                                                                                                40
Dominion Virginia Power Co.                                                                                                        32
Progress Energy Carolinas (Carolina Power & Light Company)                                                                         32
TXU Corp.                                                                                                                          30
Oglethorp Power Corp./Georgia Transmission Corp.                                                                                   24
     Many of the customers listed above are our top customers. Our top ten customers accounted for approximately 56.8% and 47.4% of our
total revenues during the nine months ended March 31, 2005 and the year ended June 30, 2004, respectively, and approximately 49.9% of our
total revenues for the year ended June 30, 2004 on a pro forma basis after giving effect to the acquisition of Red Simpson. For the year ended
June 30, 2004, on a pro forma basis after giving effect to the acquisition of Red Simpson, 12.6% of our total revenues were derived from Duke
Power. For the nine months ended March 31, 2005, 11.3% of our total revenues were derived from Duke Power. However, the decline in the
percentage of our total revenues attributable to Duke Power for the nine months ended March 31, 2005 as compared to the year ended June 30,
2004 on a pro forma basis was due to our unusually high level of storm restoration revenue in the nine months ended March 31, 2005. Except
for Duke Power and Florida Power & Light, none of our customers separately accounted for more than 10% of our total revenues for the year
ended June 30, 2004 or the nine months ended March 31, 2005. While our exposure to Duke Power has decreased as a result of our acquisition
of Red Simpson, a substantial portion of our total revenues will continue to be derived from a limited group of customers.
    We believe that our corporate structure and culture successfully foster our long-term customer relationships by affording our clients
multiple points of contact within our organization. Each customer typically has five points of contact within our company, including the local
area supervisor, local area manager, area vice president, regional vice president and our chief executive officer. The commitment by our
managers and employees, many of whom are family members of current and former personnel, helps to reinforce customer loyalty.

Types of Service Arrangements
    Over 90% of our services are provided under master service arrangements, or MSAs, that cover maintenance, upgrade and extension
services, as well as new construction. We do not derive significant revenues from fixed-price agreements relating to large-scale capital
improvements, which typically involve

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competitive bidding and substantial performance bond requirements. Our sub-500 kV transmission work performed under fixed price bids
represents relatively small jobs (typically less than $5.0 million) with modest (i.e., approximately $500,000 on average) bonding requirements.
As of June 30, 2004, an estimated 49% of our arrangements were hourly, while an estimated 45% were unit-based. The terms of our service
arrangements are typically between one to three years for cooperatives and municipalities and three to five years for investor-owned utilities,
with periodic pricing reviews. Our customers are not required to use us exclusively and do not guarantee service volumes. Most of our
arrangements, including MSAs, may be terminated by our customers on short notice. We typically invoice our customers on a weekly basis,
with payments due in 30 days. Because the majority of our customers are well-capitalized, investment grade-rated electric utilities or
cooperatives, we have historically experienced de minimis levels of bad debt.
    Initial contract awards usually are made on a competitive bid basis, but extensions often are completed on a negotiated basis. As a result of
our track record of quality work and services, we estimate that a majority of our arrangements are renewed at or before the expiration of their
terms.

Training, Quality Assurance and Safety
     Performance of our services requires the use of heavy equipment and exposure to potentially dangerous conditions. Our safety record
reflects our commitment to operating safely and prudently. As employee safety is a top corporate priority, we have developed an extensive
safety and training program that we believe meets applicable DOL requirements in all material respects. Our lineman training program, an
accredited four-year program, has grown to be one of the largest non-union powerline training programs in the United States. As a result of this
focus on employee safety, we have received a recognition of excellence from the North Carolina Department of Labor for the results of our
apprenticeship program. We operate 28 training facilities in 11 states to teach employees safe working skills. In addition to on-the-job training,
our career development program and specialized training, we require our employees to attend 12 hours per year of ongoing safety training
programs. Our continued focus on safety and workforce developments has resulted in year-over-year improvements in recordable and lost-time
incidence rates, which we calculated in accordance with methodologies prescribed by the Occupational Safety and Health Administration at
Pike stand-alone in each of the five years ended June 30, 2004. We also conduct other training programs covering a variety of areas, such as
supervisor development and CPR/First Aid Certification.
    We regularly communicate with our employees to promote safety and to instill safe work habits. In addition, we maintain a safety incentive
program that rewards employees for working safely and minimizing injuries.
     As is common in our industry, we regularly have been and will continue to be subject to claims by employees, customers and third parties
for property damage and personal injuries.

Equipment
    Our fleet, substantially all of which we own, consists of over 6,000 pieces of specialized equipment with an average age of approximately
five years (measured as of May 2005) as compared to their average useful lives of eight to 12 years. Over the five years ended June 30, 2004,
pro forma for the Red Simpson acquisition, we invested approximately $250 million in our fleet, facilities and equipment which includes trucks
and trailers, support vehicles and specialty construction equipment, such as backhoes, excavators, trenchers, generators, boring machines,
cranes, wire pullers and tensioners. We believe that these vehicles generally are well maintained and adequate for our current operations.
    The majority of our heavy equipment is specifically designed and custom-fitted to meet the needs of our crews. We service the majority of
our fleet and are a final-stage manufacturer for several configurations of our specialty vehicles. In the event that a particular application is not
available to us, we can build the component on-site, which reduces our reliance on our equipment suppliers.

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    Our maintenance function has the capability to operate 24 hours a day, both at our maintenance centers and in the field, providing
high-quality custom repair work and expedient service, in order to maintain a fleet poised for mobilization. We believe that this helps us
achieve a greater local presence, lower fuel costs and more efficient equipment maintenance. We believe that our maintenance facilities are
adequate for our current operations.

Properties
    We are headquartered in a modern and sophisticated 120-acre facility located in Mount Airy, North Carolina. This facility has served as
Pike headquarters since 1998, when we consolidated our numerous Mount Airy properties into one facility. The facility consists of 53,600
square feet of corporate headquarters and central administrative offices and 201,000 square feet of garage and maintenance facilities, vehicle
staging areas, warehouses and a training facility.
    We also maintain a range of regional facilities, including warehouses, offices, maintenance centers and storage garages throughout our
19-state service area. We continuously review our property needs and, as a result, may consolidate or eliminate certain facilities in the future.
However, no specific future eliminations or consolidations have been identified. We believe that our facilities are adequate for our current
operations.
      The table below sets forth, as of March 31, 2005, certain information in respect of our principal owned and leased properties:
                                                                                                  Square                 Title/Number of
State                                              Description of Facilities                      Footage                   Properties

Georgia                                          garage and maintenance facilities                     3,300                     Own(one)
North Carolina                                   corporate offices; garage and
                                                 maintenance facilities                              261,700                   Own(two)
Texas                                                                                                                       Lease(one) (a) /
                                                 garage and maintenance facilities                    18,900                  Own(one)


(a)     This lease expires April 30, 2007.
   We have pledged the properties in Georgia and North Carolina listed in the table above, as well as certain other properties, as collateral
under our senior credit facility.

Employees
    At May 15, 2005, we employed over 6,700 full-time and part-time employees. We offer our employees a competitive package of benefits
including medical, dental, life and disability insurance, paid vacation and holidays, 401(k) plans and annual bonuses. The level of benefits per
employee varies and is contingent upon years of service, as well as levels of seniority and other variables.
      Our employees are not currently unionized, and we believe that our relationship with our employees is good.

Risk Management and Insurance
     We maintain insurance policies with coverage customary for companies of our type and size, including general liability, automotive and
workers’ compensation. We are partially self-insured under all of our policies, and our insurance does not cover all types or amounts of
liabilities. Under each of these insurance policies, we are liable up to $1,000,000 per occurrence. We also maintain insurance for health
insurance claims exceeding $225,000 per person on an annual basis. We are not required to, and do not, specifically set aside funds for our
self-insurance programs. At any given time, we are subject to multiple workers’ compensation and personal injury and other employee-related
claims. We maintain accruals based on

                                                                               68
known facts and historical trends. Our workers’ compensation and insurance costs have been rising for several years notwithstanding our
emphasis on safety.
    In the ordinary course of business, we occasionally are required by our customers to post surety or performance bonds in connection with
services that we provide to them. These bonds have face amounts ranging from $48,000 to $5.4 million. As of March 31, 2005, we have
approximately $26.5 million in surety bonds outstanding. We have never had to reimburse any of our sureties for expenses or outlays incurred
under a performance or payment bond.

Information Systems
    We have developed an integrated information system to manage our accounting, human resources and fleet. Our information system
applications have the capacity to support our future growth and include systems to track historical job costs, determine the fixed and hourly
costs of vehicles, manage and monitor fleet operating costs and other equipment and streamline administrative and accounting processes. We
continuously seek to enhance our technology to better manage our business. We are currently in the process of transitioning the Red Simpson
business into our information systems. Upon completion, we will manage our business activities using a single company-wide information
system.

Competition
   We face significant competition from subsidiaries or divisions of five national companies, approximately eight regional companies and
numerous small owner-operated private companies. Our competitors vary in size, geographic scope and areas of expertise. We also face
competition from the in-house service organizations of our existing and prospective customers, some of which employ personnel who perform
some of the same types of services we provide.
    The principal competitive factors in the end markets in which we operate are:
    • reputation and relationships with customers;

    • history of service execution (for example, safety record, cost control, timing and experience);

    • geographic presence and breadth of service offerings;

    • price; and

    • the availability of qualified and/or licensed personnel.
    We believe that we have a favorable competitive position in the markets that we serve due in large part to our strong operating history,
reputation and relationships with our customers. Small third-party service providers pose a smaller threat to us than national competitors
because they are frequently unable to compete for larger, blanket service agreements to provide system-wide coverage. However, some of our
competitors are larger, have greater resources and are able to offer a broader range of services (such as services to the telecommunications
industry) or offer services in a broader geographic territory. In addition, certain of our competitors may have lower overhead cost structures and
may, therefore, be able to provide their services at lower rates than we can. Competitive factors may require us to take measures, such as price
reductions, in the future that could reduce our profitability.

Regulation
    Our operations are subject to various federal, state and local laws and regulations including:
    • licensing requirements applicable to electricians and engineers;

    • building and electrical codes;

    • permitting and inspection requirements applicable to construction projects;

    • regulations relating to worker safety and health, including those in respect of OSHA; and

    • regulations relating to environmental protection.

                                                                        69
    We believe that we are in material compliance with applicable regulatory requirements and have all material licenses required to conduct
our operations. Our failure to comply with applicable regulations could result in substantial fines and/or revocation of our operating licenses.
Many state and local regulations governing electrical construction require permits and licenses to be held by individuals who typically have
passed an examination or met other requirements. We have a regulatory compliance group that monitors our compliance with applicable
regulations.

Environmental Matters
     Our facilities and operations are subject to a variety of environmental laws and regulations which govern, among other things, the use,
storage and disposal of solid and hazardous wastes, the discharge of pollutants into the air, land and water, and the cleanup of contamination. In
connection with our truck fueling, maintenance, repair, washing and final-stage manufacturing operations, we use regulated substances such as
gasoline, diesel and oil, and generate small quantities of regulated waste such as used oil, antifreeze, paint and car batteries. Some of our
properties contain, or previously contained, aboveground or underground storage tanks, fuel dispensers, and/or solvent-containing parts
washers. In addition, our construction and maintenance activities are sometimes performed in environmentally sensitive areas, such as
wetlands, or in underground environments for which we must rely on field maps for the location of underground assets and obstacles. In the
event we cause, or we or our predecessors have caused, a release of hazardous substances or other environmental damage, whether at our sites,
sites where we perform our services, or other locations such as off-site disposal locations or adjacent properties, we could incur liabilities
arising out of such releases or environmental damage. Although we have incurred in the past, and will incur in the future, costs to maintain
environmental compliance and/or to address contaminants in the soil or groundwater at our current or former properties, such costs have not,
and are not expected to, have a material adverse effect on our results of operations, cash flows or financial condition.

Legal Proceedings
    We are currently in the process of a DOL audit of redemptions of our common stock under our 401(k) plan. The DOL is currently
evaluating whether we redeemed common stock under our 401(k) plan for less than fair market value from 1999 to 2002. We believe we have a
strong basis for our position. We believe that any DOL assessment against us will not have a material adverse effect on our results of
operations, cash flows or financial condition.
    In addition, from time to time, we are a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our
business. These actions typically seek, among other things, compensation for alleged personal injury, workers’ compensation, employment
discrimination, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. We do
not believe that we have any proceedings that, individually or in the aggregate, would be expected to have a material adverse effect on our
results of operations, cash flows or financial condition.

Corporate Information
    We were incorporated in North Carolina in 1968. We reincorporated in Delaware on July 1, 2005. To effect the reincorporation, we merged
with and into a newly created wholly owned subsidiary, Pike Electric Corporation, which was formed in Delaware for the sole purpose of
effecting the reincorporation. As a result of the reincorporation, each outstanding share of our common stock was automatically converted into
14.76 shares of common stock, with par value of $0.001, of Pike Electric Corporation.
    The reincorporation did not result in any change in the economic or beneficial ownership interests of our stockholders. The reincorporation
also did not result in any change in the business, management, fiscal year, assets, liabilities, or location of our principal facilities.

                                                                        70
                                                                MANAGEMENT

Executive Officers and Directors
    Set forth below are our executive officers, directors and director appointees, together with their positions and ages as of June 30, 2005.
Name                                                                     Age                                    Position

J. Eric Pike                                                                 37     President, Chief Executive Officer and Director
Mark Castaneda                                                               41     Chief Financial Officer
Jeffery L. Collins                                                           47     Chief Operating Officer
Robert Ratliff, Jr.                                                          54     Chief Administrative Officer
John H. Merritt                                                              43     Vice President, Operations
Alan E. Goldberg                                                             50     Director Appointee
Robert D. Lindsay                                                            50     Director Appointee
Stuart S. Janney III                                                         56     Director Appointee
Adam P. Godfrey                                                              43     Director Appointee
J. Russell Triedman                                                          35     Director
James R. Helvey III                                                          46     Director Appointee
    Set forth below is a brief description of the business experience of our directors (including those persons appointed to serve as directors
effective immediately prior to, and contingent on the completion of, this offering) and executive officers.
    J. Eric Pike — President, Chief Executive Officer and Director. Mr. Pike, the grandson of founder Floyd Pike, has been our President
since 1998 and our Chief Executive Officer since 2002. Mr. Pike will be Chairman of the Board upon completion of this offering. He joined
Pike Electric in 1990 as an A-class lineman on an overhead construction crew. He then advanced through various office positions and served as
Vice President of the Central Region from 1993 to 1998, where he was responsible for the powerline operations in North and South Carolina.
Mr. Pike joined Pike’s Board of Directors in 1994. Mr. Pike graduated from Emory University with a B.A. in History.
     Mark Castaneda — Chief Financial Officer and Secretary. Mr. Castaneda has served as our Chief Financial Officer since December
2004 and is responsible for the corporate planning, financial reporting and supervision of all finance and accounting functions. Prior to joining
Pike, Mr. Castaneda served as the Chief Financial Officer and a director of Blue Rhino Corporation from 1997 to September 2004. Prior to
that, he served as Vice President of Finance and the Chief Financial Officer for All Star Gas Corporation from 1995 until 1997, as a Director of
Planning and Controller of Skelgas Propane, Inc. from 1991 to 1995, and as a certified public accountant with Deloitte & Touche LLP from
1988 to 1990. Mr. Castaneda graduated from DePaul University with a B.S. in Accountancy and an M.S. in Taxation.
     Jeffery L. Collins — Chief Operating Officer. Mr. Collins has been our Chief Operating Officer since July 2002 and is responsible for
field and fleet operations. He joined Pike Electric in 1984 as a groundman on an overhead construction crew. He then advanced through various
office positions and served as Vice President of the Northern Region from 1995 to August 1998, where he was responsible for powerline
operations in six states, and as Vice President of the Central Region from September 1998 to June 2002, where he was responsible for
powerline operations in two states. Mr. Collins graduated from North Carolina State University with a B.S. in Engineering Operations.
     Robert Ratliff, Jr. — Chief Administrative Officer. Mr. Ratliff has been our Chief Administrative Officer since 2003 and is responsible
for human resources, safety and training. He joined our subsidiary, Pike Electric, in 1979 as an operations supervisor. He then advanced
through various office positions and served in various Vice President roles in operations and administration from 1990 to 2003. Mr. Ratliff

                                                                        71
graduated from Virginia Polytechnic Institute and State University with a B.S.-M.E. and is a registered professional engineer.
   John H. Merritt — Vice President, Operations. Mr. Merritt has been our Vice President of Operations since 1993 and is responsible for
powerline operations in our southern region. He joined Pike Electric in 1984 as a groundman on an overhead construction crew. He then
advanced through various office positions, including serving as Vice President of the Southern Region, where he was responsible for the
powerline operations in five states. Mr. Merritt graduated from Guilford College with a B.A. in Business Management.
    Alan E. Goldberg — Director Appointee. Mr. Goldberg served on the Board of Directors of our predecessor Pike Holdings, Inc. from
2002 until July 1, 2005, when we reincorporated in Delaware, and will serve as a director upon completion of this offering. Mr. Goldberg
co-founded Lindsay Goldberg & Bessemer in 2001. Previously, he served as Chairman and Chief Executive Officer of Morgan Stanley Private
Equity from February 1998 to January 2001. Mr. Goldberg spent a total of 22 years at Morgan Stanley, including the last 17 years at Morgan
Stanley Private Equity, where, together with Robert D. Lindsay, he played an integral role in founding the business in 1984. Mr. Goldberg
holds a B.A. in Philosophy and Economics from New York University, an M.B.A. from the New York University Graduate School of Business
and a J.D. from Yeshiva University. He is a member of the Investor Committee of Wacker Construction Equipment AG, a member of the
Supervisory Board and Stockholders’ Committee of Klöckner & Co. GmbH and a director of the Smurfit Stone Corporation, Envirocare of
Utah, LLC, FAPS Holdings, Inc., Maine Beverage Company, LLC, Keystone Foods Holdings LLC and PetroLogistics LLC. He also serves as
a Trustee of Yeshiva University and Mount Sinai Medical Center in New York.
    Robert D. Lindsay — Director Appointee. Mr. Lindsay served on the Board of Directors of our predecessor Pike Holdings, Inc. from 2002
until July 1, 2005, when we reincorporated in Delaware, and will serve as a director upon completion of this offering. Mr. Lindsay co-founded
Lindsay Goldberg & Bessemer in 2001. Previously, he was the Managing General Partner of Bessemer Holdings and, prior to joining Bessemer
Holdings in 1991, Managing Director at Morgan Stanley Private Equity, where, together with Alan E. Goldberg, he played an integral role in
founding the business in 1984. Mr. Lindsay holds a B.A. in English and American Literature and Language from Harvard College and an
M.B.A. from Stanford University. He is President and CEO of Bessemer Securities LLC as well as a director of The Bessemer Group,
Incorporated and its subsidiary banks, including Bessemer Trust Company, N.A. Mr. Lindsay is a member of the Investor Committee of
Wacker Construction Equipment AG, a member of the Supervisory Board and Stockholders’ Committee of Klöckner & Co. GmbH, and is
Chairman of the Board of Identity Group, Inc. He also serves as a director of Envirocare of Utah, LLC, FAPS Holdings, Inc., Maine Beverage
Company, LLC, Keystone Foods Holdings LLC and PetroLogistics LLC. In addition, he serves as a Trustee of the Cold Spring Harbor
Biological Laboratory and St. Paul’s School in Concord, New Hampshire.
    Stuart S. Janney III — Director Appointee. Mr. Janney served on the Board of Directors of our predecessor Pike Holdings, Inc. from
2003 until July 1, 2005, when we reincorporated in Delaware, and will serve as a director upon completion of this offering. Mr. Janney is
currently the Chairman of Bessemer Securities LLC and The Bessemer Group Incorporated, including its subsidiary banks, Bessemer Trust
Company, Bessemer Trust Company, N.A. and Bessemer Trust Company of Florida. From 1986 through 1994, Mr. Janney was a Managing
Director of Alex Brown & Sons and a director of Brown Advisory and Trust Company and Alex Brown Holdings. In 1977 he joined Niles,
Barton & Wilmer, a Baltimore law firm, where he was a partner until 1985. From 1973 through 1976, Mr. Janney held several positions in the
federal government. He received a B.A. from the University of North Carolina at Chapel Hill and a J.D. from the University of Maryland.
Mr. Janney serves as a director of King Ranch, Inc., Identity Group, Inc., Pride Manufacturing Company, LLC and Keystone Foods Holdings
LLC. He also serves on the Boards of the Maryland Zoological Society, the New York Racing Association, the Keeneland Association, the
Jockey Club and the Maryland Million, where he served as President until 1998. Mr. Janney is a Trustee of The Johns Hopkins University and
Chairman of its Applied Physics Lab.

                                                                      72
     Adam P. Godfrey — Director Appointee. Mr. Godfrey served on the Board of Directors of our predecessor Pike Holdings, Inc. from 2002
until July 1, 2005, when we reincorporated in Delaware, and will serve as a director upon completion of this offering. Mr. Godfrey has been a
Partner with Lindsay Goldberg & Bessemer since its formation in 2001. Previously, he was a Partner with Bessemer Holdings, which he joined
in 1992. From 1987 to 1990, he worked in the mergers and acquisitions department and venture capital group at Morgan Stanley. Mr. Godfrey
began his career at Manufacturers Hanover Trust. He received an A.B. from Brown University and an M.B.A. from the Amos Tuck School at
Dartmouth College. He currently serves as Chairman of the Board of Pride Manufacturing Company LLC and is a director of FAPS Holdings,
Inc. and Wyoming Refining Company.
    J. Russell Triedman — Director. Mr. Triedman has served on our Board of Directors since 2002. Mr. Triedman has been a Principal with
Lindsay Goldberg & Bessemer since its formation in 2001. Previously, he was a Principal with Bessemer Holdings starting in 2000. He was a
Director at Fox Paine & Company, LLC, a San Francisco-based private equity firm, and an Associate at Cravath, Swaine & Moore LLP.
Mr. Triedman began his career in the private equity group of Brown Brothers Harriman & Co. He earned a Sc.B. in Applied Mathematics and
Economics from Brown University and a J.D. from the University of Chicago Law School. Mr. Triedman currently serves as a director of
Keystone Foods Holdings LLC.
    James R. Helvey III — Director Appointee. Mr. Helvey will serve on our Board of Directors upon completion of this offering. He has
been the President of Helvey & Associates, LLC, a financial risk management consulting firm, since its formation in October 2002. From June
2000 to October 2002, Mr. Helvey was the Chairman and Chief Executive Officer of Cygnifi Derivative Services, LLC. Due to adverse market
conditions associated with the overall decline in technology stocks, Cygnifi voluntarily filed for bankruptcy protection under Chapter 11 of the
U.S. Bankruptcy Code in October of 2001. From 1985 to 2000, he worked in several positions at J.P. Morgan & Co., where he became a
Managing Director and served as Vice-Chairman of J.P. Morgan’s Global Risk Management Committee, responsible for monitoring the firm’s
global risk positions, balance sheet and capital. Mr. Helvey graduated from Wake Forest University, with a B.A. in Politics and German, and
Columbia University with a Masters of International Affairs, with a specialization in international finance and banking. He was also a Fulbright
Scholar at the University of Cologne in Germany. Mr. Helvey is a member of the Wake Forest University Board of Trustees, where he serves
on the Investment Policy and Audit Committees, and Chairman of the Forsyth Country Day School Board of Trustees. Mr. Helvey also serves
on the Oakwood Country School Board of Trustees in Morgan Hill, California.

Board of Directors
    Our business and affairs are managed under the direction of our board of directors. Upon the consummation of this offering, the board will
be composed of seven directors.

Committees of the Board of Directors
    Our board of directors has the authority to appoint committees to perform certain management and administration functions.
     None of the directors currently on our board, other than James R. Helvey III, is independent as such term is defined in Rule 10A-3(b) under
the Exchange Act and under New York Stock Exchange Rule 303A (Rule 303A). In accordance with the requirements of Rule 303A, we intend
that a majority of our directors will be independent within one year after the consummation of this offering.
    We plan to appoint one independent director to each of our audit committee, our compensation committee and our nominating and
corporate governance committee upon completion of this offering. In accordance with the requirements of Rule 303A, we plan to nominate
new independent members to each of these committees so that they are comprised of a majority of independent directors within 90 days after,
and entirely of independent directors within one year after, the consummation of this offering.

                                                                      73
    Audit Committee
    Upon completion of this offering, we will have an audit committee that will have responsibility for, among other things:

    • overseeing management’s maintenance of the reliability and integrity of our accounting policies and financial reporting and our
      disclosure practices;

    • overseeing management’s establishment and maintenance of processes to assure that an adequate system of internal control is
      functioning;

    • overseeing management’s establishment and maintenance of processes to assure our compliance with all applicable laws, regulations
      and corporate policy;

    • reviewing our annual and quarterly financial statements prior to their filing or prior to the release of earnings; and

    • reviewing the performance of the independent accountants and making recommendations to the board of directors regarding the
      appointment or termination of the independent accountants and considering and approving any non-audit services proposed to be
      performed by the independent accountants.
   The audit committee will have the power to investigate any matter brought to its attention within the scope of its duties and to retain
counsel for this purpose where appropriate.


    Compensation Committee
    Upon completion of this offering, we will have a compensation committee that will have responsibility for, among other things:

    • reviewing key employee compensation policies, plans and programs;

    • monitoring performance and compensation of our employee-directors, officers and other key employees;

    • preparing recommendations and periodic reports to the board of directors concerning these matters; and

    • administering the incentive programs referred to in “Executive Compensation” below.


    Nominating and Corporate Governance Committee
    Upon completion of this offering, we will have a nominating and corporate governance committee that will have responsibility for, among
other things:

    • recommending persons to be selected by the board as nominees for election as directors and to fill any vacancies on the board;

    • considering and recommending to the board qualifications for the position of director and policies concerning the term of office of
      directors and the composition of the board; and

    • considering and recommending to the board other actions relating to corporate governance.


    Compensation Committee Interlocks and Insider Participation
     Upon completion of this offering, our board of directors will form a compensation committee as described above. None of our executive
officers will serve as a member of our compensation committee, and none of them have served, or will be permitted to serve, on the
compensation committee, or other committee serving a similar function, of any entity of which an executive officer is expected to serve as a
member of our compensation committee.

                                                                        74
Director Compensation
    Directors who are employees of Pike Electric Corporation or its subsidiaries or affiliated with Lindsay Goldberg & Bessemer will receive
no compensation for service as members of either the board of directors or board committees. Directors who are not employees of Pike Electric
Corporation or its subsidiaries or affiliated with Lindsay Goldberg & Bessemer will be paid:

        • a base annual retainer of $25,000 in cash;

        • $100,000 in shares of restricted stock upon election to a three-year term and annual issuances of $25,000 in shares of restricted stock
          thereafter, all of which will vest over three years;

        • a fee of $1,000 for each board meeting attended;

        • $500 for each committee meeting attended; and

        • the chair of the audit committee will receive an additional annual retainer of $15,000 in cash, the chair of the nominating and
          governance committee will receive an additional annual retainer of $10,000 in cash and the chair of the compensation committee will
          receive an additional cash annual retainer of $5,000 in cash.
        We intend to promptly reimburse all directors for reasonable expenses incurred to attend meetings of our board of directors or committees.

Executive Compensation
   The following table sets forth certain summary information concerning the compensation provided by us in the fiscal years ended June 30,
2004 and 2005 to our Chief Executive Officer and our other four most highly compensated executive officers:


                                                                 Summary Compensation Table
                                                                                                         Long-Term Compensation

                                                                                                           Awards
                                                           Annual Compensation
                                                                                                                    Securities
                                                                             Other Annual         Restricted        Underlying                All Other
                                                Salary          Bonus        Compensation           Stock            Options/      LTIP     Compensation
Name and Position                    Year         ($)            ($)            ($)(2)             Awards             SARs        Payouts         ($)

J. Eric Pike                          2005       752,266         275,875            87,513 (3)             —                 —         —                   —
    President and Chief               2004       489,298          21,325           129,163 (4)             —                 —         —                   —
    Executive Officer
Jeffery L. Collins                    2005       392,231         116,060            39,056 (5)             —                 —         —           57,680(12)
    Chief Operating Officer           2004       351,720          15,455            69,577 (6)             —                 —         —           72,859(13)
Robert B. Ratliff                     2005       322,084          64,610            53,533 (7)             —                 —         —           52,470(12)
    Chief Administrative Officer      2004       302,621          14,070            66,113 (8)             —                 —         —       66,278(13)(14)
John H. Merritt                       2005       299,535          83,454            49,721 (9)             —                 —         —       53,052(12)(14)
    Vice President, Operations        2004       259,952          12,490            84,167 (10)            —                 —         —       67,013(13)(14)
Mark Castaneda(1)                     2005       277,180           2,925             6,969 (11)            —                 —         —                   —
    Chief Financial Officer



  (1)      Mr. Castaneda was hired in October 2004 at an annual salary of $400,000.

  (2)      The deferred compensation portions of the amounts below were paid pursuant to a deferred compensation plan that was terminated in January 2005.

  (3)      Represents $44,363 in deferred compensation, $26,610 in personal use of company aircraft and $16,540 in personal use of company vehicle.

  (4)      Represents $89,148 in deferred compensation, $26,910 in personal use of company aircraft and $13,105 in personal use of company vehicle.

  (5)      Represents $29,479 in deferred compensation and $9,577 in personal use of company vehicle.

  (6)      Represents $59,238 in deferred compensation and $10,339 in personal use of company vehicle.

  (7)      Represents $37,635 in deferred compensation and $15,898 in personal use of company vehicle.

  (8)      Represents $52,750 in deferred compensation and $13,363 in personal use of company vehicle.
75
 (9)     Represents $35,781 in deferred compensation and $13,940 in personal use of company vehicle.
(10)    Represents $71,202 in deferred compensation and $12,965 in personal use of company vehicle.

(11)    Represents $6,969 in personal use of company vehicle.

(12)    Represents the value of a profit interest in LGB Pike LLC, a former shareholder affiliated with Lindsay Goldberg & Bessemer, that was issued pursuant
        to the 2002 recapitalization transaction. Such value was determined at the issuance date by a third-party valuation and was being amortized into
        compensation expense over its three-year vesting period. The amortization attributable to 2005 was $72,698, $57,680, $52,470 and $53,052 for
        Messrs. Banner, Collins, Ratliff and Merritt, respectively. LGB Pike LLC distributed shares of our common stock to the members of LGB Pike LLC
        effective June 13, 2005, canceling the related profit interests.

(13)    Represents the value of a profits interest in LGB Pike LLC, a former shareholder affiliated with Lindsay Goldberg & Bessemer, that was issued
        pursuant to the 2002 recapitalization transaction. Such value was determined at the issuance date by a third-party valuation and was being amortized
        into compensation expense over its three-year vesting period. The amortization attributable to 2004 was $91,829, $72,859, $66,278 and $67,013 for
        Messrs. Banner, Collins, Ratliff and Merritt, respectively. LGB Pike LLC distributed shares of our common stock to the members of LGB Pike LLC
        effective June 13, 2005, canceling the related profit interests.

(14)    Represents employer’s contributions to employee’s 401(k) plan of $141 and $386 for Messrs. Ratliff and Merritt, respectively, in 2004 and $137 for
        Mr. Merritt in 2005.

Option Grants in Last Fiscal Year
   The following table shows the options that were granted during the fiscal year ended June 30, 2005 to the executive officers named in the
Summary Compensation Table above.
                                                                                                                           Potential Realizable Value
                                                                                                                           at Assumed Annual Rates
                                                                                                                                 of Stock Price
                                                                                                                            Appreciation for Option
                                                                                                                                    Term(2)
                                 Number of           Percent of
                                                        Total
                                  Securities                               Exercise
                                                      Options
                                 Underlying          Granted to             or Base
                                  Options           Employees in             Price            Expiration
            Name                 Granted(1)          Fiscal Year           ($/share)            Date                      5%                      10%

J. Eric Pike                        484,040                 32.2 %     $        6.51            10/21/2014         $      1,388,108        $       3,517,739
Reginald L. Banner                  110,464                  7.3 %     $        6.51            10/21/2014         $        316,793        $         805,816
Jeffery L. Collins                  124,516                  8.3 %     $        6.51            10/21/2014         $        357,065        $         904,872
Robert B. Ratliff                    99,615                  6.6 %     $        6.51            10/21/2014         $        285,652        $         723,898
John H. Merritt                      87,173                  5.8 %     $        6.51            10/21/2014         $        249,976        $         633,487
Mark Castaneda                      161,814                 10.8 %     $        6.51            10/21/2014         $        464,024        $       1,175,926


(1)    These options were granted on October 21, 2004 and vest in four equal annual installments. The exercise price equalled the fair market value on the grant
       date.

(2)    Amounts represent hypothetical values that could be achieved for the respective options if exercised at the end of the option term. These values are based
       on assumed rates of stock price appreciation of 5% and 10%, compounded annually for a ten-year period based on an initial stock price of $15.00 per
       share (the midpoint of the estimated offering price range set forth on the cover page of this prospectus). These assumptions are not intended to forecast
       future appreciation of our stock price. The potential realizable value does not take into account federal or state income tax consequences of option
       exercises or sales of appreciated stock.

                                                                                 76
Exercise of Stock Options
     The following table shows aggregate amounts of outstanding options to purchase equity interests in us held by the executive officers named
in the Summary Compensation Table above at June 30, 2004 and 2005.


                        Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values
                                                                              Number of Securities                           Value of Unexercised
                                                                             Underlying Unexercised                              In-the-Money
                                                                                Options/SARs at                                  Options/SARs at
                                      Shares                                  Fiscal Year-End (#)                            Fiscal Year-End ($)(1)
                                     Acquired
                                                       Value
                                       On
                                     Exercise         Realized
Name                                                                   Exercisable           Unexercisable             Exercisable            Unexercisable
                                        (#)             ($)

J. Eric Pike               2005             —                  —            140,482                   627,481      $      1,573,398       $           6,096,236
                           2004             —                  —            209,068                   388,269      $        566,574       $           1,052,209
Jeffery L. Collins         2005             —                  —             89,401                   268,988      $      1,001,291       $           2,773,026
                           2004             —                  —            133,047                   247,082      $        360,557       $             669,592
Robert B. Ratliff          2005             —                  —             76,619                   225,504      $        858,133       $           2,333,926
                           2004             —                  —            114,036                   211,777      $        309,038       $             573,916
John H. Merritt            2005             —                  —             76,619                   216,663      $        858,133       $           2,258,866
                           2004             —                  —            114,036                   211,777      $        309,038       $             573,916
Mark Castaneda             2005             —                  —                 —                    114,922      $             —        $             975,688
                           2004             —                  —                 —                         —       $             —        $                  —


(1)    Calculated by determining the difference between the fair market value of $6.51 or $15.00 per share (the midpoint of the estimated offering price range
       set forth on the cover page of this prospectus) for our common stock underlying the options at June 30, 2004 and 2005, respectively, and the exercise
       prices of the options held by each of the executive officers named in the Summary Compensation Table above.

Long-Term Incentive Plan Awards
    No long-term incentive awards were granted to the executive officers named in the Summary Compensation Table in the fiscal years ended
June 30, 2004 and 2005.

IPO Grants
    Upon consummation of this offering, we expect to grant equity compensation to certain members of our management. Assuming the shares
being offered pursuant to this prospectus are offered at $15.00 per share, which is the midpoint of the estimated offering price range set forth on
the cover page of this prospectus, a total of 150,833 shares of restricted stock and options to purchase 905,000 shares of common stock at the
offering price will be granted to 20 to 25 members of management. Of this total, Mr. Pike will receive 66,667 shares of restricted stock and
options to purchase 400,000 shares of common stock at the offering price, and each of Messrs. Castaneda, Collins, Ratliff and Merritt will
receive 6,019 shares of restricted stock and options to purchase 36,111 shares of common stock at the offering price. The restricted stock will
vest in full on the fifth anniversary of this offering, subject to the executive’s continued employment with us. The stock options will have a
term of ten years, will have a per share exercise price equal to the initial public offering price of our common stock and will vest in equal
annual installments over the five-year period following the consummation of this offering, subject to the executive’s continued employment
with us. The grant to Mr. Pike will also vest upon termination of his employment under certain circumstances. See “— Employment
Agreements — Employment Agreement with Mr. Pike” below. The restricted stock and the stock options will be subject to the other terms and
conditions of our 2005 Omnibus Incentive Compensation Plan, which is described below. We currently estimate that the value of the grants, as
calculated in accordance with SFAS No. 123 (revised 2004), Share-Based Payment, will be approximately $7.0 million to $11.0 million, which
will be expensed over five years. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent
Accounting Pronouncements.”

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Employment Agreements
    Employment Agreement with Mr. Pike
     e have entered into an amended and restated employment agreement with Mr. Pike. The agreement with Mr. Pike provides for his
employment on an annual basis and is automatically renewed at the end of each year for an additional year, subject to our or Mr. Pike’s right to
terminate the agreement upon at least 60 days’ written notice prior to the expiration of such year. Under the agreement, Mr. Pike is entitled to a
minimum annual base salary of $750,000, and his salary may be adjusted upward by the compensation committee of our board of directors in
its sole discretion.
    During each fiscal year of our company, beginning with the fiscal year ending June 30, 2006, Mr. Pike will be entitled to annual equity
compensation consisting of (i) stock options with a grant date value of $250,000 and (ii) shares of common stock with a grant date value of
$250,000, except that the stock options will only be payable if our company satisfies budget targets during the applicable fiscal year. The stock
options will have a term of ten years and will have a per share exercise price equal to the fair market value of our common stock on the date of
grant. The stock options and shares of common stock will be paid following the end of the applicable fiscal year and will not be subject to any
vesting or forfeiture provisions.
    Under the terms of the agreement with Mr. Pike, if his employment is terminated by us without cause (as defined in the employment
agreement) or by Mr. Pike for good reason (as defined in the employment agreement), Mr. Pike will be entitled to receive two years of his then
current annual base salary and the continuation for two years of health, life, disability and other benefits that he was receiving as of the last day
of his employment. In addition, all restricted stock and stock options then held by Mr. Pike will automatically become vested and exercisable.
    We will also make a tax gross-up payment to Mr. Pike if he becomes subject to excise taxes under Sections 280G and 4999 of the Internal
Revenue Code on his payments and benefits in connection with a change of control of our company unless the value of the payments and
benefits does not exceed 5% of the maximum amount payable without triggering any such taxes, in which case the payments and benefits will
be reduced to such maximum amount.
    We may also terminate Mr. Pike’s employment if, based upon independent medical advice, the board of directors determines that due to
physical or mental illness Mr. Pike is unable to perform his customary duties for (i) 120 consecutive business days, if he fails to return to his
duties within five days of written notice of the end of that 120-day period, or (ii) 130 business days in any 12-month period. In any such event,
Mr. Pike is entitled to a continuation of his base salary and other benefits during the 120-day or 130-day period.
    The agreement also entitles Mr. Pike to use our company aircraft for up to 50 flight hours per year for his personal use, provided that this
use does not interfere with the normal business use of the aircraft.
    Mr. Pike is subject to a non-solicitation provision for 24 months after termination of his employment, as well as a confidentiality provision.
In addition, Mr. Pike has agreed to refrain from engaging in certain activities that are competitive with our company and its business for a
period of five years after the termination of his employment. Mr. Pike is entitled to indemnification in his position to the fullest extent
permitted by the laws of Delaware.

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    Arrangement with Mr. Castaneda
    Although we have not entered into an employment agreement with Mr. Castaneda, we operate under an arrangement with him.
    Our arrangement with Mr. Castaneda provides for his employment for two years and thereafter is automatically extended for additional
one-year periods, subject to our or Mr. Castaneda’s right to terminate the arrangement upon at least 60 days’ written notice prior to the
expiration of such period of employment. Under the arrangement, Mr. Castaneda is entitled to a base salary of $400,000, and his salary may be
adjusted upward by the board of directors in its sole discretion. The arrangement also provides that Mr. Castaneda is eligible to participate in
management incentive plans currently in effect and to receive additional compensation that may be provided pursuant to such plans or as
otherwise approved by our board of directors.
    In addition, pursuant to our arrangement, Mr. Castaneda received options to purchase 161,814 shares of our common stock under our 2002
Stock Option Plan A and 2002 Stock Option Plan B at a purchase price of $6.51. The options vest and become exercisable in the following
manner: 50% will vest in October 2007, 25% will vest in October 2008 and 25% will vest in October 2009. In addition, the options will vest
and become exercisable upon the death or disability of Mr. Castaneda or as described in our 2002 Stock Option Plan A, 2002 Stock Option
Plan B or the corresponding option award agreement, as applicable. In connection with our 2004 recapitalization, we repurchased
46,893 options from Mr. Castaneda.
    Under the terms of the arrangement with Mr. Castaneda, if his employment is terminated by us without cause or by Mr. Castaneda for good
reason, Mr. Castaneda will be entitled to a continuation of his base salary for a period of 24 months and any health, life, disability or other
benefits that Mr. Castaneda was receiving as of the last day of his employment for a period of 12 months after the date of termination.
    We may also terminate Mr. Castaneda’s employment if, based upon independent medical advice, the board of directors determines that due
to physical or mental illness Mr. Castaneda is unable to perform his customary duties for (1) 120 consecutive business days, if he fails to return
to his duties within five days of written notice of the end of that 120-day period, or (2) 130 business days in any twelve-month period. In any
such event, Mr. Castaneda is entitled to a continuation of his base salary and other benefits during the 120-day or 130-day period.
    Mr. Castaneda is also subject to a non-solicitation provision for 24 months after his employment terminates, as well as a confidentiality
provision.

Stock Incentive Plans
    2005 Omnibus Incentive Compensation Plan
     We have adopted the 2005 Omnibus Compensation Plan (the “Plan”). The purpose of the Plan is to promote our interests and the interests
of our stockholders by (i) attracting and retaining exceptional directors, officers, employees and consultants (including prospective directors,
officers, employees and consultants) and (ii) enabling such individuals to participate in our long-term growth and financial success.
     Awards. The Plan provides for the grant of options intended to qualify as incentive stock options (“ISOs”) under Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”), and non-statutory stock options (“NSOs”), stock appreciation rights (“SARs”),
restricted stock awards, restricted stock units (“RSUs”), performance units, cash incentive awards, deferred share units and other equity-based
or equity-related awards.
    Plan Administration. The Plan is administered by the compensation committee of our board of directors or such other committee as our
board may designate to administer the Plan. Subject to the terms of the Plan and applicable law, the committee has sole authority to administer
the Plan, including, but not

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limited to, the authority to (i) designate Plan participants, (ii) determine the type or types of awards to be granted to a participant,
(iii) determine the number of shares of our common stock to be covered by, or with respect to which payments, rights or other matters are to be
calculated in connection with, awards, (iv) determine the terms and conditions of any awards, (v) determine the vesting schedules of awards
and, if certain performance criteria must be attained in order for an award to vest or be settled or paid, establish such performance criteria and
certify whether, and to what extent, such performance criteria have been attained, (vi) determine whether, to what extent and under what
circumstances awards may be settled or exercised in cash, shares of our common stock, other securities, other awards or other property, or
canceled, forfeited or suspended and the method or methods by which awards may be settled, exercised, canceled, forfeited or suspended,
(vii) determine whether, to what extent and under what circumstances cash, shares of our common stock, other securities, other awards, other
property and other amounts payable with respect to an award will be deferred either automatically or at the election of the holder thereof or of
the committee, (viii) interpret, administer, reconcile any inconsistency in, correct any default in and supply any omission in, the Plan and any
instrument or agreement relating to, or award made under, the Plan, (ix) establish, amend, suspend or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration of the Plan, (x) accelerate the vesting or exercisability of,
payment for or lapse of restrictions on, awards, (xi) amend an outstanding award or grant a replacement award for an award previously granted
under the Plan if, in its sole discretion, the committee determines that the tax consequences of such award to us or the participant differ from
those consequences that were expected to occur on the date the award was granted or that clarifications or interpretations of, or changes to, tax
law or regulations permit awards to be granted that have more favorable tax consequences than initially anticipated and (xii) make any other
determination and take any other action that the committee deems necessary or desirable for the administration of the Plan.
    Shares Available For Awards. Subject to adjustment as provided below, the aggregate number of shares of our common stock that may be
delivered pursuant to awards granted under the Plan is 1,750,000, of which the maximum number of shares that may be delivered pursuant to
ISOs granted under the Plan is 500,000 and the maximum number of shares that may be delivered as restricted stock awards under the Plan is
450,000. The maximum number of shares of our common stock with respect to which awards may be granted to any participant in the Plan in
any fiscal year of Pike is 600,000. If an award granted under the Plan is forfeited, or otherwise expires, terminates or is canceled without the
delivery of shares, then the shares covered by the forfeited, expired, terminated or canceled award will again be available to be delivered
pursuant to awards under the Plan.
    In the event of any corporate event affecting the shares of our common stock, the committee in its discretion may make such adjustments
and other substitutions to the Plan and awards under the Plan as it deems equitable or desirable in its sole discretion.
     The committee may grant awards in assumption of, or in substitution for, outstanding awards previously granted by us or any of our
affiliates or a company that we acquire or with which we combine. Any shares issued by us through the assumption of or substitution for
outstanding awards granted by a company that we acquire will not reduce the aggregate number of shares of our common stock available for
awards under the Plan, except that awards issued in substitution for ISOs will reduce the number of shares of our common stock available for
awards under the Plan.
    Any shares of our common stock issued under the Plan may consist, in whole or in part, of authorized and unissued shares of our common
stock or of treasury shares of our common stock.
    Eligibility. Any director, officer, employee or consultant (including any prospective director, officer, employee or consultant) of us or of
our affiliates is eligible to participate in the Plan.
    Stock Options. The committee may grant both ISOs and NSOs under the Plan. Except as otherwise determined by the committee in an
award agreement, the exercise price for options cannot be less than the fair market value (as defined in the Plan) of our common stock on the
grant date. In the case of ISOs granted to an employee who, at the time of the grant of an option, owns stock representing more than 10% of the
voting power of all classes of our stock or the stock of any of our affiliates, the exercise price cannot

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be less than 110% of the fair market value of a share of our common stock on the grant date. All options granted under the Plan will be NSOs
unless the applicable award agreement expressly states that the option is intended to be an ISO. All terms and conditions of all grants of ISOs
will be subject to and comply with Section 422 of the Code and the regulations promulgated thereunder. All ISOs and NSOs are intended to
qualify as “performance-based compensation” under Section 162(m) of the Code.
    Subject to the applicable award agreement, options will vest and become exercisable with respect to one-third of the shares of our common
stock subject to such options on each of the first three anniversaries of the grant date. The term of each option will be determined by the
committee, except that no option will be exercisable after the tenth anniversary of the date the option is granted. The exercise price may be paid
with cash (or its equivalent) or, in the sole discretion of the committee, with previously acquired shares of our common stock or through
delivery of irrevocable instructions to a broker to sell our common stock otherwise deliverable upon the exercise of the option (provided that
there is a public market for our common stock at such time), or a combination of any of the foregoing.
     Stock Appreciation Rights. The committee may grant SARs under the Plan either alone or in tandem with, or in addition to, any other
award permitted to be granted under the Plan. SARs granted in tandem with, or in addition to, an award may be granted either at the same time
as the award or at a later time. Subject to the applicable award agreement, the exercise price of each share of our common stock covered by a
SAR cannot be less than the fair market value of such share on the grant date. Upon exercise of a SAR, the holder will receive cash, shares of
our common stock, other securities, other awards, other property or a combination of any of the foregoing, as determined by the committee,
equal in value to the excess over the exercise price, if any, of the fair market value of the common stock subject to the SAR at the exercise date.
All SARs are intended to qualify as “performance-based compensation” under Section 162(m) of the Code. Subject to the provisions of the
Plan and the applicable award agreement, the committee will determine, at or after the grant of a SAR, the vesting criteria, term, methods of
exercise, methods and form of settlement and any other terms and conditions of any SAR.
    The committee may substitute, without the consent of affected participants or holders, SARs settled in cash or in shares of our common
stock for outstanding NSOs. However, (i) the substitution must not modify the terms of any such outstanding NSOs, (ii) the number of shares
of common stock underlying the SARs used in the substitution must be the same as the number of shares of common stock underlying such
outstanding NSOs and (iii) the exercise price of the SARs used in the substitution must be equal to the exercise price of such outstanding
NSOs.
    Restricted Shares and Restricted Stock Units. Subject to the provisions of the Plan, the committee may grant restricted shares and RSUs.
Restricted shares and RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered except as provided in the Plan or the
applicable award agreement, except that the committee may determine that restricted shares and RSUs may be transferred by the participant.
Upon the grant of a restricted share, a certificate will be issued and registered in the name of the participant and deposited by the participant,
together with a stock power endorsed in blank, with us or a custodian designated by the committee or us. Upon the lapse of the restrictions
applicable to such restricted share, we or the custodian, as applicable, will deliver such certificate to the participant or his or her legal
representative.
    An RSU will have a value equal to the fair market value of a share of our common stock. RSUs may be paid in cash, shares of our common
stock, other securities, other awards or other property, as determined by the committee, upon the lapse of restrictions applicable to such RSU or
in accordance with the applicable award agreement. The committee may, on such terms and conditions as it may determine, provide a
participant who holds restricted shares or RSUs with dividends or dividend equivalents, payable in cash, shares of our common stock, other
securities, other awards or other property. If a restricted share or RSU is intended to qualify as “qualified performance-based compensation”
under Section 162(m) of the Code, the requirements described below in “— Performance Compensation Awards” must be satisfied.

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     Performance Units. Subject to the provisions of the Plan, the committee may grant performance units to participants. Performance units
are awards with an initial value established by the committee (or that is determined by reference to a valuation formula specified by the
committee or the fair market value of our common stock) at the time of the grant. In its discretion, the committee will set performance goals
that, depending on the extent to which they are met during a specified performance period, will determine the number and/or value of
performance units that will be paid out to the participant. The committee, in its sole discretion, may pay earned performance units in the form
of cash, shares of our common stock or any combination thereof that has an aggregate fair market value equal to the value of the earned
performance units at the close of the applicable performance period. Performance unit awards to any participant in the Plan cannot exceed
$2,000,000 during any performance period. The determination of the committee with respect to the form and timing of payout of performance
units will be set forth in the applicable award agreement. The committee may, on such terms and conditions as it may determine, provide a
participant who holds performance units with dividends or dividend equivalents, payable in cash, shares of our common stock, other securities,
other awards or other property. If a performance unit is intended to qualify as “qualified performance-based compensation” under
Section 162(m) of the Code, the requirements below described in “— Performance Compensation Awards” must be satisfied.
    Cash Incentive Awards. Subject to the provisions of the Plan, the committee may grant cash incentive awards payable upon the attainment
of performance goals. Cash incentive awards to any participant in the Plan cannot exceed $2,000,000 during any performance period. If a cash
incentive award is intended to qualify as “qualified performance-based compensation” under Section 162(m) of the Code, the requirements
described below in “— Performance Compensation Awards” must be satisfied.
    Other Stock-Based Awards. Subject to the provisions of the Plan, the committee may grant to participants other equity-based or
equity-related compensation awards, including deferred share units and vested stock. The committee may determine the amounts and terms and
conditions of any such awards provided that they comply with applicable laws.
     Performance Compensation Awards. The committee may designate any award granted under the Plan (other than ISOs, NSOs and SARs)
as a performance compensation award in order to qualify such award as “qualified performance-based compensation” under Section 162(m) of
the Code. The committee will, in its sole discretion, designate within the first 90 days of a performance period the participants who will be
eligible to receive performance compensation awards in respect of such performance period. The committee will also determine the length of
performance periods, the types of awards to be issued, the performance criteria that will be used to establish the performance goals, the kinds
and levels of performance goals applicable to Pike and any performance formula used to determine whether a performance compensation
award has been earned for the performance period.
     The performance criteria will be limited to the following: (i) net income before or after taxes, (ii) earnings before or after taxes (including
earnings before interest, taxes, depreciation and amortization), (iii) operating income, (iv) earnings per share, (v) return on stockholders’ equity,
(vi) return on investment or capital, (vii) return on assets, (viii) level or amount of acquisitions, (ix) share price, (x) profitability and profit
margins, (xi) market share, (xii) revenues or sales (based on units or dollars), (xiii) costs, (xiv) cash flow, (xv) working capital and (xvi) safety
and accident rates. These performance criteria may be applied on an absolute basis or be relative to one or more of our peer companies or
indices or any combination thereof. The performance goals and periods may vary from participant to participant and from time to time. To the
extent required under Section 162(m) of the Code, the committee will, within the first 90 days of the applicable performance period, define in
an objective manner the method of calculating the performance criteria it selects to use for the performance period.
    The committee may adjust or modify the calculation of performance goals for a performance period in the event of, in anticipation of, or in
recognition of, any unusual or extraordinary corporate item, transaction, event or development or any other unusual or nonrecurring events
affecting us, any of our affiliates or our financial statements or the financial statements of any of our affiliates, or changes in

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applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles, law or
business conditions, so long as that adjustment or modification does not cause the performance compensation award to fail to qualify as
“qualified performance-based compensation” under Section 162(m) of the Code. In order to be eligible for payment in respect of a performance
compensation award for a particular performance period, participants must be employed by us on the last day of the performance period (unless
otherwise determined in the discretion of the compensation committee), the performance goals for such period must be satisfied and certified
by the committee and the performance formula must determine that all or some portion of the performance compensation award has been
earned for such period. The committee may, in its sole discretion, reduce or eliminate the amount of a performance compensation award earned
in a particular performance period, even if applicable performance goals have been attained. In no event will any discretionary authority
granted to the committee under the Plan be used to grant or provide payment in respect of performance compensation awards for which
performance goals have not been attained, increase a performance compensation award for any participant at any time after the first 90 days of
the performance period or increase a performance compensation award above the maximum amount payable under the underlying award.
      Amendment and Termination of the Plan. Subject to any government regulation, to any requirement that must be satisfied if the Plan is
intended to be a shareholder approved plan for purposes of Section 162(m) of the Code and to the rules of the NYSE, the Plan may be
amended, modified or terminated by our board of directors without the approval of our stockholders, except that stockholder approval will be
required for any amendment that would (i) increase the maximum number of shares of our common stock available for awards under the Plan,
(ii) increase the maximum number of shares of our common stock that may be delivered pursuant to ISOs granted under the Plan or (iii) modify
the requirements for participation under the Plan. No modification, amendment or termination of the Plan that is adverse to a participant will be
effective without the consent of the affected participant, unless otherwise provided by the committee in the applicable award agreement.
    The committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate any
award previously granted, prospectively or retroactively. However, unless otherwise provided by the committee in the applicable award
agreement or in the Plan, any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would
materially and adversely impair the rights of any participant to any award previously granted will not to that extent be effective without the
consent of the affected participant.
     The committee is authorized to make adjustments in the terms and conditions of awards in the event of any unusual or nonrecurring
corporate event (including the occurrence of a change of control of Pike) affecting us, any of our affiliates or our financial statements or the
financial statements of any of our affiliates, or of changes in applicable rules, rulings, regulations or other requirements of any governmental
body or securities exchange, accounting principles or law whenever the committee, in its discretion, determines that those adjustments are
appropriate or desirable, including providing for the substitution or assumption of awards, accelerating the exercisability of, lapse of
restrictions on, or termination of, awards or providing for a period of time for exercise prior to the occurrence of such event and, in its
discretion, the committee may provide for a cash payment to the holder of an award in consideration for the cancellation of such award.
    Change of Control. The Plan provides that, unless otherwise provided in an award agreement, in the event of a change of control of Pike,
unless provision is made in connection with the change of control for assumption for, of substitution of, awards previously granted:

    • any options and SARs outstanding as of the date the change of control is determined to have occurred will become fully exercisable and
      vested, as of immediately prior to the change of control;

    • all performance units and cash incentive awards will be paid out as if the date of the change of control were the last day of the
      applicable performance period and “target” performance levels had been attained; and

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    • all other outstanding awards will automatically be deemed exercisable or vested and all restrictions and forfeiture provisions related
      thereto will lapse as of immediately prior to such change of control.
    Unless otherwise provided pursuant to an award agreement, a change of control is defined to mean any of the following events, generally:

    • a change in the composition of a majority of our board of directors that is not supported by the incumbent board of directors;

    • the consummation of a merger, reorganization or consolidation or sale or other disposition of all or substantially all of our assets;

    • the approval by our stockholders of a plan of our complete liquidation or dissolution; or

    • an acquisition by any individual, entity or group of beneficial ownership of 20% or more of the combined voting power of our then
      outstanding voting securities entitled to vote generally in the election of directors but only if the percentage so owned exceeds the
      percentage of the combined voting power of our voting securities then owned by Lindsay Goldberg & Bessemer L.P. and its affiliates.
    Term of the Plan. No award may be granted under the Plan after July 20, 2015, the tenth anniversary of the date the Plan was approved by
our stockholders.


     2002 Stock Option Plan A
     We adopted our 2002 Stock Option Plan A to provide incentives to our employees to continue and increase their efforts for us through the
grant of non-qualified stock options. We do not intend to grant any additional options under Stock Option Plan A. Stock Option Plan A is
administered by a committee of our board of directors, which is authorized to, among other things, select the officers and other employees who
will receive grants and determine the exercise price and vesting schedule of the options. We have granted options to purchase an aggregate of
2,864,343 shares of our common stock to 11 employees (including Mssrs. Pike, Castaneda, Collins and Ratliff) at an exercise price of $3.80 per
share for 1,796,085 options granted in April 2002 (of which 161,547 were subsequently canceled) and for 177,386 options granted in April
2003 and $6.51 per share for 1,052,419 options granted in October 2004. The exercise price of a share of common stock under each option was
at the fair market value of each share of common stock on the day of the grant. As part of the 2004 recapitalization, we repurchased
1,185,980 options, resulting in 1,678,363 options outstanding at March 31, 2005.
     Generally, the options previously issued under Stock Option Plan A vest in four annual installments over a period of four years, with the
first installment becoming vested and exercisable on the first anniversary of the date of the stock option grant, provided that the option holder
remains employed with us during each applicable period. Options also generally vest upon the death or disability of the option holder. Options
granted under the plan generally expire no later than the tenth anniversary of the date of the grant, unless otherwise provided in the stock option
agreement executed at the time of the grant.
     Upon any sale of the company, the outstanding options will terminate unless the committee decides, in its discretion, that all or a portion of
the then outstanding options will vest and become exercisable on a date generally at least 21 days before the effective date of the sale. In the
event of a sale of the company in which more than 70% of our common stock will be acquired for cash, the committee may, in its discretion,
convert each vested option into the right to receive an amount of cash equal to the product of (1) the excess of the sale consideration per share
over the exercise price of the option times (2) the number of shares of common stock underlying the option. In the event of a proposed sale of
the company, the committee may also, in its discretion, suspend the exercise of vested options for up to 120 days.
   Upon the termination of an option holder’s employment, all unvested options will immediately terminate and vested options will generally
remain exercisable for a period of 90 days after the date of

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termination, three years after the option holder’s retirement and through the tenth anniversary of the grant of the option in the case of death or
disability.
    Stock Option Plan A terminates in accordance with its terms on the tenth anniversary of its adoption unless sooner terminated by the board
of directors. The board may amend the plan without the approval of stockholders, except that stockholder approval is required for any
amendment that increases the maximum number of shares of common stock for which options may be granted (other than pursuant to an
adjustment for a stock split or stock dividend), changes the class of employees eligible to participate or adopts other material amendments. No
termination or amendment of the plan may adversely affect the rights under the plan of a person to whom an option has been granted without
the consent of that person.
    Options granted under the plan may not be transferred, except to an option holder’s estate and in other limited circumstances.


    2002 Stock Option Plan B
    We adopted our 2002 Stock Option Plan B to provide incentives to our employees to continue and increase their efforts for us through the
grant of non-qualified stock options. We do not intend to grant any additional options under Stock Option Plan B. Stock Option Plan B is
administered by a committee of our board of directors, which is authorized to, among other things, select the officers and other employees who
will receive grants and determine the exercise price and vesting schedule of the options. We have granted options to purchase an aggregate of
1,227,578 shares of our common stock to the same 11 employees that were granted options under Stock Option Plan A. The options were
granted at an exercise price of $3.80 per share for 769,734 options granted in April 2002 (of which 69,239 were subsequently canceled) and for
76,014 options granted in April 2003 and $6.51 per share for 451,068 options granted in October 2004. The exercise price of a share of
common stock under each option was at the fair market value of each share of common stock on the day of the grant. We did not repurchase
any options under Stock Option Plan B as part of the 2004 recapitalization.
     The exercise of these options is contingent on the increase in the value of our stock over time. If the target stock value is not achieved, the
options may not be exercised. In accordance with the terms of Stock Option Plan B, all options that have been granted pursuant to the plan will
immediately vest and become exercisable at an average purchase price of $4.80 per share of common stock upon the consummation of this
offering. Options granted under the plan generally expire no later than the tenth anniversary of the date of the grant, unless otherwise provided
in the stock option agreement executed at the time of the grant.
    In the event of a sale of the company in which more than 70% of our common stock will be acquired for cash, the committee may, in its
discretion, convert each vested option into the right to receive an amount of cash equal to the product of (1) the excess of the sale consideration
per share over the exercise price of the option times (2) the number of shares of common stock underlying the option. In the event of a
proposed sale of the company, the committee may also, in its discretion, suspend the exercise of vested options for up to 120 days.
    Upon the termination of an option holder’s employment, all unvested options will immediately terminate and vested options will generally
remain exercisable for a period of 90 days after the date of termination, three years after the option holder’s retirement and through the tenth
anniversary of the grant of the option in the case of death or disability.
    Stock Option Plan B terminates in accordance with its terms on the tenth anniversary of its adoption unless sooner terminated by the board
of directors. The board may amend the plan without the approval of stockholders, except that stockholder approval is required for any
amendment that increases the maximum number of shares of common stock for which options may be granted (other than pursuant to an
adjustment for a stock split or stock dividend), changes the class of employees eligible to participate or adopts other material amendments. No
termination or amendment of the plan may adversely affect the rights under the plan of a person to whom an option has been granted without
the consent of that person.

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    Options granted under the plan may not be transferred, except to an option holder’s estate and in other limited circumstances.


    2005 Employee Stock Purchase Plan
   In December 2004, we adopted the 2005 Employee Stock Purchase Plan, or ESPP, and we amended the plan in January 2005. As of
March 31, 2005, we had issued and sold 598,519 shares of common stock.
   Purpose. The purpose of the ESPP is to advance our interests and the interests of our affiliates by providing eligible employees with an
opportunity to subscribe for and purchase common stock in order to further align their interests with those of other stockholders of the
company.
     Shares Subject to Purchase Plan. An aggregate of 959,400 shares of common stock have been reserved for issuance and will be available
for purchase under the ESPP. The amount of common stock issued and sold under the ESPP during any consecutive twelve-month period will
not exceed (a) $5,000,000 in the aggregate and (b) $1,500,000 in the case of any individual participant. As of June 30, 2005, 598,519 shares of
common stock had been issued to a total of 60 employees under the ESPP.
     Administration. Our board of directors will serve as administrator of the ESPP. The administrator has the authority to construe and
interpret the terms of the ESPP and the terms and conditions of purchases of common stock under it, to determine eligibility to participate and
to establish policies and procedures for administration of the plan.
    Eligibility. Our board of directors will determine in its discretion from time to time the individuals entitled to subscribe for and purchase
common stock under the ESPP, except that no person will be permitted to subscribe for or purchase common stock under the ESPP unless that
person is an employee of our company or any of our affiliates having the position of area supervisor or higher.
     Terms and Conditions of Purchase. The board of directors will determine any and all terms and conditions applicable to the subscription
for and purchase of common stock under the ESPP, including the number of shares of common stock each participant is eligible to subscribe
for and purchase and the form and amount of consideration to be paid for such common stock. As a condition to the subscription for and
purchase of common stock under the ESPP, each participant will be required to become a party to the stockholders agreement described below
under “Related Party Agreements—Stockholders Agreement” and to execute a proxy granting LGB Pike II LLC the authority to vote and take
other actions with respect to the shares of our company owned by the participant.
    Successors and Assigns. The ESPP will be binding upon each of our successors and assigns. All obligations imposed upon a participant,
and all rights granted to us hereunder, will be binding upon the participant’s heirs, legal representatives and successors. Rights granted under
the ESPP are not transferable by a participant other than by will or the laws of descent and distribution.
    Amendment and Termination. The board of directors may at any time amend, modify or terminate the ESPP in its sole discretion. Unless
the ESPP is previously terminated, the ESPP will terminate on, and no common stock may be subscribed for or purchased after, December 9,
2014.


    New Employee Stock Purchase Plan
    We intend to adopt a new employee stock purchase plan, or the New ESPP, after the consummation of this offering. We anticipate that an
aggregate of up to 500,000 shares will be reserved for issuance and available for purchase by employees under the New ESPP and that the
purchase price for each share of common stock to be purchased under the New ESPP will not be less than 95% of the fair market value of a
share of our common stock on the date of purchase. The New ESPP will be intended to qualify under Section 423 of the Code.

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                                                      RELATED PARTY AGREEMENTS

Stockholders Agreement
    We, LGB Pike II LLC, an affiliate of Lindsay Goldberg & Bessemer, and certain other stockholders, including members of management,
are parties to a stockholders agreement. The stockholders agreement covers matters of corporate governance and registration rights, as
described below.
    Corporate Governance. The stockholders agreement provides that J. Eric Pike will have the right to occupy one seat on the board of
directors so long as he is our chief executive officer and controls at least 1,321,965 shares. So long as J. Eric Pike has the right to a seat on the
board of directors, then LGB Pike II LLC and any affiliate of LGB Pike II LLC must vote in favor of the election of J. Eric Pike to the board.
     Registration Rights. The stockholders agreement provides that LGB Pike II LLC and its affiliates and the other stockholders party to the
stockholders agreement have registration rights with respect to our stock. LGB Pike II LLC and its affiliates have “demand registration” rights
under which they may require us to register any or all of the common stock they hold. The demand registration rights held by LGB Pike II LLC
and its affiliates include the right to require us to put up a shelf registration statement permitting those stockholders to sell into the market from
time to time over an extended period of time. In addition, each of LGB Pike II LLC and its affiliates and the other stockholders party to the
stockholders agreement have “piggyback” registration rights. If we propose to register any of our securities after the closing of this offering,
other than a registration in connection with an employee benefit or similar plan or an exchange offer, we will be required to give each party to
the stockholders agreement the opportunity to participate in such registration. We have agreed to indemnify any stockholder that sells shares of
our common stock upon exercise of registration rights against certain liabilities under the Securities Act.

Management Advisory Services Agreement
     Pike Electric, Inc. (Pike Electric), our subsidiary, entered into a management advisory services agreement with Goldberg Lindsay & Co.
LLC, an affiliate of Lindsay Goldberg & Bessemer, on April 18, 2002 in connection with the 2002 recapitalization, and amended it and restated
it on July 1, 2004 in connection with our acquisition of Red Simpson, increasing the management fee to $375,000 per quarter from $250,000
per quarter. Under the agreement, Goldberg Lindsay & Co. LLC agreed to provide management, financial, strategic planning and similar
advisory services to Pike Electric. We incurred fees of $200,000, $1,000,000 and $1,000,000 for management advisory services in June 30,
2002, 2003 and 2004, respectively. For the nine months ended March 31, 2005, we incurred a fee of $1,125,000 under the agreement. In
addition, Goldberg Lindsay & Co. LLC received one-time transaction fees for structuring the transactions related to our 2002 recapitalization
and the acquisition of Red Simpson of $3,750,000 and $3,125,000, respectively. Pursuant to the agreement, Pike Electric also agreed to
indemnify Goldberg Lindsay & Co. LLC and its members, partners and affiliates, and their respective directors, officers, agents and employees
against losses arising out of or in connection with the agreement, any activities contemplated by the agreement or any services rendered under
the agreement. In connection with this

                                                                          87
offering, we agreed to terminate the management advisory services agreement, effective June 15, 2005, for an aggregate consideration of
$4.0 million, to be paid at the closing of this offering.

Letter Agreement with Mr. Joe B. Pike
    In connection with the April 2002 recapitalization, LGB Pike LLC entered into an agreement with Mr. Joe B. Pike, our former Chairman of
the Board and father of J. Eric Pike, our current President and Chief Executive Officer. Pursuant to the agreement, so long as LGB Pike LLC
continues to own a majority of the common stock of Pike Electric Corporation, Joe B. Pike will be entitled to the following benefits: (1) the use
of up to $100,000 in value of Pike’s corporate aircraft per year, (2) the use of an office and administrative services at Pike’s corporate
headquarters and (3) participation in Pike’s medical, dental and life insurance plans until the age of 65. Mr. Joe B. Pike was also entitled to
receive title to his company-assigned car or the car’s cash value.

                                                                       88
                                              PRINCIPAL AND SELLING STOCKHOLDERS
    The following table sets forth certain information regarding the beneficial ownership of our common stock (1) immediately prior to the
consummation of the offering and (2) as adjusted to reflect the sale of the shares of common stock in this offering. The percentage of beneficial
ownership before the offering is based on 21,484,454 shares of our common stock issued and outstanding as of June 30, 2005. The table sets
forth stockholder information with respect to:

    • each of our current directors;

    • each of the executive officers listed in the Summary Compensation table above;

    • our directors, director appointees and named executive officers as a group;

    • each person known by us to beneficially own more than 5% of our common stock; and

    • each of our selling stockholders.
     Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a
person and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of June 30, 2005 are deemed outstanding. These shares, however, are not deemed outstanding for the
purposes of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table and as provided pursuant
to applicable community property laws, the stockholders named in the table have sole voting and investment power with respect to the shares
set forth opposite each stockholder’s name. Unless otherwise indicated, the address for each of the individuals listed below is: c/o Pike Electric,
Inc., 100 Pike Way, Mount Airy, NC 27030.
                                            Shares Beneficially Owned                                          Shares Beneficially Owned
                                              Prior to this Offering                                             After this Offering(1)

                                          Number of                                    Shares                Number of
Name of Beneficial Owner                   Shares                Percentage            Offered                Shares                Percentage

J. Eric Pike(2)                               2,231,902                 10.2 %                   —              2,231,902                  6.7%

Robert Ratliff, Jr.(3)                          364,305                  1.7 %                   —                364,305                  1.1%

John H. Merritt(4)                              347,554                  1.6 %                   —                347,554                  1.1%

Jeffery L. Collins(5)                           345,369                  1.6 %                   —                345,369                  1.0%

Mark Castaneda(6)                               132,309                       *                  —                132,309                        *

Alan E. Goldberg(7)                          18,155,891                 84.5 %          3,019,798              15,136,093                  47.5%

Robert D. Lindsay(7)                         18,155,891                 84.5 %          3,019,798              15,136,093                  47.5%

Stuart S. Janney                                      —                       *                  —                       —                    —

Adam P. Godfrey(8)                                    —                       *                  —                       —                    —

J. Russell Triedman(8)                                —                       *                  —                       —                    —

Directors, director appointees and
 executive officers as a group
 (10 persons)                                21,577,330                 95.3 %          3,019,798              18,557,532                  58.3%

Reginald L. Banner(9)                           480,202                  2.2 %            480,202                        —                    —

Lindsay Goldberg & Bessemer(7)               18,155,891                 84.5 %          3,019,798              15,136,093                  47.5%

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*      Beneficial ownership is less than 1%.

(1)    Assumes the underwriters do not exercise their over-allotment option.

(2)    Includes 1,549,253 shares of common stock held by Takuan LLC, an entity controlled by Mr. Pike, 150,301 shares of common stock
       owned directly and 67,467 shares of common stock held by the Joe B./Anne A. Pike Generation Skipping Trust, of which Mr. Pike is
       deemed to be the beneficial owner. Includes 464,881 common stock options.

(3)    Includes 160,056 shares of common stock held directly and 204,249 common stock options. These share numbers reflect the distribution
       of shares of our common stock previously held through LGB Pike LLC, as described in note 7.

(4)    Includes 147,039 shares of common stock held directly and 200,515 common stock options. These share numbers reflect the distribution
       of shares of our common stock previously held through LGB Pike LLC, as described in note 7.

(5)    Includes 104,574 shares of common stock owned directly and 240,795 common stock options. These share numbers reflect the
       distribution of shares of our common stock previously held through LGB Pike LLC, as described in note 7.

(6)    Includes 83,763 shares of common stock held directly and 48,546 common stock options.

(7)    The 18,155,891 shares of common stock, including the 3,019,798 shares being offered, are held through LGB Pike II LLC. The sole
       manager of LGB Pike II LLC is Lindsay Goldberg & Bessemer L.P. Messrs. Goldberg and Lindsay, through intermediate entities,
       indirectly have shared control over Lindsay Goldberg & Bessemer L.P. Messrs. Goldberg and Lindsay expressly disclaim beneficial
       ownership of the shares of common stock held by LGB Pike II LLC. If the over-allotment option is exercised in full, LGB Pike II LLC
       will sell an additional 2,025,000 shares. 11,836,575 of these shares were acquired in connection with Lindsay, Goldberg & Bessemer’s
       acquisition of Pike in 2002, and 6,319,316 of these shares were acquired in connection with our common stock placement in July 2004,
       which helped finance our acquisition of Red Simpson. These share numbers reflect the distribution of shares of our common stock
       previously held through LGB Pike LLC to LGB Pike II LLC and the other members of LGB Pike LLC, which became effective as of
       June 13, 2005. The address for Lindsay Goldberg & Bessemer and for Messrs. Goldberg and Lindsay is c/o Lindsay Goldberg &
       Bessemer L.P., 630 Fifth Avenue, 30th Floor, New York, NY 10111.

(8)    By virtue of their affiliation with Lindsay Goldberg & Bessemer, Messrs. Godfrey and Triedman may be deemed to have or share
       beneficial ownership of shares of our common stock beneficially owned by Lindsay Goldberg & Bessemer. Messrs. Godfrey and
       Triedman expressly disclaim beneficial ownership of such common stock. The address for Messrs. Godfrey and Triedman is c/o Lindsay
       Goldberg & Bessemer L.P., 630 Fifth Avenue, 30th Floor, New York, NY 10111.

(9)    Includes 131,792 shares of common stock held directly and 348,410 common stock options. Mr. Banner acquired all of his shares of our
       common stock as a result of grants of stock options pursuant to our 2002 Stock Option Plan A and 2002 Stock Option Plan B. These
       share numbers reflect the distribution of shares of our common stock previously held through LGB Pike LLC, as described in note 7.

Selling Stockholders
      Lindsay Goldberg & Bessemer
   The shares held by Lindsay Goldberg & Bessemer are held through LGB Pike II LLC, a limited liability company controlled by Lindsay
Goldberg & Bessemer.

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    Lindsay Goldberg & Bessemer was founded by Robert Lindsay and Alan Goldberg in 2001 to pursue public and private investment
opportunities through a variety of methods, including leveraged buyouts, recapitalizations, joint ventures, restructurings and strategic public
security investments. Lindsay Goldberg & Bessemer has aggregate committed capital of $2.0 billion.
    Lindsay Goldberg & Bessemer’s other investments include First American Payment Systems Holdings, Inc., Wacker Construction
Equipment AG, Keystone Foods Holdings, LLC, Maine Beverage Company, LLC, Petrologistics LLC, Klöckner & Co. GmbH and Envirocare
of Utah, LLC.
    References in this prospectus to Lindsay Goldberg & Bessemer refer to Lindsay Goldberg & Bessemer L.P. together with its affiliated
partnerships.
    Reginald L. Banner
     Mr. Banner served on our Board of Directors from 1984 to May 2005, when he resigned from the Board. In addition, Mr. Banner served
Pike in various capacities, ultimately serving as our Chief Financial Officer, Treasurer and Secretary until he retired on April 1, 2005. During
his career with us, Mr. Banner was granted options to purchase 348,410 shares of our common stock pursuant to our 2002 Stock Option Plan A
and 2002 Stock Option Plan B. In connection with this offering, Mr. Banner intends to exercise his options and sell all of the underlying shares
in this offering.
    Neither Lindsay Goldberg & Bessemer nor Mr. Banner purchased the securities held by them outside of the ordinary course of their
business or employment, as applicable, or had an understanding with any person to distribute such securities.

                                                                        91
                                                    DESCRIPTION OF CAPITAL STOCK
    We were originally incorporated in North Carolina in 1968. We reincorporated in Delaware on July 1, 2005. The following summary
descriptions of our capital stock do not purport to be complete. The rights of the holders of our capital stock are set forth in our certificate of
incorporation and bylaws as well as the stockholders agreement, each of which are filed as exhibits to the registration statement of which this
prospectus forms a part.

Authorized Capitalization
    Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.001 per share, and 100,000,000 shares of
preferred stock, par value $0.001 per share. Immediately following the completion of this offering, we expect that 31,832,864 shares of
common stock will be issued and outstanding.

Common Stock

    Voting Rights
     Each share of common stock entitles the holder to one vote with respect to each matter presented to our stockholders on which the holders
of common stock are entitled to vote. Our common stock votes as a single class on all matters relating to the election and removal of directors
on our board of directors and as provided by law, with each share of common stock entitling its holder to one vote. Except in respect of matters
relating to the election and removal of directors on our board of directors and as otherwise provided in our certificate of incorporation or
required by law, all matters to be voted on by our stockholders must be approved by a majority of the votes entitled to be cast by all shares of
common stock. In the case of election of directors, all matters to be voted on by our stockholders must be approved by a plurality of the votes
entitled to be cast by all shares of common stock.


    Dividend Rights
    Holders of common stock will share equally in any dividend declared by our board of directors, subject to the rights of the holders of any
outstanding preferred stock.


    Liquidation Rights
     In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of our common stock would be
entitled to share ratably in our assets that are legally available for distribution to stockholders after payment of liabilities. If we have any
preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution and/or liquidation preferences. In either
such case, we must pay the applicable distribution to the holders of our preferred stock before we may pay distributions to the holders of our
common stock.


    Other Rights
    Our stockholders have no preemptive or other rights to subscribe for additional shares. All holders of our common stock are entitled to
share equally on a share-for-share basis in any assets available for distribution to common stockholders upon our liquidation, dissolution or
winding up. All outstanding shares are, and all shares offered by this prospectus will be, when sold, validly issued, fully paid and
nonassessable.

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    Registration Rights
   Certain of our stockholders have certain registration rights with respect to our common stock. See “Related Party
Agreements — Stockholders Agreement.”

Preferred Stock
    Our board of directors is authorized to provide for the issuance of preferred stock in one or more series and to fix the preferences, powers
and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including the dividend rate,
conversion rights, voting rights, redemption rights and liquidation preference and to fix the number of shares to be included in any such series.
Any preferred stock so issued may rank senior to our common stock with respect to the payment of dividends or amounts upon liquidation,
dissolution or winding up, or both. In addition, any such shares of preferred stock may have class or series voting rights. As of June 30, 2005,
there are no outstanding shares of preferred stock.


    Series A Preferred Stock
    In connection with our 2004 recapitalization, we redeemed and canceled all outstanding shares of Series A preferred stock for $20 per
share, in an aggregate amount of $20.0 million.

Anti-Takeover Effects of the Delaware General Corporation Law and Our Certificate of Incorporation and Bylaws
    Our certificate of incorporation and our bylaws contain provisions that may delay, defer or discourage another party from acquiring control
of us. We expect that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids.
These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors, which we
believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give our board the
power to discourage acquisitions that some stockholders may favor.


    Undesignated Preferred Stock
    The ability to authorize undesignated preferred stock will make it possible for our board of directors to issue preferred stock with super
voting, special approval, dividend or other rights or preferences on a discriminatory basis that could impede the success of any attempt to
acquire us. These and other provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or
management of our company.


    Board of Directors
     Our certificate of incorporation provides that the number of directors will be fixed in the manner provided in our bylaws. Our bylaws
provide that the number of directors will be fixed from time to time solely pursuant to a resolution adopted by the board. Upon completion of
this offering, our board of directors will have seven members.


    Requirements for Advance Notification of Stockholder Meetings, Nominations and Proposals


    Our bylaws provide that special meetings of the stockholders may be called only upon the request of any two directors. Our bylaws
prohibit the conduct of any business at a special meeting other than as specified in the notice for such meeting. These provisions may have the
effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.

                                                                         93
     Our bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as
directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors. In order for any
matter to be “properly brought” before a meeting, a stockholder will have to comply with advance notice requirements and provide us with
certain information. Additionally, vacancies and newly created directorships may be filled only by a vote of a majority of the directors then in
office, even though less than a quorum, and not by the stockholders. Our bylaws allow the presiding officer at a meeting of the stockholders to
adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business at a meeting if
the rules and regulations are not followed. These provisions may also defer, delay or discourage a potential acquiror from conducting a
solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of our company.


    Stockholder Action by Written Consent
    Pursuant to Section 228 of the Delaware General Corporation Law (“DGCL”), any action required to be taken at any annual or special
meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting
forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted, unless
the company’s certificate of incorporation provides otherwise. Our certificate of incorporation provides that any action required or permitted to
be taken by our stockholders may be effected at a duly called annual or special meeting of our stockholders and may not be effected by consent
in writing by such stockholders, unless such action is recommended by all directors then in office.


    Business Combinations under Delaware Law
     Our certificate of incorporation expressly states that we have elected not to be governed by Section 203 of the DGCL, which prohibits a
publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years
after the time the stockholder became an interested stockholder, subject to certain exceptions, including if, prior to such time, the board of
directors approved the business combination or the transaction which resulted in the stockholder becoming an interested stockholder. “Business
combinations” include mergers, asset sales and other transactions resulting in a financial benefit to the “interested stockholder.” Subject to
various exceptions, an “interested stockholder” is a person who, together with his or her affiliates and associates, owns, or within three years
did own, 15% or more of the corporation’s outstanding voting stock. These restrictions generally prohibit or delay the accomplishment of
mergers or other takeover or change-in-control attempts that are not approved by a company’s board of directors.


    Limitations on Liability and Indemnification of Officers and Directors
     The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for
monetary damages for breaches of directors’ fiduciary duties. Our certificate of incorporation includes a provision that eliminates the personal
liability of directors for monetary damages for actions taken as a director to the fullest extent authorized by the DGCL. The DGCL does not
permit exculpation for liability:

    • for breach of duty of loyalty;

    • for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law;

    • under Section 174 of the DGCL (unlawful dividends); or

    • for transactions from which the director derived improper personal benefit.

                                                                        94
    Our certificate of incorporation and bylaws provide that we shall indemnify our directors and officers to the fullest extent permitted by law.
We are also expressly authorized to carry directors’ and officers’ insurance providing indemnification for our directors, officers and certain
employees and agents for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain
qualified directors and executive officers.
     The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from
bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of
derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In
addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and
officers pursuant to these indemnification provisions.
    There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which
indemnification is sought.

Transfer Agent and Registrar
    The transfer agent and registrar of the common stock is National City Bank.

Listing
    Our common stock has been approved for listing on the New York Stock Exchange under the symbol “PEC.”

                                                                        95
                                               DESCRIPTION OF SENIOR CREDIT FACILITY
    The following summary description of our senior credit facility does not purport to be complete. The agreements setting forth the principal
terms and conditions of our senior credit facility are filed as exhibits to the registration statement of which this prospectus forms a part.
     Pursuant to a credit agreement dated as of July 1, 2004 and amended December 10, 2004 and June 27, 2005 among us, our subsidiary, Pike
Electric, Inc., as borrower, the lenders named therein, Barclays Bank PLC as administrative agent, J.P. Morgan Securities Inc. as syndication
agent and National City Bank as documentation agent, a syndicate of banks and other financial institutions provided us with senior credit
facilities of up to $520.0 million. The senior credit facilities consist of a $300.0 million term credit facility (the “Tranche B Loan”), which
matures on July 1, 2012, a $150.0 million term credit facility (the “Tranche C Loan” and together with the Tranche B Loan, the “Term Loans”),
which matures on December 10, 2012, and a $70.0 million revolving portion of the senior credit facility, which matures on July 1, 2010. The
revolving portion of the senior credit facility includes a sublimit of $55.0 million for letters of credit and a sublimit of $10.0 million for
swingline loans.
    The obligations under the senior secured bank facilities are unconditional and irrevocably guaranteed by us and each of our existing and
subsequently acquired or organized domestic subsidiaries (other than the direct obligor under the senior credit facilities, Pike Electric, Inc.). In
addition, the senior credit facilities and such guarantees are secured on a first-priority basis by security interests (subject to permitted liens as
defined in the credit agreement) in substantially all tangible and intangible assets owned by us, Pike Electric, Inc. and each of our other
domestic subsidiaries, subject to certain exceptions, including limiting pledges of voting stock of foreign subsidiaries to 66% of such voting
stock.
     Currently, the interest rates on our loans are equal to (1) in the case of Term Loans, at our option, (i) the greater of Barclays Banks’ prime
rate and the federal funds rate plus / 2 of 1% per annum (the “Alternate Base Rate”) plus 1.25% or (ii) a LIBOR rate plus 2.25%, (2) in the
                                     1



case of revolving loans, (i) the Alternate Base Rate plus 1.50% or (ii) a LIBOR rate plus 2.50% and (3) in the case of swingline loans, the
Alternate Base Rate plus 1.50%.
     In addition to paying interest on outstanding principal under the senior credit facilities, we are also required to pay a commitment fee in
respect of unutilized commitments at a rate equal to / 2 of 1% per annum on the daily unused commitments available to be drawn under the
                                                       1



revolving portion of the senior credit facility. We will also be required to pay letter of credit fees, with respect to each letter of credit issued, of
0.25% per annum on the average daily statement amount of all letters of credit. We are also required to pay fronting fees, with respect to each
letter of credit issued, of / 4 of 1% per annum to the issuer of the letters of credit on the average daily stated amount of that letter of credit.
                          1




     The Tranche B Loan amortizes in quarterly installments of $750,000, provided that the final installment shall be equal to the amount
outstanding in respect of the Tranche B Loan (which, after giving effect to the use of net proceeds from this offering, if we do not make any
prepayments in the future, will be equal to $175.0 million). The Tranche C Loan amortizes in quarterly installments of $375,000, provided that
the final installment shall be equal to the amount outstanding in respect of the Tranche C Loan (which, after giving effect to the use of net
proceeds from this offering, if we do not make any prepayments in the future, will be equal to $99.5 million).
     We are generally required to prepay borrowings under the senior credit facilities with (1) 100% of the proceeds we receive from
non-ordinary course asset sales, sale and leaseback transactions and insurance recovery events, (2) 100% of the proceeds we receive from the
issuance of debt obligations other than debt obligations permitted under the credit agreement, (3) 50% of the proceeds that we receive from the
issuance of capital stock in an initial public offering, (4) the excess, if any, of 75% (or, if our leverage ratio is not greater than 2.5 to 1.0, 50%)
of excess cash flow (as defined in the credit agreement) over the aggregate amount of term loans prepaid during the applicable fiscal year, and
(5) any refunds received pursuant to a purchase price adjustment in connection with the acquisition of Red Simpson.

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     The credit agreement also contains a number of affirmative and restrictive covenants including limitations on mergers, consolidations and
dissolutions; sales of assets; investments and acquisitions; indebtedness and liens; and dividends and other restricted payments. Under the
credit agreement, we are permitted maximum annual capital expenditures of $60.0 million in the fiscal years ending June 30, 2005, 2006 and
2007 and $70.0 million in any fiscal year thereafter, subject to a one year carry-forward of 50% of the unused amount from the previous fiscal
year. The credit agreement also limits our payments on deferred compensation liability (as defined in the credit agreement) to $23.5 million in
the fiscal year ended June 30, 2005, $12.5 million in the fiscal year ending June 30, 2006, $7.5 million in the fiscal year ending June 30, 2007,
$6.5 million in the fiscal year ending June 30, 2008 and $6.0 million in any fiscal year thereafter, subject to a one year carry-forward on
amounts not used during the previous fiscal year and to increases in the deferred compensation liability amounts as determined pursuant to the
credit agreement.
    In addition, the credit agreement provides that we are required to meet the following financial covenants, which are tested quarterly:
    • a minimum cash interest coverage ratio based upon the ratio of consolidated EBITDA to consolidated cash interest expense, which will
      require us to maintain a ratio of 3.50 to 1.00, and

    • a maximum leverage ratio based upon the ratio of consolidated funded debt to consolidated EBITDA which will require us to maintain,
      beginning with the quarter ending on or about December 31, 2004 a ratio of 4.75 to 1.00 through the quarter ending on or about
      March 31, 2006, 4.50 to 1.00 from the quarter ending on or about June 30, 2006 to the quarter ending on or about March 31, 2007, 4.25
      to 1.00 from the quarter ending on or about June 30, 2007 to the quarter ending on or about March 31, 2008, 3.75 to 1.00 from the
      quarter ending on or about June 30, 2008 to the quarter ending on or about March 31, 2009, 3.25 to 1.00 from the quarter ending on or
      about June 30, 2009 to the quarter ending on or about March 31, 2010, 3.00 to 1.00 from the quarter ending on or about June 30, 2010
      to the quarter ending on or about March 31, 2011, 2.50 to 1.00 from the quarter ending and about June 30, 2011 to the quarter ending
      on or about March 31, 2012, and 2.25 to 1.00 thereafter.
     Our credit agreement defines consolidated EBITDA as net income plus the sum of (i) total income tax expense, (ii) interest expense,
amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with
indebtedness, (iii) depreciation and amortization expense, (iv) amortization of intangibles, capitalized consulting fees and organization costs,
(v) any extraordinary expenses or losses, (vi) any non-cash compensation and related expenses, (vii) expenses attributable to any step-up in the
value of inventory as a result of the application of purchase accounting in connection with any acquisition or recapitalization or as a result of
any LIFO adjustment, (viii) any contingent or deferred payments made to sellers in business acquisitions permitted by the credit agreement,
(ix) any payment of fees owing to Lindsay Goldberg & Bessemer and/or its affiliates permitted pursuant to our credit agreement, (x) non-cash
write-offs (excluding provisions for restructuring charges), (xi) any nonrecurring charge or expense arising in connection with the our 2002
recapitalization or our acquisition of Red Simpson and the transactions contemplated thereby and minus any extraordinary income or gains,
(xii) any expense due to deferred compensation liability incurred in connection with our acquisition of Red Simpson during such period to the
extent that such expense is included in our income statement for such period, (xiii) non-cash charges related to or caused by our 2005
Employee Stock Purchase Plan and (xiv) any nonrecurring charge or expense incurred in connection with this offering and the company’s
reincorporation in Delaware (including, without limitation, the expenses identified in the registration statement filed with the SEC in
connection with this offering), whether or not consummated. For purposes of calculating the cash interest coverage ratio and the leverage ratio,
EBITDA is deemed to be $1.0 million greater for each quarter ended during the period beginning on September 30, 2003 through and including
June 30, 2004. In addition, for purposes of calculating the cash interest coverage ratio and the leverage ratio for any period including the
quarter ended September 30, 2004, EBITDA for the quarter ended September 30, 2004 is deemed to be $33.6 million. EBITDA, as defined

                                                                       97
under our credit agreement, is not calculated in the same manner as the EBITDA and Adjusted EBITDA figures presented in “Prospectus
Summary — Summary Historical and Pro Forma Financial Data.”
     The credit agreement contains events of default that are customary for facilities and transactions of this type, including a cross-default
provision with respect to other indebtedness having an aggregate principal amount of at least $10.0 million and an event of default that would
be triggered by a change of control, as defined in the credit agreement.


                                                 SHARES ELIGIBLE FOR FUTURE SALE
     Before this offering, there has been no public market for our common stock. We cannot predict the effect, if any, that market sales of shares
or the availability of shares will have on the market price of our common stock. Sales of substantial amounts of common stock in the public
market, or the perception that such sales could occur, could cause the prevailing market price to decrease or to be lower than it might be in the
absence of those sales or perceptions.
    Upon the closing of this offering, we will have outstanding approximately 31,832,864 shares of common stock, assuming no exercise of the
underwriters’ over-allotment option. In addition, we have an aggregate of approximately 5,178,088 shares of common stock reserved for
issuance under our 2002 Stock Option Plan A, our 2002 Stock Option Plan B and our 2005 Employee Stock Purchase Plan. At the time of the
consummation of this offering, we will have an additional 1,750,000 shares of common stock reserved for issuance under our 2005 Omnibus
Incentive Compensation Plan. All of the shares of our common stock sold in this offering will be freely tradeable without restriction under the
Securities Act of 1933, except for any shares that may be acquired by an affiliate of Pike Electric Corporation, as the term “affiliate” is defined
in Rule 144 under the Securities Act. Persons who may be deemed to be affiliates generally include individuals or entities that control, are
controlled by, or are under common control with, Pike Electric Corporation and may include directors and officers of Pike Electric Corporation
as well as significant stockholders of Pike Electric Corporation. All remaining shares, and any of the shares issued pursuant to our 2005
Omnibus Incentive Compensation Plan, our 2002 Stock Option Plan A, our 2002 Stock Option Plan B and our 2005 Employee Stock Purchase
Plan, will be “restricted securities” as defined in Rule 144, and may not be sold other than through registration under the Securities Act or
under an exemption from registration, such as the one provided by Rule 144.

Rule 144
    Generally, Rule 144 provides that a person who has beneficially owned “restricted” shares for at least one year will be entitled to sell on
the open market in brokers’ transactions, within any three-month period, a number of shares that does not exceed the greater of:

    • 1% of the then outstanding shares of common stock, which will equal approximately 318,329 shares of common stock immediately
      after this offering, assuming no exercise of the underwriters’ over-allotment option; and

    • the average weekly trading volume of the common stock on the open market during the four calendar weeks preceding the filing of
      notice with respect to such sale.
    Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and the availability of current public
information about our company.
    In the event that any person who is deemed to be our affiliate purchases shares of our common stock in this offering or acquires shares of
our common stock pursuant to one of our employee benefit plans, sales under Rule 144 of the shares held by that person are subject to the
volume limitations and other restrictions (other than the one-year holding period requirement) described in the preceding two paragraphs.
    Under Rule 144(k), a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the
90 days preceding a sale and who has beneficially owned the shares

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proposed to be sold for at least two years, including the holding period of any prior owner other than our affiliates, is entitled to sell such shares
without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. Therefore, unless otherwise
restricted, “144(k) shares” may be sold immediately upon the closing of this offering.

Registration Rights
    Pursuant to the stockholders agreement, LGB Pike II LLC and its affiliates, which will beneficially own 15,136,093 shares of common
stock after this offering, have the right to require us to effect additional registration statements, or “demand registrations.” In addition to our
obligations with respect to demand registrations, each of LGB Pike II LLC and its affiliates and the other stockholders party to the stockholders
agreement have “piggyback” registration rights. If we propose to register any of our securities other than a registration in connection with an
employee benefit or similar plan or an exchange offer, we will be required to give each party to the stockholders agreement the opportunity to
participate in such registration.

Lock-Up Agreements
    We, LGB Pike II LLC and our directors and executive officers have agreed not to offer or sell any shares of our common stock, or
securities convertible into or exchangeable for our common stock, for a period of 180 days after the date of this prospectus, subject to the
exceptions listed under “Underwriting,” without the prior written consent of Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. as
representatives of the underwriters.
     We have been advised by the representatives that they may at their discretion waive the lock-up agreements; however, they have no current
intention of releasing any shares subject to a lock-up agreement. The release of any lock-up would be considered on a case-by-case basis.
Among the factors that Citigroup and JPMorgan may consider in deciding whether to release shares may include the length of time before the
lock-up expires, the number of shares involved, the reason for the requested release, market conditions, the trading price of our common stock,
historical trading volumes of our common stock and whether the person seeking the release is an officer, director or affiliate of our company.
No agreement has been made between the representatives and our company or any stockholder pursuant to which the representatives will waive
the lock-up restrictions.

Stock Options and 2005 Omnibus Incentive Compensation Plan
    As soon as practicable following this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to
register all shares of common stock subject to our 2005 Omnibus Incentive Compensation Plan, our 2002 Stock Option Plan A and our 2002
Stock Option Plan B. Shares covered by these registration statements will be eligible for sale in the public markets, other than shares owned by
our affiliates, which may be sold in the public market in compliance with applicable law, including Rule 144.

                                                                         99
                                MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES FOR
                                               NON-U.S. STOCKHOLDERS
    This is a general summary of material U.S. federal income and estate tax considerations with respect to your acquisition, ownership and
disposition of common stock if you purchase your common stock in this offering, you will hold the common stock as a capital asset and you
are a beneficial owner of shares other than:

    • a citizen or resident of the United States;

    • a corporation or other entity taxable as a corporation created or organized in, or under the laws of, the United States or any political
      subdivision of the United States;

    • an estate, the income of which is subject to U.S. federal income taxation regardless of its source;

    • a trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more
      U.S. persons have the authority to control all substantial decisions of the trust; or

    • a trust that has a valid election in place to be treated as a U.S. person.
     This summary does not address all of the U.S. federal income and estate tax considerations that may be relevant to you in light of your
particular circumstances or if you are a beneficial owner subject to special treatment under U.S. income tax laws (such as a “controlled foreign
corporation,” “passive foreign investment company,” company that accumulates earnings to avoid U.S. federal income tax, foreign tax-exempt
organization, financial institution, broker or dealer in securities, insurance company, regulated investment company, real estate investment
trust, financial asset securitization investment trust, person who holds common stock as part of a hedging or conversion transaction or as part of
a short-sale or straddle, or former U.S. citizen or resident). This summary does not discuss any aspect of U.S. federal alternative minimum tax,
state, local or non-U.S. taxation. This summary is based on current provisions of the Internal Revenue Code (“Code”), Treasury regulations,
judicial opinions, published positions of the United States Internal Revenue Service (“IRS”) and all other applicable authorities, all of which
are subject to change, possibly with retroactive effect.
     If a partnership holds our common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities
of the partnership. If you are a partner of a partnership holding our common stock, you should consult your tax advisor.
   WE URGE PROSPECTIVE NON-U.S. STOCKHOLDERS TO CONSULT THEIR TAX ADVISORS REGARDING THE UNITED
STATES FEDERAL, STATE, LOCAL AND NON-UNITED STATES INCOME AND OTHER TAX CONSIDERATIONS OF
ACQUIRING, HOLDING AND DISPOSING OF SHARES OF COMMON STOCK.

Dividends
     In general, any distributions we make to you with respect to your shares of common stock that constitute dividends for U.S. federal income
tax purposes will be subject to U.S. withholding tax at a rate of 30% of the gross amount, unless you are eligible for a reduced rate of
withholding tax under an applicable income tax treaty and you provide proper certification of your eligibility for such reduced rate. A
distribution will constitute a dividend for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as
determined under the Code. Any distribution not constituting a dividend will be treated first as reducing your basis in your shares of common
stock and, to the extent it exceeds your basis, as capital gain.
    Dividends we pay to you that are effectively connected with your conduct of a trade or business within the United States (and, if certain
income tax treaties apply, are attributable to a U.S. permanent establishment maintained by you) generally will not be subject to U.S.
withholding tax if you comply with applicable certification and disclosure requirements. Instead, such dividends generally will be subject to

                                                                        100
U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. persons. If you are a
corporation, effectively connected income may also be subject to a “branch profits tax” at a rate of 30% (or such lower rate as may be specified
by an applicable income tax treaty). Dividends that are effectively connected with your conduct of a trade or business but that under an
applicable income tax treaty are not attributable to a U.S. permanent establishment maintained by you may be eligible for a reduced rate of U.S.
withholding tax under such treaty, provided you comply with certification and disclosure requirements necessary to obtain treaty benefits.
    We do not anticipate paying any dividends on the common stock in the foreseeable future.

Sale or Other Disposition of Common Stock
   You generally will not be subject to U.S. federal income tax on any gain realized upon the sale or other disposition of your shares of
common stock unless:

    • the gain is effectively connected with your conduct of a trade or business within the United States (and, under certain income tax
      treaties, is attributable to a U.S. permanent establishment you maintain);

    • you are an individual, you are present in the United States for 183 days or more in the taxable year of disposition and you meet other
      conditions, and you are not eligible for relief under an applicable income tax treaty; or

    • we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes (which we believe we are
      not and have never been, and do not anticipate we will become) and you hold or have held, directly or indirectly, at any time within the
      shorter of the five-year period preceding disposition or your holding period for your shares of common stock, more than 5% of our
      common stock.
    Gain that is effectively connected with your conduct of a trade or business within the United States generally will be subject to U.S. federal
income tax, net of certain deductions, at the same rates applicable to U.S. persons. If you are a corporation, the branch profits tax also may
apply to such effectively connected gain. If the gain from the sale or disposition of your shares is effectively connected with your conduct of a
trade or business in the United States but under an applicable income tax treaty is not attributable to a permanent establishment you maintain in
the United States, your gain may be exempt from U.S. tax under the treaty. If you are described in the second bullet point above, you generally
will be subject to U.S. tax at a rate of 30% on the gain realized, although the gain may be offset by some U.S. source capital losses realized
during the same taxable year.

Information Reporting and Backup Withholding
    We must report annually to the IRS the amount of dividends or other distributions we pay to you on your shares of common stock and the
amount of tax we withhold on these distributions regardless of whether withholding is required. The IRS may make copies of the information
returns reporting those distributions and amounts withheld available to the tax authorities in the country in which you reside pursuant to the
provisions of an applicable income tax treaty or exchange of information treaty.
     The United States imposes a backup withholding tax on dividends and certain other types of payments to U.S. persons. You will not be
subject to backup withholding tax on dividends you receive on your shares of common stock if you provide proper certification of your status
as a non-U.S. person or you are a corporation or one of several types of entities and organizations that qualify for exemption (an “exempt
recipient”).
     Information reporting and backup withholding generally are not required with respect to the amount of any proceeds from the sale of your
shares of common stock outside the United States through a foreign office of a foreign broker that does not have certain specified connections
to the United States. However, if you sell your shares of common stock through a U.S. broker or the U.S. office of a foreign broker, the

                                                                       101
broker will be required to report the amount of proceeds paid to you to the IRS and also backup withhold on that amount unless you provide
appropriate certification to the broker of your status as a non-U.S. person or you are an exempt recipient. Information reporting will also apply
if you sell your shares of common stock through a foreign broker deriving more than a specified percentage of its income from U.S. sources or
having certain other connections to the United States, unless such broker has documentary evidence in its records that you are a non-U.S.
person and certain other conditions are met or you are an exempt recipient.
    Any amounts withheld with respect to your shares of common stock under the backup withholding rules will be refunded to you or credited
against your U.S. federal income tax liability, if any, by the IRS if the required information is furnished in a timely manner.

Estate Tax
     Common stock owned or treated as owned by an individual who is not a citizen or resident (as defined for U.S. federal estate tax purposes)
of the United States at the time of his or her death will be included in the individual’s gross estate for U.S. federal estate tax purposes and
therefore may be subject to U.S. federal estate tax unless an applicable treaty provides otherwise.

                                                                       102
                                                   CERTAIN ERISA CONSIDERATIONS
     Section 406 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and Section 4975 of the Code prohibit
“employee benefit plans” (as defined in Section 3(3) of ERISA) and certain other retirement plans, accounts and arrangements that are subject
to Title I of ERISA or Section 4975 of the Code (“ERISA Plans”) from engaging in specified transactions involving plan assets with persons or
entities who are “parties in interest,” within the meaning of ERISA, or “disqualified persons,” within the meaning of Section 4975 of the Code,
unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject
to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engaged in such
a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. The acquisition of our common
stock by an ERISA Plan with respect to which we or any of the underwriters are considered a party in interest or a disqualified person may
constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/ or Section 4975 of the Code, unless the
investment is acquired in accordance with an applicable statutory, class or individual prohibited transaction exemption. In this regard, the
Department of Labor has issued prohibited transaction class exemptions, or “PTCEs,” that may apply to the acquisition of our common stock.
     Governmental plans and certain church and non-United States plans, while not subject to the fiduciary responsibility provisions of ERISA
or the provisions of Section 4975 of the Code, may nevertheless be subject to local, state, federal, non-U.S. or other laws that are substantially
similarly to the foregoing provisions of ERISA or the Code (“Similar Laws”).
     The foregoing discussion is general in nature and is not intended to be all-inclusive. Due to the complexity of these rules and the penalties
that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons
considering purchasing shares of our common stock on behalf of, or with the assets of, and ERISA Plan, consult with their counsel regarding
the potential applicability of ERISA, Section 4975 of the Code and any Similar Laws to such investment and whether an exemption would be
applicable to the purchase and holding of our shares of common stock.

                                                                        103
                                                                 UNDERWRITING
    We and the selling stockholders are offering the shares of common stock described in this prospectus through a number of underwriters.
Citigroup Global Markets Inc., or Citigroup, and J.P. Morgan Securities Inc., or JPMorgan, are acting as joint book-running managers of the
offering and as representatives of the underwriters. We and the selling stockholders will enter into an underwriting agreement with the
underwriters. Subject to the terms and conditions of the underwriting agreement, we and the selling stockholders will agree to sell to the
underwriters, and each underwriter will severally agree to purchase, at the public offering price less the underwriting discounts and
commissions set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the following table:
                                                                                                                              Number of
                                                       Name                                                                    Shares

Citigroup Global Markets Inc.
J.P. Morgan Securities Inc.
Robert W. Baird & Co. Incorporated
Friedman, Billings, Ramsey Group, Inc.

      Total                                                                                                                          13,500,000


    The underwriters are committed to purchase all the common shares offered by us and the selling stockholders if they purchase any shares.
The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also
be increased or the offering may be terminated.
     The underwriters propose to offer the common shares directly to the public at the initial public offering price set forth on the cover page of
this prospectus and to certain dealers at that price less a concession not in excess of $        per share. Any such dealers may resell shares to
certain other brokers or dealers at a discount of up to $        per share from the initial public offering price. After the initial public offering of
the shares, the offering price and other selling terms may be changed by the underwriters. Sales of shares made outside of the United States
may be made by affiliates of the underwriters. The representatives have advised us and the selling stockholders that the underwriters do not
intend to confirm discretionary sales in excess of 5% of the common shares offered in this offering.
    The underwriters have an option to buy up to 2,025,000 additional shares of common stock from LGB Pike II LLC, one of the selling
stockholders, to cover sales of shares by the underwriters that exceed the number of shares specified in the table above. The underwriters have
30 days from the date of this prospectus to exercise this over-allotment option. If any shares are purchased with this over-allotment option, the
underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional shares of common stock
are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.
     The underwriting fee is equal to the public offering price per share of common stock less the amount paid by the underwriters to us and the
selling stockholders per share of common stock. The underwriting fee is $         per share. The following tables show the per share and total
underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option
to purchase additional shares.


                                                                      Paid by Us
                                                                                                    Without                        With Full
                                                                                                 Over-allotment                  Over-allotment
                                                                                                   Exercise                        Exercise

Per Share                                                                                    $                               $
    Total                                                                                    $                               $

                                                                          104
                                                         Paid by the Selling Stockholders
                                                                                                   Without                        With Full
                                                                                                Over-allotment                  Over-allotment
                                                                                                  Exercise                        Exercise

Per Share                                                                                   $                               $
    Total                                                                                   $                               $
    We estimate that our share of the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and
accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $4.25 million.
   A prospectus in electronic format may be made available by one or more of the underwriters. The representatives may agree to allocate a
number of shares to underwriters for sale to their online brokerage account holders. The representatives will allocate shares to underwriters that
may make Internet distributions on the same basis as other allocations. In addition, shares may be sold by the underwriters to securities dealers
who resell shares to online brokerage account holders.
    Fbr.com, a division of FBR Investment Services Inc., which is an affiliate of Friedman, Billings, Ramsey Group, Inc., will be facilitating
Internet distribution for this offering to certain of its Internet subscription customers. Friedman, Billings, Ramsey intends to allocate a limited
number of shares for sale to its online brokerage customers. An electronic prospectus will be available on the Internet website maintained by
Friedman, Billings, Ramsey. Other than the prospectus in electronic format, the information on the Friedman, Billings, Ramsey website is not
part of this prospectus.
    We, the selling stockholders and our directors and executive officers have agreed with the underwriters prior to the commencement of this
offering pursuant to which we and each of these persons or entities, with limited exceptions, for a period of 180 days after the date of this
prospectus, may not, without the prior written consent of Citigroup and JPMorgan:

    • offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or
      contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of
      our common stock or any securities convertible into or exercisable or exchangeable for our common stock (including, without
      limitation, common stock that may be deemed to be beneficially owned by such persons or entities in accordance with the rules and
      regulations of the SEC and securities that may be issued upon exercise of a stock option or warrant); or

    • enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the
      common stock,
whether any such transaction described in the bullet points above is to be settled by delivery of common stock or such other securities, in cash
or otherwise.
    The restrictions described in the immediately preceding paragraph do not apply to:

    • sale of shares to the underwriters;



    • issuance by us of shares of common stock upon the exercise of an option or a warrant or the conversion of a security outstanding on the
      date of the prospectus of which the underwriters have been advised in writing, so long as each recipient that has previously signed a
      lock-up agreement agrees to be subject to the restrictions described in the immediately preceding paragraph;



    • issuance by the company of shares or options to purchase shares of our common stock, or the repurchase of unvested shares upon
      termination of service of an employee, director, consultant or other service provider, pursuant to a stock incentive plan in existence on
      the date of the prospectus or pursuant to the employee stock purchase plan that we intend to adopt as described in “Management —
      Stock Incentive Plans — New Employee Stock Purchase Plan”;

                                                                         105
    • transactions by persons other than the company relating to shares of common stock or other securities acquired in open market
      transactions after the completion of the offering, so long as no filing by any party with the SEC shall be required or voluntarily made in
      connection with subsequent sales of common stock or other securities acquired in such open market transactions;




    • filing by us of any registration statement with the SEC on Form S-8 relating to the offering of securities pursuant to the terms of a stock
      incentive plan in existence on the date of the prospectus or pursuant to the employee stock purchase plan that we intend to adopt as
      described in “Management — Stock Incentive Plans — New Employee Stock Purchase Plan”;



    • issuance by the company of shares in connection with the acquisition of another company, so long as (1) the shares issued do not
      represent more than 20% of our company’s market capitalization after the issuance and (2) each recipient agrees to be subject to the
      restrictions described in the immediately preceding paragraph;

    • transfers by a person other than us of shares of common stock or any security convertible into common stock as a bona fide gift or for
      no consideration and transfers by a person other than us by will or intestate, so long as (1) each recipient agrees to be subject to the
      restrictions described in the immediately preceding paragraph and (2) the underwriters have been advised in writing;

    • transfers by a person other than us to any trust, partnership or limited liability company for the direct or indirect benefit of such person
      for estate planning purposes, so long as (1) the trustee, partnership or limited liability company agrees to be subject to the restrictions
      described in the immediately preceding paragraph, (2) any such transfer shall not involve a disposition for value and (3) no filing by
      any party with the SEC shall be required or voluntarily made in connection with such transfer; or

    • transfers by any corporation, partnership, limited liability company or other entity to an affiliate, provided such affiliate agrees to be
      subject to the restrictions described in the immediately preceding paragraph.
     Citigroup and JPMorgan have no current intent or arrangement to release any of the shares subject to the lock-up agreements prior to the
expiration of the 180-day lock-up period. There are no contractually specified conditions for the waiver of lock-up restrictions, and any waiver
is at the joint discretion of Citigroup and JPMorgan.
    There are no specific criteria for the waiver of lock-up restrictions, and Citigroup and JPMorgan cannot in advance determine the
circumstances under which a waiver might be granted. Any waiver will depend on the facts and circumstances existing at the time. Among the
factors that Citigroup and JPMorgan may consider in deciding whether to release shares may include the length of time before the lock-up
expires, the number of shares involved, the reason for the requested release, market conditions, the trading price of our common stock,
historical trading volumes of our common stock and whether the person seeking the release is an officer, director or affiliate of our company.
Neither Citigroup nor JPMorgan will consider its own positions in our securities, if any, in determining whether to consent to a waiver of a
lock-up agreement.
    We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933.
    Our common stock has been approved for listing on the New York Stock Exchange under the symbol “PEC.”
     In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and
selling shares of common stock in the open market for the purpose of preventing or retarding a decline in the market price of the common stock
while this offering is in progress. These stabilizing transactions may include making short sales of the common stock, which involves the sale
by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering, and purchasing shares of
common stock on the open market to cover positions created by short sales.

                                                                       106
Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ over-allotment option referred to
above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position
either by exercising their over-allotment option, in whole or in part, or by purchasing shares in the open market. In making this determination,
the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which
the underwriters may purchase shares through the over-allotment option. A naked short position is more likely to be created if the underwriters
are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors
who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to
cover the position.
    The underwriters have advised us that, pursuant to Regulation M of the Securities Act of 1933, they may also engage in other activities that
stabilize, maintain or otherwise affect the price of the common stock, including the imposition of penalty bids. This means that if the
representatives of the underwriters purchase common stock in the open market in stabilizing transactions or to cover short sales, the
representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.
    These activities may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in
the market price of the common stock, and, as a result, the price of the common stock may be higher than the price that otherwise might exist in
the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these
transactions on the New York Stock Exchange, in the over-the-counter market or otherwise.
    At our request, the underwriters have reserved for sale as part of the underwritten offering, at the initial offering price, up to
675,000 shares, or approximately 5.0% of the total number of shares offered in this prospectus, for our employees and directors, selected
business associates and certain related persons. If purchased by these persons, these shares will be subject to a 25-day lock-up restriction. The
number of shares of common stock available for sale to the general public will be reduced to the extent such persons purchase such reserved
shares. Any reserved shares which are not so purchased will be offered by the underwriters to the general public on the same basis as the other
shares offered in this prospectus.
     Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by
negotiations among us, the selling stockholders and the representatives of the underwriters. In determining the initial public offering price, we,
the selling stockholders and the representatives of the underwriters expect to consider a number of factors including:

    • the information set forth in this prospectus and otherwise available to the representatives;

    • our prospects and the history and prospects for the industry in which we compete;

    • an assessment of our management;

    • the capital structure of our company;

    • our prospects for future earnings;

    • the general condition of the securities markets, and the initial public offering market in particular, at the time of this offering;

    • the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

    • other factors deemed relevant by the underwriters, the selling stockholders and us.
    Neither we nor the selling stockholders or the underwriters can assure investors that an active trading market will develop for our common
shares, or that the shares will trade in the public market at or above the initial public offering price.

                                                                        107
    In the underwriting agreement, each underwriter will agree that:

    • it has not offered or sold and, prior to the date six months after the closing date, will not offer or sell any shares to persons in the United
      Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as
      principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an
      offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 (as amended);

    • it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or
      inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000)
      received by it in connection with the issue or sale of any shares in circumstances in which Section 21(1) of the Financial Services and
      Markets Act 2000 does not apply to us; and

    • it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 with respect to anything
      done by it in relation to the shares in, from or otherwise involving the United Kingdom.
     Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and to Lindsay Goldberg & Bessemer and
its affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other
services for us, Lindsay Goldberg & Bessemer and such affiliates in the ordinary course of their business, for which they have received and
may continue to receive customary fees and commissions. For example, an affiliate of JPMorgan is a lender under our senior credit facilities,
and affiliates of Citigroup and JPMorgan are lenders to certain of Lindsay Goldberg & Bessemer’s other portfolio companies. In addition, from
time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold
on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.


                                                            LEGAL MATTERS
   The validity of our common stock offered hereby will be passed upon for us by Cravath, Swaine & Moore LLP, New York, New York.
The validity of the common stock offered hereby will be passed upon for the underwriters by Simpson Thacher & Bartlett LLP, New York,
New York.


                                                                    EXPERTS
    The consolidated financial statements of Pike Electric Corporation and subsidiaries as of June 30, 2003 and 2004, and for each of the two
years in the period ended June 30, 2004 appearing in this prospectus and registration statement have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon
such report given on the authority of such firm as experts in accounting and auditing.
    The consolidated financial statements of Pike Electric Corporation and subsidiaries for the year ended June 30, 2002 included in this
prospectus have been audited by Dixon Hughes PLLC, an independent registered public accounting firm, as stated in their report, and are
included elsewhere in this prospectus, and have been so included in reliance upon the report of such firm given upon their authority as experts
in auditing and accounting.
    The consolidated financial statements of Red Simpson, Inc. and subsidiaries as of December 31, 2003 and 2002, and for each of the three
years in the period ended December 31, 2003 and as of June 30, 2004 and 2003 and for the six-month periods ended June 30, 2004 and 2003,
included in this prospectus have been audited by Grant Thornton LLP, an independent registered public accounting firm, as indicated in their
report with respect thereto, and are included elsewhere in this prospectus in reliance upon the report of such firm given upon their authority as
experts in auditing and accounting.

                                                                        108
                                                         ADDITIONAL INFORMATION
     We have not previously been subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. We filed with the
SEC a registration statement on Form S-1 under the Securities Act, with respect to the offer and sale of common stock pursuant to this
prospectus. This prospectus, filed as a part of the registration statement, does not contain all of the information set forth in the registration
statement or the exhibits and schedules thereto in accordance with the rules and regulations of the SEC and no reference is hereby made to such
omitted information. Statements made in this prospectus concerning the contents of any contract, agreement or other document filed as an
exhibit to the registration statement are summaries of the terms of such contracts, agreements or documents and are not necessarily complete.
    The registration statement and the exhibits and schedules thereto filed with the SEC may be inspected, without charge, and copies may be
obtained at prescribed rates, at the Public Reference Room maintained by the SEC at its principal office at 100 F Street, N.E., Washington,
D.C. 20549. You may also receive copies of these documents upon payment of a duplicating fee by writing to the SEC’s Public Reference
Room. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room in Washington, D.C. and other locations.
The SEC also maintains a website (http://www.sec.gov) available to the public that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC. The registration statement of which this prospectus forms a part
and the exhibits thereto may be obtained through the SEC’s website. For further information pertaining to our company and the common stock
offered by this prospectus, reference is made to the registration statement.
    Upon completion of this offering, we will become subject to the information and periodic reporting requirements of the Securities
Exchange Act of 1934, as amended, and will file periodic reports and other information with the SEC. These periodic reports and other
information will be available for inspection and copying at the SEC’s public reference facilities and the website of the SEC referred to above.

                                                                      109
                                           INDEX TO FINANCIAL STATEMENTS
PIKE ELECTRIC CORPORATION AUDITED CONSOLIDATED FINANCIAL STATEMENTS
     Reports of Independent Registered Public Accounting Firms                                               F-2
     Consolidated Balance Sheets as of June 30, 2003 and 2004                                                F-4
     Consolidated Statements of Income for the Years Ended 2002, 2003 and 2004                               F-5
     Consolidated Statements of Stockholders’ Equity for Years Ended June 30, 2002, 2003 and 2004            F-6
     Consolidated Statements of Cash Flows for the Years Ended June 30, 2002, 2003 and 2004                  F-7
     Notes to Consolidated Financial Statements                                                              F-8
PIKE ELECTRIC CORPORATION CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
     Condensed Consolidated Balance Sheets as of March 31, 2004 and 2005                                    F-25
     Condensed Consolidated Statements of Income for the Nine Months Ended March 31, 2004 and 2005          F-26
     Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2004 and 2005      F-27
     Notes to Condensed Consolidated Financial Statements                                                   F-28
RED SIMPSON, INC. AUDITED CONSOLIDATED FINANCIAL STATEMENTS
     Report of Independent Registered Public Accounting Firm                                                F-39
     Consolidated Balance Sheets as of December 31, 2002 and 2003                                           F-40
     Consolidated Statements of Income for the Years Ended December 31, 2001, 2002 and 2003                 F-41
     Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2001, 2002 and 2003   F-42
     Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2002 and 2003             F-43
     Notes to Consolidated Financial Statements                                                             F-44
RED SIMPSON, INC. AUDITED CONSOLIDATED FINANCIAL STATEMENTS
     Report of Independent Registered Public Accounting Firm                                                F-53
     Consolidated Balance Sheets as of June 30, 2003 and 2004                                               F-54
     Consolidated Statements of Income for the Six Months Ended June 30, 2003 and 2004                      F-55
     Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2003 and 2004        F-56
     Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2003 and 2004                  F-58
     Notes to Consolidated Financial Statements                                                             F-59

                                                             F-1
                              REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors
Pike Electric Corporation and Subsidiaries
    We have audited the accompanying consolidated balance sheets of Pike Electric Corporation, formerly Pike Holdings, Inc., and
subsidiaries as of June 30, 2004 and 2003, and the related consolidated statements of income, stockholders’ equity and cash flows for the two
years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audits.
     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
    In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Pike
Electric Corporation and subsidiaries at June 30, 2004 and 2003, and the consolidated results of their operations and their cash flows for the
years then ended, in conformity with U.S. generally accepted accounting principles.
    As discussed in Note 2 to the consolidated financial statements, in 2004, the Company adopted Statement of Financial Accounting
Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” and changed its method
of accounting for mandatorily redeemable preferred stock.




                                                            /s/ ERNST & YOUNG LLP

August 13, 2004, except for Note 17,
as to which the date is July 1, 2005
Greensboro, North Carolina

                                                                         F-2
                              REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Pike Electric Corporation and Subsidiaries
Mount Airy, North Carolina
    We have audited the accompanying consolidated statements of income, stockholders’ equity and cash flows of Pike Electric Corporation
and subsidiaries, formerly Pike Holdings, Inc., for the year ended June 30, 2002. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we
express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audit of the financial statements provides a reasonable basis
for our opinion.
    In our opinion, the financial statements referred to above present fairly, in all material respects, the results of the operations and cash flows
of Pike Electric Corporation and subsidiaries for the year ended June 30, 2002, in conformity with accounting principles generally accepted in
the United States of America.



                                                            /s/ DIXON HUGHES PLLC

April 4, 2005 except for Note 17,
as to which the date is July 1, 2005
Greensboro, North Carolina

                                                                         F-3
                                          PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                                    CONSOLIDATED BALANCE SHEETS
                                                            (in thousands)
                                                                                                                    June 30,

                                                                                                         2003                      2004

                                                                    ASSETS
Current assets:
   Cash and cash equivalents                                                                       $         3,637             $      4,937
   Accounts receivable, net                                                                                 21,491                   29,297
   Work completed not billed                                                                                23,119                   35,801
   Inventories                                                                                               5,766                    6,162
   Prepaid and other                                                                                         4,040                    1,167
   Deferred income taxes                                                                                     4,129                    2,635
        Total current assets                                                                                62,182                   79,999
Property and equipment, net                                                                                171,488                  190,600
Goodwill                                                                                                        —                     3,000
Deferred loan costs, net                                                                                     7,548                    5,583
Other assets                                                                                                 4,030                    7,914

    Total assets                                                                                   $       245,248             $    287,096

                                          LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
   Accounts payable                                                           $                              3,840             $      4,741
   Accrued compensation                                                                                     11,795                   15,865
   Accrued expenses and other                                                                                2,731                    3,009
   Current portion of insurance claim accruals                                                               2,444                    1,887
   Revolving credit facility                                                                                    —                    13,000

        Total current liabilities                                                                           20,810                   38,502
Long-term debt, net of current portion                                                                     140,000                  137,000
Insurance and claim accruals, net of current portion                                                         3,656                    5,614
Deferred income taxes                                                                                       39,904                   43,980
Mandatorily redeemable preferred stock                                                                          —                     5,810
Other liabilities                                                                                            3,114                    6,907
Commitments and contingencies
Mandatorily redeemable preferred stock                                                                          5,429                     —
Stockholders’ equity:
    Common stock, par value $0.001 per share; 100,000 authorized shares; 24,437 shares
      issued and outstanding at June 30, 2003 and 2004                                                       1,656                    1,656
    Additional paid-in capital                                                                                 508                      928
    Retained earnings                                                                                       30,171                   46,699

        Total stockholders’ equity                                                                          32,335                   49,283
    Total liabilities and stockholders’ equity                                                     $       245,248             $    287,096


                               The accompanying notes are an integral part of these consolidated financial statements

                                                                        F-4
                                       PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                             CONSOLIDATED STATEMENTS OF INCOME
                                                (in thousands, except per share amounts)
                                                                                                   Years Ended June 30,

                                                                                     2002                  2003                 2004

Revenues                                                                       $      273,235         $      297,514        $    356,697
Cost of operations                                                                    225,280                247,204             300,313
    Gross profit                                                                       47,955                 50,310              56,384
General and administrative expenses                                                    14,176                 16,783              18,812
Recapitalization expenses                                                              10,893                    386                  —
(Gain) loss on sale of property and equipment                                              (4 )                  539                 265

    Income from operations                                                             22,890                 32,602              37,307
Other expense (income):
    Interest expense                                                                    2,802                 11,862               9,192
    Other, net                                                                           (267 )                  (46 )               (19 )

         Total other expense                                                            2,535                 11,816               9,173
Income before income taxes from continuing operations                                  20,355                 20,786              28,134
Income tax expense                                                                      9,519                  8,335              11,276

Income from continuing operations                                                      10,836                 12,451              16,858
Loss from discontinued operations, net of taxes                                          (324 )                 (621 )              (330 )

Net income                                                                             10,512                 11,830              16,528
Decrease in redemption value of mandatorily redeemable preferred stock                     —                  12,071                  —

Net income available to common stockholders                                    $       10,512         $       23,901        $     16,528

Basic and diluted earnings (loss) per share available to common
 stockholders:
    Income from continuing operations available to common stockholders         $            0.18      $            1.00     $           0.69
    Loss from discontinued operations, net                                                    —                   (0.02 )              (0.01 )

    Net income available to common stockholders                                $            0.18      $           0.98      $          0.68

Weighted average basic and diluted common shares outstanding                           59,633                 24,437              24,437


                            The accompanying notes are an integral part of these consolidated financial statements

                                                                     F-5
                                             PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
                                                        (in thousands)
                                                         Class A
                           Common                       Convertible      Class B       Class C      Class D      Class E     Additional
                            Stock        Common          Common         Common         Common       Common      Common        Paid-In            Retained
                            Shares        Stock           Stock           Stock         Stock        Stock        Stock       Capital            Earnings           Total

Balance July 1, 2001         48,466      $    3,284     $     1,353     $       —      $     —      $    —      $     —      $        —      $     166,196      $   170,833
Net income for year              —               —               —              —            —           —            —               —             10,512           10,512
Proceeds from sale of
  21,646 shares of
  common stock               21,646               7              —          1,146          313           —            —          75,804                     —         77,270
Recapitalization of
  common stock                (4,471 )         (860 )            —            197          313           99         251               —                     —                —
Cost of 65,692 shares of
  common stock
  purchased and
  exchanged for
  1,000,000 shares of
  mandatorily
  redeemable preferred
  stock                     (65,642 )        (2,431 )        (1,353 )           —          (313 )       (99 )       (251 )       (75,804 )        (171,242 )        (251,493
Exchange of common
  stock                      24,437           1,656              —          (1,343 )       (313 )        —            —               —                     —                —
Equity compensation
  expense                         —              —               —              —            —           —            —               88                    —                88

Balance June 30, 2002        24,437           1,656              —              —            —           —            —               88             5,466             7,210
Net income for year              —               —               —              —            —           —            —               —             23,901            23,901
Equity compensation
  expense                         —              —               —              —            —           —            —              420                    —               420
Decrease in redemption
  value of preferred
  stock                           —              —               —              —            —           —            —               —                     —                —
Final settlement of
  recapitalization                —              —               —              —            —           —            —               —                 804                 804

Balance June 30, 2003        24,437           1,656              —              —            —           —            —              508            30,171            32,335
Net income for year              —               —               —              —            —           —            —               —             16,528            16,528
Equity compensation
 expense                          —              —               —              —            —           —            —              420                    —               420

Balance June 30, 2004        24,437      $    1,656     $        —      $       —      $     —      $    —      $     —      $       928     $      46,699      $     49,283



                             The accompanying notes are an integral part of these consolidated financial statements.

                                                                              F-6
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        (in thousands)
                                                                                                    Years Ended June 30,

                                                                                     2002                     2003                2004

Cash flows from operating activities:
   Income from continuing operations                                           $        10,836          $       12,451        $     16,858
   Adjustments to reconcile income from continuing operations to net
     cash provided by operating activities from continuing operations:
       Depreciation                                                                     17,162                  17,625              19,457
       Recapitalization expenses                                                        10,893                     386                  —
       Non-cash interest expense                                                           291                   2,927                 922
       Deferred income taxes                                                                 7                   3,256               5,570
       Unrealized (gain) loss on investments                                               342                      55                (465 )
       (Gain) loss on sale of property and equipment                                        (4 )                   540                 265
       Equity compensation expense                                                          88                     420                 420
       Changes in assets and liabilities arising from continuing operations:
           Accounts receivable and work completed not billed                             1,094                   (2,139 )          (20,488 )
           Inventories, prepaids and other                                              (2,038 )                  1,334              2,132
           Other assets                                                                    847                   (1,175 )              313
           Insurance and claim accruals                                                  5,429                   (3,284 )            1,401
           Recapitalization expenses                                                   (10,893 )                   (386 )               —
           Accounts payable and other                                                     (899 )                  1,868              5,075

                Net cash provided by operating activities from continuing
                 operations                                                             33,155                  33,878              31,460

Cash flows from investing activities from continuing operations:
       Purchases of property and equipment                                             (20,184 )               (21,227 )           (35,678 )
       Business acquisitions, net of cash acquired                                          —                       —               (6,994 )
       Proceeds from sale of property and equipment                                      4,897                   6,096                 901

           Net cash used in investing activities from continuing operations            (15,287 )               (15,131 )           (41,771 )
Cash flows from financing activities from continuing operations:
       Principal payments on long-term debt                                            (28,494 )               (15,000 )            (3,000 )
       Proceeds from long-term debt                                                    170,000                      —                   —
       Proceeds from revolving credit facility, net                                         —                       —               13,000
       Deferred loan costs                                                              (9,173 )                   (47 )                —
       Proceeds from sale of common stock                                               77,259                     804                  —
       Repurchase of common stock                                                     (233,982 )                    —                   —
       Dividends paid                                                                     (337 )                    —                   —
       Other                                                                               (15 )                   (15 )               (15 )

           Net cash provided by (used in) financing activities from
            continuing operations                                                      (24,742 )               (14,258 )             9,985

Net cash provided by (used in) discontinued operations                                      1,395                    (951 )          1,626
          Net increase (decrease) in cash and cash equivalents                          (5,479 )                  3,538              1,300
Cash and cash equivalents beginning of year                                              5,578                       99              3,637

Cash and cash equivalents end of year                                          $              99        $         3,637       $      4,937


                             The accompanying notes are an integral part of these consolidated financial statements

                                                                       F-7
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           For the years ended June 30, 2002, 2003 and 2004
                                               (in thousands, except per share amounts)


1.    Organization and Business

     Organization
    The consolidated financial statements of Pike Electric Corporation and subsidiaries include the accounts of Pike Holdings, Inc., which was
merged with and into Pike Electric Corporation to effect the reincorporation as discussed in Note 17, and was formerly known as Pike
Equipment and Supply Company (the “Company”), and its wholly owned subsidiaries, Pike Electric, Inc. (“Pike Electric”), Pike Equipment
and Supply Company, formerly known as Pike Equipment and Supply Company of North Carolina, Inc., and Red Simpson, Inc. (“Red
Simpson”), which was acquired on July 1, 2004. The Company is a provider of outsourced electric distribution and transmission services in the
United States and is headquartered in Mount Airy, North Carolina.
     As a result of the transactions consummated in 2002 in accordance with the recapitalization and investment agreement discussed below:
(1) Pike Electric’s Articles of Incorporation were amended and restated to authorize four additional classes of common stock; (2) certain
holders of Pike Electric ordinary common stock and Class A convertible common stock (including certain members of management)
exchanged their shares for such newly authorized shares; (3) LGB Acquisition Corp. was merged with and into Pike Electric, with Pike Electric
as the surviving corporation; (4) Pike Merger Sub, Inc., a wholly owned subsidiary of the Company, was merged with and into Pike Electric,
with Pike Electric as the surviving corporation; (5) Pike Electric became a wholly owned subsidiary of its previously owned subsidiary, the
Company; (6) the accounts of the Company were transferred to a newly created wholly owned subsidiary of the Company, Pike Equipment and
Supply Company and, (7) the newly created Pike Equipment and Supply Company became a wholly owned subsidiary of Pike Electric.


     Recapitalization and Nonrecurring Charges
    On April 18, 2002, a recapitalization of Pike Electric and its subsidiary was completed, as contemplated by the recapitalization agreement
(the “April 2002 Recapitalization Agreement”), dated as of March 15, 2002, as amended on April 11, 2002, by and among LGB Pike LLC
(“LGB Pike”), the Company, Pike Merger Sub, Inc., then a wholly owned subsidiary of the Company, Pike Electric and certain stockholders of
Pike Electric named therein.
     Pursuant to the terms of the April 2002 Recapitalization Agreement, holders of Pike Electric ordinary common stock and Class A
convertible common stock received cash and mandatorily redeemable preferred stock. Certain of the stockholders, including certain executive
officers, retained and “rolled over” certain of the shares of stock held by them rather than receive the cash consideration corresponding to the
shares held prior to the exchange described above. As a result of the merger of Pike Merger Sub, Inc. with and into Pike Electric, as discussed
above, all shares of Pike Electric held by management and LGB Pike were exchanged for the common stock of the Company.
     Due to the significant “rollover” of equity interests by a number of stockholders who owned common stock of Pike Electric prior to the
April 2002 Recapitalization Agreement, the transaction has been accounted for as a leveraged recapitalization. Accordingly, the Company has
retained its historical cost basis of accounting. The shares repurchased by the Company have been cancelled.
    Upon completion of the April 2002 Recapitalization Agreement, LGB Pike owned common stock representing approximately 88% of the
equity ownership of the Company and members of management owned common stock representing approximately 12%. The Company’s
common stockholders maintain the same rights as the common stockholders prior to the transaction.

                                                                       F-8
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    The Company incurred approximately $9,200 in debt issuance costs related to the April 2002 transactions, of which approximately $1,900
was paid to a related party affiliated with LGB Pike, Goldberg Lindsay & Co. LLC. These costs have been capitalized as long-term assets and
are being amortized over the term of the indebtedness. In addition, the Company also incurred transaction costs of approximately $11,200,
comprised of bonus payments of approximately $3,000 and professional service fees of approximately $8,200, of which approximately $1,900
was paid to Goldberg Lindsay & Co. LLC. In conjunction with the recapitalization, Pike Electric entered into a management advisory services
agreement with Goldberg Lindsay & Co. LLC, under which the Company is required to pay $1,000 annually in quarterly installments of $250.
The Company incurred $200, $1,000 and $1,000 in management fee expense under this agreement for the years ended June 30, 2002, 2003 and
2004, respectively.


     Business
    The Company operates in one reportable segment as a provider of outsourced electric distribution and transmission services. The
Company’s customers include more than 150 electric utilities, cooperatives and municipalities across a contiguous 19-state region that stretches
from Pennsylvania in the north to Florida in the southeast and to Texas in the southwest. The Company’s core services consist of the
maintenance, upgrade and extension of electric distribution and sub-500 kV transmission power lines. Additionally, the Company provides
storm restoration services and a variety of ancillary services. The Company does not have any operations or assets outside the United States.
    The Company monitors revenues by two categories of services: powerline and storm restoration. The Company uses this breakdown
because powerline services represents its ongoing service revenues, most of which are generated by its customers’ recurring maintenance
needs. Storm restoration revenues represent additional revenue opportunities that depend on weather conditions.
     The following table sets forth our revenues by category of service for the periods indicated:
                                                                                For the Year Ended June 30,

                                                      2002                                   2003                                 2004

Powerline services                       $    266,215              97.4 %     $     250,944                    84.3 %   $   313,705          87.9 %
Storm restoration services                      7,020               2.6              46,570                    15.7          42,992          12.1

      Total                              $    273,235             100.0 %     $     297,514                   100.0 %   $   356,697         100.0 %




2.    Significant Accounting Policies

     Principles of Consolidation
    The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany amounts
and transactions have been eliminated in consolidation.


     Use of Estimates
     The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.

                                                                        F-9
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




    Cash and Cash Equivalents
    The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash
equivalents.


    Investments
    The Company accounts for investments in equity securities in accordance with Statement of Financial Accounting Standards (“SFAS”)
No. 115, Accounting for Certain Investments in Debt and Equity Securities. Management determines the appropriate classification of its
investments in equity securities at the time of purchase and reevaluates such determinations at each balance sheet date.
     In accordance with SFAS No. 115, the Company has designated certain of its marketable securities as trading securities. Trading securities
are held for resale in anticipation of short-term market movements. Under SFAS No. 115, marketable securities classified as trading securities
are stated at the quoted market prices at each balance sheet date. Gains and losses (realized and unrealized) related to trading securities as well
as interest on such securities are included as financial income or expenses, as appropriate.


    Revenue Recognition
    Revenues from service arrangements are recognized when services are performed. The Company generates substantially all of its revenues
from service arrangements based on a price per hour worked or a price per unit of service. Revenue on hourly based services is determined
based on actual labor and equipment time completed and for materials billed to customers. Revenue on unit-based services is recognized as the
units are completed, and the price for each unit is determined under the service arrangement. For unit-based services any estimated loss is
recognized when the actual costs to complete each unit exceed original estimates. Costs typically include all direct labor and material costs and
those indirect costs related to performance, such as indirect labor, supplies, tools, repairs and depreciation costs. The Company immediately
recognizes the full amount of any estimated loss on these projects if estimated costs to complete the remaining units for the project exceed the
revenue to be received from such units. As of each of the periods presented, the Company did not have a material amount of loss accruals.
     Work completed and not billed represents revenues earned on hourly service arrangements and recognized in the period performed but not
billed until a subsequent period and work performed on certain unit-based service arrangements and not yet billed to customers in accordance
with individual terms regarding the timing of billing.


    Accounts Receivable
    All trade accounts receivable are due from customers located within the United States. Historically, due to the high credit quality of its
customers, the Company has not incurred material bad debts. The Company’s evaluation of the collectibility of its trade accounts receivable is
based on analysis of specific customers, historical experience and current economic trends. Accounts are written off after all means of
collectibility, including legal action, are exhausted. In some instances, a portion of the total revenues billed under the customer arrangement are
held by the customer as a “retainage” until the job is complete.


    Inventories
   Inventories consist of machine parts, supplies, small tools and other materials used in the ordinary course of business and are stated at the
lower of average cost or market.

                                                                       F-10
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




    Property and Equipment
     Property and equipment is stated at cost. Depreciation is calculated using cost, reduced by its estimated salvage value, using the
straight-line method over the estimated useful lives. Expenditures for repairs and maintenance are expensed as incurred.
     The Company reviews its long-lived assets for impairment when events or changes in business conditions indicate the carrying value of the
asset may not be recoverable, as required by SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Impairment on
assets classified as “held and used” is evaluated when the sum of the undiscounted estimated cash flows expected is less than the carrying value
of the assets. If such measurement indicates a possible impairment, the estimated fair value of the asset is compared to the net book value to
measure the impairment charge, if any. When the criteria for classifying assets as “held for sale” has been met, the assets are recorded at the
lower of carrying value or fair value, less selling costs.


    Goodwill
    In accordance with SFAS 141, Business Combinations , the Company identifies and values, separate from goodwill, those intangible assets,
such as customer arrangements, customer relationships, and non-compete agreements, that arise from contractual or other legal rights or that
are capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented, or exchanged. The fair value of
identified intangible assets is based upon an estimate of the future economic benefits expected to result from ownership, which represents the
amount at which it could be bought or sold in a current transaction between willing parties, that is, other than in a forced or liquidation sale. For
customers with whom we have an existing relationship prior to the date of the transaction, we utilize assumptions that a marketplace participant
would consider to estimate the fair value of customer relationships that an acquired entity had with pre-existing customers of the Company in
accordance with EITF 02-17, Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination .
     In accordance with SFAS No. 142, Goodwill and Other Intangible Assets , the Company tests goodwill and indefinite lived intangible
assets for impairment at least annually, or more frequently if events or circumstances exist which indicate impairment may exist. Examples of
such events or circumstances may include a significant change in business climate or a loss of a significant customer, among others. The
Company generally completes its annual analysis of the reporting unit on the first day of its fourth fiscal quarter. A two-step fair value-based
test is applied to assess goodwill for impairment. The first step compares the fair value of a reporting unit to its carrying amount, including
goodwill. If the carrying amount of the reporting unit exceeds its fair value, the second step is then performed. The second step compares the
carrying amount of the reporting unit’s goodwill to the fair value of the goodwill. If the fair value of the goodwill is less than the carrying
amount, an impairment loss would be recorded in income from operations. Intangible assets with definite lives are amortized over their
estimated useful lives and are also reviewed for impairment if events or changes in circumstances indicate that their carrying amount may not
be realizable.
    The Company makes certain estimates and assumptions in order to determine the fair value of net assets and liabilities, including, among
other things, an assessment of market conditions, projected cash flows, cost of capital and growth rates, which could significantly impact the
reported value of goodwill and other intangible assets. Estimating future cash flows requires significant judgment and the projections may vary
from cash flows eventually realized. When necessary, the Company utilizes third-party specialists in the preparation of valuations. The
valuations employ a combination of present value techniques to measure fair value, corroborated by comparisons to estimated market
multiples. These valuations are based on a discount rate determined by management to be consistent with industry discount rates and the risks
inherent in their current business model.

                                                                        F-11
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




    Insurance and Claim Accruals
     The Company is subject to workers’ compensation, vehicle and general liability, and health insurance claims. To mitigate a portion of these
risks, the Company maintains insurance for individual workers’ compensation, vehicle and general liability claims exceeding $500, and health
insurance claims of $225 per person on an annual basis. The amount of loss reserves and loss adjustment expenses is determined based on an
estimation process that uses information obtained from both company-specific and industry data, as well as general economic information. The
estimation process for insurance loss exposure requires management to monitor and evaluate the life cycle of claims. Using data obtained from
this monitoring and the Company’s assumptions about the emerging trends, management develops information about the size of ultimate
claims based on its historical experience, third-party actuarial estimates and other available market information. The most significant
assumptions used in the estimation process include determining the trend in loss costs, the expected consistency in the frequency and severity
of claims incurred but not yet reported to prior year claims, changes in the timing of the reporting of losses from the loss date to the notification
date, and expected costs to settle unpaid claims. Management also monitors the reasonableness of the judgments made in the prior year’s
estimation process (referred to as a hindsight analysis) and adjusts current year assumptions based on the hindsight analysis. Additionally,
beginning in 2003, the Company utilizes an actuary to evaluate open claims and estimate the ongoing development exposure.
    For the years ended June 30, 2002, 2003 and 2004, insurance and claims expense was $24,564, $24,291 and $29,718, respectively.


    Stock-Based Compensation
    In December 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 148, Accounting for Stock-Based
Compensation — Transition and Disclosure. SFAS No. 148 amends SFAS No. 123 to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure
provisions of SFAS No. 123 and Accounting Principles Board (“APB”) Opinion No. 28, Interim Financial Reporting, to require more
prominent disclosure in the summary of significant accounting policies about the method of accounting for the effects of an entity’s accounting
policy with respect to stock-based employee stock compensation and the effect of the method used on reported net income results.
     The Company has elected to continue to account for stock options granted to employees using the intrinsic value method as prescribed by
APB Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”), and thus recognizes no compensation expense for options
granted with exercise prices equal to the fair market value of the Company’s common stock on the date of grant. The pro forma information
regarding net income as required by SFAS No. 123 has been determined as if the Company had accounted for its employee stock options under
the fair value method of that Statement.
   The following table illustrates the assumptions for the Black-Scholes model used in determining the fair value of options granted to
employees for the years ended June 30, 2002, 2003 and 2004:
Dividend yield                                                                                                                             —
Risk-free interest rate                                                                                                                  5.02 %
Volatility                                                                                                                               0.45
Expected life                                                                                                                           6 yea
                                                                                                                                            rs
    For purposes of disclosures pursuant to SFAS No. 123, as amended by SFAS No. 148, the estimated fair value of the options is amortized
to expense over the options’ vesting period using the straight line

                                                                        F-12
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

method. The following table illustrates the effect on net income available to common stockholders if the Company had applied the fair value
recognition provisions of SFAS No. 123:
                                                                                                           Years Ended June 30,

                                                                                           2002                     2003               2004

Net income available to common stockholders, as reported                              $      10,512            $      23,901      $     16,528
Add: Stock-based employee compensation expense included in reported net
 income, net of related income tax effects                                                          88                     420                420
Less: Stock-based employee compensation expense determined under fair value
 based method of all awards, net of related income tax effects                                    (211 )               (1,010 )         (1,010 )
Pro forma net income available to common stockholders                                 $      10,389            $      23,311      $     15,938

Net income available to common stockholders per share — basic and diluted, as
 reported                                                                             $           0.18         $           0.98   $        0.68

Net income available to common stockholders per share — basic and diluted,
 pro forma                                                                            $           0.17         $           0.95   $        0.65




    Earnings Per Share
     Basic earnings per common share available to common stockholders is computed by dividing income available to common stockholders by
the weighted average number of common shares outstanding for the period. Diluted earnings per common share include the potential dilution
that could occur if securities or other contracts to issue common stock were exercised and has been computed after giving consideration to the
weighted average dilutive effect of the Company’s stock options, if any, using the treasury stock method.


    Deferred Loan Costs
    Deferred loan costs are being amortized over the term of the related debt using the effective interest method. Accumulated amortization
amounted to approximately $2,438 and $3,507 at June 30, 2003 and 2004, respectively. Amortization expense was $291, $1,401 and $1,965 for
the years ended June 30, 2002, 2003 and 2004.


    Income Taxes
     The liability method is used in accounting for income taxes as required by SFAS No. 109, Accounting for Income Taxes. Under this
method, deferred tax assets and liabilities are recognized for operating income and tax credit carryforwards and for the future tax consequences
attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in the results of operations in the period that includes the enactment date.


    Adoption of Recent Accounting Pronouncement
     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and
Equity. SFAS No. 150 requires issuers to classify as liabilities (or assets in some circumstances) three classes of freestanding financial
instruments that embody obligations

                                                                       F-13
                                          PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

for the issuer. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and is otherwise effective at the
beginning of the first interim period beginning after June 15, 2003.
    Effective July 1, 2003, the Company adopted SFAS No. 150. Upon the adoption of SFAS No. 150, the Company’s mandatorily redeemable
preferred stock (“Preferred Stock”) totaling $5,810 as of June 30, 2004 has been classified as a long-term liability in the Company’s
consolidated balance sheet as it is redeemable at a fixed and determinable date (April 18, 2022). Changes in the redemption value related to the
Preferred Stock, which previously had been recorded below net income as a charge in determining net income available to common
stockholders have been charged to interest expense in the accompanying consolidated statement of income since adoption of this standard on
July 1, 2003 and amounted to $381 during the year ended June 30, 2004. In accordance with SFAS No. 150, changes in the redemption value of
the Preferred Stock recorded prior to July 1, 2003 have not been reclassified to interest expense. Prior to the adoption of SFAS No. 150,
changes in the redemption value of the Preferred Stock were accounted for as a direct reduction to stockholders’ equity, and the Preferred Stock
was presented between liabilities and stockholders’ equity in the Company’s consolidated balance sheet.


     Reclassifications
    Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. These
reclassifications had no impact on net income or stockholders’ equity.


3.    Property and Equipment
     Property and equipment is comprised of the following:
                                                                                           Estimated
                                                                                            Useful                                   June 30,
                                                                                            Lives in
                                                                                             Years                       2003                       2004

Land                                                                                                —             $            2,995            $         3,315
Buildings                                                                                        15-39                        25,153                     25,295
Vehicles                                                                                          5-12                       177,154                    197,852
Machinery and equipment                                                                           3-19                        58,189                     72,187
Office equipment and furniture                                                                     3-7                         4,710                      5,142

Total                                                                                                                        268,201                    303,791
Less: accumulated depreciation                                                                                                96,713                    113,191

Property and equipment, net                                                                                       $          171,488            $       190,600


   Expenses for maintenance and repairs of property and equipment amounted to $26,171, $25,138, and $26,407 for the years ended June 30
2002, 2003 and 2004, respectively.


4.    Investments
     Investments consist of the following:
                                                                                                              June 30,

                                                                                          2003                                             2004

                                                                            Fair Value                 Cost                  Fair Value                  Cost

Trading securities                                                      $         3,108           $      3,863           $         4,268            $      4,558


     Trading securities are included in “Other assets” at fair value.

                                                                             F-14
                                          PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




5.    Debt
     Debt consists of the following:
                                                                                                                   June 30,

                                                                                                       2003                       2004

Revolving credit facility                                                                        $             —              $     13,000

$170,000 term loan                                                                               $       140,000              $    137,000
Less: current portion of long-term debt                                                                       —                         —

                                                                                                 $       140,000              $    137,000


     On April 18, 2002, in connection with the recapitalization discussed in Note 1, the Company entered into a secured bank credit agreement
(“Credit Agreement”) consisting of: (i) a $170,000 term facility (“Term Loan”) due April 18, 2010 bearing interest at a variable rate based on
the Company’s leverage ratio (LIBOR plus a margin of 3.25% and 3.25% at June 30, 2003 and 2004 respectively), with interest payable
monthly and principal payments payable quarterly beginning on September 30, 2002; and, (ii) a $40,000 revolving facility (“Revolver”), which
matures April 18, 2008 and bears interest at a variable rate based on the Company’s leverage ratio (LIBOR plus a margin of 2.75% and 2.75%
at June 30, 2003 and 2004, respectively), with interest on the outstanding balance payable monthly. The proceeds of the Term Loan were used
to pay the merger consideration to the former stockholders, to retire approximately $12,000 of the then outstanding 7.125% note due October 1,
2013, to pay transaction fees and expenses of approximately $12,100 and to provide the Company with working capital for operations.
   The amount available under the Revolver is reduced by letters of credit outstanding and was approximately $18,000 at June 30, 2004.
Outstanding letters of credit, primarily for insurance purposes, totaled $11,662 and $8,950 at June 30, 2003 and 2004, respectively.
    The Credit Agreement is secured by substantially all of the assets of the Company and contains a number of affirmative and restrictive
covenants including limitations on mergers, consolidations and dissolutions; sales of assets; investments and acquisitions; indebtedness and
liens; dividends and other restricted payments; and the maintenance of certain financial ratios.
    Pursuant to the terms of the Credit Agreement, the Company may prepay any loans under the agreement in whole or in part, without
penalty. The Company has made payments on the Term Loan in an aggregate amount of $15,000 and $3,000 in 2003 and 2004, respectively. In
accordance with the Credit Agreement, no scheduled payments are due on the Term Loan through December 31, 2009.
     Subsequent to year-end on July 1, 2004, the Company obtained a new secured bank credit agreement (“2004 Credit Agreement”) in
connection with the business acquisition discussed in Note 16. The 2004 Credit Agreement consists of: (i) a $300,000 term facility due July 1,
2012 bearing interest at a variable rate based on the Company’s leverage ratio at either LIBOR plus a margin of ranging from 2.00% to 2.25%
or the Alternate Base Rate, defined as the greater of the Prime Rate or the Federal Funds Effective Rate plus 0.50%, plus a margin ranging from
1.00% to 1.25%; interest is payable monthly and principal payments are payable quarterly beginning on September 30, 2004; and (ii) a $70,000
revolving facility which matures July 1, 2010 and bears interest at a variable rate based on the Company’s leverage ratio at either LIBOR plus a
margin ranging from 2.00% to 2.50% or the Alternate Base Rate, defined as the greater of the Prime Rate or the Federal Funds Effective Rate
plus 0.50%, plus a margin ranging from 1.00% to 1.50%; interest on the outstanding balance is payable monthly. The proceeds of the term loan
were used to pay the acquisition consideration discussed in Note 16, to retire approximately $137,000 of the outstanding amounts under the
Credit Agreement, to pay loan issuance costs of approximately $10,200 and acquisition transaction fees and expenses of approximately $4,200,
and to provide the Company with working capital for operations. Approximately $1,200 in loan costs were incurred during the year ended

                                                                     F-15
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

June 30, 2004 related to the 2004 Credit Agreement and were included in capitalized transaction costs and accrued as transaction liabilities in
the Company’s Consolidated Balance Sheets at June 30, 2004. In connection with the 2004 Credit Agreement, the Company wrote off the
remaining unamortized portion of deferred loan costs related to the previous Credit Agreement totaling approximately $5,583, which will be
recorded in the Company’s Statement of Income for the year ended June 30, 2005.
     Cash paid for interest expense totaled $2,341, $8,882 and $8,190 for the years ended June 30, 2002, 2003 and 2004, respectively.


6.    Mandatorily Redeemable Preferred Stock
     The Company’s Preferred Stock consists of Series A preferred stock issued in connection with the April 2002 Recapitalization Agreement
discussed in Note 1. At June 30, 2003 and 2004, 1,000,000 shares, no par value, were authorized, issued and outstanding. The holders of shares
of the Preferred Stock are not entitled to receive any dividends. The Preferred Stock is not puttable at the option of the holder or callable at the
option of the Company prior to the stated redemption date except upon certain limited events, such as certain change of control transactions or
the sale of substantially all of the Company’s assets. The Preferred Stock is mandatorily convertible upon an initial public offering at the
liquidation value at the date of the offering. The shares of the Preferred Stock, in accordance with the terms of the preferred stock agreement,
are mandatorily redeemable on April 18, 2022, the twentieth anniversary of their date of issue. The Preferred Stock was issued with a base
value of $45 per share and was initially recorded at a fair value of $17,500, as determined by the company.
     The liquidation value of a share of Preferred Stock will accrete at a rate equal to 7% per annum (such accretion will be calculated using
compounding on an annual basis on December 31 of each year and will equal the adjusted base value plus the aggregate of all accretion). The
base value will be subject to adjustment based on targeted levels of adjusted earnings before income taxes, depreciation and amortization
(“Adjusted EBITDA”) and average Adjusted EBITDA, as defined in the preferred stock agreement, beginning with the fiscal year ending
June 30, 2002 and ending with fiscal year ending June 30, 2006. It is the Company’s policy to recognize changes in the redemption value
immediately as they occur and adjust the carrying value of the preferred stock to equal the redemption value at the end of each reporting period
as if the end of the reporting period was the redemption date of the security. If average Adjusted EBITDA did not meet minimum levels
prescribed in the preferred stock agreement for the fiscal years ending June 30, 2002 and 2003, the adjusted base value would be zero. Because
of the uncertainty of redemption, the Company did not adjust the initial carrying amount until redemption was deemed to be probable. Based
upon sufficient levels of Adjusted EBITDA and average Adjusted EBITDA levels for fiscal years ending June 30, 2002 and 2003, the
Company determined that redemption was probable. Accordingly, the carrying value of the preferred stock was reduced to $5,429 at June 30,
2003, with the offsetting adjustment reflected as an increase in net income available to common stockholders of $12,071 in the Consolidated
Statements of Income.
    As discussed in Note 2, beginning in fiscal 2004, the Company adopted SFAS No. 150. The carrying value of the Preferred Stock was
$5,810 at June 30, 2004, with the $381 increase in carrying value reflected as interest expense for the fiscal year ended June 30, 2004.

                                                                       F-16
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




7.    Income Taxes
     Income taxes from continuing operations consisted of the following:
                                                                                                     Years Ended June 30,

                                                                                          2002               2003                    2004

Current                                                                               $     9,512        $      5,079            $      5,706
Deferred                                                                                        7               3,256                   5,570

     Total                                                                            $     9,519        $      8,335            $     11,276


    Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax liabilities
and assets are as follows:
                                                                                                                      June 30,

                                                                                                         2003                        2004

Deferred tax liabilities:
   Tax over book depreciation                                                                       $        42,876              $     48,885
   Other                                                                                                        828                       621

Total deferred tax liabilities                                                                               43,704                    49,506

Deferred tax assets:
   Deferred compensation                                                                                      1,527                     1,802
   Workers compensation                                                                                       3,200                     3,492
   Recapitalization expenses                                                                                  1,214                       894
   Accrued vacation                                                                                           1,401                     1,569
   Other                                                                                                        587                       404

Total deferred tax assets                                                                                     7,929                     8,161

Net deferred tax liabilities                                                                        $        35,775              $     41,345


     The balance sheet classification of deferred income taxes is as follows:
                                                                                                                      June 30,

                                                                                                         2003                        2004

Current assets                                                                                      $         4,129              $      2,635
Non-current liabilities                                                                                      39,904                    43,980

Net deferred tax liabilities                                                                        $        35,775              $     41,345


                                                                       F-17
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    The differences between the income tax expense and the amounts computed by applying the statutory federal income tax rates to earnings
before income taxes are as follows:
                                                               2002

                                                                                                    2003

                                                                                            Years Ended June 30,

                                                                                                                                           2004

Computed tax at federal statutory rate               $    7,124          35.0 %         $      7,275             35.0 %         $    9,847             35.0 %
State income taxes, net of federal benefit                1,025           5.0 %                  890              4.3 %              1,316              4.7 %
Recapitalization expenses                                 1,591           7.8 %                  129              0.6 %                 —               0.0 %
Permanent differences                                       193           0.9 %                  221              1.1 %                 96              0.3 %
Credits and other                                                             )                                       )
                                                           (414 )        (2.1 %                 (180 )           (0.9 %                17               0.1 %
Net income tax expense                               $    9,519          46.8 %         $      8,335             40.1 %         $   11,276             40.1 %


     Cash paid for income taxes totaled $9,595, $5,049 and $2,796 for the years ended June 30, 2002, 2003 and 2004, respectively.


8.    Employee Benefit Plans
    The Company sponsors a defined contribution plan that covers all full-time employees of the Company. Contributions relating to the
defined contribution plan will be made based upon the plan’s provisions. In November 2003, the Company amended the defined contribution
plan whereby the Company’s matching contributions were suspended. In July 2004, the Company’s matching contributions were resumed.
Additional amounts may be contributed at the option of the Company’s board of directors. The Company contributions were $1,327, $1,425
and $572 for the years ended June 30, 2002, 2003 and 2004, respectively.


9.    Stockholders’ Equity

     Earnings Per Share
    The following table sets forth a reconciliation of the numerators and denominators in computing earnings per share available to common
stockholders in accordance with SFAS No. 128.
                                                                                                         Years Ended June 30,

                                                                                 2002                              2003                       2004

Income from continuing operations                                            $     10,836                   $        12,451            $          16,858
Decrease in redemption value of Preferred Stock                                        —                             12,071                           —
Income from continuing operations available to common stockholders                 10,836                            24,522                       16,858
Loss from discontinued operations, net                                               (324 )                            (621 )                       (330 )

Net income available to common stockholders                                  $     10,512                   $        23,901            $          16,528

Weighted average basic and diluted common shares outstanding:                      59,633                            24,437                       24,437

                                                                      F-18
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     Common stock options listed below for the years ended June 30, 2002, 2003 and 2004 were not included in the computation of diluted
earnings per share. Common stock options issued under the Stock Option Plan B include contingencies which have not been satisfied at the end
of the periods presented, and therefore are not exercisable and are not included in the fully diluted computation in accordance with
SFAS No. 128. Common stock options under Plan A are not included in the computation for the years ended June 30, 2002, 2003 and 2004 as
the weighted-average exercise price and fair value are equal such that the effect on the computation is neutral.
                                                                                                                 June 30,

                                                                                                 2002               2003              2004

Common stock option Plan B                                                                           770                776               776
Common stock option Plan A                                                                         1,796              1,812             1,812

                                                                                                   2,566              2,588             2,588




    LGB Pike Membership Units
   Certain members of the Company’s management were granted profit participation units at LGB Pike in connection with the April 2002
Recapitalization Agreement. The fair value of the units was $1,260 and generally vest over three years, which is being amortized as
compensation expense.


    Stock Option Plans
     Effective April 18, 2002, the Company implemented the 2002 Stock Option Plan A (“Stock Plan A”). Stock Plan A authorizes the Board of
Directors to grant nonqualified stock options to employees, officers, and directors of the Company. As of June 30, 2003 and 2004, there were
1,901 shares of common stock reserved for issuance, of which 89 were available for grant. Under Stock Plan A, stock options must be granted
at a price not less than the fair market value at the date of grant. Options granted under the Stock Plan A have a term of up to ten years. Stock
options issued under Stock Plan A generally, vest over a four-year period beginning on the date of the grant.
     Effective April 18, 2002, the Company implemented the 2002 Stock Option Plan B (“Stock Plan B”). Stock Plan B authorizes the Board of
Directors to grant nonqualified stock options to employees, officers, and directors of the Company. As of June 30, 2003 and 2004, there were
815 shares of common stock reserved for issuance, of which 38 were available for grant. Under Stock Plan B, stock options must be granted at
a price not less than the fair market value at the date of grant. Options granted under the Stock Plan B have a term of up to ten years. Stock
options issued under Stock Plan B generally, vest over a four-year period beginning on the date of the grant. Exercise of stock options issued
under Stock Plan B is contingent upon certain specified events occurring as described in the plan agreement, primarily regarding one of the
Company’s owners liquidating its position and receiving a stated return on its original investment. Because of this contingency, the Stock
Plan B options are considered a target stock price award, and the Company has appropriately factored in the contingency in determining a value
for the options in accordance with SFAS No. 123.

                                                                      F-19
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    A summary of the Company’s stock option plans at June 30, 2002, 2003 and 2004 and changes during each of the years then ended is
presented in the table below:
                                                                                                                                  Weighted
                                                                                                                                  Average
                                                                Options            Options                   Exercise             Exercise
                                                                Available         Outstanding                 Price                Price

Balance at July 1, 2001                                                    —                 —           $          —         $          —
   Exercised                                                               —                 —                      —                    —
   Granted                                                                 —              2,566                   3.80                 3.80
Balance at June 30, 2002                                                  149             2,566                   3.80                 3.80
   Exercised                                                               —                 —                      —                    —
   Cancelled                                                               —               (231 )                 3.80                 3.80
   Granted                                                                 —                253                   3.80                 3.80

Balance at June 30, 2003                                                  127             2,588                   3.80                 3.80
   Exercised                                                               —                 —                      —                    —
   Granted                                                                 —                 —                      —                    —

Balance at June 30, 2004                                                  127             2,588          $        3.80        $        3.80


   As of June 30, 2003 and 2004, respectively, options to purchase 453 and 906 shares of common stock outstanding were exercisable. The
weighted average remaining contractual life of options outstanding at June 30, 2003 and 2004 was 8.8 and 7.8 years, respectively.


    Fair Value of Option Grants
    The fair value of the common stock underlying the options granted to employees in April 2002 was determined to be $3.80 per share. This
value was determined under the market approach contemporaneously with the April 2002 Recapitalization Agreement as discussed in Note 1.
This value was the same as the price at which Lindsay Goldberg & Bessemer purchased shares pursuant to the April 2002 Recapitalization
Agreement, which was the result of an arms’-length negotiation with the Company.
    The fair value of the common stock underlying the options granted to employees in April 2003 was determined to be $3.80 per share. The
board of directors evaluated a number of factors and determined that there was no change in the fair value of the common stock since the April
2002 recapitalization. These factors included the following:

    • the price per share paid in April 2002 recapitalization for the common stock in an arms’-length transaction;

    • the trailing revenues, gross profit, cost structure and earnings;

    • the total amount of debt;

    • the earnings before interest, taxes depreciation and amortization (EBITDA) from continuing operations, as adjusted;

    • the management team; and

    • the prospects for continuing and improving the above factors.

                                                                          F-20
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




10.     Leases
    The Company leases various technology hardware, real estate used as satellite offices and storage facilities, and an airplane under operating
leases with terms ranging from one to ten years. The Company also rents various vehicles and equipment on short-term, month-to-month
leases. At June 30, 2004, the future minimum lease payments under the operating leases are as follows:
2005                                                                                                                              $       1,122
2006                                                                                                                                        843
2007                                                                                                                                        707
2008                                                                                                                                        557
2009                                                                                                                                        525
Thereafter                                                                                                                                2,608

                                                                                                                                  $       6,362


     Rent expense related to operating leases was approximately $86, $289 and $845 for the years ended June 30, 2002, 2003 and 2004,
respectively. The Company does not have any leases that are classified as capital leases for any of the periods represented by these financial
statements.


11.     Discontinued Operations
    During the year ended June 30, 2004, the Company discontinued the operations of its industrial division due to decreasing market share
and poor profitability. The assets disposed of included approximately $640 of equipment, net of accumulated depreciation of $494. The results
of operations and statement of financial position have been reported as a discontinued operation for the year ended June 30, 2004 and for all
prior years presented herein.
    The following summarizes the operating results from discontinued operations for the industrial division in the Consolidated Statements of
Income:
                                                                                                          Years Ended June 30,

                                                                                              2002                2003                    2004

Revenue                                                                                   $     9,458        $        8,379           $     1,933

Operating loss                                                                                   (523 )              (1,009 )                (544 )
Income tax benefit                                                                                199                   388                   214

Loss from discontinued operations                                                         $      (324 )      $           (621 )       $      (330 )




12.     Financial Instruments

      Concentrations of Credit Risk
    Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of accounts receivable. The
Company had accounts receivable from one customer of $6,254 and $6,048 at June 30, 2003 and 2004. The Company had sales to the same
customer, which comprised 26%, 26% and 20% of the Company’s consolidated net sales for the years ended June 30, 2002, 2003 and 2004.
The Company performs periodic credit evaluations of its customers’ financial condition, but generally does not require collateral. Credit losses
have generally been within management’s estimates. At June 30, 2003 and 2004, the Company had cash in excess of federally insured limits
with a financial institution of approximately $3,500 and $4,800, respectively.

                                                                      F-21
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




      Off-Balance Sheet Risk
   At June 30, 2003 and 2004, the Company had letters of credit outstanding totaling $11,622 and $8,950, respectively as required by its
workers’ compensation, vehicle liability insurance providers and to the surety bond holder.


      Fair Value of Financial Instruments
     The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:
i) investments classified as trading securities are reported in the consolidated balance sheet at fair market value; ii) accounts receivable and
accounts payable carrying amounts reported in the balance sheet approximate their fair value; iii) long and short-term debt carrying amounts
approximate their fair value due to the market-determined, variable interest rates; and iv) Preferred Stock is stated in accordance with
SFAS No. 150, see Note 6.


      Derivatives
     During the year ended June 30, 2003, the Company entered into interest rate swap agreements with two banks to manage its interest rate
risk. In accordance with the provisions of SFAS No. 133, Accounting for Derivatives and Hedging Activities, these agreements did not meet the
criteria to qualify for hedge accounting and are marked to market and are included in other current liabilities on the balance sheet at fair value
in the amount of $1,526 and $102 at June 30, 2003 and 2004, respectively. The Company recognized a gain (loss) on the change in fair value of
the derivatives of $(1,526) and $1,424, included in interest expense in the income statement, for the years ended June 30, 2003 and 2004,
respectively.


13.     Related Party Transactions and Agreements

      Stockholders Agreement
    The Company, LGB Pike and certain other stockholders are parties to a stockholders agreement. The stockholders agreement covers
matters of restrictions on transfers of common stock, corporate governance and registration rights, as described below.

        Restrictions on Transfer of Shares. Under the terms of the stockholders agreement, each stockholder agreed not to transfer or sell any
        shares of common stock unless such transfer or sale is pursuant to an effective registration statement or unless consented to by the
        company.

        Corporate Governance. The stockholders agreement provides that the current President and Chief Executive Officer (“CEO”) will have
        the right to occupy one seat on the board of directors so long as he is the CEO and, controls at least 1,322 shares. So long as the CEO
        has the right to a seat on the board of directors, then LGB Pike and any affiliate of LGB Pike, agrees to vote in favor of the election of
        the CEO.

        Registration Rights. The stockholders agreement provides that LGB Pike and its affiliates and the other stockholders party to the
        stockholders agreement have registration rights with respect to its stock. LGB Pike and its affiliates have the right to require the
        Company to effect additional registration statements, or “demand registrations.” In addition to its rights with respect to demand
        registrations, each of LGB Pike and its affiliates and the other stockholders party to the stockholders agreement have “piggyback”
        registration rights. If the Company proposes to register any of its securities, other than a registration in connection with an employee
        benefit or similar plan or an exchange offer, the Company will be required to give each party to the stockholders agreement the
        opportunity to participate in such registration.

                                                                       F-22
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




      Management Agreement
    On April 18, 2002, Pike Electric entered into a management advisory services agreement with Goldberg Lindsay & Co. LLC, an affiliate of
Lindsay Goldberg & Bessemer, for ongoing management advisory services. The agreement was amended and restated on July 1, 2004
increasing the management fee to $375 per quarter from $250 per quarter. Pursuant to the agreement, the Company also agreed to indemnify
Goldberg Lindsay & Co. LLC and its members, partners and affiliates, and their respective directors, officers, agents and employees against
losses arising out of or in connection with the agreement, any activities contemplated by the agreement or any services rendered under the
agreement.


14.     Business Acquisitions
    On September 26, 2003, the Company completed the purchase of the assets of Eden Electric, Inc., an electrical contractor based in
Springfield, Tennessee. The acquisition was accounted for as a purchase in accordance with SFAS No. 141, Business Combinations . The
aggregate purchase price was $6,994 of which $3,000 was allocated to goodwill. The net assets acquired consisted primarily of equipment. The
purchase price was made in cash from existing cash balances. The pro forma results of operations taking into account this acquisition, as if it
occurred and at the beginning of the period, are not materially different from the historical results presented.


15.     Commitments and Contingencies
Litigation
    The Company is from time to time party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of
business. These actions typically seek, among other things, compensation for alleged personal injury, workers’ compensation, employment
discrimination, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With
respect to all such lawsuits, claims and proceedings, the Company accrues reserves when it is probable that a liability has been incurred and the
amount of loss can be reasonably estimated. The Company does not believe that any of these proceedings, separately or in the aggregate, would
be expected to have a material adverse effect on the Company’s results of operations or financial position.

Performance Bonds
    In certain circumstances the Company is required to provide performance bonds in connection with its contractual commitments. The
Company has indemnified the surety for any expenses that may be paid out under these performance bonds. At June 30, 2004, the Company
had an outstanding letter of credit of $3,000 to provide collateral to the surety. At June 30, 2004 the total amount of outstanding performance
bonds was approximately $22,800.


16.     Subsequent Event

      Acquisition of Red Simpson
    On July 1, 2004, the Company acquired all of the outstanding stock of Red Simpson Inc., an electric transmission and distribution service
provider headquartered in Alexandria, Louisiana. The total cash purchase price was approximately $194,000, net of cash acquired of
approximately $2,200. The acquisition was financed through the issuance of $71,000 in new common equity to some of our existing
stockholders and approximately $123,000 of new indebtedness under the credit agreement, which was refinanced in connection with the
transaction, see Note 6. The acquisition was accounted for as a purchase in accordance with SFAS No. 141, Business Combinations. The
Company is in the process of evaluating the valuation of the assets acquired and related allocation of the purchase price. In addition, Goldberg

                                                                      F-23
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Lindsay & Co. LLC received a one-time transaction fee for the structuring of the transactions and the related financing of $3,125.


17.    Reincorporation
    On July 1, 2005, the Company’s Board of Directors approved the reincorporation and merger of Pike Holdings, Inc., a North Carolina
corporation, with and into a newly created wholly owned subsidiary, Pike Electric Corporation, which was formed in Delaware for the sole
purpose of effecting the reincorporation. Each share of Pike Holdings, Inc. common stock was converted to 14.76 shares of Pike Electric
Corporation common stock with a par value of $0.001 per share. Pike Electric Corporation has 100,000 authorized shares. All common stock
and per share amounts for all periods presented in the accompanying financial statements have been restated to reflect the effect of this
conversion as a result of the reincorporation.

                                                                     F-24
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                          CONDENSED CONSOLIDATED BALANCE SHEETS
                                                        (Unaudited)
                                                       (in thousands)
                                                                                                               March 31,

                                                                                                      2004                     2005

                                                                ASSETS
Current assets:
   Cash and cash equivalents                                                                    $            37            $         73
   Accounts receivable, net                                                                              29,028                  68,830
   Work completed not billed                                                                             28,882                  46,276
   Inventories                                                                                            5,061                   7,556
   Prepaid and other                                                                                      4,674                   4,085
   Deferred income taxes                                                                                  4,129                  17,368

           Total current assets                                                                          71,811                 144,188
Property and equipment, net                                                                             191,116                 282,417
   Goodwill                                                                                               3,000                  89,640
   Other intangibles, net                                                                                    —                   56,549
   Deferred income taxes                                                                                     —                    1,434
   Deferred loan costs, net                                                                               6,074                  10,205
   Other assets                                                                                           4,639                   1,923

           Total assets                                                                         $       276,640            $    586,356



                                           LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
   Accounts payable                                                             $                         6,146            $     15,556
   Accrued compensation                                                                                  11,620                  15,095
   Accrued expenses and other                                                                             3,167                   7,918
   Deferred compensation                                                                                    110                  14,967
   Current portion of insurance claims accruals                                                           2,708                   3,905
   Revolving credit facility                                                                             13,000                      —

            Total current liabilities                                                                    36,751                  57,441
    Long-term debt                                                                                      137,000                 408,000
    Deferred income taxes                                                                                46,570                  90,168
    Insurance and claim accruals, net of current portion                                                  3,656                  14,421
    Mandatorily redeemable preferred stock                                                                5,712                      —
    Deferred compensation, net of current portion                                                         3,551                   1,858
    Other liabilities                                                                                        75                      60
Commitments and contingencies
Stockholders’ equity:
    Common stock, par value $0.001 per share; 100,000 shares authorized; 24,437 and
      21,484 shares issued and outstanding at March 31, 2004 and 2005, respectively                       1,656                   6,415
    Additional paid-in capital                                                                              823                     105
    Unearned compensation—restricted stock                                                                   —                     (952 )
    Retained earnings                                                                                    40,846                   8,840

           Total stockholders’ equity                                                                    43,325                  14,408
           Total liabilities and stockholders’ equity                                           $       276,640            $    586,356


                      The accompanying notes are an integral part of these condensed consolidated financial statements

                                                                   F-25
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                           (Unaudited)
                                            (in thousands, except per share amounts)
                                                                                                              Nine Months Ended
                                                                                                                  March 31,

                                                                                                       2004                       2005

Revenues                                                                                         $       263,058            $      524,247
   Cost of operations                                                                                    223,520                   428,073

   Gross profit                                                                                           39,538                    96,174
General and administrative expenses                                                                       14,050                    33,506
Loss on sale of property and equipment                                                                       105                       256
        Income from operations                                                                            25,383                    62,412
Other expense:
   Interest expense                                                                                           6,754                 34,265
   Other, net                                                                                                   (17 )                  (94 )

       Total other expense                                                                                 6,737                    34,171
Income before income taxes from continuing operations                                                     18,646                    28,241
Income tax expense                                                                                         7,588                    17,429

Income from continuing operations                                                                         11,058                    10,812
Loss from discontinued operations, net of taxes                                                             (384 )                      —

Net income                                                                                       $        10,674            $       10,812

Basic earnings per share:
    Income from continuing operations                                                            $             0.45         $            0.36
    Loss from discontinued operations, net                                                                    (0.01 )                      —
    Net income per share                                                                         $             0.44         $            0.36

Weighted average basic common shares outstanding:                                                         24,437                    29,753

Diluted earnings per share:
    Income from continuing operations                                                            $             0.45         $            0.36
    Loss from discontinued operations, net                                                                    (0.01 )                      —

    Net income per share                                                                         $             0.44         $            0.36

Weighted average diluted common shares outstanding:                                                       24,437                    30,196


                        The accompanying notes are an integral part of these condensed consolidated financial statements

                                                                     F-26
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (Unaudited)
                                                    (in thousands)
                                                                                                          Nine Months Ended
                                                                                                              March 31,

                                                                                                   2004                       2005

Cash flows from operating activities:
   Income from continuing operations                                                          $        11,058             $          10,812
   Adjustments to reconcile net income from continuing operations to net cash provided
     by operating activities from continuing operations:
        Depreciation                                                                                   14,342                        23,939
        Amortization                                                                                       —                          4,261
        Non-cash interest expense                                                                         661                        21,618
        Provision for deferred income taxes                                                             6,666                        10,411
        Unrealized (loss) gain on investments                                                             411                          (566 )
        Loss on sale of property and equipment                                                             41                           256
        Equity compensation expense                                                                       315                         1,597
        Changes in assets and liabilities arising from continuing operations:
           Accounts receivable and work completed not billed                                          (13,299 )                   (7,939 )
           Inventories, prepaids and other                                                             (2,224 )                   (1,670 )
           Deferred compensation                                                                          527                    (12,123 )
           Other assets                                                                                (1,096 )                    1,209
           Insurance and claim accruals                                                                   263                     (1,530 )
           Accounts payable and other                                                                   4,098                        442

               Net cash provided by operating activities from continuing operations                    21,763                        50,717
Cash flows from investing activities from continuing operations:
   Purchases of property and equipment                                                                (30,638 )                 (40,769 )
   Business acquisitions, net of cash acquired                                                         (6,994 )                (194,222 )
   Proceeds from sale of property and equipment                                                           621                     1,598
        Net cash used in investing activities from continuing operations                              (37,011 )                (233,393 )
Cash flows from financing activities of continuing operations:
   Principal payments on long-term debt                                                                (3,000 )                (179,000 )
   Proceeds from long-term debt                                                                            —                    450,000
   Borrowings (payments) on revolving credit facility, net                                             13,000                   (13,000 )
   Redemption of mandatorily redeemable preferred stock                                                    —                    (20,000 )
   Repurchase of stock                                                                                     —                   (123,283 )
   Proceeds from sale of common stock                                                                      —                     76,000
   Deferred loan costs                                                                                     —                    (12,254 )
   Stock issuance cost                                                                                     —                       (651 )

               Net cash provided by financing activities from continuing operations                    10,000                   177,812

               Net cash provided by discontinued operations                                             1,648                            —
               Net decrease in cash and cash equivalents                                               (3,600 )                      (4,864 )
Cash and cash equivalents beginning of period                                                           3,637                         4,937
Cash and cash equivalents end of period                                                       $            37             $              73


                       The accompanying notes are an integral part of these condensed consolidated financial statements

                                                                      F-27
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                                         (Unaudited)
                                          (in thousands, except per share amounts)


1.    Basis of Presentation
     The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with the requirements
of Article 10 of Regulation S-X included in the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain
information and footnote disclosures, normally included in annual financial statements prepared in accordance with accounting principles
generally accepted in the United States, have been condensed or omitted pursuant to those rules and regulations. Pike Electric Corporation (the
“Company”) believes that the disclosures made are adequate to make the information presented not misleading. In the opinion of management,
all adjustments, consisting only of normal recurring adjustments, necessary to fairly present the financial position, results of operations and
cash flows with respect to the interim consolidated financial statements have been included. Operating results for the nine months ended
March 31, 2004 and 2005 are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed
consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto
for the fiscal years ended June 30, 2003 and 2004. Certain amounts in the accompanying statements have been reclassified for comparative
purposes.


2.    Significant Accounting Policies

     Stock Based Compensation
     In December 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”)
No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure. SFAS No. 148 amends SFAS No. 123 to provide alternative
methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition,
SFAS No. 148 amends the disclosure provisions of SFAS No. 123 and Accounting Principles Board (“APB”) Opinion No. 28, Interim
Financial Reporting, to require more prominent disclosure in the summary of significant accounting policies about the method of accounting
for the effects of an entity’s accounting policy with respect to stock-based employee stock compensation and the effect of the method used on
reported net loss results.
     The Company has elected to continue to account for stock options granted to employees using the intrinsic value method as prescribed by
APB Opinion No. 25, Accounting for Stock Issued to Employees, and thus recognizes no compensation expense for options granted with
exercise prices equal to the fair market value of the Company’s common stock on the date of grant. The pro forma information regarding pro
forma net income as required by SFAS No. 123 has been determined as if the Company had accounted for its employee stock options under the
fair value method of that Statement.

                                                                     F-28
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    For purposes of disclosures pursuant to SFAS No. 123, as amended by SFAS No. 148, the estimated fair value of the options is amortized
to expense over the options’ vesting period. The following table illustrates the effect on net income available to common stockholders if the
Company had applied the fair value recognition provisions of SFAS No. 123:
                                                                                                                      Nine Months Ended
                                                                                                                          March 31,

                                                                                                               2004                       2005

Net income, as reported                                                                                   $      10,674            $        10,812
Add: Stock-based employee compensation expense included in reported net income, net of
 related income tax effects                                                                                           315                    2,985
Less: Stock-based employee compensation expense determined under fair value based method of
 all awards, net of related income tax effects                                                                        (757 )                (1,646 )

Pro forma net income                                                                                      $      10,232            $        12,151

Net income per share — diluted, as reported                                                               $           0.44         $             0.36

Net income per share — diluted, pro forma                                                                 $           0.42         $             0.40




    Valuation of Goodwill and Intangible Assets
     As a result of the Company’s acquisition of Red Simpson, Inc. (“Red Simpson”), the Company acquired certain intangible assets including
customer arrangements, customer relationships and non-compete agreements totaling $60,810, which are being amortized over their estimated
useful lives ranging from 3 to 30 years, see Note 3. In accordance with SFAS 141, Business Combinations , the Company identifies and values,
separate from goodwill, intangible assets, such as customer arrangements, customer relationships, and non-compete agreements, that arise from
contractual or other legal rights or that are capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented,
or exchanged. The fair value of identified intangible assets is based upon an estimate of the future economic benefits expected to result from
ownership, which represents the amount at which it could be bought or sold in a current transaction between willing parties, that is, other than
in a forced or liquidation sale. For customers with whom we have an existing relationship prior to the date of the transaction, we utilize
assumptions that a marketplace participant would consider to estimate the fair value of customer relationships that an acquired entity had with
pre-existing customers of the Company in accordance with EITF 02-17, Recognition of Customer Relationship Intangible Assets Acquired in a
Business Combination.
     In accordance with SFAS No. 142, Goodwill and Other Intangible Assets , the Company tests goodwill and indefinite lived intangible
assets for impairment at least annually, or more frequently if events or circumstances exist which indicate impairment may exist. Examples of
such events or circumstances may include a significant change in business climate or a loss of significant customers, among others. The
Company generally completes its annual analysis of the reporting unit on the first day of its fourth fiscal quarter. A two-step fair value-based
test is applied to assess goodwill for impairment. The first step compares the fair value of a reporting unit to its carrying amount, including
goodwill. If the carrying amount of the reporting unit exceeds its fair value, the second step is then performed. The second step compares the
carrying amount of the reporting unit’s goodwill to the fair value of the goodwill. If the fair value of the goodwill is less than the carrying
amount, an impairment loss would be recorded in income from operations. Intangible assets with definite lives are amortized over their
estimated useful lives and are also reviewed for impairment if events or changes in circumstances indicate that their carrying amount may not
be realizable.

                                                                        F-29
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    The Company makes certain estimates and assumptions in order to determine the fair value of net assets and liabilities, including, among
other things, an assessment of market conditions, projected cash flows, cost of capital and growth rates, which could significantly impact the
reported value of goodwill and other intangible assets. Estimating future cash flows requires significant judgment and the projections may vary
from cash flows eventually realized. When necessary, the Company utilizes third-party specialists in the preparation of valuations. The
valuations employ a combination of present value techniques to measure fair value, corroborated by comparisons to estimated market
multiples. These valuations are based on a discount rate determined by management to be consistent with industry discount rates and the risks
inherent in their current business model.


    Recent Accounting Pronouncements
    On December 16, 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment, which is a revision of SFAS No. 123,
Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and
amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in
SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be
recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.
    SFAS No. 123(R) must be adopted no later than July 1, 2005. Early adoption will be permitted in periods in which financial statements
have not yet been issued. The Company expects to adopt SFAS No. 123(R) on July 1, 2005. SFAS No. 123(R) permits public companies to
adopt its requirements using one of two methods:

        (1) A “modified prospective” method in which compensation cost is recognized beginning with the effective date (a) based on the
    requirements of SFAS No. 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of
    SFAS No. 123 for all awards granted to employees prior to the effective date of SFAS No. 123(R) that remain unvested on the effective
    date.

         (2) A “modified retrospective” method which includes the requirements of the modified prospective method described above, but also
    permits entities to restate based on the amounts previously recognized under SFAS No. 123 for purposes of pro forma disclosures either
    (a) all prior periods presented or (b) prior interim periods of the year of adoption.
    The Company plans to adopt SFAS No. 123(R) using the modified prospective method. As permitted by SFAS No. 123(R), the Company
currently accounts for share-based payments to employees using intrinsic value method prescribed in APB Opinion 25 and, as such, generally
recognizes no compensation cost for employee stock options. Accordingly, the adoption of SFAS No. 123(R)’s fair value method will have a
significant impact on our result of operations, although it will have no impact on the Company’s overall financial position. The impact of
adoption of SFAS No. 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future.
However, had the Company adopted SFAS No. 123(R) in prior periods, the impact of that standard would have approximated the impact of
SFAS No. 123 as described in the disclosure of pro forma net income and earnings per share in Note 2 to our consolidated financial statements.
SFAS No. 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash
flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and
increase net financing cash flows in periods after adoption. While the company cannot estimate what those amounts will be in the future
(because they depend on, among other things, when employees exercise stock options), no amount of operating cash flows have been
recognized in prior periods for such excess tax deductions.

                                                                     F-30
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)




3.    Acquisition
     On July 1, 2004, the Company acquired all of the outstanding stock of Red Simpson, Inc. (“Red Simpson”), an electric transmission and
distribution services provider headquartered in Alexandria, Louisiana prior to the acquisition. Red Simpson’s service territory was contiguous
with the Company’s. The acquisition diversified the Company’s customer base by providing several new customers. The total cash purchase
price was approximately $194,222 net of cash acquired of approximately $2,200. The acquisition was financed through the issuance of
approximately $71,000 in new common equity to certain of our existing stockholders and approximately $123,222 of new indebtedness under
the Company’s secured bank credit agreement, which was refinanced in connection with the transaction, see Note 8. The acquisition was
accounted for as a purchase in accordance with SFAS No. 141, Business Combinations.
    In connection with the continuing integration, the Company is still in the process of determining the value of certain tangible assets and
evaluating estimates of certain liabilities that could affect the allocation of the purchase price through an adjustment to the valuation of
goodwill, and as a result, the purchase price is still preliminary. The preliminary purchase price has initially been allocated to the fair value of
assets acquired and liabilities assumed as follows:
Accounts receivable                                                                                                          $         35,042
Work completed not billed                                                                                                               7,027
Other current assets                                                                                                                   18,257
Property, plant & equipment                                                                                                            76,840
Goodwill                                                                                                                               86,640
Identified intangible assets                                                                                                           60,810
Other non-current assets                                                                                                                1,385
Accounts payable and accrued expenses                                                                                                 (12,933 )
Insurance payable                                                                                                                     (14,121 )
Deferred compensation                                                                                                                 (28,948 )
Deferred income taxes                                                                                                                 (35,777 )

Total net assets acquired                                                                                                    $        194,222


    Identified intangible assets consisting of customer relationships, non-compete agreements and customer arrangements have been valued at
approximately $43,200, $10,600 and $7,000, respectively and will be amortized over their estimated useful lives of 30, 3 and 9 years,
respectively.


     Pro Forma Financial Information
   The following table provides pro forma unaudited consolidated statements of operations data for the period from July 1, 2003 to March 31,
2004 as if the acquisition of Red Simpson had occurred as of July 1, 2003:
                                                                                                                           Pro Forma
                                                                                                                          For the Nine
                                                                                                                          Months Ended
                                                                                                                           March 31,
                                                                                                                              2004

Revenues                                                                                                              $            406,883
Income from continuing operations                                                                                     $             14,427
Weighted average basic and diluted common shares outstanding                                                                        35,643
Basic and diluted net income from continuing operations per share                                                     $               0.40

                                                                        F-31
                                             PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     The historical results of operations for the nine months ended March 31, 2004 have been adjusted to reflect the pro forma effects of the
acquisition. The principal adjustments include (1) the effects on amortization expense (included in cost of operations and general and
administrative expenses) resulting from establishing identified intangible assets and corresponding amortization; (2) the effect of depreciation
expense as a result of a change in value of assets, useful lives and salvage values; (3) deferred compensation charges related to the acquisition;
(4) additional interest expense related to additional debt used to finance the acquisition; and (5) the additional common shares issued to finance
the acquisition. The above pro forma information is not necessarily indicative of the results of operations that would have occurred had the
July 1, 2004 acquisition been made as of July 1, 2003, or of results that may occur in the future.


4.    Recapitalization
     In December 2004, the Company underwent a recapitalization whereby it borrowed a new $150,000 term loan under its existing credit
facility, $20,000 of which was used to redeem all of the outstanding shares of its Series A preferred stock in January 2005, $123,500 of which
was used to repurchase 999,832 shares of its common stock and $4,200 of which was used to repurchase options to purchase 80,351 shares of
common stock. The repurchased stock options were from members of management and the Company incurred compensation expense of
approximately $4,200 during the nine month period ended March 31, 2005. In addition, a charge of approximately $14,000 was incurred in the
nine month period ended March 31, 2005 related to the redemption of the Series A preferred stock, which is included in interest expense. The
Company negotiated the redemption value of the Series A preferred stock with the Series A preferred stockholders in an arms’-length
transaction. This transaction allowed the Company to simplify its capital structure and eliminate the effect on future earnings from annual
adjustments to the redemption value of the preferred stock. The preferred stock agreement provided for increases in the redemption value based
on the future performance of the Company plus a 7% accretion. The original valuation of the preferred stock was $17.5 million, as determined
by the company. Based on that original valuation and the potential negative impact on the net income due to annual adjustments to the
redemption value, the Company determined that the $20 million redemption value was fair and reasonable.


5.    Stockholders’ Equity

     Earnings Per Share
    The following table sets forth a reconciliation of the numerators and denominators in computing earnings per common share in accordance
with SFAS No. 128.
                                                                                                                    Nine Months Ended
                                                                                                                        March 31,

                                                                                                             2004                        2005

                                                                                                                       (Unaudited)
Net income                                                                                              $      10,674                $     10,812
Weighted average number of common shares outstanding                                                           24,437                      29,753

Basic earnings per common share                                                                         $           0.44             $          0.36

Effect of potentially dilutive securities:
    Common stock options                                                                                             —                          443

     Weighted average number of common shares outstanding assuming dilution                                    24,437                      30,196

     Diluted earnings per common share                                                                  $           0.44             $          0.36


                                                                       F-32
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     Common stock options listed below for the nine months ended March 31, 2004 and 2005 were not included in the computation of diluted
earnings per share. Common stock options issued under the Stock Option Plan B include contingencies which have not been satisfied at the end
of the periods presented, and therefore are not exercisable and are not included in the fully diluted computation in accordance with SFAS
No. 128. Common stock options under Plan A are not included in the computation for the nine months ended March 31, 2004 as the weighted
average exercise price and fair value are equal such that the effect on the computation is neutral.
                                                                                                                    Nine Months
                                                                                                                   Ended March 31,

                                                                                                            2004                     2005

                                                                                                                     (Unaudited)
Common stock option Plan B                                                                                       776                   1,228
Common stock option Plan A                                                                                     1,812                      —

                                                                                                               2,588                   1,228




    Stock Option Plans
    The Company has two stock option plans and has had two separate grant dates under each of the two options plans. Options were granted
in April 2002, in connection with a recapitalization transaction and in October 2004, in connection with the acquisition of Red Simpson, Inc.
and the corresponding equity offering.
    In October 2004, the Company increased the available shares to a total of 2,953 under the 2002 Stock Option Plan A and granted 1,052
options, leaving 89 shares available for grant at March 31, 2005. In October 2004, the Company increased the available shares to a total of
1,266 under the 2002 Stock Option Plan B and granted 451 options leaving 38 shares available for grant at March 31, 2005.
    In December 2004, the Company redeemed 1,186 non-vested options from the 2002 Stock Option Plan A from the employees as part of the
recapitalization transaction. As a result of this redemption, the Company recorded compensation expense of approximately $4,200 during the
nine months ended March 31, 2005, computed as the difference between the option exercise price and the estimated fair value of the shares
repurchased.


    Employee Stock Purchase Plan
    In January 2005, the Company adopted an employee stock purchase plan (the “Plan”). The Plan enables eligible employees of the
Company and its affiliates to subscribe to purchase shares of common stock. A maximum of 959 shares of common stock were authorized for
issuance and sale or total purchases of $5,000 under the Plan, subject to adjustment. On January 31, 2005, the Company sold 599 shares of
common stock for a total of $5,000, or $8.35 per share, to various employees and members of management. At March 31, 2005, no shares were
available to be issued under the Plan.


    Fair Value of Equity Instruments
   The fair value of the common stock underlying the options granted to employees in October 2004 was determined to be $6.51 per share.
The value was the same as that at which certain shareholders of Red Simpson and the Company purchased shares of the common stock in
connection with the Red Simpson acquisition, which value was determined based on arms’-length negotiations with a third party, see Note 3.
   In January 2005, the Company sold common stock to various members of management and other employees through the Plan, as discussed
above. The fair value was determined to be $8.35 per share

                                                                     F-33
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)

based upon applying a market approach. The increase in value was primarily due to the increase in operating results from the significant storm
revenue for the six months ended December 31, 2004 and significant debt prepayments using the cash generated by that storm work. In
addition, the positive operating results from the recent acquisition of Red Simpson contributed to the increase in value. In May 2005, the
Company received a third-party valuation as of January 2005, which confirmed a value substantially similar to the value at which the common
stock was sold in January 2005.


6.    Property and Equipment
     Property and equipment is comprised of the following:
                                                                                 Estimated
                                                                                  Useful                             March 31,
                                                                                  Lives in
                                                                                   Years                   2004                          2005

Land                                                                                      —            $      3,313              $          3,124
Buildings                                                                              15-39                 25,296                        25,918
Vehicles                                                                                5-12                196,507                       284,742
Machinery and equipment                                                                 3-19                 70,241                        97,369
Office equipment and furniture                                                           3-7                  5,142                         5,468

Total                                                                                                       300,499                       416,621
Less: accumulated depreciation                                                                              109,383                       134,204

Property and equipment, net                                                                            $    191,116              $        282,417


   Expenses for maintenance and repairs of property and equipment amounted to $20,263 and $34,747 for the nine months ended March 31,
2004 and 2005, respectively.


7.    Goodwill and Intangible Assets
     Goodwill and intangible assets are comprised of:
                                                                                        Estimated                        March 31,
                                                                                        useful life
                                                                                         in years                 2004                   2005

Goodwill                                                                                          —         $       3,000            $     89,640

Intangible assets:
    Customer relationships                                                                        30                     —                 43,220
    Customer arrangements                                                                          9                     —                  6,990
    Non-compete agreements                                                                         3                     —                 10,600
    Accumulated amortization                                                                                             —                 (4,261 )

Intangible assets, net                                                                                      $            —           $     56,549


                                                                     F-34
                                        PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     Estimated amortization expense for the five subsequent fiscal years ended following March 31, 2005 and thereafter:
Year Ended June 30,                                                                                                               Amount

2006                                                                                                                          $       4,883
2007                                                                                                                                  3,617
2008                                                                                                                                  3,731
2009                                                                                                                                  3,699
2010                                                                                                                                  3,611


8.     Debt
     Debt consists of the following:
                                                                                                                  March 31,

                                                                                                        2004                       2005

Revolving credit facility                                                                         $         13,000            $            —

Long-term debt:
$170 million term loan                                                                            $       137,000             $          —
$300 million term loan                                                                                         —                    260,000
$150 million term loan                                                                                         —                    148,000

                                                                                                          137,000                   408,000
Less: current portion                                                                                          —                         —

Long term debt                                                                                    $       137,000             $     408,000


     On July 1, 2004, the Company obtained a new secured bank credit agreement (“Credit Agreement”) in connection with the business
acquisition discussed in Note 3. The Credit Agreement consists of: (i) a $300,000 term loan due July 1, 2012 bearing interest at a variable rate
based on the Company’s leverage ratio at either LIBOR plus a margin ranging from 2.00% to 2.25% or the Alternate Base Rate, defined as the
greater of the Prime Rate or the Federal Funds Effective Rate plus 0.50%, plus a margin ranging from 1.00% to 1.25%, interest is payable
monthly and principal payments are payable quarterly beginning on September 30, 2004; and (ii) a $70,000 revolving facility which matures
July 1, 2010 and bears interest at a variable rate based on the Company’s leverage ratio at either LIBOR plus a margin of ranging from 2.00%
to 2.50% or the Alternate Base Rate, defined as the greater of the Prime Rate or the Federal Funds Effective Rate plus 0.50%, plus a margin
ranging from 1.00% to 1.50%, interest on the outstanding balance is payable monthly. The proceeds of the term loan were used to pay the
acquisition consideration discussed in Note 3, to retire approximately $137,000 of the outstanding amounts under the previous credit
agreement, to pay loan issuance costs of approximately $10,200 and acquisition transaction fees and expenses of approximately $4,200 and to
provide the Company with working capital for operations. In connection with the Credit Agreement, the Company wrote off the remaining
unamortized portion of deferred loan costs related to the previous credit agreement totaling approximately $5,600, which has been recorded in
the Company’s statement of operations for the nine month period ending March 31, 2005.
    On December 10, 2004, the Credit Agreement was amended to permit the 2004 recapitalization, see Note 4, obtain additional liquidity and
increase the total facility to $520,000. In addition to the original $300,000 term loan and $70,000 revolving credit facility, the Company
obtained a new $150,000 term loan. No substantive terms for the original $300,000 term loan and $70,000 revolving credit facility were
modified pursuant to this amendment. The borrowing availability was $46,920 as of March 31, 2005 (after

                                                                      F-35
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)

giving effect to $23,080 of outstanding letters of credit). The Credit Agreement contains a number of affirmative and restrictive covenants
including limitations on mergers, consolidations and dissolutions; sales of assets; investments and acquisitions; indebtedness and liens;
dividends and other restricted payments; and the maintenance of certain financial ratios.
      Aggregate maturities of long-term debt for the five years ended June 30 following March 31, 2005 and thereafter are as follows:
                                                                                                                             Amount

2005                                                                                                                    $             —
2006                                                                                                                                 250
2007                                                                                                                               1,500
2008                                                                                                                               1,500
2009                                                                                                                               1,500
Thereafter                                                                                                              $        403,250


     In connection with the recapitalization in December 2004, the Company cancelled the interest rate swap agreements. These agreements did
not meet the criteria to qualify for hedge accounting and were marked to market and are included in accrued expenses and other liabilities on
the balance sheet at fair value in the amount of $426 at March 31, 2004. In January 2005, the Company entered into an interest rate swap
agreement with a notional amount of $50,000 for a term of two years to hedge against interest rate fluctuations. Under the terms of the swap,
the Company makes quarterly fixed rate payments to the counterparty at rates ranging from 2.59% to 3.76% and in return receives payments at
the three-month LIBOR. The Company is exposed to credit loss in the event of nonperformance by the counterparty to the swap agreement;
however, the Company does not anticipate nonperformance. In accordance with the provisions of SFAS No. 133, Accounting for Derivatives
and Hedging Activities, this agreement did not meet the criteria to qualify for hedge accounting and are marked to market and are included in
other assets on the balance sheet at fair value in the amount of $101 at March 31, 2005. The Company recognized a gain on the change in fair
value of these derivatives of $1,096 and $203, which is included in interest expense in the income statement, for the nine months ended
March 31, 2004 and 2005, respectively.
     In addition, in January 2005, the Company entered into an interest rate cap agreement with a notional amount of $45,000. Under the
interest rate cap agreement, the Company receives quarterly payments based upon the excess of the three-month LIBOR over the cap rate of
5.0%.


9.     Income taxes
     The effective tax rates for the nine months ended March 31, 2004 and 2005 was 40.7% and 61.7%, respectively. Income tax expense for
the nine months ended March 31, 2005 significantly increased from the statutory federal and state tax rates primarily due to the $14,190 of
interest expense incurred as a result of the redemption of the mandatorily redeemable preferred stock, which is nondeductible.


10.      Deferred Compensation Plan
   In connection with the acquisition of Red Simpson discussed in Note 3, the Company entered into certain transactions involving employee
compensation expenses that have impacted and, in some cases, will continue to impact the results of operations.
   Prior to the acquisition of Red Simpson, certain Red Simpson supervisors and managers were entitled to payments of deferred
compensation. In connection with the acquisition of Red Simpson, the Company

                                                                      F-36
                                         PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)

agreed to pay $26,000 in deferred compensation as part of the purchase price over two fiscal years. In addition, the Company agreed to pay
$29,100 in deferred compensation over four years if the employees continued their employment.
      For the nine months ended March 31, 2005, the Company incurred approximately $4,800 of expense for deferred compensation.
     In May 2005, the deferred compensation plan was amended to eliminate the future service requirement and fully vest the benefits under the
plan. The amendment provides that if an employee continues to be employed, dies, becomes disabled, retires, or is terminated for other than
“cause” as defined in the amendment, the amounts under the deferred compensation plan shall be paid out in accordance with the original
four-year payment term. Generally under the amendment, if an employee voluntarily terminates or is terminated for cause, then any remaining
unpaid amounts under the deferred compensation plan are paid out on the fifteenth anniversary of the initial payment date plus interest. The
interest rate is to be determined by the Company based upon a risk-free interest rate plus a margin reflecting an appropriate risk premium in
accordance with FASB Con 7, Using Cash Flow Information and Present Values in Accounting Measurements . Generally under the
amendment, if an employee is terminated for “specified cause”, as defined in the amendment, then all unpaid amounts under the deferred
compensation plan are forfeited. As a result of the amendment the Company will incur a one-time compensation expense charge of
approximately $18,000 in May 2005.
    The following table sets forth the approximate amounts of deferred compensation remaining to be paid in each of the four years ended
June 30:
2006                                                                                                                     $        15,000
2007                                                                                                                               9,000
2008                                                                                                                               4,500
2009                                                                                                                               9,000

Total                                                                                                                    $        37,500


    In connection with the acquisition of Red Simpson, the Company also agreed to permit two members of Red Simpson’s management to
convert an aggregate of approximately $3,300 of unvested deferred compensation into shares of restricted common stock valued at
approximately $2,000. In connection with this transaction, the Company recognized compensation expense of approximately $1,300 in the nine
month period ending March 31, 2005 equal to the excess of the accelerated deferred compensation amount over the fair value of the stock
acquired by those persons.


11.      Concentrations of Credit Risk
   The Company had accounts receivable from two customers of $8,777 and $10,429 at March 31, 2004 and 2005, respectively. The
Company had revenues from two customers, which comprised 26% and 26% of total revenues for the nine months ended March 31, 2004 and
2005, respectively.

                                                                     F-37
                                          PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
                        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (continued)




12.      Revenue Categories
      The following table sets forth our revenues by category of service for the periods indicated:
                                                                                      For the Nine Months Ended March 31,

                                                                               2004                                              2005

Powerline services                                            $     226,896                    86.3 %          $       377,255           72.0 %
Storm restoration services                                           36,162                    13.7                    146,992           28.0

       Total                                                  $     263,058                  100.0 %           $       524,247          100.0 %




13.      Commitments and Contingencies
    The Company is from time to time party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of
business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage,
punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims and proceedings,
the Company accrues reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The
Company does not believe that any of these proceedings, separately or in the aggregate, would be expected to have a material adverse effect on
the Company’s results of operations or financial position.


14.      Subsequent Events
    On July 1, 2005, the Company’s Board of Directors approved the reincorporation and merger of Pike Holdings, Inc., a North Carolina
corporation, with and into a newly created wholly owned subsidiary, Pike Electric Corporation, which was formed in Delaware for the sole
purpose of effecting the reincorporation. Each share of Pike Holdings, Inc. common stock was converted to 14.76 shares of Pike Electric
Corporation common stock with a par value of $0.001 per share. Pike Electric Corporation has 100,000 authorized shares. All common stock
and per share amounts for all periods presented in the accompanying financial statements have been restated to reflect the effect of this
conversion as a result of the reincorporation.
     In June 2004, the Company agreed to terminate the management advisory services agreement with Goldberg Lindsay & Co. LLC, an
affiliate of Lindsay Goldberg & Bessemer, for aggregate consideration of $4.0 million, which is expected to be paid at the closing of the initial
public offering of the Company.

                                                                        F-38
                             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Red Simpson, Inc.
    We have audited the accompanying consolidated balance sheets of Red Simpson, Inc. (a Louisiana corporation) and Subsidiaries as of
December 31, 2003 and 2002, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three
years in the period ended December 31, 2003. These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on the financial statements based on our audits.
    We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
    In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position of Red Simpson, Inc. and Subsidiaries as of December 31, 2003 and 2002 and the consolidated results of their operations and their
cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in
the United States of America.
    As discussed in Note A to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards
No. 142, “Goodwill and Other Intangible Assets,” on January 1, 2002.


/s/ Grant Thornton LLP

Houston, Texas
August 5, 2004

                                                                      F-39
                                                   RED SIMPSON, INC. AND SUBSIDIARIES
                                                     CONSOLIDATED BALANCE SHEETS
                                                      (in thousands, except share amounts)
                                                                                                                    December 31,

                                                                                                           2002                        2003

                                                                     ASSETS
Current assets:
Cash and cash equivalents                                                                            $           150               $      8,094
Accounts receivable, net                                                                                      34,123                     32,430
Work completed not billed                                                                                      5,698                      5,640
Inventory                                                                                                      1,432                      1,612
Prepaid expenses                                                                                               4,626                      3,099
    Total current assets                                                                                      46,029                     50,875

Property and equipment, net                                                                                   70,672                     61,697

Other assets:
Goodwill                                                                                                          4,786                       5,547
Intangible assets, net                                                                                               —                        5,557
Other                                                                                                               306                       1,315

    Total other assets                                                                                            5,092                  12,419

Total Assets                                                                                         $       121,793               $    124,991

                                               LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                                                                                     $            4,621            $          6,225
Accrued liabilities                                                                                               2,176                       1,417
Accrued payroll and related liabilities                                                                           5,340                       6,057
Notes payable, deferred compensation                                                                                410                         749
Current portion of long-term debt                                                                                   709                          84
Insurance and claim accruals                                                                                      1,465                       5,256

    Total current liabilities                                                                                 14,721                     19,788

Long-term liabilities:
Insurance and claim accruals                                                                                   8,719                      7,254
Deferred compensation                                                                                         19,250                     21,158
Notes payable, deferred compensation                                                                           1,509                      1,704
Long-term debt, less current portion                                                                           6,439                        120
Amounts due to previous owners                                                                                 3,117                      2,967
Other                                                                                                            565                        503

    Total long-term liabilities                                                                               39,599                     33,706

Stockholders’ equity:
Common stock, no par value; 2,000,000 shares authorized; 1,090,439 shares issued;
  929,442 shares outstanding                                                                                     584                        584
Retained earnings                                                                                             67,282                     71,306
Treasury stock 160,997 shares, at cost                                                                          (393 )                     (393 )

    Total stockholders’ equity                                                                                67,473                     71,497
Total Liabilities and Stockholders’ Equity                                                           $       121,793               $    124,991


                                The accompanying notes are an integral part of these consolidated financial statements.

                                                                         F-40
                                                RED SIMPSON, INC. AND SUBSIDIARIES
                                              CONSOLIDATED STATEMENTS OF INCOME
                                                         (in thousands)
                                                                                                       December 31,

                                                                                      2001                  2002              2003

Revenues                                                                        $      198,146         $     212,630      $    191,375
Cost of operations                                                                     175,035               184,640           166,255
Gross profit                                                                            23,111                 27,990           25,120
General and administrative expenses                                                     11,712                 12,311           12,668

Income from operations                                                                  11,399                 15,679           12,452
Other income (expense):
Other income                                                                                 —                     —                  249
Interest income                                                                              —                     —                   41
Interest expense                                                                         (1,686 )              (1,084 )              (325 )

    Total other income (expense)                                                         (1,686 )              (1,084 )               (35 )
Income before income taxes                                                                9,713                14,595           12,417
Income tax expense                                                                          212                   485              406

Net income                                                                      $         9,501        $       14,110     $     12,011


                             The accompanying notes are an integral part of these consolidated financial statements.

                                                                      F-41
                                               RED SIMPSON, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
                                                Years ended December 31, 2003
                                             (in thousands, except share amounts)
                                                  Common Stock                                         Treasury Stock
                                                                                  Retained
                                               Shares            Amount           Earnings          Shares            Amount           Total

Balance at January 1, 2001                      1,090,439        $   584      $      58,296          160,997          $   (393 )   $    58,487
Net income                                                                            9,501                                              9,501
Distributions to stockholders                                                        (6,697 )                                           (6,697 )
Balance at December 31, 2001                    1,090,439            584             61,100          160,997              (393 )        61,291
Net income                                                                           14,110                                             14,110
Distributions to stockholders                                                        (7,928 )                                           (7,928 )

Balance at December 31, 2002                    1,090,439            584             67,282          160,997              (393 )        67,473
Net income                                                                           12,011                                             12,011
Distributions to stockholders                                                        (7,987 )                                           (7,987 )

Balance at December 31, 2003                    1,090,439        $   584      $      71,306          160,997          $   (393 )   $    71,497


                            The accompanying notes are an integral part of these consolidated financial statements.

                                                                     F-42
                                                RED SIMPSON, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                         (in thousands)
                                                                                                        December 31.

                                                                                   2001                     2002               2003

Cash flows from operating activities:
Net income                                                                    $        9,501        $          14,110      $     12,011
Adjustments to reconcile net income to net cash provided by operating
 activities:
   Depreciation and amortization                                                     21,212                    22,052            21,589
   Deferred compensation expense                                                      4,062                     5,368             2,896
   Gain on sale of property, plant and equipment                                         12                        47               (18 )
   Other                                                                                (19 )                     (80 )             283
   Changes in assets and liabilities; net of acquisition
       Accounts receivable and work completed not billed                               1,055                     4,187            3,678
       Inventory and other assets                                                     (2,319 )                      42              337
       Accounts payable and accrued expenses                                            (443 )                  (4,691 )            628
       Self-insurance claims                                                           8,645                      (635 )          2,327

                                                                                     41,706                    40,400            43,731
Cash flows from investing activities:
   Purchase of property and equipment                                                (44,534 )                  (8,710 )         (9,883 )
   Proceeds from sale of property and equipment                                        3,722                       773               63
   Net cash paid on acquisition of Gillette Electric Construction, Inc.                   —                         —            (9,342 )

                                                                                     (40,812 )                  (7,937 )        (19,162 )
Cash flows from financing activities:
   Proceeds from long-term debt                                                       29,664                   76,195            65,532
   Payments on long-term debt                                                        (23,521 )               (101,276 )         (73,540 )
   Payments on amounts due previous owners                                              (168 )                   (191 )            (150 )
   Payments on deferred compensation notes payable                                        —                        —               (360 )
   Distributions to stockholders                                                      (6,697 )                 (7,928 )          (7,987 )

                                                                                          (722 )              (33,200 )         (16,505 )
Net increase (decrease) in cash and cash equivalents                                       172                   (737 )           7,943
Cash and cash equivalents at beginning of the year                                         715                    887               150
Cash and cash equivalents at end of the year                                  $           887       $              150     $      8,094


                            The accompanying notes are an integral part of these consolidated financial statements.

                                                                      F-43
                                                RED SIMPSON, INC. AND SUBSIDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                         For the years ended December 31, 2001, 2002 and 2003
                                                  (in thousands except share amounts)


Note A — Significant Accounting Policies
     A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial
statements follows.


    Business Activity
    Red Simpson, Inc., a Louisiana corporation, is in the electric distribution and transmission services industry and works primarily in the
southern United States of America. Major types of projects include electrical distribution and transmission services and substation installation.
The length of customer arrangements varies, and projects under those arrangements typically last less than one year.


    Principles of Consolidation
   The consolidated financial statements include Red Simpson, Inc. and its wholly owned subsidiaries (collectively “Red Simpson” or the
“Company”). All significant intercompany transactions and accounts have been eliminated in the consolidation.


    Use of Estimates
    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates and such differences may be material to the financial statements.


    Revenue Recognition
     Revenues from services provided to customers are reported as earned and are recognized when services are performed. The majority of Red
Simpson’s customer arrangements are unit based. Revenue on unit-based customer arrangements is recognized as the unit is completed.
Revenue on hourly based services is determined based on actual labor and equipment time completed and materials used. Revenue on fixed
price customer arrangements is recognized under the percentage-of-completion method based primarily on the ratio of costs incurred to date to
total estimated costs under the arrangement. At the time a loss on a customer arrangement becomes known, the entire amount of the estimated
ultimate loss is accrued. “Work completed not billed” primarily relates to revenues for completed but unbilled units under unit-based
arrangements, as well as unbilled revenues recognized under the percentage-of-completion method for fixed price arrangements.


    Retainage
     Many of the customer arrangements under which the Company performs work contain retainage provisions. Retainage refers to that portion
of revenue earned by the Company but held for payment by the customer pending satisfactory completion of the project. Unless reserved, the
Company assumes that all amounts retained by customers under such provisions are fully collectible. Retainage is generally collected within
one year of the completion of a job.


    Cash and Cash Equivalents
    The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company
regularly has significant amounts of cash balances in excess of the Federal Deposit Insurance Corporation maximum of $100. The Company
has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

                                                                      F-44
                                                 RED SIMPSON, INC. AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




    Inventories
    Inventories consist primarily of materials and supplies used in the Company’s business and are carried at the lower of cost (first-in, first
out) or market (net realizable value). No obsolescence reserve has been recorded in the period presented.


    Property and Equipment
    Property and equipment are stated at cost and depreciated on a straight-line basis over their estimated useful lives, as follows:
                                                                                                                        Life in Years

Buildings                                                                                                                            27.5
Office improvements                                                                                                               10-31.5
Vehicles, equipment and furniture                                                                                                     3-7
     Maintenance and repairs are expensed as incurred and major improvements are capitalized. When assets are sold or retired, the cost and
related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income.
    The Company reviews its long-lived assets for impairment when events or changes in business conditions indicate the carrying value of the
asset may not be recoverable, as required by SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Impairment on
assets classified as “held and used” exists when the sum of the undiscounted estimated cash flows expected is less than the carrying value. If
such measurement indicates a possible impairment, the estimated fair value of the asset is compared to the net book value to measure the
impairment charge, if any. When the criteria for “held for sale” has been met, the assets are recorded at the lower of carrying value or fair
value, less selling costs.


    Intangible Assets
     Intangible assets consist of covenants not to compete and acquired customer relationships that are amortized on a straight-line basis over
their estimated useful lives of up to 4 years.


    Goodwill
     In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 142, Goodwill and Other Intangible Assets, which
supersedes APB Opinion No. 17, Intangible Assets. SFAS No. 142 establishes new standards for goodwill acquired in a business combination,
eliminates amortization of goodwill, and instead sets forth methods to periodically evaluate goodwill for impairment. The Company adopted
SFAS No. 142 on January 1, 2002. In accordance with SFAS No. 142, the Company ceased amortization of goodwill and conducts on at least
an annual basis a review of its single reporting unit to determine whether its carrying value exceeds its fair market value. Should this be the
case, a detailed analysis of the reporting unit’s assets and liabilities is performed to determine whether the goodwill is impaired. Impairment
losses are required to be reflected in operating income or loss in the consolidated statements of income. The information presented below
reflects adjustments to information reported in 2001 as if SFAS No. 142 had been applied in those years. The adjustments include the effects of
not amortizing goodwill.
                                                                                             2001                2002                       2003

Reported net income                                                                      $    9,501         $      14,110               $    12,011
Add: Goodwill amortization                                                                      237                    —                         —

    Adjusted net income                                                                  $    9,738         $      14,110               $    12,011


                                                                       F-45
                                                 RED SIMPSON, INC. AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




    Insurance and Claim Accruals
     The Company retains the risk, up to certain limits, for automobile and general liability, workers’ compensation, and employee group health
claims. A liability for unpaid claims and the associated claim expenses, including incurred but not reported losses, is actuarially determined and
reflected in the consolidated financial statements as an accrued liability. The determination of such claims and expenses and the
appropriateness of the related liability is periodically reviewed and updated. Because the Company retains these risks, up to certain limits, a
change in experience or actuarial assumptions could materially affect results of operations in a particular period.


    Income Taxes
     Beginning January 1, 1997, the Company elected to be taxed as a Subchapter S corporation. At that date, payment of income taxes became
the responsibility of the stockholders. The Company may incur income taxes within the first ten years as it relates to any “built-in gain.” If the
Company disposes of assets that were owned on the date of election to be taxed as a Subchapter S corporation and there is a gain, the Company
would pay income taxes on the difference in the tax basis and the fair value (built-in gain) at the date of election to be taxed as a Subchapter
S corporation. The Company has accrued a deferred tax liability of approximately $170 to accrue for expected built-in gains taxes.


    Recently Issued Accounting Pronouncements
     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity. This statement requires certain financial instruments that could previously be accounted for by issuers as equity to be classified as
liabilities or, in some cases, assets. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003 and
otherwise is effective at the beginning of the first fiscal period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have a
material effect on the Company’s financial condition or results of operations.
     In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities. FIN 46 addresses when a
company should consolidate in its financial statements the assets, liabilities and activities of a variable interest entity (VIE). It defines VIEs as
entities that either do not have any equity investors with a controlling financial interest, or have equity investors that do not provide sufficient
financial resources for the entity to support its activities without additional subordinated financial support. FIN 46 also requires disclosures
about VIEs that a company is not required to consolidate, but in which it has a significant variable interest. The consolidation requirements of
FIN 46 applied immediately to variable interest entities created after January 31, 2003. The Company has not obtained an interest in a VIE
subsequent to that date. A modification to FIN 46 (FIN 46(R)) was released in December 2003. FIN 46(R) delayed the effective date for VIEs
created before February 1, 2003, with the exception of special-purpose entities, until the first fiscal year or interim period ending after
March 15, 2004. FIN 46(R) delayed the effective date for special-purpose entities until the first fiscal year or interim period after December 15,
2003. The Company is not the primary beneficiary of any SPEs or non-SPEs at December 31, 2003.

Note B — Acquisition of Gillette Electric Construction, Inc.
    On June 8, 2003, the Company acquired 100% of the outstanding common stock of Gillette Electric Construction, Inc. for a purchase price
of approximately $9,300 paid in cash. The acquisition has been accounted for as a purchase and, accordingly, the acquired assets and liabilities
have been recorded at their fair values at the date of acquisition. The operating results arising from the acquisition are included in the
consolidated statement of earnings from the acquisition date.

                                                                        F-46
                                                 RED SIMPSON, INC. AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    The following table summarizes the estimated fair values of certain assets acquired and liabilities assumed at the date of acquisition
(June 8, 2003):
Current assets                                                                                                               $         2,244
Property and equipment                                                                                                                 1,950
Goodwill                                                                                                                                 761
Intangible assets                                                                                                                      6,383
    Total assets acquired                                                                                                             11,338
Current liabilities                                                                                                                     (933 )
Long-term debt                                                                                                                        (1,063 )

                                                                                                                             $         9,342


    The intangible assets valued at $6,383 have a weighted average useful life of approximately 4 years. The intangible assets consist of
customer relationships of $6,290 and a covenant not to compete of $93.
     The purchase price was allocated based on the fair value of the assets acquired and liabilities assumed and the excess of cost over fair value
of the net assets acquired of $761 which is recorded as goodwill and will be subject to an annual test of impairment as required by
SFAS No. 142, Goodwill and Other Intangible Assets.

Note C — Accounts Receivable
    Accounts receivable consists of the following:
                                                                                                                     December 31,

                                                                                                             2002                    2003

Billing                                                                                                 $      31,681            $     29,261
Retainage receivable                                                                                            2,064                   1,870
Other receivables                                                                                                 403                   1,616
    Total                                                                                                      34,148                  32,747
Less allowance for bad debts                                                                                      (25 )                  (317 )

    Accounts receivable, net                                                                            $      34,123            $     32,430


    The Company expects to collect all balances, including retainage, within the next twelve months.

Note D — Work Completed not Billed
    Work completed not billed consists of the following:
                                                                                                                     December 31,

                                                                                                             2002                    2003

Costs incurred on work in progress                                                                      $        7,929           $       9,368
Estimated earnings to date                                                                                         762                   1,321
    Total costs and estimated earnings                                                                           8,691                 10,689
Less billings to date                                                                                           (2,993 )               (5,049 )

Work completed not billed                                                                               $        5,698           $       5,640


                                                                       F-47
                                              RED SIMPSON, INC. AND SUBSIDIARIES
                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

   As stated in Note A, the Company performs services under unit-based and non-unit based customer arrangements. The amounts presented
above aggregate the effects of these types of arrangements.

Note E — Property and Equipment
    The accompanying consolidated balance sheet includes the following property and equipment:
                                                                                                                        December 31,

                                                                                                           2002                                2003

Land                                                                                              $               612                 $               612
Buildings                                                                                                         179                                 198
Machinery and Equipment                                                                                       170,886                             175,620
      Total                                                                                                   171,677                             176,430
Less accumulated depreciation                                                                                (101,005 )                          (114,733 )

Property and equipment, net                                                                       $               70,672              $               61,697


    Maintenance and repairs of property and equipment amounted to $9,043, $10,649 and $11,302 for the years ended December 31, 2001,
2002 and 2003, respectively. Depreciation expense amounted to $20,738, $21,816 and $20,762 for the years ended December 31, 2001, 2002
and 2003, respectively.

Note F — Goodwill and Intangible Assets
    Changes in the carrying amount of the Company’s goodwill and intangible assets were as follows:
                                                                                                          Intangible                       Accumulated
                                                                             Goodwill                       Assets                         Amortization

Balance at January 1, 2001                                              $          5,023              $              50            $                    (50 )
Amortization                                                                        (237 )                           —                                   —
Balance at December 31, 2001                                                       4,786                             50                                 (50 )
Balance at December 31, 2002                                                       4,786                             50                                 (50 )
Acquisition of Gillette Electric                                                     761                          6,383                                  —
Amortization                                                                          —                              —                                 (826 )

Balance at December 31, 2003                                            $          5,547              $           6,433            $                   (876 )


    The following table summarizes the carrying amounts and amortization of intangible assets:
                                                                                                 December 31,

                                                                           2002                                                2003

                                                             Gross                                                Gross
                                                            Carrying              Accumulated                    Carrying                  Accumulated
                                                            Amount                Amortization                   Amount                    Amortization

Amortized intangible assets:
  Covenants not to compete                                  $      50         $              50              $           143           $                 61
  Customer relationships                                           —                         —                         6,290                            815

                                                            $      50         $              50              $         6,433           $                876


                                                                    F-48
                                                 RED SIMPSON, INC. AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    Aggregate amortization expense:
    For the years ended December 31
2001                                                                                                                                      $ 237
2002                                                                                                                                         —
2003                                                                                                                                        826
    Estimated amortization expense for the years ended December 31:
2004                                                                                                                              $           1,416
2005                                                                                                                              $           1,416
2006                                                                                                                              $           1,416
2007                                                                                                                              $           1,300
2008                                                                                                                              $               8

Note G — Long-Term Debt
    Long-term debt consisted of the following:
                                                                                                                           December 31,

                                                                                                                    2002                      2003

Open lines of credit for $37,000 and $60,000 with Red River Bank with a monthly interest rate calculated
  as a three-month LIBOR rate plus 1%, due November 12, 2004 and December 2005                                  $      6,375              $       —
$72 note payable to Max Green for the land and office building. Interest is payable annually at a rate of
  7%                                                                                                                        72                   64
$5,900 installment note payable to Red River Bank with a 7.5% interest rate, maturing May 2003                             701                   —
Various term loans with Ford Motor Credit financing the purchase of vehicles at 0% interest                                 —                   140

                                                                                                                       7,148                    204
Less current maturities                                                                                                 (709 )                  (84 )

                                                                                                                $      6,439              $     120


    During the year ended December 31, 2003, the Company repaid all outstanding indebtedness under all lines of credit with Red River Bank.
As of December 31, 2003, there were approximately $20,100 of standby letters of credit issued by Red River Bank on behalf of the Company.
    Under the terms of the credit agreements with Red River Bank, the Company is not required to comply with any financial covenants. Red
Simpson has pledged collateral securing these lines of credit with a blanket security interest in substantially all equipment, vehicles, rolling
stock, machinery, inventory, furniture and fixtures.
    The President of the Company is a member of the Board of Directors of Red River Bank.

                                                                      F-49
                                                RED SIMPSON, INC. AND SUBSIDIARIES
                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    Aggregate maturities of long-term debt for the five years following December 31, 2003 and thereafter are as follows:
                                                                                                                                  Amount

2004                                                                                                                          $            84
2005                                                                                                                                       69
2006                                                                                                                                       11
2007                                                                                                                                        8
2008                                                                                                                                        8
Thereafter                                                                                                                                 24
                                                                                                                              $        204



Note H — Income Taxes
    As discussed in Note A, the Company has elected to be taxed as a Subchapter S corporation. In certain states, taxes must be paid at the
corporate level. For the years ended December 31, 2001, 2002 and 2003, state tax expense was approximately $212, $485 and $406,
respectively.
    The Company has made a number of acquisitions during the past several years. In these acquisitions, the Company acquired all of the
outstanding stock of the acquired companies and they became a subsidiary of the Company. These acquired companies were C corporations
and have been inactive since the acquisitions. The Company is of the opinion there was a de facto liquidation of these corporations. If the
Internal Revenue Service were to disagree with the Company’s position, income tax could be assessed on the corporations. Any tax due would
ultimately be the responsibility of the stockholders of Red Simpson, Inc.
    Had the Company been subject to Federal income taxes, it would have recorded approximately $2,200, $4,400, and $5,200 in income tax
expense for the years ended December 31, 2001, 2002 and 2003, respectively.

Note I — Employee Benefit Plans
     The Company sponsors a 401(k) defined contribution plan that provides retirement benefits to all employees that elect to participate. Under
the plan, participating employees may defer up to 15% of their base pre-tax compensation. Contributions by the Company are discretionary.
During the years ended December 31, 2001, 2002 and 2003, the Company contributed approximately $618, $689, and $635, respectively,
related to this plan.

                                                                     F-50
                                                RED SIMPSON, INC. AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    Effective January 1, 1997, the Company adopted a non-qualified deferred compensation plan for select employees. The plan is not funded
and the balance is payable over four to five years after employment termination and is reflected in the deferred compensation balance. The net
accruals were as follows:
Balance at January 1, 2001                                                                                                 $        12,963
Conversion to notes payable deferred compensation                                                                                   (2,075 )
Expense                                                                                                                              4,062
Balance at December 31, 2001                                                                                                        14,950
Conversion to notes payable deferred compensation                                                                                   (1,068 )
Expense                                                                                                                              5,368

Balance at December 31, 2002                                                                                                        19,250
Conversion to notes payable deferred compensation                                                                                     (988 )
Expense                                                                                                                              2,896

    Balance at December 31, 2003                                                                                           $        21,158



Note J — Related Party Transactions
   The Company leases its corporate headquarters from Simpson-Noles, LLC, of which the Company owned a 50% interest. The future
minimum lease commitments under this arrangement include monthly rental payments in the amount of $12 for the duration of the agreement,
which has an indefinite life. Rent expense for the years ended December 31, 2001, 2002 and 2003 was approximately $145 each year.

Note K — Major Customers and Concentration of Credit Risk
     Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of accounts receivable. The
Company has not incurred significant bad debts in the past, and expects that the allowance for doubtful accounts is reasonable based on historic
experience and current composition of its accounts receivable. During the year ended December 31, 2001, the Company had sales to three
customers that exceeded 10% of total revenues at 18.6%, 13.2% and 10.2%. During the year ended December 31, 2002, the Company had sales
to two customers that exceeded 10% of total revenues at 13.2% and 13.5%. For the year ended December 31, 2003, the Company had sales to
three customers that exceeded 10% of total revenues at 14.9%, 14% and 11.7%. The Company performs periodic credit evaluations of its
customers’ financial condition, but generally does not require collateral. Credit losses have generally been within management’s estimates.

Note L — Commitments and Contingencies

    Litigation
    The Company is involved in various claims and legal proceedings. These cases are, in the opinion of management, ordinary, routine
matters incidental to the normal business conducted by the Company. Management believes that the ultimate disposition of such proceedings
will not have a materially adverse effect on the Company’s consolidated financial statements.


    Guarantees
    The Company guarantees two term loans of Simpson-Noles LLC, a related party joint venture in which the Company owns a 50% interest.
Should Simpson-Noles LLC be unable to perform under the terms of the loan, the Company could be held responsible for the ultimate
repayment of the loans. At

                                                                      F-51
                                                RED SIMPSON, INC. AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

December 31, 2003, the outstanding loans were approximately $1,800. The Company has not experienced material adverse results from such
guarantee and foresees no further material adverse impact on the financial position, results of operations or cash flows of the Company. As a
result, the Company has not recorded a liability on the balance sheet associated with this risk.
    The Company has many customer arrangements that require the Company to indemnify the other party against loss from claims. Also, the
Company is required to indemnify its bonding agent in the event of non-performance. The Company has not experienced material losses under
these arrangements and foresees no future material adverse impact on financial position, results of operations or cash flows.

Note M — Subsequent Events
    Effective July 1, 2004, the Company entered into a stock purchase agreement with Pike Electric, Inc. In relation to the stock purchase
agreement, the Company sold its interests in the Simpson-Noles, LLC and RSA Aviation, LLC to former stockholders.

                                                                     F-52
                              REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Red Simpson, Inc.
    We have audited the accompanying consolidated balance sheets of Red Simpson, Inc. (a Louisiana corporation) and Subsidiaries as of
June 30, 2004 and 2003, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the six-month
periods then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audits.
    We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
    In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Red
Simpson, Inc. and Subsidiaries as of June 30, 2004 and 2003, and the results of their operations and their cash flows for each of the six-month
periods then ended in conformity with accounting principles generally accepted in the United States of America.


/s/ Grant Thornton LLP

Houston, Texas
December 22, 2004

                                                                        F-53
                                             RED SIMPSON, INC. AND SUBSIDIARIES
                                                CONSOLIDATED BALANCE SHEETS
                                                 (in thousands, except share amounts)
                                                                                                       June 30,

                                                                                            2003                      2004

                                                                 ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                                             $       2,016             $      2,173
  Accounts receivable                                                                          30,479                   35,042
  Work completed not billed                                                                     7,443                    7,027
  Inventory                                                                                     1,399                    1,499
  Prepaid expenses                                                                              3,040                    1,650
       Total current assets                                                                    44,377                   47,391
PROPERTY AND EQUIPMENT, NET                                                                    65,821                   55,996
OTHER ASSETS
   Goodwill                                                                                        5,547                     5,547
   Intangible assets, net                                                                          6,265                     4,840
   Other                                                                                             960                     1,383

       Total other assets                                                                      12,772                   11,770

                                                                                        $     122,970             $    115,157



                                          LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
  Accounts payable                                                            $                    5,358          $          6,093
  Accrued liabilities                                                                              2,451                     1,885
  Accrued payroll and related liabilities                                                          6,112                     4,954
  Current portion of notes payable, deferred compensation                                            447                        —
  Insurance and claim accruals                                                                     3,579                     4,480
  Current portion of long-term debt                                                                7,161                        —

      Total current liabilities                                                                25,108                   17,412
LONG-TERM LIABILITIES
  Insurance and claim accruals                                                                  6,644                    8,682
  Notes payable, deferred compensation, net of current portion                                  1,586                       —
  Deferred compensation                                                                        20,537                   23,074
  Long-term debt, net of current portion                                                          164                       —
  Amounts due to previous owners                                                                3,060                    2,915
  Other                                                                                           346                       —
       Total long-term liabilities                                                             32,337                   34,671

                                                                                               57,445                   52,083
STOCKHOLDERS’ EQUITY
   Common stock, no par value; 2,000,000 shares authorized; 1,090,439 shares issued;
    929,442 shares outstanding                                                                    584                      584
   Retained earnings                                                                           65,334                   62,883
   Treasury stock 160,997 shares, at cost                                                        (393 )                   (393 )

       Total stockholders’ equity                                                              65,525                   63,074
                                                                                        $     122,970             $    115,157


                                                                   F-54
                                                 RED SIMPSON, INC. AND SUBSIDIARIES
                                              CONSOLIDATED STATEMENTS OF INCOME
                                                         (in thousands)
                                                                                                                 Six Months Ended
                                                                                                                      June 30,

                                                                                                         2003                       2004

Revenues                                                                                            $      91,121            $        95,543
Cost of Operations                                                                                         80,147                     85,390

    Gross profit                                                                                           10,974                     10,153
General and administrative expenses                                                                         4,928                      6,323
Transaction expenses                                                                                           —                       5,573
    Income from operations                                                                                   6,046                     (1,743 )
Other expenses:
    Interest expense                                                                                             142                       38
    Other                                                                                                        118                       —

        Total other expenses                                                                                     260                       38

Income (loss) before income taxes                                                                            5,786                     (1,781 )
Income tax expense                                                                                             271                        182

Net income (loss)                                                                                   $        5,515           $         (1,963 )


                                    The accompanying notes are an integral part of these financial statements.

                                                                      F-55
                                        RED SIMPSON, INC. AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
                                           (in thousands, except share amounts)
                                                                     Six Months Ended June 30, 2003

                                           Common Stock                                               Treasury Stock
                                                                            Retained
                                        Shares            Amount            Earnings            Shares             Amount           Total

Balance at January 1, 2003               1,090,439        $   584       $      67,283            160,997          $    (393 )   $    67,474
Net income                                      —              —                5,515                 —                  —            5,515
Distributions to stockholders                   —              —               (7,464 )               —                  —           (7,464 )
Balance at June 30, 2003                 1,090,439        $   584       $      65,334            160,997          $    (393 )   $    65,525


                                                              F-56
                                             RED SIMPSON, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY — (continued)
                                           (in thousands, except share amounts)
                                                                         Six Months Ended June 30, 2004

                                               Common Stock                                               Treasury Stock
                                                                                Retained
                                            Shares            Amount            Earnings            Shares             Amount           Total

Balance at January 1, 2004                   1,090,439        $   584       $      71,307            160,997          $    (393 )   $    71,498
Net loss                                            —              —               (1,963 )               —                  —           (1,963 )
Distributions to stockholders                       —              —               (6,461 )               —                  —           (6,461 )
Balance at June 30, 2004                     1,090,439        $   584       $      62,883            160,997          $    (393 )   $    63,074


                                The accompanying notes are an integral part of these financial statements.

                                                                  F-57
                                                RED SIMPSON, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENT OF CASH FLOWS
                                                        (in thousands)
                                                                                                                Six Months Ended
                                                                                                                     June 30,

                                                                                                        2003                       2004

Cash flows from operating activities
   Net income (loss)                                                                              $            5,515         $        (1,963 )
   Adjustments to reconcile net loss to net cash provided by operating activities
        Depreciation and amortization                                                                      10,621                    10,158
        Deferred compensation expense                                                                       1,501                     2,006
        Gain on sale of property and equipment                                                                (99 )                    (840 )
        Other                                                                                                 136                         4
        Changes in assets and liabilities
            Accounts receivable and work completed not billed                                                  4,007                  (3,998 )
            Inventory and other assets                                                                           965                   1,489
            Accounts payable, accrued expenses and other                                                         604                   1,423
            Insurance and claim accruals                                                                          40                  (2,041 )

            Net cash provided by operating activities                                                      23,290                     6,238
Cash flows from investing activities
   Purchase of property and equipment                                                                      (9,343 )                   (5,655 )
   Proceeds from sale of property and equipment                                                                63                      2,755
   Net cash paid on acquisition of Gillette Electric Construction, Inc.                                    (3,666 )                       —

            Net cash used in investing activities                                                         (12,946 )                   (2,900 )
Cash flows from financing activities
   Payments on long-term debt                                                                             (46,956 )                     (204 )
   Proceeds from long-term debt                                                                            46,070                         —
   Payments on notes payable — deferred compensation                                                          (70 )                   (2,594 )
   Payments on amounts due to previous owners                                                                 (58 )                       —
   Distributions to stockholders                                                                           (7,464 )                   (6,461 )

            Net cash used by financing activities                                                          (8,478 )                   (9,259 )

Net (decrease) increase in cash and cash equivalents                                                           1,866                  (5,921 )
Cash and cash equivalents at beginning of year                                                                   150                   8,094
Cash and cash equivalents at end of year                                                          $            2,016         $        2,173

Supplemental disclosures
   Cash paid for
       Interest                                                                                   $             164          $             33
       Income taxes                                                                                             271                       182
   Issuance of notes for deferred compensation liability                                                        214                        90

                                   The accompanying notes are an integral part of these financial statements.

                                                                      F-58
                                                RED SIMPSON, INC. AND SUBSIDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           For the six months ended June 30, 2003 and 2004
                                                 (in thousands, except share amounts)

Note A — Summary of Significant Accounting Policies
     A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial
statements follows.


    Business Activity
    Red Simpson, Inc., a Louisiana corporation, is in the electric distribution and transmission services industry and works primarily in the
southern United States of America. Major types of projects include electrical distribution and transmission services and substation installation.
The length of customer arrangements varies, and projects under those arrangements typically last less than one year.


    Principles of Consolidation
   The consolidated financial statements include Red Simpson, Inc. and its wholly owned subsidiaries (collectively “Red Simpson” or the
“Company”). All significant intercompany transactions and accounts have been eliminated in the consolidation.
    In June 2004, the Company transferred its 50% ownership interest in Simpson-Noles, LLC to John Simpson, President of Red Simpson
(see Note B). Prior to the disposal, the Company accounted for this interest under the equity method of accounting.
    In June 2004, the Company sold its 100% ownership interest in RSA Aviation, LLC to a stockholder for $750 (see Note B). Effective
July 1, 2004, Red Simpson entered into a stock purchase agreement with Pike Electric, Inc. (see Note B).


    Use of Estimates
    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates and such differences may be material to the financial statements.


    Revenue Recognition
     Revenues from services provided to customers are reported as earned and are recognized when services are performed. The majority of Red
Simpson’s customer arrangements are unit based. Revenue on unit-based customer arrangements is recognized as the unit is completed.
Revenue on hourly based services is determined based on actual labor and equipment time completed and materials used. Revenue on fixed
price customer arrangements is recognized under the percentage-of-completion method based primarily on the ratio of costs incurred to date to
total estimated costs under the arrangement. At the time a loss on a customer arrangement becomes known, the entire amount of the estimated
ultimate loss is accrued. “Work completed not billed” primarily relates to revenues for completed but unbilled units under unit-based
arrangements, as well as unbilled revenues recognized under the percentage-of-completion method for fixed price arrangements.


    Retainage
     Many of the customer arrangements under which the Company performs work contain retainage provisions. Retainage refers to that portion
of revenue earned by the Company but held for payment by the customer pending satisfactory completion of the project. Unless reserved, the
Company assumes that

                                                                      F-59
                                                 RED SIMPSON, INC. AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

all amounts retained by customers under such provisions are fully collectible. Retainage is generally collected within one year of the
completion of a job.


    Cash and Cash Equivalents
    The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company
regularly has significant amounts of cash balances in excess of the Federal Deposit Insurance Corporation maximum of $100. The Company
has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.


    Inventories
    Inventories consist primarily of materials and supplies used in the Company’s business and are carried at the lower of cost (first-in, first
out) or market (net realizable value). No obsolescence reserve has been recorded in the period presented.


    Property and Equipment
    Property and equipment are stated at cost and depreciated on a straight-line basis over their estimated useful lives, as follows:
                                                                                                                       Life in Years

Buildings                                                                                                                           27.5
Office improvements                                                                                                              10-31.5
Vehicles, equipment and furniture                                                                                                    3-7
     Maintenance and repairs are expensed as incurred and major improvements are capitalized. When assets are sold or retired, the cost and
related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income.
    The Company reviews its long-lived assets for impairment when events or changes in business conditions indicate the carrying value of the
asset may not be recoverable, as required by Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. Impairment on assets classified as “held and used” exists when the sum of the undiscounted estimated cash
flows expected is less than the carrying value. If such measurement indicates a possible impairment, the estimated fair value of the asset is
compared to the net book value to measure the impairment charge, if any. When the criteria for “held for sale” has been met, the assets are
recorded at the lower of carrying value or fair value, less selling costs.


    Intangible Assets
     Intangible assets consist of covenants not to compete and acquired customer relationships that are amortized on a straight-line basis over
their estimated useful lives of up to 4 years.


    Goodwill
    In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 142, Goodwill and Other Intangible Assets , which
supersedes APB Opinion No. 17, Intangible Assets. SFAS No. 142 establishes new standards for goodwill acquired in a business combination,
eliminates amortization of goodwill, and instead sets forth methods to periodically evaluate goodwill for impairment. The Company adopted
SFAS No. 142 on January 1, 2002. In accordance with SFAS No. 142, the Company ceased amortization of goodwill and conducts on at least
an annual basis a review of its single reporting unit to determine whether its carrying value exceeds its fair market value. Should this be the
case, a detailed

                                                                       F-60
                                                 RED SIMPSON, INC. AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

analysis of the reporting unit’s assets and liabilities is performed to determine whether the goodwill is impaired. Impairment losses are required
to be reflected in operating income or loss in the consolidated statements of income.


    Insurance and Claim Accruals
     The Company retains the risk, up to certain limits, for automobile and general liability, workers’ compensation, and employee group health
claims. A liability for unpaid claims and the associated claim expenses, including incurred but not reported losses, is actuarially determined and
reflected in the consolidated financial statements as an accrued liability. The determination of such claims and expenses and the
appropriateness of the related liability is periodically reviewed and updated. Because the Company retains these risks, up to certain limits, a
change in experience or actuarial assumptions could materially affect results of operations in a particular period.


       Income Taxes
     Beginning January 1, 1997, the Company elected to be taxed as a Subchapter S corporation. At that date, payment of income taxes became
the responsibility of the shareholders. The Company may incur income taxes within the first ten years as it relates to any “built-in gain.” If the
Company disposes of assets that were owned on the date of election to be taxed as a Subchapter S corporation and there is a gain, the Company
would pay income taxes on the difference in the tax basis and the fair value (built-in gain) at the date of election to be taxed as a Subchapter
S corporation. The Company has accrued a deferred tax liability of approximately $170 to accrue for expected built-in gains taxes.


       Recently Issued Accounting Pronouncements
     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity. This statement requires certain financial instruments that could previously be accounted for by issuers as equity to be classified as
liabilities or, in some cases, assets. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003 and
otherwise is effective at the beginning of the first fiscal period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have a
material effect on the Company’s financial condition or results of operations.
     In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities. FIN 46 addresses when a
company should consolidate in its financial statements the assets, liabilities and activities of a variable interest entity (VIE). It defines VIEs as
entities that either do not have any equity investors with a controlling financial interest, or have equity investors that do not provide sufficient
financial resources for the entity to support its activities without additional subordinated financial support. FIN 46 also requires disclosures
about VIEs that a company is not required to consolidate, but in which it has a significant variable interest. The consolidation requirements of
FIN 46 applied immediately to variable interest entities created after January 31, 2003. The Company has not obtained an interest in a VIE
subsequent to that date. A modification to FIN 46 (FIN 46(R)) was released in December 2003. FIN 46(R) delayed the effective date for VIEs
created before February 1, 2003, with the exception of special-purpose entities, until the first fiscal year or interim period ending after
March 15, 2004. FIN 46(R) delayed the effective date for special-purpose entities until the first fiscal year or interim period after December 15,
2003. The Company is not the primary beneficiary of any SPEs or non-SPEs at June 30, 2004.

                                                                        F-61
                                               RED SIMPSON, INC. AND SUBSIDIARIES
                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)


Note B — Sale of Red Simpson, Inc. to Pike Electric, Inc.
    Effective July 1, 2004, the Company entered into a stock purchase agreement with Pike Electric, Inc. Proceeds from the sale were used to
pay off the notes payable with Red River Bank, Max Green and Ford Motor Credit. In relation to the stock purchase agreement, the Company
sold its interests in Simpson-Noles, LLC and RSA Aviation, LLC to former stockholders.

Note C — Accounts Receivable
    Accounts receivable consists of the following:
                                                                                                                       June 30,

                                                                                                            2003                          2004

Billing                                                                                             $         27,896                  $     33,303
Retainage receivable                                                                                           1,535                         1,739
Other                                                                                                          1,209                            —
                                                                                                              30,640                        35,042
                                                                                                                (161 )                          —

    Accounts receivable                                                                             $         30,479                  $     35,042


The Company expects to collect all balances, including retainage, within the next twelve months.

Note D — Work Completed Not Billed
    Work completed not billed consists of the following:
                                                                                                                           June 30,

                                                                                                             2003                         2004

Costs incurred on work in progress                                                                      $          5,784              $     10,163
Estimated to date earnings                                                                                         1,659                     1,862
    Total costs and estimated earnings                                                                             7,443                    12,025
Less: billings to date                                                                                                —                     (4,998 )

    Work completed not billed                                                                           $          7,443              $      7,027


As stated in Note A, the Company performs services under unit-based and non-unit based customer arrangements. The amounts presented
above aggregate the effects of these types of arrangements.

                                                                    F-62
                                                 RED SIMPSON, INC. AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)




Note      Property and Equipment
E—
    The accompanying consolidated balance sheet includes the following property and equipment:
                                                                                                                                 June 30,

                                                                                                                      2003                            2004

Land                                                                                                          $             612                 $          198
Buildings                                                                                                                   198                            238
Machinery and equipment                                                                                                 171,545                        176,098

    Total                                                                                                               172,355                        176,534
Less accumulated depreciation                                                                                           106,534                        120,538

    Property and equipment, net                                                                               $            65,821               $        55,996


    Maintenance and repairs of property and equipment amounted to $5,531 and $5,741 for the six months ended June 30, 2003 and 2004,
respectively. Depreciation expense amounted to $10,503 and $9,440 for the six months ended June 30, 2003 and 2004, respectively.


Note F —     Goodwill and Intangible Assets
    Changes in the carrying amount of the Company’s goodwill and intangible assets were as follows:
                                                                                                     Six Months Ended June 30, 2003

                                                                                                               Intangible                       Accumulated
                                                                                 Goodwill                        Assets                         Amortization

Balance at January 1, 2003                                                   $          4,786             $               50             $                    (50 )
Acquisition of Gillette Electric Construction, Inc.                                       761                          6,383                                   —
Amortization                                                                               —                              —                                  (118 )
Balance at June 30, 2003                                                     $          5,547             $            6,433             $                   (168 )


                                                                                                     Six Months Ended June 30, 2004

                                                                                                              Intangible                        Accumulated
                                                                                 Goodwill                       Assets                          Amortization

Balance at January 1, 2004                                                  $          5,547             $            6,433            $                     (876 )
Amortization                                                                              —                              —                                   (717 )

Balance at June 30, 2004                                                    $          5,547             $            6,433            $                (1,593 )


    The following table summarizes the carrying amounts and amortization of intangible assets:
                                                                       June 30, 2003                                             June 30, 2004

                                                             Gross                                                     Gross
                                                            Carrying                  Accumulated                     Carrying                   Accumulated
                                                            Amount                    Amortization                    Amount                     Amortization

Amortized intangible assets:
  Covenants not to compete                              $         143             $              52               $            143          $                70
  Customer relationships                                        6,290                           116                          6,290                        1,523

                                                        $       6,433             $             168               $          6,433          $             1,593
Aggregate amortization expense for the six months ended June 30, 2003 and 2004 was $118 and $717, respectively.

                                                              F-63
                                                RED SIMPSON, INC. AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

    Estimated amortization expense for the years ended December 31:
2005                                                                                                                              $     1,416
2006                                                                                                                                    1,416
2007                                                                                                                                    1,300
2008                                                                                                                                        8
2009                                                                                                                                       —

Note G — Long-Term Debt
    Long-term debt consists of the following:
                                                                                                                             June 30,

                                                                                                                     2003                    2004

Line of credit of $60,000 with Red River Bank, paid in full during 2004                                          $      7,039            $      —
$72 note payable to Max Green for the land and Marshall office building, paid in full during 2004                          64                   —
Various term loans with Ford Motor Credit, paid in full during 2004                                                       222                   —

                                                                                                                        7,325                   —
    Less: current maturities                                                                                            7,161                   —

                                                                                                                 $          164          $      —



Note H — Income Taxes
    As discussed in Note A, the Company has elected to be taxed as a Subchapter S corporation. In certain states, taxes must be paid at the
corporate level. For the six months ended June 30, 2003 and 2004, state tax expense was approximately $271 and $182, respectively.
    The Company has made a number of acquisitions during the past several years. In these acquisitions, the Company acquired all of the
outstanding stock of the acquired companies and they became a subsidiary of the Company. These acquired companies were C corporations
and have been inactive since the acquisitions.
     Had the Company been subject to Federal income taxes, it would have recorded approximately $2,000 and $1,700 in income tax benefit for
the six months ended June 30, 2003 and 2004, respectively.

Note I — Employee Benefit Plans
    The Company sponsors a 401(k) defined contribution plan that provides retirement benefits to all employees that elect to participate. Under
the plan, participating employees may defer up to 15% of their base pre-tax compensation. Contributions by the Company are discretionary.
During the six months ended June 30, 2003 and 2004, the Company contributed approximately $339 and $309, respectively related to this plan.
    Effective January 1, 1997, the Company adopted a non-qualified deferred compensation plan for select employees. The plan is not funded
and the balance is payable over four to five years after employment

                                                                     F-64
                                               RED SIMPSON, INC. AND SUBSIDIARIES
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

termination and is reflected in the deferred compensation balance. The net accruals for the six months ended June 30, 2003 and 2004 were as
follows:
Balance at January 1, 2003                                                                                                $        19,250
Conversion to notes payable deferred compensation                                                                                    (214 )
Expense                                                                                                                             1,501
Balance at June 30, 2003                                                                                                  $        20,537

Balance at January 1, 2004                                                                                                $        21,158
Conversion to notes payable deferred compensation                                                                                     (90 )
Expense                                                                                                                             2,006
    Balance at June 30, 2004                                                                                              $        23,074




Note J —      Related Party Transactions
     The Company leases its corporate headquarters from the Simpson-Noles, LLC, of which the Company owned a 50% interest until June 30,
2004. The future minimum lease commitments under this arrangement include monthly rental payments in the amount of $12 for the duration
of the agreement, which has an indefinite life. Rent expense for the six months ended June 30, 2003 and 2004 was approximately $73 and $72,
respectively.


Note      Major Customers and Concentration of Credit Risk
K—
    Almost all of the Company’s revenues are generated from work performed with utility companies and municipalities throughout the
southern United States of America. While the individual jobs may be short-term in nature, relationships with these entities may be
longstanding. The Company had four customers that made up 47% and 56% of total revenues during the six months ended June 30, 2003 and
2004, respectively.
    Financial instruments which subject the Company to concentrations of credit risk consist almost entirely of trade accounts receivable. The
Company has not incurred significant bad debts in the past, and expects that the lack of any allowance for doubtful accounts is reasonable
based on historic experience and current composition of its account receivable.


Note      Commitments and Contingencies
L—

     Litigation
    The Company is involved in various claims and legal proceedings. These cases are, in the opinion of management, ordinary, routine
matters incidental to the normal business conducted by the Company. Management believes that the ultimate disposition of such proceedings
will not have a materially adverse effect on the Company’s consolidated financial statements.


     Guarantees
    The Company has many customer arrangements that require the Company to indemnify the other party against loss from claims. Also, the
Company is required to indemnify its bonding agent in the event of non-performance. The Company has not experienced material losses under
these arrangements and foresees no future material adverse impact on financial position, results of operations or cash flows.

                                                                     F-65
Overhead Distribution Transformer Replacement Underground Distribution Trenching & Boring Overhead Distribution Hot Stick Work Procedure Hurricane Damage Emergency Power Restoration
                                                         13,500,000 Shares


                                Pike Electric Corporation

                                                           Common Stock




                                                                  PROSPECTUS
                                                                         , 2005
Citigroup                                                                                                                     JPMorgan
          Robert W. Baird & Co.                                                               Friedman Billings Ramsey


      No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this
prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the shares
offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information in this prospectus may
only be accurate on the date of this document.
   We have not undertaken any efforts to qualify this offering for offers to individual investors in any jurisdiction outside the United States.
Therefore, individual investors located outside the United States should not expect to be eligible to participate in this offering.
    Through and including                  , 2005 (the 25th day after the date of this prospectus) all dealers effecting transactions in these
securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to
deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.
                                                                      PART II
                                            INFORMATION NOT REQUIRED IN PROSPECTUS


Item 13.           Other Expenses of Issuance and Distribution.
    The following table sets forth the expenses (other than underwriting compensation expected to be incurred) in connection with this
offering. All of such amounts (except the SEC registration fee and NASD filing fee) are estimated.
SEC registration fee                                                                                                   $              30,000
Listing fee                                                                                                            $             200,000
NASD filing fee                                                                                                        $              23,500
Blue Sky fees and expenses                                                                                             $               5,000
Printing and engraving costs                                                                                           $             450,000
Legal fees and expenses                                                                                                $           1,750,000
Accounting fees and expenses                                                                                           $           1,750,000
Transfer Agent and Registrar fees and expenses                                                                         $               5,000
Miscellaneous                                                                                                          $              36,500
       Total                                                                                                           $           4,250,000


Item 14.           Indemnification of Directors and Officers.
     Section 145(a) of the Delaware General Corporation Law (the “DGCL”) provides in relevant part that a corporation may indemnify any
officer or director who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding
(other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a director or officer of another entity, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such
action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct
was unlawful.
     Section 145(b) of the DGCL provides in relevant part that a corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses
(including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if
the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation
and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
    Our bylaws generally provide that we will indemnify our directors and officers to the fullest extent permitted by law.
    The registrant also obtained officers’ and directors’ liability insurance which insures against liabilities that officers and directors of the
registrant may, in such capacities, incur. Section 145(g) of the DGCL provides that a corporation shall have power to purchase and maintain
insurance on behalf of any person

                                                                         II-1
who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would
have the power to indemnify such person against such liability under that section.
    Section 8 of the Underwriting Agreement, to be filed as Exhibit 1.1 provides that the Underwriters named therein will indemnify us and
hold us harmless and each of our directors, officers or controlling persons from and against certain liabilities, including liabilities under the
Securities Act. Section 8 of the Underwriting Agreement also provides that such Underwriters will contribute to certain liabilities of such
persons under the Securities Act.


Item 15.           Recent Sales of Unregistered Securities.
     The following information relates to all securities issued or sold by our predecessor, Pike Holdings, Inc., formerly Pike Equipment and
Supply Company, within the past three years and not registered under the Securities Act. Each of the transactions described below was
conducted in reliance upon the available exemptions from the registration requirements of the Securities Act, including those contained in
Section 4(2), on the basis that such transactions did not involve a public offering, and on Rule 701 promulgated under Section 3(b), which
relates to exemptions for offers and sales of securities pursuant to certain compensatory benefit plans. There were no underwriters employed in
connection with any of the transactions set forth in this Item 15.
    On April 18, 2002, the registrant issued and sold an aggregate of 24,436,936 shares of the registrant’s common stock at a per share price of
$3.80 for an aggregate purchase price of $92.9 million in connection with the registrant’s 2002 recapitalization. Ten stockholders and senior
management received 2,892,547 shares while LGB Pike LLC received 21,544,390 shares. The transactions were conducted in reliance upon the
available exemptions from the registration requirements of the Securities Act, including those contained in Section 4(2), on the basis that such
transactions did not involve a public offering, no general solicitation or advertising was used in connection with the offering and the purchasers
either received or had access to adequate information about us in order to make informed investment decisions.
     On April 18, 2002, the registrant issued 1,000,000 shares of its Series A preferred stock to the stockholders and senior management of Pike
Electric, Inc. as part of the consideration for the registrant’s 2002 recapitalization. The Series A preferred stock shares’ face value accreted at
7.0% per annum. The initial face value was determined to be within a range of $5.00 to $45.00 per share based on the registrant’s achieving
certain performance targets. All 1,000,000 shares of the registrant’s Series A preferred stock were redeemed in January 2005 for an aggregate
consideration of $20.0 million. The transactions were conducted in reliance upon the available exemptions from the registration requirements
of the Securities Act, including those contained in Section 4(2), on the basis that such transactions did not involve a public offering, no general
solicitation or advertising was used in connection with the offering and the purchasers either received or had access to adequate information
about us in order to make informed investment decisions.
     On April 18, 2002, the registrant issued options to senior management to purchase up to an aggregate total of 2,565,819 shares of the
registrant’s common stock, including 1,796,085 shares pursuant to the registrant’s 2002 Stock Option Plan A and 769,734 shares pursuant to
the registrant’s 2002 Stock Option Plan B. The exercise price per share was $3.80. No consideration was paid to the registrant by any recipient
of any of the foregoing options for the grant of stock options. As of June 30, 2005, none of the options has been exercised. The transactions
were conducted in reliance upon the available exemptions from the registration requirements of the Securities Act, including those contained in
Rule 701 promulgated under Section 3(b), which relates to exemptions for offers and sales of securities pursuant to certain compensatory
benefit plans.
    On April 18, 2002, the registrant issued one share of Series B Preferred Stock to Pike Electric, Inc. in exchange for the shares of common
stock owned by Pike Electric, Inc. in the registrant. The transactions

                                                                        II-2
were conducted in reliance upon the available exemptions from the registration requirements of the Securities Act, including those contained in
Section 4(2), on the basis that such transactions did not involve a public offering, no general solicitation or advertising was used in connection
with the offering and the purchasers either received or had access to adequate information about us in order to make informed investment
decisions.
    On June 30, 2002, the registrant contributed all of its operating assets and liabilities (other than shares of Pike Electric, Inc. and Pike
Equipment and Supply Company (formerly known as Pike Equipment and Supply Company of North Carolina) and certain liabilities,
including those related to the credit agreement) to Pike Equipment and Supply Company. The registrant then contributed the shares of Pike
Equipment and Supply Company to Pike Electric, Inc. and in exchange redeemed the outstanding share of its Series B Preferred Stock. As a
result of this contribution, no shares of Series B Preferred Stock were outstanding and Pike Equipment and Supply Company became a wholly
owned subsidiary of Pike Electric, Inc.
    On April 18, 2003, the registrant issued options to senior management to purchase up to an aggregate total of 253,400 shares of the
registrant’s common stock, including 177,386 shares pursuant to the registrant’s 2002 Stock Option Plan A and 76,014 shares pursuant to the
registrant’s 2002 Stock Option Plan B. The exercise price per share was $3.80. No consideration was paid to the registrant by any recipient of
any of the foregoing options for the grant of such options. The transactions were conducted in reliance upon the available exemptions from the
registration requirements of the Securities Act, including those contained in Rule 701 promulgated under Section 3(b), which relates to
exemptions for offers and sales of securities pursuant to certain compensatory benefit plans.
     On April 18, 2003, options to purchase 161,548 shares granted under the registrant’s 2002 Stock Option Plan A and options to purchase
69,239 shares granted under the registrant’s 2002 Stock Option Plan B were terminated without being exercised. As of June 30, 2005, none of
the options has been exercised. The transactions were conducted in reliance upon the available exemptions from the registration requirements
of the Securities Act, including those contained in Rule 701 promulgated under Section 3(b), which relates to exemptions for offers and sales of
securities pursuant to certain compensatory benefit plans.
     On July 1, 2004, in connection with the Red Simpson, Inc. acquisition, the registrant issued and sold an aggregate of 11,206,574 shares of
our common stock at a per share price of $6.51 for an aggregate purchase price of $73.0 million to (1) management personnel of Red Simpson,
Inc., 307,038 shares, (2) the Joe B./Anne A. Pike Irrevocable Generation Skipping Trust, 115,143 shares and (3) LGB Pike II LLC,
10,784,394 shares. The transactions were conducted in reliance upon the available exemptions from the registration requirements of the
Securities Act, including those contained in Section 4(2), on the basis that such transactions did not involve a public offering, no general
solicitation or advertising was used in connection with the offering and the purchasers either received or had access to adequate information
about us in order to make informed investment decisions.
     On October 21, 2004, the registrant issued options to senior management to purchase up to an aggregate total of 1,503,487 shares of the
registrant’s common stock including 1,052,419 shares pursuant to the registrant’s 2002 Stock Option Plan A, and 451,068 shares pursuant to
the registrant’s 2002 Stock Option Plan B. The exercise price per share was $6.51. No consideration was paid to the registrant by any recipient
of any of the foregoing options for the grant of such options. As of June 30, 2005, none of the options has been exercised. The transactions
were conducted in reliance upon the available exemptions from the registration requirements of the Securities Act, including those contained in
Rule 701 promulgated under Section 3(b), which relates to exemptions for offers and sales of securities pursuant to certain compensatory
benefit plans.
    On December 10, 2004, the registrant canceled options to purchase an aggregate 1,185,981 shares granted under the 2002 Stock Option
Plan A. The registrant paid option holders $8.35 less the respective exercise price of $3.80 or $6.51 for each canceled share for an aggregate
purchase price of $4.2 million.

                                                                       II-3
    On January 31, 2005, the registrant issued an aggregate total of 598,519 shares of the registrant’s common stock to 60 participant directors,
executive officers and employees under the registrant’s 2005 Employee Stock Purchase Plan. The price per share was $8.35 for an aggregate
purchase price of $5.0 million. The transactions were conducted in reliance upon the available exemptions from the registration requirements of
the Securities Act, including those contained in Rule 701 promulgated under Section 3(b), which relates to exemptions for offers and sales of
securities pursuant to certain compensatory benefit plans.
     The registrant reincorporated in Delaware on July 1, 2005. To effect the reincorporation, Pike Holdings, Inc. (the predecessor to Pike
Electric Corporation) merged with and into Pike Electric Corporation, a newly created wholly owned subsidiary which was formed in Delaware
for the sole purpose of effecting the reincorporation. As a result of the reincorporation, each outstanding share of common stock, no par value,
of Pike Holdings, Inc. was converted into 14.76 shares of common stock, par value $0.001 per share, of Pike Electric Corporation. The
transactions were conducted in reliance upon the available exemptions from the registration requirements of the Securities Act, including those
contained in Section 4(2), on the basis that such transactions did not involve a public offering, no general solicitation or advertising was used in
connection with the transactions and the stockholders either received or had access to adequate information about us in order to make informed
investment decisions, and Rule 145(a)(2), which provides an exception for exchanges of securities in connection with a merger for the purpose
of changing the domicile of a corporation.


Item 16.              Exhibits and Financial Statement Schedules.

    (a)     Exhibits
           Exhibit
           Number                                                                   Description

               1 .1              Underwriting Agreement.
               2 .1              Recapitalization and Investment Agreement, dated as of March 15, 2002, by and among LGB Pike LLC, LGB
                                 Acquisition Corp., Pike Electric, Inc., Pike Equipment and Supply Company, Pike Merger Sub, Inc. and certain
                                 stockholders.†
               2 .2              Amendment Agreement and Consent, dated as of April 11, 2002, to the Recapitalization and Investment
                                 Agreement, dated as of March 15, 2002, by and among LGB Pike LLC, LGB Acquisition Corp., Pike Electric,
                                 Inc., Pike Equipment and Supply Company, Pike Merger Sub, Inc. and certain stockholders.†
              3 .1               Certificate of Incorporation of Pike Electric Corporation.†
              3 .3               Bylaws of Pike Electric Corporation.†
              5 .1               Opinion of Cravath, Swaine & Moore LLP.
             10 .1               2005 Employee Stock Purchase Plan.†
             10 .2               2002 Stock Option Plan A.†
             10 .3               2002 Stock Option Plan B.†
             10 .4               Amended and Restated Credit Agreement, dated as of July 1, 2004, among Pike Holdings, Inc., Pike Electric,
                                 Inc. and the lenders party thereto.†
             10 .5               First Amendment to the Amended and Restated Credit Agreement, dated as of December 10, 2004, among Pike
                                 Holdings, Inc., Pike Electric, Inc. and the lenders party thereto.†
             10 .6               Stockholders Agreement, dated April 18, 2002, among Pike Holdings, Inc., LGB Pike LLC, certain rollover
                                 holders and certain management stockholders.†
             10 .7               Management Advisory Services Agreement, dated April 18, 2002, between Pike Electric, Inc. and Goldberg
                                 Lindsay & Co. LLC.†
             10 .8               Amendment Agreement, dated as of July 1, 2004, to the Management Advisory Services Agreement, dated
                                 April 18, 2002, between Pike Electric, Inc. and Goldberg Lindsay & Co. LLC.†

                                                                        II-4
           Exhibit
           Number                                                                  Description

             10 .9              Amended and Restated Employment Agreement, dated as of July 20, 2005, between J. Eric Pike and Pike
                                Electric Corporation.
             10 .10             Letter Agreement, dated as of March 15, 2002, between Joe B. Pike and LGB Pike LLC.†
             10 .11             Second Amendment to the Amended and Restated Credit Agreement, dated as of June 27, 2005, among Pike
                                Holdings, Inc., Pike Electric, Inc. and the lenders party thereto.†
             10 .12             Termination Agreement, dated as of June 23, 2005, between Pike Electric, Inc. and Goldberg Lindsay & Co.
                                LLC.†
             10 .13             Addendum, dated June 13, 2005, to the Stockholders Agreement dated April 18, 2004, among Pike Holdings,
                                Inc., LGB Pike LLC, certain rollover holders and certain management stockholders.†
             10 .14             Arrangement with Mr. Castaneda.
             10 .15             2005 Omnibus Incentive Compensation Plan.
             10 .16             Amendment, dated July 21, 2005, to the Stockholders Agreement dated April 18, 2002, among Pike Electric
                                Corporation as successor to Pike Holdings, Inc., LGB Pike II LLC as successor to LGB Pike LLC, certain
                                rollover holders and certain management stockholders.
             21 .1              List of subsidiaries of Pike Electric Corporation.
             23 .1              Consent of Ernst & Young LLP.
             23 .2              Consent of Dixon Hughes PLLC.
             23 .3              Consent of Grant Thornton LLP.
             23 .4              Consent of Cravath, Swaine & Moore LLP (contained in Exhibit 5.1).
             23 .5              Consent of Appraisal Economics, Inc.
             23 .6              Consent to Serve as Director of Alan E. Goldberg.
             23 .7              Consent to Serve as Director of Robert D. Lindsay.
             23 .8              Consent to Serve as Director of Stuart S. Janney III.
             23 .9              Consent to Serve as Director of Adam P. Godfrey.
             23 .10             Consent to Serve as Director of James R. Helvey III.
             24 .1              Powers of Attorney (included on signature page of Amendment No. 3 to this Registration Statement).


† Previously filed.

    (b)     Financial Statement Schedules.
    The financial statement schedules are omitted because they are inapplicable or the requested information is shown in the consolidated
financial statements of Pike Electric Corporation or related notes thereto.


Item 17.              Undertakings
    The undersigned registrant hereby undertakes as follows:

       (1) The undersigned will provide to the underwriters at the closing specified in the underwriting agreement certificates in such
    denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

         (2) For purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from the form of
    prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the
    registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of
    the time it is declared effective.

                                                                       II-5
        (3) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form
    of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such
    securities at that time shall be deemed to be the initial bona fide offering thereof.
    Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described in Item 14 or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as
amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                                                        II-6
                                                                 SIGNATURES
   Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Mount Airy, North Carolina, on the 22nd day of July, 2005.




                                                          PIKE ELECTRIC CORPORATION




                                                         By: *

                                                          Name:      J. Eric Pike
                                                          Title:      President, Chief Executive Officer and Director


                                                          POWER OF ATTORNEY
    We, the undersigned directors and officers of Pike Electric Corporation, do hereby constitute and appoint Mark Castaneda and J. Russell
Triedman, or any of them, our true and lawful attorneys and agents, with full power of substitution, to do any and all acts and things in our
name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the
capacities indicated below, which said attorneys and agents, or either of them, may deem necessary or advisable to enable said registrant to
comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection
with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names in
the capacities indicated below, any and all amendments (including post-effective amendments and any related registration statement pursuant to
Rule 462(b) under the Securities Act of 1933) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof.
    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
                              Signature                                                          Title                                  Date


                                 *                                                   President, Chief Executive                    July 22, 2005
                                                                                        Officer and Director
                            J. Eric Pike

                      /s/ MARK CASTANEDA                                               Chief Financial Officer                     July 22, 2005

                         Mark Castaneda

                                 *                                                            Controller                           July 22, 2005

                          David J. Mills

                                 *                                                             Director                            July 22, 2005

                       J. Russell Triedman

 *By:                        /s/ MARK CASTANEDA

                                Attorney-in-fact

                                                                      II-7
                                         EXHIBIT INDEX
Exhibit
Number                                                      Description

   1 .1    Underwriting Agreement.
   2 .1    Recapitalization and Investment Agreement, dated as of March 15, 2002, by and among LGB Pike LLC, LGB
           Acquisition Corp., Pike Electric, Inc., Pike Equipment and Supply Company, Pike Merger Sub, Inc. and certain
           stockholders.†
   2 .2    Amendment Agreement and Consent, dated as of April 11, 2002, to the Recapitalization and Investment
           Agreement, dated as of March 15, 2002, by and among LGB Pike LLC, LGB Acquisition Corp., Pike Electric,
           Inc., Pike Equipment and Supply Company, Pike Merger Sub, Inc. and certain stockholders.†
   3 .1    Certificate of Incorporation of Pike Electric Corporation.†
   3 .3    Bylaws of Pike Electric Corporation.†
   5 .1    Opinion of Cravath, Swaine & Moore LLP.
  10 .1    2005 Employee Stock Purchase Plan.†
  10 .2    2002 Stock Option Plan A.†
  10 .3    2002 Stock Option Plan B.†
  10 .4    Amended and Restated Credit Agreement, dated as of July 1, 2004, among Pike Holdings, Inc., Pike Electric,
           Inc. and the lenders party thereto.†
  10 .5    First Amendment to the Amended and Restated Credit Agreement, dated as of December 10, 2004, among Pike
           Holdings, Inc., Pike Electric, Inc. and the lenders party thereto.†
  10 .6    Stockholders Agreement, dated April 18, 2002, among Pike Holdings, Inc., LGB Pike LLC, certain rollover
           holders and certain management stockholders.†
  10 .7    Management Advisory Services Agreement, dated April 18, 2002, between Pike Electric, Inc. and Goldberg
           Lindsay & Co. LLC.†
  10 .8    Amendment Agreement, dated as of July 1, 2004, to the Management Advisory Services Agreement, dated
           April 18, 2002 between Pike Electric, Inc. and Goldberg Lindsay & Co. LLC.†
  10 .9    Amended and Restated Employment Agreement, dated as of July 20, 2005, between J. Eric Pike and Pike
           Electric Corporation.
  10 .10   Letter Agreement, dated as of March 15, 2002, between Joe B. Pike and LGB Pike LLC.†
  10 .11   Second Amendment to the Amended and Restated Credit Agreement, dated as of June 27, 2005, among Pike
           Holdings, Inc., Pike Electric, Inc. and the lenders party thereto.†
  10 .12   Termination Agreement, dated as of June 23, 2005, between Pike Electric, Inc. and Goldberg Lindsay & Co.
           LLC.†
  10 .13   Addendum, dated June 13, 2005, to the Stockholders Agreement dated April 18, 2002, among Pike Holdings,
           Inc., LGB Pike LLC, certain rollover holders and certain management stockholders.†
  10 .14   Arrangement with Mr. Castaneda.
  10 .15   2005 Omnibus Incentive Compensation Plan.
  10 .16   Amendment, dated July 21, 2005, to the Stockholders Agreement dated April 18, 2002, among Pike Electric
           Corporation as successor to Pike Holdings, Inc., LGB Pike II LLC as successor to LGB Pike LLC, certain
           rollover holders and certain management stockholders.
  21 .1    List of subsidiaries of Pike Electric Corporation.
  23 .1    Consent of Ernst & Young LLP.
  23 .2    Consent of Dixon Hughes PLLC.
  23 .3    Consent of Grant Thornton LLP.
  23 .4    Consent of Cravath, Swaine & Moore LLP (contained in Exhibit 5.1).
  23 .5    Consent of Appraisal Economics, Inc.
  23 .6    Consent to Serve as Director of Alan E. Goldberg.
  23 .7    Consent to Serve as Director of Robert D. Lindsay.
         Exhibit
         Number                                                        Description

            23 .8     Consent to Serve as Director of Stuart S. Janney III.
            23 .9     Consent to Serve as Director of Adam P. Godfrey.
            23 .10    Consent to Serve as Director of James R. Helvey III.
            24 .1     Powers of Attorney (included on signature page of Amendment No. 3 to this Registration Statement).


† Previously filed.
                                                                 EXHIBIT 1.1

                                                    PIKE ELECTRIC CORPORATION

                                                     13,500,000 Shares of Common Stock

                                                           Underwriting Agreement

                                                                  July -, 2005

Citigroup Global Markets Inc.
J.P. Morgan Securities Inc.
as Representatives of the
several Underwriters listed
in Schedule I hereto

c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

Pike Electric Corporation, a Delaware corporation (the "Company"), proposes to issue and sell to the several Underwriters (the "Underwriters")
listed in Schedule I to this agreement (this "Agreement"), for whom you are acting as representatives (the "Representatives"), an aggregate of
10,000,000 shares of common stock, par value $0.001 per share (the "Stock"), of the Company, and the stockholders of the Company named in
Schedule II hereto (the "Selling Stockholders") propose to sell to the Underwriters an aggregate of 3,500,000 shares and, at the option of the
Underwriters, up to 2,025,000 additional shares of Stock. The aggregate of 13,500,000 shares to be sold by the Company and the Selling
Stockholders are herein called the "Underwritten Shares," and the aggregate of 2,025,000 additional shares to be sold by LGB Pike II LLC are
herein called the "Option Shares." The Underwritten Shares and the Option Shares are herein referred to as the "Shares."

As part of the offering contemplated by this Agreement, Citigroup Global Markets Inc. has agreed to reserve out of the Shares set forth
opposite its name on the Schedule I to this Agreement up to 675,000 shares for sale to the Company's employees, officers and directors,
selected business associates and certain related persons of the Company (collectively, "Participants"), as set forth in the Prospectus under the
heading "Underwriting" (the "Directed Share Program"). The Shares to be sold by Citigroup Global Markets Inc. pursuant to the Directed
Share Program (the "Directed Shares") will be sold by Citigroup Global Markets Inc. pursuant to this Agreement at the public offering price.
Any Directed Shares not orally confirmed for purchase by any Participants by 8:00
A.M. New York City time on the business day (as hereinafter defined) following the date on which this Agreement is executed will be offered
to the public by Citigroup Global Markets Inc. as set forth in the Prospectus.

The Company hereby confirms its agreement with the several Underwriters concerning the purchase and sale of the Shares, as follows:
                                                                         2

1. Registration Statement. The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Securities Act"), a
registration statement (File No. 333-124117) including a prospectus, relating to the Shares. Such registration statement, as amended at the time
it becomes effective, including the information, if any, deemed pursuant to Rule 430A under the Securities Act to be part of the registration
statement at the time of its effectiveness ("Rule 430 Information"), is referred to herein as the "Registration Statement"; and as used herein, the
term "Preliminary Prospectus" means each prospectus included in such registration statement (and any amendments thereto) before it becomes
effective, any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the
Registration Statement at the time of its effectiveness that omits Rule 430A Information, and the term "Prospectus" means the prospectus in the
form first used to confirm sales of the Shares. If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to
include such Rule 462 Registration Statement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the
Registration Statement and the Prospectus.

2. Purchase of the Shares by the Underwriters. (a) The Company and each of the Selling Stockholders agree, severally and not jointly, to sell
the Shares to the several Underwriters as provided in this Agreement, and each Underwriter, on the basis of the representations, warranties and
agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company and
each of the Selling Stockholders at a purchase price per share of $- (the "Purchase Price") the number of Underwritten Shares (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying the aggregate number of Underwritten Shares to be sold by the Company
and each of the Selling Stockholders as set forth opposite their respective names in Schedule II hereto by a fraction, the numerator of which is
the aggregate number of Underwritten Shares to be purchased by such Underwriter as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the aggregate number of Underwritten Shares to be purchased by all the Underwriters from
the Company and all the Selling Stockholders hereunder.

In addition, LGB Pike II LLC agrees to sell the Option Shares to the several Underwriters, and the Underwriters shall have the option to
purchase at their election up to 2,025,000 Option Shares at the Purchase Price. The Underwriters, on the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated, shall have the option to purchase, severally and not jointly, from
LGB Pike II LLC at the Purchase Price that portion of the number of Option Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying such number of Option Shares by a fraction the numerator of
which is the maximum number of Option Shares which such Underwriter is entitled to purchase and the denominator of which is the maximum
number of Option Shares which all of the Underwriters are entitled to purchase hereunder.

The Underwriters may exercise the option to purchase the Option Shares at any time and from time to time on or before the thirtieth day
following the date of this Agreement, by written notice from the Representatives to the Company and LGB Pike II LLC. Such notice shall set
                                                                         3

forth the aggregate number of Option Shares as to which the option is being exercised and the date and time when the Option Shares are to be
delivered and paid for, which may be the same date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the
Closing Date nor, unless the Representatives and LGB Pike II LLC otherwise agree, earlier than the second or later than the tenth full business
day after the date of such notice (unless such time and date are postponed in accordance with the provisions of Section 11 hereof). Any such
notice shall be given at least two business days prior to the date and time of delivery specified therein.

(b) The Company and the Selling Stockholders understand that the Underwriters intend to make a public offering of the Shares as soon after the
effectiveness of this Agreement as in the judgment of the Representatives is advisable and initially intend to offer the Shares on the terms set
forth in the Prospectus. The Company and the Selling Stockholders acknowledge and agree that the Underwriters may offer and sell Shares to
or through any affiliate of an Underwriter and that any such affiliate may offer and sell Shares purchased by it to or through any Underwriter.

(c) Payment for the Shares shall be made by wire transfer in immediately available funds to the accounts specified by the Company and the
Selling Stockholders to the Representatives, in the case of the Underwritten Shares, at the offices of Simpson Thacher & Bartlett LLP, 425
Lexington Avenue, New York, New York, at 10:00 A.M., New York City time, on -, 2005, or at such other time or place on the same or such
other date, not later than the fifth business day thereafter, as the Representatives, the Company and the Selling Stockholders may agree upon in
writing, or, in the case of the Option Shares, on the date and at the time and place specified by the Representatives in the written notice of the
Underwriters' election to purchase such Option Shares. The time and date of such payment for the Underwritten Shares are referred to herein as
the "Closing Date," and the time and date for such payment for the Option Shares, if other than the Closing Date, are herein referred to as the
"Additional Closing Date."

On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Selling Stockholders shall deliver to the Company's
transfer agent a properly executed stock power and an instruction to transfer ownership of the specific number of Shares to be sold by them to
Cede & Co., as nominee of The Depository Trust Company ("DTC"), on the Closing Date or the Additional Closing Date, as the case may be.
On the Closing Date or the Additional Closing Date, as the case may be, the Selling Stockholders shall cause DTC to credit security
entitlements with respect to the Shares by book entry to the securities accounts of the Representatives at DTC for the account of each
Underwriter against payment of the purchase price to the Selling Stockholders as described in the preceding paragraph, with any transfer taxes
payable in connection with the sale of the Shares duly paid by the Company or the Selling Stockholders, as the case may be.

Time shall be of the essence, and crediting of security entitlements at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder.
                                                                         4

3. Representations and Warranties of the Company. The Company represents and warrants to each Underwriter that:

(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and
each Preliminary Prospectus, at the time of filing thereof, complied in all material respects with the Securities Act and did not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Representatives expressly for use in any Preliminary Prospectus.

(b) Registration Statement and Prospectus. No order suspending the effectiveness of the Registration Statement has been issued by the
Commission, and no proceeding for that purpose has been initiated or threatened by the Commission; as of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement complied and will comply in all material respects with the
Securities Act, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading; and as of the applicable filing date of the Prospectus and any
amendment or supplement thereto and as of the Closing Date and the Additional Closing Date, if applicable, the Prospectus will not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto.

(c) Financial Statements. The financial statements and the related notes thereto included in the Registration Statement and the Prospectus
comply in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder (collectively, the "Exchange Act"), as applicable, and present fairly, in all material
respects, the consolidated financial position of the Company and its subsidiaries as of the dates indicated and the results of their operations and
the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods covered thereby, and the supporting schedules included in the
Registration Statement present fairly, in all material respects, the information required to be stated therein; the other financial information
included in the Registration Statement and the Prospectus has been derived from the accounting records of the Company and its subsidiaries
and presents fairly, in all material respects, the information shown thereby; the pro forma financial statements included in the Prospectus and
the Registration Statement include assumptions that provide a reasonable basis for presenting the significant
                                                                        5

effects directly attributable to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement amounts in
the pro forma financial statements included in the Prospectus and the Registration Statement; and the pro forma financial statements included in
the Prospectus and the Registration Statement comply as to form in all material respects with the applicable accounting requirements of
Regulation S-X under the Securities Act and the pro forma adjustments have been properly applied to the historical amounts in the compilation
of those statements.

(d) No Material Adverse Change. Since the date of the most recent financial statements of the Company included in the Registration Statement
and the Prospectus, (i) there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any
dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or any material
adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management,
financial position, stockholders' equity, results of operations or prospects of the Company and its subsidiaries taken as a whole; (ii) neither the
Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as
a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole; and
(iii) neither the Company nor any of its subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or
governmental or regulatory authority, except in the case of each of clauses (i),
(ii) and (iii) above as otherwise disclosed in the Registration Statement and the Prospectus.

(e) Organization and Good Standing. The Company and each of its subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification,
and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority would not, individually or in the aggregate, have a material adverse
effect on the business, properties, management, financial position or results of operations of the Company and its subsidiaries taken as a whole
(a "Material Adverse Effect"). The Company does not own or control, directly or indirectly, any corporation, association or other entity other
than the subsidiaries listed in Exhibit 21 to the Registration Statement and the following subsidiaries that the Company intends to dissolve:
Akerman Foundation Drilling, Inc. and Industrial Electrical Corporation of Texas, Inc.

(f) Capitalization. The Company has an authorized capitalization as set forth in the Prospectus under the heading "Capitalization"; all the
outstanding shares of capital stock of the Company (including the Shares to be sold by the Selling Stockholders) have been duly and validly
authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; except as described in or
expressly contemplated by the Prospectus,
                                                                         6

there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its subsidiaries, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company or any such
subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options or restricting the voting or transfer of any
shares of capital stock of the Company or any such subsidiary; the capital stock of the Company conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus; the form of certificate for the Stock has been duly authorized
and is in sufficient form; and all the outstanding shares of capital stock or other equity interests of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of
any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party, other than pursuant to the
Amended and Restated Credit Agreement, dated as of July 1, 2004, as amended as of December 10, 2004 and as of June 27, 2005 (as so
amended, the "Senior Credit Agreement"), among the Company, Pike Electric, Inc., the lenders from time to time parties thereto and Barclays
Bank PLC, as administrative agent.

(g) Due Authorization. The Company has full right, power and authority to execute and deliver this Agreement and to perform its obligations
hereunder; and all action required to be taken for the due and proper authorization, execution and delivery by it this Agreement and the
consummation by it of the transactions contemplated hereby has been duly and validly taken.

(h) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by the Company.

(i) The Shares. The Shares to be issued and sold by the Company hereunder have been duly authorized by the Company and, when issued and
delivered and paid for as provided herein, will be duly and validly issued and will be fully paid and nonassessable and will conform to the
descriptions thereof in the Prospectus; and the issuance of the Shares is not subject to any preemptive or similar rights.

(j) Description of this Agreement. This Agreement conforms in all material respects to the description thereof contained in the Registration
Statement and the Prospectus.

(k) No Violation or Default. Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational
documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.
                                                                         7

(l) No Conflicts. The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares to be sold by
the Company hereunder and the consummation by the Company of the transactions contemplated by this Agreement will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other material agreement or instrument to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii)
result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or any of its subsidiaries
or (iii) except as could not reasonably be expected to have a Material Adverse Effect, result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority.

(m) No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or governmental or
regulatory authority is required for the execution, delivery and performance by the Company of this Agreement, the issuance and sale of the
Shares to be sold by the Company hereunder and the consummation by the Company of the transactions contemplated by this Agreement,
except for the registration of the Shares under the Securities Act and such consents, approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities laws in connection with the purchase and distribution of the Shares by the
Underwriters.

(n) Legal Proceedings. Except as described in the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or any of
its subsidiaries is or may be the subject that, individually or in the aggregate, if determined adversely to the Company or any of its subsidiaries,
would not have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under this
Agreement; no such investigations, actions, suits or proceedings are threatened or, to the best knowledge of the Company, contemplated by any
governmental or regulatory authority or threatened by others; and (i) there are no current or pending legal, governmental or regulatory actions,
suits or proceedings that are required under the Securities Act to be described in the Prospectus that are not so described and (ii) there are no
statutes, regulations or contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration
Statement or described in the Registration Statement or the Prospectus that are not so filed or described.

(o) Transfer Taxes. There are no transfer taxes or other similar fees or charges under federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance by the Company or
sale by the Company and the Selling Stockholders of the Shares, other than the New York State Stock Transfer Tax in an amount not to exceed
$350 per Selling Stockholder.

(p) Independent Accountants. Ernst & Young LLP, who have certified certain financial statements of the Company and its subsidiaries, Dixon
Hughes PLLC, who have
                                                                        8

certified certain financial statements of the Company and its subsidiaries, and Grant Thornton LLP, who have certified certain financial
statements of Red Simpson, Inc. and its subsidiaries, are each independent public accountants with respect to the Company and its subsidiaries
as required by the Securities Act.

(q) Title to Real and Personal Property. The Company and its subsidiaries have good and marketable title in fee simple to all real property and
good and marketable title to all items of real and personal property described as being owned by them in the Prospectus that are material to the
respective businesses of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and
imperfections of title except (i) such as are described in the Prospectus, (ii) those pursuant to the Senior Credit Agreement and (iii) those that
(A) do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries and (B) could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and any real and personal property held under
leases by the Company and its subsidiaries are held by them under valid and enforceable leases with such exceptions as are not material and do
not materially interfere with the use of such properties by the Company and its subsidiaries.

(r) Title to Intellectual Property. The Company and its subsidiaries own or possess the right to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of
their respective businesses as described in the Registration Statement and the Prospectus; and the conduct of their respective businesses will not
infringe or conflict with any such rights of others, except as could not reasonably be expected to have a Material Adverse Effect, and the
Company and its subsidiaries have not received any notice of any claim of infringement or conflict with any such rights of others.

(s) No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the
one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that is
required by the Securities Act to be described in the Registration Statement and the Prospectus and that is not so described.

(t) Investment Company Act. The Company is not and, after giving effect to the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be required to register as an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder (collectively, "Investment Company Act").

(u) Taxes. The Company and its subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns (or requested
extensions thereof in a timely manner) required to be paid or filed through the date hereof; and except as otherwise disclosed in the Prospectus
and as could not reasonably be expected to have a Material Adverse Effect, there is
                                                                        9

no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their
respective properties or assets.

(v) Licenses and Permits. The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and
have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are
necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Registration
Statement and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material
Adverse Effect; and except as described in the Prospectus and as could not reasonably be expected to have a Material Adverse Effect, neither
the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or
authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.

(w) No Labor Disputes. No labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the best
knowledge of the Company, is contemplated or threatened that could reasonably be expected to have a Material Adverse Effect.

(x) Compliance With Environmental Laws. The Company and its subsidiaries
(i) are in compliance with any and all, and have not violated any, applicable federal, state and local laws, rules, regulations, judgments and
orders relating to the protection of the environment, human health and safety as it relates to the environment, the use, management or disposal
of hazardous or toxic substances or wastes, pollutants or contaminants (collectively, "Environmental Laws"); (ii) have received and are in
compliance with all, and have not violated any, permits, licenses or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses, all of which permits, licenses and other approvals are in full force and effect and as to which neither the
Company nor any of its subsidiaries has received any notice that such permits, licenses or other approvals will be revoked, modified or
otherwise adversely affected; and (iii) have not received notice of, and are not otherwise aware of any facts or circumstances that could result
in, any actual or potential violation or liability or other obligation of or affecting the Company or any of its subsidiaries under any
Environmental Law, other than exceptions to any of (i), (ii) or (iii) above that individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.

(y) Compliance With ERISA. Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or
former employees of the Company and its affiliates has been maintained in compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code"); no
prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan,
excluding transactions effected pursuant to a statutory or administrative exemption; for each such plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code has been
incurred, whether or not waived, and
                                                                       10

the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value
of all benefits accrued under such plan determined using reasonable actuarial assumptions; and neither the Company nor any of its subsidiaries
has incurred or could reasonably be expected to incur any withdrawal liability under Section 4201 of ERISA, any liability under Section 4062,
4063, or 4064 of ERISA, or any other liability under Title IV of ERISA.

(z) Accounting Controls. The Company and its subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable
assurance that
(i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(aa) Insurance and Bonding. Except to the extent that the Company is self-insured, as described in the Prospectus, the Company and its
subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption
insurance, which insurance is in amounts and insures against such losses and risks as are adequate to protect the Company and its subsidiaries
and their respective businesses and are prudent and customary in those businesses in which the Company and its subsidiaries are currently
engaged; neither the Company nor any of its subsidiaries has (i) received written notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it
will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost
from similar insurers as may be necessary to continue its business; the Company and its subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and there are no material claims by the Company or any of its subsidiaries under any such
policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; the Company and
its subsidiaries have in effect performance and payment bonds adequate for the conduct of their respective businesses as currently conducted,
and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing performance and
payment bonds or obtain new bonds as may be necessary to continue its business.

(bb) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the best knowledge of the Company, any director, officer,
agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
                                                                        11

(cc) Currency and Foreign Transactions Reporting Act. The operations of the Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the "Money Laundering Laws")
and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company and the Selling
Stockholders, threatened.

(dd) Office of Foreign Assets Control. Neither the Company nor any of its subsidiaries nor, to the best knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department ("OFAC"); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(ee) No Broker's Fees. Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person
(other than this Agreement) that would give rise to a valid claim against the Company or any of its subsidiaries or any Underwriter for a
brokerage commission, finder's fee or like payment in connection with the offering and sale of the Shares.

(ff) No Registration Rights. Except as described in the Prospectus, no person has the right to require the Company or any of its subsidiaries to
register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the
issuance and sale of the Shares to be sold by the Company hereunder or, as to the Selling Stockholders only, the sale of the Shares to be sold by
the Selling Stockholders hereunder.

(gg) No Stabilization. The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause
or result in any stabilization or manipulation of the price of the Shares.

(hh) Business With Cuba. The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing business with the Government of Cuba or with any
person or affiliate located in Cuba.

(ii) Margin Rules. Neither the issuance, sale and delivery of the Shares nor the application of the proceeds thereof by the Company as described
in the Registration Statement and the Prospectus will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board of Governors.
                                                                        12

(jj) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of
the Exchange Act) contained in the Registration Statement and the Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.

(kk) Regulation G. The adjustments to calculate Adjusted EBITDA, as set forth in the Prospectus in the notes under the caption "Prospectus
Summary -- Summary Historical and Pro Forma Financial Data," comply with Regulation G and Item 10(e) of Regulation S-K of the
Commission.

Furthermore, the Company represents and warrants to Citigroup Global Markets Inc. that (i) the Registration Statement, the Prospectus and
Preliminary Prospectus comply, and any further amendments or supplements thereto will comply, with any applicable laws or regulations of
foreign jurisdictions in which the Prospectus or Preliminary Prospectus, as amended or supplemented, if applicable, are distributed in
connection with the Directed Share Program, and that (ii) no authorization, approval, consent, license, order, registration or qualification of or
with any government, governmental instrumentality or court, other than such as have been obtained, is necessary under the securities laws and
regulations of foreign jurisdictions in which the Directed Shares are offered outside the United States. The Company has not offered, or caused
the Underwriters to offer, Securities to any person pursuant to the Directed Share Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or supplier's level or type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the Company or its products.

Any certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters in connection with
the offering of the Shares shall be deemed a representation and warranty by the Company as to matters covered thereby to each Underwriter.

4. Representations and Warranties of the Selling Stockholders. Each of the Selling Stockholders severally and not jointly represents and
warrants to each Underwriter and the Company that:

(a) Required Consents; Authority. All consents, approvals, authorizations and orders necessary for the execution and delivery by such Selling
Stockholder of this Agreement, and for the sale and delivery of the Shares to be sold by such Selling Stockholder hereunder, have been
obtained; and such Selling Stockholder has full right, power and authority to enter into this Agreement and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder hereunder; this Agreement has been duly authorized, executed and delivered by such Selling
Stockholder and constitutes a valid and legally binding agreement enforceable against such Selling Stockholder in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally or by
equitable principles relating to enforceability.
                                                                         13

(b) No Conflicts. The execution, delivery and performance by such Selling Stockholder of this Agreement, the sale of the Shares to be sold by
such Selling Stockholder and the consummation by such Selling Stockholder of the transactions herein contemplated will not (i) conflict with
or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of such Selling Stockholder pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which such Selling Stockholder is a party or by which such Selling Stockholder is
bound or to which any of the property or assets of such Selling Stockholder is subject, (ii) result in any violation of the provisions of the charter
or by-laws or similar organizational documents of such Selling Stockholder or (iii) except as could not reasonably be expected to have a
Material Adverse Effect, result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory agency.

(c) Title to Shares. Such Selling Stockholder has and will have, immediately prior to the Closing Date and the Additional Closing Date, if
applicable, good and valid title to, or a valid "security entitlement" within the meaning of Section 8-501 of the New York Uniform Commercial
Code ("UCC") in respect of, the Shares to be sold at the Closing Date and the Additional Closing Date, if applicable, by such Selling
Stockholder, free and clear of all liens, encumbrances, equities or adverse claims, within the meaning of Section 8-105 of the UCC; and such
Selling Stockholder has full power, right and authority to sell, transfer and deliver the Shares to be sold at the Closing Date and the Additional
Closing Date, if applicable, by such Selling Stockholder in the manner provided in this Agreement.

(d) Transfer of Security Entitlement. Upon payment for the Shares to be sold by such Selling Stockholder pursuant to this Agreement, delivery
of such Shares, as directed by the Underwriters, to Cede & Co. or such other nominee as may be designated by DTC, registration of such
Shares in the name of Cede & Co. or such other nominee and the crediting of such Shares on the books of DTC to securities accounts of the
Underwriters (assuming that neither DTC nor any such Underwriter has notice of any adverse claim (within the meaning of Section 8-105 of
the UCC) to such Shares), (A) DTC shall be a "protected purchaser" of such Shares within the meaning of Section 8-303 of the UCC, (B) under
Section 8-501 of the UCC, the Underwriters will acquire a valid security entitlement in respect of such Shares and (C) no action based on any
adverse claim, within the meaning of Section 8-105 of the UCC, to such Shares may be asserted against the Underwriters with respect to such
security entitlement.

(e) No Stabilization. Such Selling Stockholder has not taken and will not take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.

(f) Selling Stockholder Information. The information in the Registration Statement under the caption "Principal and Selling Stockholders" that
specifically relates to such Selling Stockholder does not, and on the Closing Date and any Additional Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
                                                                       14

Any certificate signed by any Selling Stockholder or any representative of any Selling Stockholder and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Shares shall be deemed a representation and warranty by such Selling
Stockholder as to matters covered thereby to each Underwriter.

5. Further Agreements of the Company. The Company covenants and agrees with each Underwriter that:

(a) Effectiveness of the Registration Statement. The Company will use its reasonable best efforts to cause the Registration Statement to become
effective at the earliest possible time and, if required, will file the final Prospectus with the Commission within the time periods specified by
Rule 424(b) and Rule 430A under the Securities Act; and the Company will furnish copies of the Prospectus to the Underwriters in New York
City prior to 10:00 A.M., New York City time, on the business day next succeeding the date of this Agreement in such quantities as the
Representatives may reasonably request.

(b) Delivery of Copies. The Company will deliver, without charge, (i) to the Representatives, three signed copies of the Registration Statement
as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith; and (ii) to each Underwriter
(A) a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) and (B) during the
Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and supplements thereto) as the
Representatives may reasonably request. As used herein, the term "Prospectus Delivery Period" means such period of time after the first date of
the public offering of the Shares as in the opinion of counsel for the Underwriters a prospectus relating to the Shares is required by law to be
delivered in connection with sales of the Shares by any Underwriter or dealer.

(c) Amendments or Supplements. Before filing any amendment or supplement to the Registration Statement or the Prospectus, the Company
will furnish to the Representatives and counsel for the Underwriters a copy of the proposed amendment or supplement for review and will not
file any such proposed amendment or supplement to which the Representatives promptly and reasonably object.

(d) Notice to the Representatives. The Company will advise the Representatives promptly, and confirm such advice in writing, (i) when the
Registration Statement has become effective; (ii) when any amendment to the Registration Statement has been filed or becomes effective; (iii)
when any supplement to the Prospectus or any amendment to the Prospectus has been filed;
(iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or
the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any
additional information; (v) of the issuance by the Commission of any order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any Preliminary Prospectus or the Prospectus or the initiation or threatening of any proceeding for that
purpose; (vi) of the occurrence of any event within the Prospectus Delivery Period as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the
                                                                        15

statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading; and (vii) of the
receipt by the Company of any notice with respect to any suspension of the qualification of the Shares for offer and sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of
any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending any such qualification of the Shares and, if any such order is issued, will use its reasonable best efforts to obtain
as soon as possible the withdrawal thereof.

(e) Ongoing Compliance of the Prospectus. If during the Prospectus Delivery Period (i) any event shall occur or condition shall exist as a result
of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus
is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the Company will
immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission and furnish to
the Underwriters and to such dealers as the Representatives may designate, such amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law.

(f) Blue Sky Compliance. The Company will use its reasonable best efforts to qualify the Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as required
for distribution of the Shares; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a
dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.

(g) Earning Statement. The Company will make generally available to its security holders and the Representatives as soon as practicable an
earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder
covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the "effective date" (as
defined in Rule 158) of the Registration Statement.

(h) Clear Market. For a period of 180 days beginning on the date hereof (the "Restricted Period"), the Company will not (i) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Stock or any securities convertible
into or exercisable or exchangeable for Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery
of Stock or such other securities, in cash or
                                                                        16

otherwise, without the prior written consent of the Representatives, other than (A) the Shares to be sold hereunder, (B) the issuance by the
Company of shares of Stock upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof of which
the Underwriters have been advised in writing; provided that each recipient of such shares during the Restricted Period that is listed on
Schedule III hereto shall sign and deliver a lock-up letter substantially in the form of Exhibit A hereto, (C) the issuance by the Company of
shares or options to purchase shares of Stock, or the repurchase by the Company of unvested shares of Stock upon termination of service of an
employee, director, consultant or other service provider, pursuant to a stock incentive plan in existence on the date hereof or pursuant to an
employee stock purchase plan adopted after the date hereof as described in the Prospectus under the heading "Management -- Stock Incentive
Plans -- New Employee Stock Purchase Plan," (D) the filing of any registration statement with the Commission on Form S-8 relating to the
offering of securities pursuant to the terms of a plan referred to in the preceding clause (C) and (E) the issuance of shares of Stock in
connection with the acquisition of another company; provided that (1) the shares of Stock issued do not represent more than 20% of the
Company's market capitalization after the issuance and (2) each recipient of such shares during the Restricted Period shall agree to be bound by
the restrictions contained in this section.

If (a) during the last 17 days of such 180-day period the Company issues an earnings release or material news or a material event relating to the
Company occurs or (b) prior to the expiration of such 180-day period the Company announces that it will release earnings results during the
16-day period beginning on the last day of such 180-day period, then the foregoing restrictions shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

(i) Sarbanes-Oxley Act. The Company will comply with all applicable securities and other applicable laws, rules and regulations, including,
without limitation, the Sarbanes-Oxley Act of 2002, and will use its best efforts to cause the Company's directors and officers, in their
capacities as such, to comply with such laws, rules and regulations, including, without limitation, the provisions of the Sarbanes-Oxley Act of
2002.

(j) Use of Proceeds. The Company will apply the net proceeds from the sale of the Shares as described in the Prospectus under the heading
"Use of Proceeds."

(k) No Stabilization. The Company will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or
result in any stabilization or manipulation of the price of the Shares.

(l) Exchange Listing. The Company will use its best efforts to list, subject to notice of issuance, the Shares on the New York Stock Exchange
(the "Exchange").

(m) Reports. During a period of two years from the effective date of the Registration Statement, the Company will furnish to the
Representatives, as soon as they are available, copies of all reports or other communications (financial or other) furnished to holders of the
Shares, and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange or
automatic quotation system (including, in each case, by posting
                                                                        17

such information on the Company's web site or by submitting such information to the Commission via EDGAR).

(n) Filings. The Company will file with the Commission such reports as may be required by Rule 463 under the Securities Act.

Furthermore, the Company covenants with Citigroup Global Markets Inc. that the Company will comply with all applicable securities and other
applicable laws, rules and regulations in each foreign jurisdiction in which the Directed Shares are offered in connection with the Directed
Share Program.

6. Further Agreements of the Selling Stockholders. Each of the Selling Stockholders covenants and agrees with each Underwriter that:

(a) Notice of Changes in Selling Shareholder Information. Such Selling Stockholder will advise the Underwriters promptly, and if requested by
the Representatives, will confirm such advice in writing, so long as delivery of a prospectus relating to the Shares by an underwriter or dealer
may be required under the Securities Act, of any change in information in the Registration Statement or the Prospectus under the caption
"Principal and Selling Stockholders" that specifically relates to such Selling Stockholder.

(b) Clear Market. During the Restricted Period, such Selling Stockholder will not (i) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares of Stock or any securities convertible into or exercisable or exchangeable for
Stock (including, without limitation, Stock that may be deemed to be beneficially owned by such Selling Shareholder in accordance with the
rules and regulations of the Commission and securities that may be issued upon exercise of a stock option or warrant) or
(ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock,
whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or
otherwise or (iii) make any demand for or exercise any right with respect to the registration of any shares of Stock or any security convertible
into or exercisable or exchangeable for Stock without the prior written consent of the Representatives, in each case other than (A) the Shares to
be sold by such Selling Stockholder hereunder, (B) transactions relating to shares of Stock or other securities acquired in open market
transactions after the Closing Date; provided that no filing by any party (transferor or transferee) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), shall be required or shall be voluntarily made in connection with subsequent sales of shares of Stock or other
securities acquired in such open market transactions, (C) transfers of which the Underwriters have been advised in writing of shares of Stock or
any security convertible into Stock as a bona fide gift or for no consideration; provided that each transferee during the Restricted Period shall
sign and deliver a lock-up letter substantially in the form of Exhibit A hereto, (D) transfers by will or intestate of which the Underwriters have
been advised in writing; provided that each transferee during the Restricted Period shall sign and deliver a lock-up letter substantially in the
form of Exhibit A hereto, (E) transfers to any trust, partnership or limited liability company for the direct
                                                                          18

or indirect benefit of such Selling Stockholder or the immediate family (any relationship by blood, marriage or adoption, not more remote than
first cousin) of such Selling Stockholder for estate planning purposes; provided that (1) the trustee of the trust, the partnership or the limited
liability company, as the case may be, during the Restricted Period shall sign and deliver a lock-up letter substantially in the form of Exhibit A
hereto, (2) no such transfer shall involve a disposition for value and (3) no filing by any party (transferor or transferee) under the Exchange Act
shall be required or shall be voluntarily made in connection with such transfer, and (F) transfers by any corporation, partnership, limited
liability company or other entity to an affiliate; provided such affiliate shall sign and deliver a lock-up letter substantially in the form of Exhibit
A hereto.

If (a) during the last 17 days of such 180-day period the Company issues an earnings release or material news or a material event relating to the
Company occurs or (b) prior to the expiration of such 180-day period the Company announces that it will release earnings results during the
16-day period beginning on the last day of such 180-day period, then the foregoing restrictions shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

(c) Tax Form. It will deliver to the Representatives prior to or at the Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by the Treasury Department regulations in lieu thereof) in order to
facilitate the Underwriters' documentation of their compliance with the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein contemplated.

(d) No Stabilization. Such Selling Stockholder will not take, directly or indirectly, any action designed to or that could reasonably be expected
to cause or result in any stabilization or manipulation of the price of the Shares.

7. Conditions of Underwriters' Obligations. The obligation of each Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be, as provided herein is subject to the performance by the Company and each
of the Selling Stockholders of their respective covenants and other obligations hereunder and to the following additional conditions:

(a) Registration Compliance; No Stop Order. The Registration Statement (or if a post-effective amendment thereto is required to be filed under
the Securities Act, such post-effective amendment) shall have become effective, and the Representatives shall have received notice thereof, not
later than 5:00 P.M., New York City time, on the date hereof; no order suspending the effectiveness of the Registration Statement shall be in
effect, and no proceeding for such purpose shall be pending before or threatened by the Commission; the Prospectus shall have been timely
filed with the Commission under the Securities Act and in accordance with Section 5(a) hereof; and all requests by the Commission for
additional information shall have been complied with to the reasonable satisfaction of the Representatives.
                                                                         19

(b) Representations and Warranties. The respective representations and warranties of the Company and the Selling Stockholders contained
herein shall be true and correct on the date hereof and on and as of the Closing Date and the Additional Closing Date, if applicable; and the
statements of the Company and its officers and of each of the Selling Stockholders made in any certificates delivered pursuant to this
Agreement shall be true and correct on and as of the Closing Date and the Additional Closing Date, if applicable.

(c) No Downgrade. Subsequent to the execution and delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded
any securities or preferred stock of or guaranteed by the Company or any of its subsidiaries by any "nationally recognized statistical rating
organization," as such term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no such organization
shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of any securities or
preferred stock of or guaranteed by the Company or any of its subsidiaries (other than an announcement with positive implications of a possible
upgrading).

(d) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement, no change or decrease specified in the letter
referred to in paragraph (g), (h) or (i) of this Section 7 and no event or condition of a type described in Section 3(d) hereof shall have occurred
or shall exist, which event or condition is not described in the Prospectus (excluding any amendment or supplement thereto) and the effect of
which in the sole judgment of the Representatives makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the
Shares on the Closing Date and the Additional Closing Date, if applicable, on the terms and in the manner contemplated by this Agreement and
the Prospectus.

(e) Certificate of the Company. The Representatives shall have received on and as of the Closing Date and the Additional Closing Date, if
applicable, a certificate of the chief financial officer or chief accounting officer of the Company and one additional senior executive officer of
the Company who is satisfactory to the Representatives (i) to the effect that such officers have carefully reviewed the Registration Statement
and the Prospectus and that (A) the representation of the Company set forth in Section 3(d) hereof is true and correct, (B) the other
representations and warranties of the Company in this Agreement are true and correct, and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the
case may be, and (ii) to the effect set forth in paragraphs (a) and (c) above. The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.

(f) Certificates of the Selling Stockholders. The Representatives shall have received on and as of the Closing Date and the Additional Closing
Date, if applicable, a certificate of each of the Selling Stockholders, in form and substance reasonably satisfactory to the Representatives, to the
effect that such Selling Stockholder has carefully reviewed the Registration Statement and the Prospectus and that the representation of such
Selling Stockholder set forth in Section 4(f) hereof is true and correct and (ii) that the other representations and warranties of such Selling
Stockholder in this agreement are true and correct, and such Selling Stockholder has complied
                                                                        20

with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to Closing Date or the Additional
Closing Date, as the case may be.

(g) Comfort Letter of Ernst & Young LLP. On the date of this Agreement and on the Closing Date and the Additional Closing Date, if
applicable, Ernst & Young LLP shall have furnished to the Representatives, at the request of the Company, letters, dated the respective dates of
delivery thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing statements
and information of the type customarily included in accountants' "comfort letters" to underwriters with respect to the financial statements of the
Company and certain financial information contained in the Registration Statement and the Prospectus; provided, that the letter delivered on the
Closing Date and the Additional Closing Date, if applicable, shall use a "cut-off" date no more than three business days prior to such Closing
Date or such Additional Closing Date, as the case may be.

(h) Comfort Letter of Grant Thornton LLP. On the date of this Agreement and on the Closing Date and the Additional Closing Date, if
applicable, Grant Thornton LLP shall have furnished to the Representatives, at the request of the Company, letters, dated the respective dates of
delivery thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing statements
and information of the type customarily included in accountants' "comfort letters" to underwriters with respect to the financial statements of
Red Simpson, Inc. and certain financial information contained in the Registration Statement and the Prospectus; provided, that the letter
delivered on the Closing Date and the Additional Closing Date, if applicable, shall use a "cut-off" date no more than three business days prior
to such Closing Date or such Additional Closing Date, as the case may be.

(i) Comfort Letter of Dixon Hughes PLLC. On the date of this Agreement and on the Closing Date and the Additional Closing Date, if
applicable, Dixon Hughes PLLC shall have furnished to the Representatives, at the request of the Company, letters, dated the respective dates
of delivery thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing
statements and information of the type customarily included in accountants' "comfort letters" to underwriters with respect to the financial
statements of the Company for the fiscal year ended June 30, 2002 and certain financial information contained in the Registration Statement
and the Prospectus; provided, that the letter delivered on the Closing Date and the Additional Closing Date, if applicable, shall use a "cut-off"
date no more than three business days prior to such Closing Date or such Additional Closing Date, as the case may be.

(j) Opinion of Counsel for the Company and LGB Pike II LLC. Cravath, Swaine & Moore LLP, counsel for the Company and LGB Pike II
LLC, shall have furnished to the Representatives, at the request of the Company and the LGB Pike II LLC, their written opinion, dated the
Closing Date and the Additional Closing Date, if applicable, and addressed to the Underwriters, in form and substance reasonably satisfactory
to the Representatives, to the effect set forth in Annex A hereto.

(k) Opinions of North Carolina Counsel for the Company and Reginald L. Banner. Bell, Davis & Pitt, P.A., North Carolina counsel for the
Company and for Reginald L. Banner,
                                                                        21

shall have furnished to the Representatives, at the request of the Company and Mr. Banner, respectively, their written opinions, dated the
Closing Date and the Additional Closing Date, if applicable, and addressed to the Underwriters, in form and substance reasonably satisfactory
to the Representatives, to the effect set forth in Annexes B and C hereto.

(l) Opinion of Counsel for the Underwriters. The Representatives shall have received on and as of the Closing Date and the Additional Closing
Date, if applicable, an opinion of Simpson Thacher & Bartlett LLP, counsel for the Underwriters, with respect to such matters as the
Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request
to enable them to pass upon such matters.

(m) No Legal Impediment to Issuance. No statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority, and no action thereunder shall have been taken, that would, as of the Closing Date and the
Additional Closing Date, if applicable, prevent the issuance or sale of the Shares; and no injunction or order of any federal, state or foreign
court shall have been issued that would, as of the Closing Date and the Additional Closing Date, if applicable, prevent the issuance or sale of
the Shares.

(n) Good Standing. The Representatives shall have received on and as of the Closing Date and the Additional Closing Date, if applicable,
satisfactory evidence of the good standing of the Company and its material subsidiaries in their respective jurisdictions of organization and
their good standing as foreign entities in such other jurisdictions as the Representatives may reasonably request, in each case in writing or any
standard form of telecommunication from the appropriate Governmental Authorities of such jurisdictions.

(o) Exchange Listing. The Shares to be delivered on the Closing Date and Additional Closing Date, if applicable, shall have been authorized for
listing on the New York Stock Exchange, subject to official notice of issuance.

(p) Lock-up Agreements. The "lock-up" agreements, each substantially in the form of Exhibit A hereto, between you and the shareholders,
officers and directors of the Company listed on Schedule III hereto relating to sales and certain other dispositions of shares of Stock or certain
other securities, delivered to you on or before the date hereof, shall be full force and effect on the Closing Date and the Additional Closing
Date, if applicable.

(q) Additional Documents. On or prior to the Closing Date and the Additional Closing Date, if applicable, the Company and the Selling
Stockholders shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably
request.

All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.
                                                                         22

8. Indemnification and Contribution.

(a) Indemnification of the Underwriters by the Company. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates,
directors and officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other
expenses reasonably incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred),
joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities arise out of, or
are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any
information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for
use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described
as such in subsection (c) below.

(b) Indemnification of the Underwriters by the Selling Stockholders. Each of the Selling Stockholders agrees severally but not jointly to
indemnify and hold harmless, in proportion to the number of Shares to be sold by such Selling Stockholder hereunder, each Underwriter, its
affiliates, directors and officers and each person, if any, who controls such Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but
only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any information relating to such Selling Stockholder furnished to
the Company in writing by such Selling Stockholder expressly for use in the Registration Statement and the Prospectus (or any amendment or
supplement thereto) or any Preliminary Prospectus; provided that the liability of such Selling Stockholder pursuant to this subsection (b) shall
not exceed the proceeds from the offering (before deducting underwriting discounts, commissions and expenses) received by such Selling
Stockholder.

(c) Indemnification of the Company and the Selling Stockholders. Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who signed the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of the Selling Stockholders to the same
extent as the indemnity set forth in paragraph
(a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter
furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, it being understood and agreed
                                                                          23

upon that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf
of each Underwriter:
the concession and reallowance figures appearing in the third paragraph under the caption "Underwriting" and the information contained in the
eighth, fifteenth, sixteenth and seventeenth paragraphs under the caption "Underwriting."

(d) Indemnification in Connection with Directed Share Program. The Company agrees to indemnify and hold harmless Citigroup Global
Markets Inc., its affiliates, directors, officers, employees and agents and each person, if any, who controls Citigroup Global Markets Inc. within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act ("Citigroup Entities"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, the legal fees and other expenses reasonably incurred in connection with any suit,
action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, to which they may become subject under
the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses,
claims damages or liabilities (or actions in respect thereof) (i) arise out of or are based upon any untrue statement or alleged untrue statement of
a material fact contained in the prospectus wrapper material prepared by or with the consent of the Company for distribution in foreign
jurisdictions in connection with the Directed Share Program attached to the Prospectus or the Preliminary Prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement
therein, when considered in conjunction with the Prospectus or the Preliminary Prospectus, not misleading; (ii) caused by the failure of any
Participant to pay for and accept delivery of the securities that, immediately following the effective date of the Registration Statement, were
subject to a properly confirmed agreement to purchase; or (iii) related to, arising out of, or in connection with the Directed Share Program,
except that this clause (iii) shall not apply to the extent that such loss, claim, damage or liability is finally judicially determined to have resulted
primarily from the gross negligence or willful misconduct of the Citigroup Entities.

(e) Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be
brought or asserted against any person in respect of which indemnification may be sought pursuant to the preceding paragraphs of this Section
8, such person (the "Indemnified Person") shall promptly notify the person against whom such indemnification may be sought (the
"Indemnifying Person") in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may
have under this Section 8 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by
such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 8. If any such proceeding shall be brought or asserted against an Indemnified Person and
it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 8 that the Indemnifying Person
may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such
proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified
                                                                       24

Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the
Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person
and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any
Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the
Representatives, any such separate firm for the Company, its directors, its officers who signed the Registration Statement and any control
persons of the Company shall be designated in writing by the Company and any such separate firm for a Selling Stockholder shall be
designated in writing by such Selling Stockholder. The Indemnifying Person shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person
for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person
of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have
been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in
form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such
proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person. Notwithstanding anything contained herein to the contrary, if indemnity may be sought pursuant to Section 8(d) hereof in
respect of such action or proceeding, then in addition to a separate firm for the Indemnified Persons as set forth in this paragraph, the
Indemnifying Person shall be liable for the reasonable fees and expenses of not more than one separate firm (in addition to any local counsel)
for Citigroup Global Markets Inc., its affiliates, directors, officers, employees and agents, and each person, if any, who controls Citigroup
Global Markets Inc. within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act for the defense of any losses, claims, damages and liabilities arising out of
the Directed Share Program.
                                                                         25

(f) Contribution. If the indemnification provided for in paragraphs (a),
(b), (c) and (d) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to
therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to
the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Shares or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other shall be deemed to be in the same respective proportions as the net
proceeds (before deducting expenses) received by the Company and the Selling Stockholders from the sale of the Shares and the total
underwriting discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate offering price of the Shares. The relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the
Selling Stockholders or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Selling Stockholders' obligations in this paragraph (f) to contribute are several in proportion to the
number of shares sold by each Selling Stockholder and not joint.

(g) Limitation on Liability. The Company, the Selling Stockholders and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Selling Stockholders or the Underwriters were
treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred
to in paragraph (f) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (f) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 8, in no event
shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions
received by such Underwriter with respect to the offering of the Shares exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The liability of each
Selling Stockholder under such Selling Stockholder's representations and warranties contained in Sections 3 and 4 hereof and under the
indemnity and contribution agreements contained in this
Section 8 shall be limited to an amount equal to the initial public offering price of the Shares sold by such Selling Stockholder to the
Underwriters. The Company and the Selling Stockholders may agree, as among themselves and without
                                                                          26

limiting the rights of the Underwriters under this Agreement, as to the respective amounts of such liability for which they each shall be
responsible. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 8 are several in proportion to their respective purchase obligations hereunder and not joint.

(h) Non-Exclusive Remedies. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any Indemnified Person at law or in equity.

9. Effectiveness of Agreement. This Agreement shall become effective upon the later of (i) the execution and delivery hereof by the parties
hereto and
(ii) receipt by the Company and the Representatives of notice of the effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment thereto).

10. Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Company and the Selling
Stockholders, if after the execution and delivery of this Agreement and prior to the Closing Date or, in the case of the Option Shares, prior to
the Additional Closing Date (i) trading generally shall have been suspended or materially limited on or by any of the New York Stock
Exchange, the American Stock Exchange or the National Association of Securities Dealers, Inc.; (ii) trading of any securities issued or
guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak
or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, if the effect of
any such event specified in this clause (iv), in the sole judgment of the Representatives, makes it impracticable or inadvisable to proceed with
the offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the
manner contemplated by this Agreement and the Prospectus.

11. Defaulting Underwriter. (a) If, on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter defaults on its
obligation to purchase the Shares that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their discretion
arrange for the purchase of such Shares by other persons satisfactory to the Company and the Selling Stockholders on the terms contained in
this Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase
of such Shares, then the Company and the Selling Stockholders shall be entitled to a further period of 36 hours within which to procure other
persons satisfactory to the non-defaulting Underwriters to purchase such Shares on such terms. If other persons become obligated or agree to
purchase the Shares of a defaulting Underwriter, either the non-defaulting Underwriters or the Company and the Selling Stockholders may
postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full business days in order to effect any changes
that in the opinion of counsel for the Company, counsel for the Selling Stockholders or counsel for the Underwriters may be necessary in the
Registration Statement and the Prospectus or in any other document or arrangement, and the Company agrees to promptly
                                                                         27

prepare any amendment or supplement to the Registration Statement and the Prospectus that effects any such changes. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in
Schedule I hereto that, pursuant to this Section 11, purchases Shares that a defaulting Underwriter agreed but failed to purchase.

(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the Selling Stockholders as provided in paragraph
(a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be,
does not exceed one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company and the Selling Stockholders
shall have the right to require each non-defaulting Underwriter to purchase the number of Shares that such Underwriter agreed to purchase
hereunder on such date plus such Underwriter's pro rata share (based on the number of Shares that such Underwriter agreed to purchase on such
date) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made.

(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the Selling Stockholders as provided in paragraph
(a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be,
exceeds one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the Company and the Selling Stockholders shall not
exercise the right described in paragraph
(b) above, then this Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to purchase Shares on the
Additional Closing Date, as the case may be, shall terminate without liability on the part of the non-defaulting Underwriters. Any termination
of this Agreement pursuant to this
Section 11 shall be without liability on the part of the Company and the Selling Stockholders, except that the Company will continue to be
liable for the payment of expenses as set forth in Section 12 hereof and except that the provisions of
Section 8 hereof shall not terminate and shall remain in effect.

(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company, the Selling Stockholders or any
non-defaulting Underwriter for damages caused by its default.

12. Payment of Expenses. (a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is
terminated, the Company will pay or cause to be paid all costs and expenses incident to the performance of its obligations and the obligations
of the Selling Stockholders hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Shares and any taxes payable in that connection; (ii) the costs incident to the preparation, printing and filing under the Securities
Act of the Registration Statement, the Preliminary Prospectus and the Prospectus (including all exhibits, amendments and supplements thereto)
and the distribution thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the
Company's and Selling Stockholders' counsel and Company's independent accountants; (v) the fees and expenses incurred in connection with
the registration or qualification and
                                                                          28

determination of eligibility for investment of the Shares under the laws of such jurisdictions as the Representatives may designate and the
preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Underwriters);
(vi) the cost of preparing stock certificates; (vii) the costs and charges of any transfer agent and any registrar; (viii) all expenses and application
fees incurred in connection with any filing with, and clearance of the offering by, the National Association of Securities Dealers, Inc.; (ix) all
expenses incurred by the Company and the Selling Stockholders in connection with any "road show" presentation to potential investors; (x) all
expenses and application fees related to the listing of the Shares on the Exchange; (xi) all fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program; (xii) all costs and expenses incurred by the Underwriters in connection with the
printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of copies of the
Directed Share Program material; and (xiii) all stamp duties, similar taxes or duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program. It is understood that except as provided in this Section, Section 8 and Section 11, the
Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, stock transfer taxes payable on resale
of any of the Shares by them and any advertising expenses connected with any offers they make. The provisions of this Section 12(a) shall not
supersede or otherwise affect any agreement that the Company and the Selling Stockholders may otherwise have for the allocation of expenses
among themselves.

(b) If (i) this Agreement is terminated pursuant to Section 10(ii), (ii) the Company or the Selling Stockholders for any reason fail to tender the
Shares for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Shares due to any failure of the Company or any
Selling Stockholder to comply with the terms or fulfill the conditions set forth in this Agreement (other than by reason of default by any of the
Underwriters), the Company agrees to reimburse the Underwriters severally on demand for all out-of-pocket costs and expenses (including the
fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated
hereby. If the Company is required to make any payments to the Underwriters under this Section 12 because of any Selling Stockholder's
refusal, inability or failure to satisfy any condition to the obligations of the Underwriters set forth in Section 7, the Selling Stockholders, pro
rata in proportion to the percentage of Shares to be sold by each, shall reimburse the Company on demand for all amounts so paid.

13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and any controlling persons referred to in Section 8 hereof. Nothing in this Agreement is
intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or
any provision contained herein. No purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such
purchase.

14. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company, the Selling
Stockholders and the Underwriters contained in this Agreement or made by or on behalf of the Company, the Selling Stockholders or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall
                                                                       29

survive the delivery of and payment for the Shares and shall remain in full force and effect, regardless of any termination of this Agreement or
any investigation made by or on behalf of the Company, the Selling Stockholders or the Underwriters.

15. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term "affiliate" has the
meaning set forth in Rule 405 under the Securities Act; (b) the term "business day" means any day other than a day on which banks are
permitted or required to be closed in New York City; and (c) the term "subsidiary" has the meaning set forth in Rule 405 under the Securities
Act.

16. Role of Underwriters. The Company and the Selling Stockholders acknowledge and agree that the Underwriters are acting solely in the
capacity of an arm's-length contractual counterparty to the Company and the Selling Stockholders with respect to the offering of the Shares
(including in connection with determining the price and other terms of the offering) and not as a financial advisor or a fiduciary to, or an agent
of, the Company, the Selling Stockholders or any other person. Additionally, neither the Representatives nor any other Underwriter is advising
the Company, the Selling Stockholders or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.
The Company and the Selling Stockholders shall consult with their own advisors concerning such matters, to the extent they deem appropriate,
and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the Company or the Selling Stockholders with respect thereto. Any review by the
Underwriters of the Company or the Selling Stockholders, the transactions contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Company or the Selling Stockholders. The
Company and the Selling Stockholders acknowledge that the Underwriters and their affiliates are engaged in a broad range of securities and
financial services and that they or their affiliates may enter into contractual relationships with purchasers or potential purchasers of the
Company's securities, some of which services or relationships may involve interests that differ from those of the Company and the Selling
Stockholders and need not be disclosed to the Company or the Selling Stockholders, unless otherwise required by law. The Company and the
Selling Stockholders waive, to the fullest extent permitted by law, any claims they may have with respect to the offering of the Shares
(including in connection with determining the price and other terms of the offering) against the Underwriters for breach of fiduciary duty or
alleged breach of fiduciary duty and agree that the Underwriters shall have no liability (whether direct or indirect) to the Company or the
Selling Stockholders in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the
Company or the Selling Stockholders, including stockholders, employees or creditors of the Company or, to the extent applicable, the Selling
Stockholders.

17. Miscellaneous. (a) Authority of the Representatives. Any action by the Underwriters hereunder may be taken by Citigroup Global Markets
Inc. or J.P. Morgan Securities Inc. on behalf of the Underwriters, and any such action taken by Citigroup Global Markets Inc. or J.P. Morgan
Securities Inc. shall be binding upon the Underwriters.
                                                                       30

(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or
transmitted and confirmed by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives c/o
Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013 (Fax: (212) 816-7912); Attention:
General Counsel. Notices to the Company shall be given to it at Pike Electric Corporation, P.O. Box 868, Mount Airy, NC 27030, (Fax: (336)
719-4330); Attention: Mark Castaneda. Notices to LGB Pike II LLC shall be given to it at ______________, ______________,
______________, (Fax: ________); Attention:
_____________. Notices to Mr. Reginald L. Banner shall be given to him at ______________, ______________, ______________, (Fax:
________); Attention:
_____________.

(c) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

(d) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.

(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure
therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.

(f) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
                                                                      31

If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided
below.

Very truly yours,

                                                   PIKE ELECTRIC CORPORATION

                                                                     By:

Name:

                                                                    Title:

                                                             LGB PIKE II LLC,

                                             by LINDSAY GOLDBERG & BESSEMER L.P.,
                                                           its manager

                                           by LINDSAY GOLDBERG & BESSEMER GP L.P.,
                                                        its general partner

                                           by LINDSAY GOLDBERG & BESSEMER GP LLC,
                                                         its general partner

                                                                     By:

Name:

                                                                    Title:

                                                                     By:

Name:

                                                                    Title:


                                                         REGINALD L. BANNER
                                      32

Accepted: __________, 2005

CITIGROUP GLOBAL MARKETS INC.

By: ___________________________
Authorized Signatory

J.P. MORGAN SECURITIES INC.

By: ___________________________
Authorized Signatory

For themselves and on behalf of the
several Underwriters listed
in Schedule I hereto.
                                                                     ANNEX A

                                      FORM OF OPINION OF CRAVATH, SWAINE & MOORE LLP

(a) The Company has been duly incorporated and is a corporation validly existing and in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate its properties and conduct its business as described in the
Prospectus.

(b) The Company's authorized equity capitalization is as set forth in the Prospectus under the heading "Capitalization"; all the outstanding
shares of capital stock of the Company (including the Shares to be sold by the Selling Stockholders) have been duly and validly authorized and
issued and are fully paid and non-assessable; the capital stock of the Company conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus.

(c) The Shares to be issued and sold by the Company hereunder have been duly authorized, and, when issued and delivered to and paid for by
the Underwriters in accordance with the terms of the Agreement, will be validly issued, fully paid and non-assessable.

(d) Immediately prior to the consummation of the transactions described in the Agreement, each of the Selling Stockholders was the sole record
holder of the Shares to be sold at the Closing Date and the Additional Closing Date, if applicable, by it under the Agreement; LGB Pike II LLC
has full corporate power, right and authority to sell the Shares to be sold by it; and, upon the payment and transfer contemplated by the
Agreement, assuming that the Underwriters purchase the Shares sold by the Selling Stockholders without notice of any adverse claim (within
the meaning of Section 8-105 of the UCC), the Underwriters will acquire a valid security entitlement in respect of such Shares, and no action
based on any adverse claim to such Shares may be asserted against the Underwriters with respect to such security entitlement.

(e) The Agreement has been duly authorized, executed and delivered by the Company and by LGB Pike II LLC.

(f) The execution, delivery and performance by the Company of the Agreement, the issuance and sale of the Shares to be sold by the Company
and delivered on the Closing Date and compliance by the Company with the terms of, and the consummation of the transactions contemplated
by, the Agreement will not
(i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to any of the
agreements set forth on a schedule to the opinion acceptable to counsel to the Underwriters, (ii) result in any violation of the provisions of the
charter or by-laws of the Company or (iii) result in the violation of any federal or New York law or statute or the Delaware General
Corporation Law or, to the knowledge of such counsel, any judgment, order or decree of any federal or New York court or governmental or
regulatory authority or any court or governmental or regulatory authority acting pursuant to the Delaware General Corporation Law.
                                                                         2

(g) No consent, approval, authorization, order, registration or qualification of or with any federal or New York court or governmental or
regulatory authority or, to the extent required under the Delaware General Corporation Law, any Delaware court or governmental or regulatory
authority is required for the execution, delivery and performance by the Company of the Agreement, the issuance and sale of the Shares to be
sold by the Company and delivered on the Closing Date and compliance by the Company with the terms of and the consummation of the
transactions contemplated by the Agreement, except for the registration of the Shares under the Securities Act and such consents, approvals,
authorizations, orders and registrations or qualifications as may be required under applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters.

(h) The sale of the Shares and the execution and delivery by LGB Pike II LLC of, and the performance by LGB Pike II LLC of its obligations
under, the Agreement and the consummation of the transactions contemplated therein, (i) have been duly authorized on the part of LGB Pike II
LLC and (ii) (a) will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any agreement set
forth on a schedule to the opinion acceptable to counsel to the Underwriters, (b) will not result in any violation of the provisions of the
certificate of formation or limited liability company agreement of LGB Pike II LLC or (c) result in any violation of any applicable federal or
New York law or statute, the Delaware General Corporation Law or the Delaware Limited Liability Company Act or, to the knowledge of such
counsel, any judgment, order or decree of any federal or New York court or governmental or regulatory authority or any Delaware court or
arbitrator or governmental or regulatory authority acting pursuant to the Delaware General Corporation Law or the Delaware Limited Liability
Company Act.

(i) No consent, approval, authorization, order, registration or qualification of or with any federal or New York court or governmental or
regulatory authority or, to the extent required under the Delaware General Corporation Law or the Delaware Limited Liability Company Act,
any Delaware court or governmental or regulatory authority is required for the sale of the applicable Shares or the consummation by LGB Pike
II LLC of the transactions contemplated by the Agreement, except such consents, approvals, authorizations, registrations or qualifications as
have been obtained under the Securities Act and as may be required under state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters.

(j) Holders of outstanding shares of capital stock of the Company are not entitled to preemptive rights under federal or New York law or under
the Delaware General Corporation Law in connection with the issuance of the Shares. There are no preemptive or other rights to subscribe for
or purchase, nor any restriction upon the voting or transfer of, any shares of the capital stock of the Company pursuant to the Company's
charter or bylaws or any agreement or other instrument identified on a schedule to the opinion acceptable to counsel to the Underwriters.

(k) No person has the right pursuant to any agreement or other instrument identified on a schedule to the opinion acceptable to counsel to the
Underwriters to require the Company or any of its subsidiaries to register any securities for sale under the Securities Act by reason of the filing
of the Registration Statement with the Commission or the issuance and sale of the Shares
                                                                        3

to be sold by the Company hereunder or the sale of the Shares to be sold by the Selling Stockholders hereunder.

(l) The statements made in the Prospectus under the caption "Material United States Federal Tax Consequences for Non-U.S. Stockholders,"
insofar as they purport to describe the material U.S. tax consequences of an investment in the Shares by a non-U.S. holder, constitute accurate
summaries of the matters described therein in all material respects.

(m) The statements made in the Prospectus under the caption "Description of Capital Stock" and in Part II of the Registration Statement under
the caption "Indemnification of Directors and Officers," insofar as they purport to constitute summaries of the terms of the capital stock of the
Company and of the terms of the Delaware General Corporation Law constitute accurate summaries of the matters described therein in all
material respects.

(n) To the knowledge of such counsel, (i) there are no current or pending legal, governmental or regulatory actions, suits or proceedings before
any court or governmental agency or authority of a character required under the Securities Act to be described in the Prospectus and that are not
so described and (ii) there are no contracts or other documents of a character required under the Securities Act to be filed as exhibits to the
Registration Statement or described in the Prospectus and that have not been filed or described as required.

(o) The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be required to register as an "investment company" or an entity "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.

(p) The Registration Statement was declared effective under the Securities Act as of the date and time specified in such opinion; the Prospectus
was filed with the Commission pursuant to the subparagraph of Rule 424(b) under the Securities Act specified in such opinion on the date
specified therein; and, to the knowledge of such counsel, no order suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose is pending or threatened by the Commission.

Such counsel shall also deliver a letter stating that they have participated in conferences with representatives of the Company and with
representatives of its independent accountants and counsel at which conferences the contents of the Registration Statement and the Prospectus
and any amendment and supplement thereto and related matters were discussed and, although such counsel cannot and does not assume any
responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus (except as
expressly provided above), on the basis of information gained in the course of the performance of the services rendered, the Registration
Statement, at the time it became effective, and the Prospectus, as of the Closing Date and the Additional Closing Date, if applicable (in each
case except for the financial statements and other information of an accounting or financial nature included therein, as to which such counsel
need express no view), appeared on its face to be appropriately responsive in all material respects to the requirements of the Securities Act and
the applicable rules and regulations thereunder, and that such counsel's
                                                                        4

work in connection with this matter did not disclose any information that gave such counsel reason to believe that the Registration Statement, at
the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus, at its date and at the Closing Date and the Additional Closing
Date, if applicable, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading (in each case except for the financial statements and
other information of an accounting or financial nature included therein, as to which such counsel need express no view).

In rendering such opinion, such counsel may rely as to matters of fact on certificates of responsible officers of the Company and public officials
that are furnished to the Underwriters.

The opinion of Cravath, Swaine & Moore LLP described above shall be rendered to the Underwriters at the request of the Company and LGB
Pike II LLC and shall so state therein.
                                                                   ANNEX B

                                     FORM OF OPINION OF NORTH CAROLINA COUNSEL FOR
                                                      THE COMPANY

(a) Each of the North Carolina Subsidiaries has been duly organized and is validly existing and in good standing under the laws of North
Carolina, is duly qualified to do business and is in good standing in each jurisdiction in which its ownership or lease of property or the conduct
of its business requires such qualification, and has all power and authority necessary to own or hold its properties and to conduct the business in
which it is engaged, except where the failure to be so qualified or have such power or authority would not, individually or in the aggregate,
have a Material Adverse Effect as such term is defined in the Agreement.

(b) All the outstanding shares of capital stock or other equity interests of each of the North Carolina Subsidiaries have been duly and validly
authorized and issued, are fully paid and non-assessable, and are owned directly or indirectly by the Company in the case of PEI and by PEI in
the case of PESC, free and clear of any perfected security interest (other than pursuant to the Senior Credit Agreement) and, to our knowledge,
any other lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.

(c) The execution, delivery and performance by the Company of the Agreement, the issuance of the Shares to be sold by the Company and the
sale of the Shares to be sold by the Company and delivered on the Closing Date and compliance by the Company with the terms of, and the
consummation of the transactions contemplated by, the Agreement will not (i) result in any violation of the provisions of the charter or by-laws
or similar organizational documents of the North Carolina Subsidiaries or (ii) result in the violation of any North Carolina law or statute or, to
our knowledge, any judgment, order or decree of any North Carolina court or governmental or regulatory authority; provided, however, no
opinion herein rendered with respect to any potential violation of applicable federal or state securities laws with respect to the purchase and
distribution of the Shares by the Underwriters.

(d) No consent, approval, authorization, order, registration or qualification of or with any federal or North Carolina court or governmental or
regulatory authority is required for the execution, delivery and performance by the Company and the Selling Stockholders of the Agreement,
the issuance of the Shares to be sold by the Selling Stockholders and sale of the Shares to be sold by the Company and delivered on the Closing
Date and compliance by the Company with the terms of and the consummation of the transactions contemplated by the Agreement, except for
such consents, approvals, authorizations, orders and registrations or qualifications as have been obtained under the Securities Act or as may be
required under applicable state securities laws in connection with the purchase and distribution of the Shares by the Underwriters.
                                                                          2

(e) To our knowledge, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or the North Carolina
Subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of
the North Carolina Subsidiaries, any such convertible or exchangeable securities or any such rights, warrants or options or restricting the voting
or transfer of any shares of capital stock of the North Carolina Subsidiaries.

(f) To our knowledge, no person has the right to require the North Carolina Subsidiaries to register any securities for sale under the Securities
Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Shares to be sold by the Company
under the Agreement or the sale of the Shares to be sold by the Selling Stockholders under the Agreement.

(g) The North Carolina Subsidiaries are not (i) in violation of their respective charter or by-laws or similar organizational documents; (ii) in
default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which they are a party or by which they are bound or to which any of their property or assets is subject; or
(iii) in violation of any federal or North Carolina law or statute or any judgment, order, rule or regulation of any federal or North Carolina court
or arbitrator or governmental or regulatory authority, except in the case of clauses (ii) and (iii) for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect or adversely affect the power or ability of the Company to perform its
obligations under the Agreement.

(h) To our knowledge, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which either of the
North Carolina Subsidiaries are or may be a party or to which any property of the North Carolina Subsidiaries are or may be the subject which,
individually or in the aggregate, if determined adversely to the North Carolina Subsidiaries, could reasonably be expected to have a Material
Adverse Effect; and to our knowledge, no such investigations, actions, suits or proceedings are threatened or contemplated by any
governmental or regulatory authority or threatened by others.
                                                                         3

(i) To our knowledge, the North Carolina Subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal or state or local governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their respective businesses, except where the failure to possess or make the
same would not, individually or in the aggregate, have a Material Adverse Effect or adversely affect the power or ability of the Company to
perform its obligations under the Agreement; and, to our knowledge, the North Carolina Subsidiaries have not received notice of any
revocation or modification of any such license, certificate, permit or authorization or have any reason to believe that any such license,
certificate, permit or authorization will not be renewed in the ordinary course.

(j) To our knowledge, the North Carolina Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise
use, all items of real and personal property that are material to their respective businesses, free and clear of all liens, encumbrances, claims and
defects and imperfections of title except (i) those pursuant to the Senior Credit Agreement, as defined in the Agreement, and (ii) those that (A)
do not materially interfere with the use made and proposed to be made of such property by the North Carolina Subsidiaries and (B) could not
reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or adversely affect the power or ability of the
Company to perform its obligations under the Agreement.

(k) To our knowledge, the North Carolina Subsidiaries are in compliance with all Environmental Laws, as defined in the Agreement, except, in
each case, where noncompliance, individually or in the aggregate, would not have a Material Adverse Effect; to our knowledge, there are no
legal or governmental proceedings pending or threatened against or affecting the North Carolina Subsidiaries under any Environmental Law
which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or adversely affect the power or ability
of the Company to perform its obligations under the Agreement.
                                                                  ANNEX C

                                     FORM OF OPINION OF NORTH CAROLINA COUNSEL FOR
                                                   REGINALD L. BANNER

(a) Immediately prior to the consummation of the transactions described in the Agreement, Banner was the sole record holder of the Shares to
be sold at the Closing Date by Banner under the Agreement, free and clear of all liens, encumbrances, equities or adverse claims.

(b) The Agreement has been duly executed and delivered by Banner.

(c) The sale of the Shares, and the execution and delivery by Banner of, and the performance by Banner of his obligations under, the
Agreement and the consummation of the transactions contemplated therein, (i) will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument to
which Banner is a party or by which Banner is bound or to which any of his property or assets is subject or (ii) result in any violation of any
applicable federal or North Carolina law or statute or, to our knowledge, any judgment, order or decree of any federal or North Carolina court
or governmental or regulatory authority; provided, however, that no opinion is herein rendered with respect to any potential violation of
applicable federal or state securities laws with respect to the purchase and distribution of the Shares by the Underwriters.

(d) No consent, approval, authorization, order, registration or qualification of or with any federal or North Carolina court or governmental or
regulatory authority is required for the execution, delivery and performance by Banner of the Agreement, the sale of the applicable Shares to be
sold by Banner and delivered on the Closing Date and the compliance by Banner with the terms of and the consummation by Banner of the
transactions contemplated by the Agreement, except such consents, approvals, authorizations, registrations or qualifications as have been
obtained under the Securities Act and as may be required under applicable state securities laws in connection with the purchase and distribution
of the Shares by the Underwriters.
                                                                   EXHIBIT A

                                                    FORM OF LOCK-UP AGREEMENT

                                                                 ______ __, 2005

Citigroup Global Markets Inc.
J.P. Morgan Securities Inc.
as Representatives of the
several Underwriters listed
in Schedule I to the Underwriting
Agreement referred to below
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013

Re: Pike Electric Corporation Public Offering

Ladies and Gentlemen:

The undersigned understands that you, as representatives (the "Representatives") of the several Underwriters, propose to enter into an
Underwriting Agreement (the "Underwriting Agreement") with Pike Electric Corporation, a Delaware corporation (the "Company"), providing
for the public offering (the "Public Offering") by the several Underwriters named in Schedule I to the Underwriting Agreement (the
"Underwriters"), of common stock of the Company (the "Securities"). Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Underwriting Agreement.

In consideration of the Underwriters' agreement to purchase and make the Public Offering of the Securities, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the
Representatives, on behalf of the Underwriters, the undersigned will not, during the period commencing on the date hereof and ending 180 days
beginning on the date of the Underwriting Agreement (the "Restricted Period"), (1) offer, pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of common stock, par value $0.001 per share, of the Company (the "Common Stock")
or any securities convertible into or exercisable or exchangeable for Common Stock (including without limitation, Common Stock that may be
deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission
and securities that may be issued upon exercise of a stock option or warrant) or (2) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. In addition, the undersigned agrees
that, without the prior written consent of the Representatives, on behalf of the Underwriters, it will not, during the Restricted
                                                                         2

Period, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock. If (a) during the last 17 days of the Restricted Period the Company issues an earnings
release or material news or a material event relating to the Company occurs or (b) prior to the expiration of the Restricted Period the Company
announces that it will release earnings results during the 16-day period beginning on the last day of the Restricted Period, then the foregoing
restrictions shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence
of the material news or material event.

The foregoing paragraph shall not apply to (a) transactions relating to shares of Common Stock or other securities acquired in open market
transactions after the Closing Date; provided that no filing by any party (transferor or transferee) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), shall be required or shall be voluntarily made in connection with subsequent sales of shares of Common Stock
or other securities acquired in such open market transactions, (b) transfers of which the Underwriters have been advised in writing of shares of
Common Stock or any security convertible into Common Stock as a bona fide gift or for no consideration; provided that each transferee during
the Restricted Period shall sign and deliver a lock-up letter substantially in the form this Letter Agreement, (c) transfers by will or intestate of
which the Underwriters have been advised in writing; provided that each transferee during the Restricted Period shall sign and deliver a lock-up
letter substantially in the form of this Letter Agreement, (d) transfers to any trust, partnership or limited liability company for the direct or
indirect benefit of the undersigned or the immediate family (any relationship by blood, marriage or adoption, not more remote than first cousin)
of the undersigned for estate planning purposes; provided that (1) the trustee of the trust, the partnership or the limited liability company, as the
case may be, during the Restricted Period shall sign and deliver a lock-up letter substantially in the form of this Letter Agreement, (2) no such
transfer shall involve a disposition for value and (3) no filing by any party (transferor or transferee) under the Exchange Act shall be required or
shall be voluntarily made in connection with such transfer, and (e) transfers by any corporation, partnership, limited liability company or other
entity to an affiliate; provided such affiliate shall sign and deliver a lock-up letter substantially in the form of this Letter Agreement.

In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter
Agreement.

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All
authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs
or personal representatives of the undersigned.

The undersigned understands that, if the Underwriting Agreement does not become effective, or if the Underwriting Agreement (other than the
provisions thereof that survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold
thereunder, the undersigned shall be released form all obligations under this Letter Agreement.
                                                                     3

The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in
reliance upon this Letter Agreement.
                                                                     4

This lock-up agreement shall be governed by and construed in accordance with the laws of the State of New York.

Very truly yours,

[Name of Signatory]

By:
 Name:


                                                                   Title:
Exhibit 4.1
COMMON STOCK COMMON STOCK PEC PIKE PIKE ELECTRIC CORPORATION INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE CUSIP 721283109 THIS CERTIFIES THAT SEE REVERSE FOR CERTAIN
DEFINITIONS THIS CERTIFIES THAT IS THE OWNER OF FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $0.001 PER SHARE OF PIKE ELECTRIC CORPORATION, (hereinafter,the 'Corporation")
transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate PROPERLY endorsed. This Certificate and the shares represented hereby are issued and shall be held subject to all of the provisions of the
Corporation's Certificate of Incorporation and By-laws. This Certificate is not valid until countersigned and registered by the Transfer Agent and Registrar. Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized
officers. Dated mark Castaneda j. eric pike president and chief executive officer Mark Castaneda Chief Financial Officer, and Corporate Secretary PIKE ELECTRIC CORPORATE SEAL 2005 DELAWARE CORPORATION COUNTERSIGNED AND
REGISTERED: NATIONAL CITY BANK BY TRANSFER AGENT AND REGISTRAR AUTHORIZED SIGNATURE INTERNATIONAL SECURITY PRODUCTS
PIKE ELECTRIC CORPORATION THE CORPORATION WILL FURNISH, WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A FULL STATEMENT OF THE DESIGNATION, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS OF EACH CLASS AUTHORIZED TO BE ISSUED, AND A FULL STATEMENT OF THE DESIGNATION, RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF EACH SERIES OF ANY CLASS OF PREFERRED shares
AUTHORIZED TO BE ISSUED SO FAR AS THE SAME MAY HAVE BEEN FIXED AND THE authority OF THE board TO DESIGNATE AND fix THE RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF OTHER SERIES. ANY SUCH
REQUEST SHOULD BE ADDRESSED TO THE SECRETARY OF THE COMPANY, OR TO THE TRANSFER AGENT AND REGISTRAR NAMED ON THE FACE OF THIS CERTIFICATE. The following abbreviations, when used in the inscription
on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: ten com as tenants in common ten ent as tenants by the entireties jt ten as joint tenants with right of survivorship and not as
tenants in common unif gift min act (Cust) custodian (minor) under uniform gifts to minors act (state) additional abbreviations may also be used though not in the above text. for value received, hereby sell, assign and transfer unto please insert social security
or other identifying number of assignee please print or typewrite name and address including zip code of assignee shares of the stock represented by the within certificate, and do hereby irrevocably constitute and appoint attorney to transfer the said stock on
the books of the within-named corporation with full power of substitution in the premises. dated, notice: the signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or
enlargement, or any change whatever signature(s) guaranteed: the signature should be guaranteed by an eligible guarantor institution, (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee
medallion program). pursuant to s.e.c. rule 17ad-15.
                                                                                                                                    EXHIBIT 5.1

                                                                 [Letterhead of]

                                                   CRAVATH, SWAINE & MOORE LLP
                                                          [New York Office]

                                                                                                                                    July 22, 2005

Ladies and Gentlemen:

    We have acted as counsel for Pike Electric Corporation, a Delaware corporation (the “ Company ”), in connection with the registration
statement on Form S-1, as amended (Registration No. 333-124117) (the “ Registration Statement ”), filed with the Securities and Exchange
Commission (the “ Commission ”) under the Securities Act of 1933, as amended (the “ Securities Act ”), with respect to the registration of
13,500,000 shares of common stock, par value $0.001 per share of the Company, covering the offer and sale by the Company of 10,000,000
shares (the “ Primary Shares ”) and the offer and sale by certain selling stockholders of 3,500,000 shares (the “ Secondary Shares ”), and, if
exercised, the offer and sale by a selling stockholder of 2,025,000 additional shares (the “ Additional Shares ”) to the underwriters (the “
Underwriters ”) pursuant to the terms of the underwriting agreement (the “ Underwriting Agreement ”) to be executed by the Company,
Citigroup Global Markets, Inc. and J.P. Morgan Securities Inc., as Representatives of the Underwriters, and the selling stockholders listed on
Schedule II to the Underwriting Agreement (the “ Selling Stockholders ”).

    In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the Registration Statement
and the exhibits thereto and such documents, corporate records and other instruments as we have deemed necessary or appropriate for the
purposes of this opinion, including, without limitation, (a) the Certificate of Incorporation of the Company, (b) the Bylaws of the Company and
(c) certain resolutions adopted by the board of directors of the Company.

   Based on the foregoing, we are of opinion as follows:

   1. The Primary Shares have been duly and validly authorized and, when issued and delivered to and paid for by the Underwriters pursuant to
the Underwriting Agreement, will be validly issued, fully paid and nonassessable.
                                                                                                                                                 2

   2. The Secondary Shares, other than the 348,410 shares to be issued by the Company to a Selling Stockholder upon exercise of options, and
the Additional Shares have been duly and valid issued, fully paid and nonassessable.

   3. The 348,410 shares to be issued by the Company to a Selling Stockholder upon exercise of options have been duly and validly authorized
and, when issued and delivered by the Company to the Selling Stockholder (and when subsequently delivered to the Underwriters in
accordance with the terms of the Underwriting Agreement), will be validly issued, fully paid and nonassessable.

    We are admitted to practice in the State of New York, and we express no opinion as to any matters governed by any laws other than the laws
of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the United States of America. The
reference and limitation to “Delaware General Corporation Law” includes the statutory provisions and all applicable provisions of the
Delaware Constitution and reported judicial decisions interpreting these laws.

   We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. We also consent to the
reference to our firm under the caption “Legal Matters” in the Registration Statement. In giving this consent, we do not thereby admit that we
are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the
Commission.

                                                                        Very truly yours,

                                                                        /s/ Cravath, Swaine & Moore LLP

Pike Electric Corporation
   100 Pike Way
      Mount Airy, North Carolina 27030
                                                                  EXHIBIT 10.9

                                                         AMENDED AND RESTATED
                                                        EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 20th day of July, 2005, by and
between PIKE ELECTRIC CORPORATION, a Delaware corporation (hereinafter "Employer"), and JOSEPH ERIC PIKE, an individual
domiciled in the State of North Carolina (hereinafter "Executive").

                                                                   GENERAL

Executive is currently employed by Employer pursuant to an Employment Agreement dated as of April 16, 2002 (the "Predecessor
Agreement"). In connection with Employer's initial public offering of its common stock (the "IPO"), Employer and Executive have agreed to
amend and restate the Predecessor Agreement, as set forth herein, as of the closing of the IPO (the date of such closing, the "Effective Date").
This Agreement shall become effective on the Effective Date and shall have no force or effect prior to the Effective Date. In the event that the
Effective Date does not occur prior to September 30, 2005, this Agreement shall be null and void ab initio and the Predecessor Agreement shall
remain in full force and effect.

                                                                 ARTICLE I
                                                                EMPLOYMENT

1.1. Position. Employer hereby hires Executive as President and Chief Executive Officer of Employer. Executive shall perform the duties of his
position as determined by the Board of Directors of Employer (hereinafter, the "Board") in accordance with the policies, practices and bylaws
of Employer. Executive shall report directly to the Board.

1.2. Time and Effort. Executive shall serve Employer faithfully, loyally, honestly and to the best of his ability. Executive shall devote all his
business time and best efforts to the performance of his duties on behalf of Employer. During his term of employment, Executive shall not at
any time or place or to any extent whatsoever, either directly or indirectly, without the express written consent of the Board, engage in any
outside employment or in any activity competitive with or adverse to Employer's business, practice or affairs. This is not intended to prohibit
Executive from engaging in nonprofessional activities such as personal investments or conducting to a reasonable extent private business
affairs, as long as they do not conflict or interfere with Executive's responsibilities to Employer, provided that Executive shall not serve on
other boards of directors without the prior consent of the Board. Participation to a reasonable extent in civic, social or community activities is
encouraged.

1.3. Term. The term ("Term") of this Agreement shall commence on and as of the Effective Date and, unless earlier terminated pursuant to
Article IV, shall continue for a period of three years (hereinafter, the "Initial Term"). Thereafter, the term of this Agreement shall be
automatically extended for additional one-year periods (each, hereinafter, an "Additional Term"), subject to either party's right to terminate this
                                                                          2

Agreement by giving the other party written notice of its intention to do so at least sixty (60) days prior to the expiration of the Initial Term or
the Additional Term, as the case may be.

                                                                  ARTICLE II
                                                                COMPENSATION

2.1. Base Salary. Employer agrees to pay Executive, and Executive agrees to accept, as compensation for the services and obligations set forth
herein, base salary (herein "Base Salary") in cash equal to the sum of Seven Hundred Fifty Thousand and no/100 dollars ($750,000.00) per
year, which sum shall be paid to Executive by Employer, less any taxes required to be withheld under federal, state and local law, in
accordance with Employer's standard payroll practices for executive personnel, as same may change from time to time. The amount of Base
Salary shall be subject to adjustment as provided in Section 2.2 below.

2.2. Adjustments to Base Salary. Upward adjustments to Executive's Base Salary shall be determined by the compensation committee of the
Board (the "Committee") in its sole discretion. For so long as Executive is employed by Employer there shall be no reductions in Executive's
Base Salary.

2.3. Annual Bonuses. Subject to Section 10.1 below, in addition to the Base Salary described above, Executive shall receive an annual bonus as
soon as practicable after the last business day of each fiscal year of Employer during the term of Executive's employment hereunder, beginning
with Employer's fiscal year ending June 30, 2006. Each such annual bonus shall consist of (a) a number of shares of Employer's common stock
("Common Stock") equal to the applicable Share Number (as defined below), which shall not be subject to transfer restrictions or forfeiture,
and (b) a number of fully vested and exercisable non-qualified options to purchase a number of shares of Common Stock equal to the
applicable Option Number (as defined below) at a purchase price per share equal to the applicable Grant Date Price, except that such options
shall not be payable if Employer has failed to satisfy the budget targets established for such fiscal year. All such shares and options shall have
the other terms and be subject to the other conditions set forth in the equity compensation plan of Employer under which such shares and
options are granted. For purposes of this Agreement, (i) "Share Number" shall mean the quotient of $250,000 divided by the applicable Grant
Date Price, (ii) "Option Number" shall mean the quotient of $250,000 divided by one half of the applicable Grant Date Price and (iii) "Grant
Date Price" shall mean the fair market value per share of Common Stock on the date the Common Stock or options, as applicable, are granted
to Executive, as determined in accordance with the equity compensation plan of Employer under which such grant is made. Employer shall
have no obligation to pay any amount to Executive under this Section 2.3 with respect to any fiscal year if Executive's employment terminates
on or prior to the last day of such fiscal year; provided that if such termination is by Employer without Cause (as defined in Section 4.1 below),
as soon as practicable following such termination, Employer shall transfer to Executive a number of shares of Common Stock equal to the
applicable Share Number, which shall not be subject to transfer restrictions or forfeiture.
                                                                        3

2.4. Additional Compensation. Executive shall further be eligible to participate in the existing management incentive plans of Employer to the
extent such plans continue in effect (as determined in the discretion of the Committee), and to receive such additional compensation as may be
provided by such plans from time to time or as otherwise approved by the Committee.

                                                              ARTICLE III
                                                          EXECUTIVE BENEFITS

3.1. Employer Policy. Executive shall be entitled to all executive benefits currently offered or adopted by Employer during Executive's
employment with Employer.

3.2. Business Expenses. Employer will reimburse Executive for all reasonably incurred business expenses, subject to the travel and expense
policy established by Employer from time to time, incurred by Executive in the performance of Executive's duties pursuant to this Agreement,
provided that Executive furnishes to Employer adequate records and other documentary evidence required to substantiate such expenditures.

3.3. Personal Use of Employer Aircraft. Employer will provide Executive with personal use of any of Employer's aircraft for up to 50 flight
hours per year, provided such use does not interfere with the normal business use of the aircraft. Executive agrees to schedule his personal use
of the aircraft in advance, upon reasonable notice to Employer.

3.4. Excise Tax Gross-Up. (a) In the event it shall be determined that any payments or distributions by Employer to Executive or for
Executive's benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 3.4) ("Payments") are subject to the excise tax imposed by
Section 4999 (or any successor provisions) of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalty is
incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, the "Excise Tax"), then
Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that, after payment by Executive of all
taxes (including any income taxes and Excise Tax imposed on the Gross-Up Payment (and any interest and penalties imposed with respect
thereto)), Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon all such Payments; provided, however,
that, if no Excise Tax would be imposed on such Payments were the aggregate amount of all such Payments reduced by an amount not to
exceed 5% of such aggregate amount, then Executive shall forfeit and Employer shall not be obligated to pay the amount of such Payments
(which shall not exceed 5% of such aggregate amount) necessary to avoid imposition of the Excise Tax on such Payments (a "Payment
Reduction"), and Executive shall be entitled to designate the particular Payments (and the amounts thereof) to be so reduced.
                                                                        4

(b) Subject to the provisions of Section 3.4(c), all determinations required to be made under this Section 3.4, including whether and when such
a Gross-Up Payment or Payment Reduction is required, the amount of such Gross-Up Payment or Payment Reduction and the assumptions to
be utilized in arriving at such determination, shall be made by Ernst & Young LLP (or its successor) (the "Accounting Firm") which shall
provide detailed supporting calculations both to Employer and to Executive within thirty (30) business days of the receipt of notice from
Executive that there has been a Payment subject to Excise Tax, or such earlier time as is requested by Employer. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the change of control of Employer that gives
rise to the Excise Tax, Employer shall appoint another nationally recognized accounting firm to make the determinations required hereunder
(which shall then be deemed to be the Accounting Firm). All fees and expenses of the Accounting Firm shall be borne solely by Employer. Any
Gross-Up Payment as determined pursuant to this Section 3.4 shall be paid by Employer to Executive within ten (10) business days of the
receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish
Executive with a written opinion that failure to report the Excise Tax on Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon Employer and Executive. As a
result of the uncertainty of the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made by Employer should have been made ("Underpayment"). In
the event that Employer exhausts its remedies pursuant to Section 3.4(c) and Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred, and any such Underpayment shall be promptly
paid by Employer to Executive.

(c) Executive shall notify Employer in writing of any claim by the Internal Revenue Service or other taxing authority that, if successful, would
require the payment by Employer of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than five (5)
days after Executive or his representative is informed in writing of such claim and shall apprise Employer of the nature of such claim and the
date on which such claim is requested to be paid. Executive shall not pay such claim or take any other action with respect thereto prior to the
expiration of the thirty (30) day period following the date on which Executive gives such notice to Employer (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If Employer notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall
(a) give Employer any information reasonably requested by Employer relating to such claim, (b) take such action in connection with contesting
such claim as Employer shall reasonably request in writing from time to time, including accepting legal representation with respect to such
claim by an attorney reasonably selected by Employer, (c) cooperate with Employer in good faith in order effectively to contest such claim and
(d) permit Employer to participate in any proceedings relating to such claim; provided, however, that Employer shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold
Executive harmless, on an
                                                                          5

after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limiting the foregoing, Employer shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with
the taxing authority in respect of any such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Employer shall determine; provided, however, that if Employer
directs Executive to pay such claim and sue for a refund, Employer shall advance the amount of such payment to Executive, on an interest-free
basis, and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and
provided, further, that any extension of the statute of limitations relating to payment of taxes for Executive's taxable year with respect to which
such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Employer's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by Executive of a Gross-Up Payment or an amount advanced by Employer pursuant to Section 3.4(c), Executive
becomes entitled to receive any refund with respect to such Gross-Up Payment or claim, Executive shall (subject to Employer's complying with
the requirements of Section 3.4(c), if applicable) promptly pay to Employer the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by Employer pursuant to Section
3.4(c), a determination is made that Executive is not entitled to any refund with respect to such claim and Employer does not notify Executive
in writing of its intent to contest such denial of refund prior to the expiration of thirty
(30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

(e) Employer shall be entitled to withhold and pay over to the Internal Revenue Service or other applicable taxing authority, for the benefit of
Executive, all or any portion of any Gross-Up Payment, and Executive hereby consents to such withholding.

                                                                  ARTICLE IV
                                                                 TERMINATION

4.1. For Cause. Employer may terminate Executive's employment hereunder for "cause". For purposes of this Agreement, the term "cause"
shall mean (a) Executive is convicted of a felony involving moral turpitude, or (b) Executive, in carrying out his duties, is guilty of (i) gross
neglect or (ii) willful misconduct resulting, in either case, in
                                                                          6

harm to Employer unless such act, or failure to act, was believed by Executive in good faith to be in the best interests of Employer.

4.2. Termination by Executive. Executive may terminate this Agreement and his employment for "Good Reason" by giving written notice to
Employer within sixty (60) days, or such longer period as may be mutually agreed to in writing by Executive and Employer, of Executive's
receipt of notice of the occurrence of any event constituting "Good Reason," as described below:

Executive shall have "Good Reason" to terminate this Agreement and his employment upon occurrence of any of the following events: (a)
Executive is assigned any duties or responsibilities that are inconsistent, in any material respect, with the scope of duties and responsibilities
associated with his position and office as described in Section 1.1 above; (b) Executive suffers a reduction in, or a material interference with,
the authorities, duties or responsibilities associated with his position and office as described in Section 1.1 above; (c) the duties of the position
described in Section 1.1 change materially from those at the date of execution of this Agreement; or (d) Executive is required to relocate to an
employment location that is more than 50 miles from his employment location on the Effective Date; provided, however, that in the case of
clauses (a) through (c) above, the event or circumstance which is alleged to constitute Good Reason does not, directly or indirectly, result from
or relate to the consummation of the IPO. If Executive terminates this Agreement and his employment under this Agreement for "Good
Reason", Executive shall be entitled to receive Severance Benefits pursuant to Article V.

4.3. Other Termination. This Agreement shall terminate, at the election of Employer, upon the death, disability or legal incapacity of Executive.

                                                                ARTICLE V
                                                            SEVERANCE BENEFITS

5.1. Triggering Events. If this Agreement is terminated by Employer without Cause, or if Executive elects to terminate this Agreement for
"Good Reason" pursuant to Section 4.2 above (each, hereinafter, a "Termination Event"), Executive shall receive the "Severance Benefits"
provided by this Article V and all stock options and restricted stock awards then held by Executive, pursuant to the Stock Option Plan A and
the Stock Option Plan B or otherwise, shall automatically become vested and exercisable, subject to the other terms and conditions of the
equity compensation plan of Employer under which they were granted.

5.2. Severance Benefits. Subject to Section 10.1 below, the Severance Benefits shall begin immediately following the date Executive incurs a
Termination Event and will continue to be payable for 24 consecutive months after the Termination Event, in accordance with Employer's
normal payroll practices. Executive's "Severance Benefits" shall consist of the continuation of Executive's Base Salary determined in
accordance with Sections 2.1 and 2.2 above, and the continuation of any health, life, disability or other benefits that Executive was receiving as
of his last day of active employment with Employer.
                                                                         7

5.3. Termination of Severance Benefits. Severance Benefits shall immediately cease if Executive commits a violation of any of the terms of this
Agreement relating to confidentiality, non-disclosure, non-solicitation and non-competition.

                                                             ARTICLE VI
                                                      CONFIDENTIAL INFORMATION

6.1. Confidential Information. Executive hereby acknowledges that in order to perform his duties as an executive of Employer, he has received,
and will in the future be given access to, certain confidential, secret and proprietary information in the form of records, data, specifications,
formulas, technology, inventions, devices, products, methods, know-how, processes, financial data, customer and/or vendor information and
practices, customer lists, cost information, executive information and trade secrets (hereinafter, collectively, "Confidential Information")
developed and owned by Employer concerning the business, products and/or services of Employer.

6.2. Non-Disclosure. Except as otherwise specifically provided herein, Executive will not, directly or indirectly, disclose or utilize, or cause or
permit to be disclosed or utilized, to any person or to any entity whatsoever any Confidential Information acquired pursuant to his employment
with Employer
(whether acquired prior to or subsequent to the execution of this Agreement) under this Agreement or otherwise.

6.3. Permitted Disclosure. Executive may utilize the Confidential Information only to the extent reasonably necessary and required in the
discharge of his duties as an executive of Employer.

6.4. Return of Information. Executive will immediately, upon the request of Employer, return to Employer all originals, copies or other
embodiments of any Confidential Information received under this Agreement or otherwise. Executive will not retain, or cause or permit to be
retained, any copies or other embodiments of the materials so returned.

6.5. Non-Competition and Non-Solicitation. Executive understands and agrees that Employer shall be entitled to protect and preserve the going
concern value of the business of Employer and its affiliates to the extent permitted by law and that Employer would not have entered into this
Agreement absent the provisions of this Section 6.5, and Executive therefore agrees to the following:

(a) Non-Solicitation. For 24 months after termination of his employment, Executive shall not (and shall not attempt to) (i) solicit, recruit or hire
any current or former employee of Employer or its affiliates or otherwise interfere with or damage the relationship between Employer and its
affiliates and any such employee, (ii) solicit, interfere with or damage any relationship between Employer or its affiliates and its customers or
suppliers (or any person that Employer has approached or has made significant plans to approach as a prospective customer or supplier) or any
governmental authority or any agent or representative thereof or (iii) assist any person in any way to do, or attempt to do, any of the foregoing.
                                                                         8

(b) Non-Competition. For five years after termination of his employment, Executive shall not (and shall not attempt to) (i) engage in any
activity or business (whether as a stockholder, partner, member investor, lender, director, officer, employee, agent, consultant, contractor or
otherwise), or establish any new business, within North America that is in competition, in whole or in material part, with Employer or its
affiliates, including selling goods or services of the type sold by Employer or its affiliates during the Term (the foregoing activities and
businesses, hereinafter, "Competitive Activities") or
(ii) assist any person in any way to do, or attempt to do, any Competitive Activities. This Section 6.5(b) shall be deemed not breached as a
result of the ownership by Executive of: (A) less than an aggregate of 5% of any class of stock of a person engaged, directly or indirectly, in
Competitive Activities, (B) less than 10% in value of any instrument of indebtedness of a person engaged, directly or indirectly, in Competitive
Activities or (C) a person that engages, directly or indirectly, in Competitive Activities if such Competitive Activities account for less than 10%
of such person's consolidated annual revenues.

(c) Notwithstanding any other provision of this Agreement, it is understood and agreed that remedies at law would be inadequate in the case of
any breach of the covenants contained in this Section. Employer shall be entitled to equitable relief, including the remedy of specific
performance, with respect to any breach or attempted breach of such covenants.

                                                               ARTICLE VII
                                                          PROPRIETARY INTEREST

All books, records and other documents relating to the business and customer accounts of Employer, whether prepared by Executive or
otherwise coming into his possession, shall be and remain the exclusive property of Employer and Executive shall not, during the Term or
thereafter, directly or indirectly, assert any interest or property rights therein. Upon termination of this Agreement, all books, records and other
documents shall immediately be returned to Employer.

                                                                 ARTICLE VIII
                                                                  DISABILITY

If, based upon independent medical advice by a competent medical authority mutually and reasonably agreed upon by the parties hereto, the
Board determines that due to physical or mental illness Executive is unable to perform his customary duties hereunder for a period in excess of
(a) one hundred twenty
(120) consecutive business days, and if, within five (5) days of written notice of the expiration of such one hundred twenty (120) day period,
Executive shall not have returned to the performance of his duties on a full-time basis, or (b) one hundred thirty (130) business days in any
consecutive twelve (12) month period, then Employer may terminate Executive's employment hereunder. During such one hundred twenty
(120) day and one hundred thirty (130) day periods, as the case may be, Executive shall continue to receive one
                                                                          9

hundred percent (100%) of his Base Salary as specified in Article II, and all benefits as specified in Article III.

                                                                   ARTICLE IX
                                                                    NOTICE

All notices, requests, demands and other communications required or permitted to be given under the terms of this Agreement shall be in
writing and shall be deemed to have been duly given if delivered personally, given by prepaid telegram or mailed first class, postage prepaid or
by registered or certified mail as follows:
                                           If to Employer:              Pike Electric Corporation
                                                                        100 Pike Way
                                                                        Mt. Airy, NC 27030
                                           If to Executive:             J. Eric Pike
                                                                        304 Johns Bluff Road
                                                                        Lewisville, NC 27023



The parties may change the address to which notices under this Agreement shall be sent by providing written notice to the other in the manner
specified above.

                                                                 ARTICLE X
                                                               MISCELLANEOUS

10.1. Code Section 409A. In light of the uncertainty surrounding the proper application of Section 409A of the Code, Executive and Employer
agree to cooperate to make necessary amendments to this Agreement (including, without limitation to the timing of any Severance Benefits
payable pursuant to Article
V) to avoid imposition of penalties and additional taxes under Code Section 409A. It is intended that the provisions of this Agreement comply
with Code
Section 409A, and all provisions of this Agreement shall be construed and interpreted in a manner consistent with Code Section 409A. In
particular, if necessary to avoid imposition of penalties and additional taxes under Code
Section 409A, (a) the timing of Severance Benefits shall be subject to a six-month deferral in a manner consistent with Section
409A(a)(2)(B)(i) and (b) any annual bonuses payable to Executive shall be paid not later than the expiration of two and one-half months from
the last business day of the fiscal year of Employer with respect to which the bonus is payable.

10.2. Delegation of Duties. Executive may not assign or delegate the services and obligations he is required to perform under this Agreement.
The parties agree that any attempt by Executive to delegate his duties hereunder shall be null and void.

10.3. Amendment. This Agreement may be modified or amended only by and to the extent of the written agreement of Employer and
Executive.

10.4. Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of Employer.
                                                                         10

10.5. Entire Agreement. This Agreement contains the entire agreement of the parties hereto and supersedes any prior written or oral agreement
between them relating to the subject matter contained herein.

10.6. Survival. The terms of Article VI, Article VII, Article X and Article XI shall survive the expiration or termination of this Agreement for
any reason.

10.7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

10.8. Severability. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or
invalidated.

10.9. Indemnity. Executive shall be indemnified in his position to the fullest extent permitted or required by the laws of the State of Delaware.

10.10. Certain Definitions. For purposes of this Agreement:

(a) The term "person" means any individual, partnership, company, corporation or other entity of any kind.

(b) The term "affiliate", with respect to any person, means any other person that, directly or indirectly, controls, is controlled by or is under
common control with such person.

                                                                 ARTICLE XI
                                                            DISPUTE RESOLUTION

11.1. Mediation. Any and all disputes arising under, pertaining to or touching upon this Agreement or the statutory rights or obligations of
either party hereto, shall, if not settled by negotiation, be subject to non-binding mediation under the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("AAA") in effect on the date of the first notice of demand for mediation,
before an independent mediator selected by the parties pursuant to Section 11.4. Notwithstanding the foregoing, both Executive and Employer
may seek preliminary judicial relief if such action is necessary to avoid irreparable damage during the pendency of the proceedings described in
this Article XI. Any demand for mediation shall be made in writing and served upon the other party to the dispute, by certified mail, return
receipt requested, at the business address of Employer, or at the last known residence address of Executive, respectively. The demand shall set
forth with reasonable specificity the basis of the dispute and the relief sought. The mediation hearing will occur at a time and place convenient
to the parties in Forsyth County, North Carolina, within thirty (30) days of the date of selection or appointment of the mediator.

11.2. Arbitration. In the event that the dispute is not settled through mediation, the parties shall then proceed to binding arbitration before a
single independent arbitrator selected pursuant to Section 11.4. The mediator shall not serve as arbitrator. The
                                                                        11

arbitration hearing shall occur at a time and place convenient to the parties in Forsyth County, North Carolina, within thirty (30) days of the
date of selection or appointment of the arbitrator. The arbitration shall be governed by the rules of the AAA in effect on the date of the first
notice of demand for arbitration. The arbitrator shall issue written findings of fact and conclusions of law, and an award, within fifteen (15)
days of the date of the hearing unless the parties otherwise agree.

11.3. Damages. In cases of breach of contract or policy, damages shall be limited to contract damages. The arbitrator may award fees to the
prevailing party and assess costs of the arbitration to the non-prevailing party.

11.4. Selection of Mediators or Arbitrators. The parties shall select the mediator or arbitrator from a panel list made available by the AAA. If
the parties are unable to agree to a mediator or arbitrator within ten (10) days of receipt of a demand for mediation or arbitration, the mediator
or arbitrator will be chosen by alternatively striking from a list of five (5) mediators or arbitrators obtained by Employer from AAA. Executive
shall have the first strike.
                                                                  12

IN WITNESS WHEREOF, the parties have executed this Agreement, in one or more counterparts which, taken together, shall constitute one
agreement.

                                                            EMPLOYER:

                                                 PIKE ELECTRIC CORPORATION,
                                                       a Delaware corporation
                                                  By:   /s/ Mark Castaneda
                                                     ---------------------------
                                                  Name: Mark Castaneda
                                                       -------------------------



                                                            EXECUTIVE:
                                                         /s/ J. Eric Pike
                                                  ------------------------------
                                                  Joseph Eric Pike
                                                                                                                                   EXHIBIT 10.14

Arrangement with Mr. Castaneda

   Although we have not entered into an employment agreement with Mr. Castaneda, we operate under an arrangement with him. Our
arrangement with Mr. Castaneda provides for his employment for two years and thereafter is automatically extended for additional one-year
periods, subject to our or Mr. Castaneda’s right to terminate the arrangement upon at least 60 days’ written notice prior to the expiration of such
period of employment. Under the arrangement, Mr. Castaneda is entitled to a base salary of $400,000, and his salary may be adjusted upward
by the board of directors in its sole discretion. The arrangement also provides that Mr. Castaneda is eligible to participate in management
incentive plans currently in effect and to receive additional compensation that may be provided pursuant to such plans or as otherwise approved
by our board of directors.

    In addition, pursuant to our arrangement, Mr. Castaneda received options to purchase 161,814 shares of our common stock under Pike’s
2002 Stock Option Plan A and 2002 Stock Option Plan B at a purchase price of $6.51. The options vest and become exercisable in the
following manner: 50% will vest in October 2007, 25% will vest in October 2008 and 25% will vest in October 2009. In addition, the options
will vest and become exercisable upon the death or disability of Mr. Castaneda or as described in Pike’s 2002 Stock Option Plan A, 2002 Stock
Option Plan B or the corresponding option award agreement, as applicable. In connection with our 2004 recapitalization, we repurchased
46,893 options from Mr. Castaneda.

    Under the terms of the arrangement with Mr. Castaneda, if his employment is terminated by Pike without cause or by Mr. Castaneda for
good reason, Mr. Castaneda will be entitled to a continuation of his base salary for a period of 24 months and any health, life, disability or other
benefits that Mr. Castaneda was receiving as of the last day of his employment for a period of 12 months. We may also terminate
Mr. Castaneda’s employment if, based upon independent medical advice, the board of directors determines that due to physical or mental
illness Mr. Castaneda is unable to perform his customary duties for (1) 120 consecutive business days, if he fails to return to his duties within
five days of written notice of the end of that 120-day period, or (2) 130 business days in any twelve-month period. In any such event,
Mr. Castaneda is entitled to a continuation of his base salary and other benefits during the 120-day or 130-day period. Mr. Castaneda is also
subject to non-solicitation provision for 24 months after his employment terminates, as well as a confidentiality provision.
                                                                                                                                 EXHIBIT 10.15

                                                   PIKE ELECTRIC CORPORATION
                                           2005 OMNIBUS INCENTIVE COMPENSATION PLAN

   SECTION 1. Purpose. The purpose of this Pike Electric Corporation 2005 Omnibus Incentive Compensation Plan is to promote the interests
of Pike Electric Corporation, a Delaware corporation (the “Company”), and its stockholders by (a) attracting and retaining exceptional
directors, officers, employees and consultants (including prospective directors, officers, employees and consultants) of the Company and its
Affiliates and (b) enabling such individuals to participate in the long-term growth and financial success of the Company.

   SECTION 2. Definitions. As used herein, the following terms shall have the meanings set forth below:

   “Affiliate” means (a) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and
(b) any entity in which the Company has a significant equity interest, in either case as determined by the Committee.

   “Award” means any award that is permitted under Section 6 and granted under the Plan.

   “Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award, which may, but need
not, require execution or acknowledgment by a Participant.

   “Board” means the Board of Directors of the Company.

   “Cash Incentive Award” shall have the meaning specified in Section 6(g).

   “Change of Control” shall (a) have the meaning set forth in an Award Agreement or (b) if there is no definition set forth in an Award
Agreement, mean the occurrence of any of the following events, not including any events occurring prior to or in connection with the initial
public offering of Shares (including the occurrence of such initial public offering):

       (i) during any period of 24 consecutive months, individuals who were directors of the Company at the beginning of such period (the
“Incumbent Directors”) cease at any time during such period for any reason to constitute a majority of the Board; provided that any individual
becoming a director subsequent to the beginning of such period whose election, or nomination for election, by the Company’s stockholders was
approved by a vote of at least a majority of the Incumbent Directors shall be deemed to be an Incumbent Director, except that any such
individual whose initial assumption of office occurs as a result of an actual or threatened proxy contest with respect to election or removal of
directors or other actual or threatened solicitation of proxies or consents by or on behalf of any “person” (as such term is used in Section 13(d)
of the Exchange Act) (each, a “Person”), other than Lindsay Goldberg & Bessemer L.P. and its Affiliates
                                                                                                                                                  2

(collectively, “LGB”), the management of the Company or the Board, shall be deemed to not be an Incumbent Director;

       (ii) the consummation of (A) a merger, consolidation, statutory share exchange or similar form of corporate transaction involving (x) the
Company or (y) any of its subsidiaries, but in the case of this clause (y) only if Company Voting Securities (as defined below) are issued or
issuable in connection with such transaction (each of the transactions referred to in this clause (A), a “Reorganization”) or (B) a sale or other
disposition of all or substantially all the assets of the Company to a person that is not an Affiliate of the Company (a “Sale”), in each case, if
such Reorganization or Sale requires the approval of the Company’s stockholders under the law of the Company’s jurisdiction of organization
(whether such approval is required for such Reorganization or Sale or for the issuance of securities in such Reorganization or Sale), unless,
immediately following such Reorganization or Sale, (1) all or substantially all the persons who were the “beneficial owners” (as such term is
defined in Rule 13d-3 under the Exchange Act) of the securities eligible to vote for the election of the Board (“Company Voting Securities”)
outstanding immediately prior to the consummation of such Reorganization or Sale beneficially own, directly or indirectly, more than 50% of
the combined voting power of the then outstanding voting securities of the corporation or other entity resulting from such Reorganization or
Sale (including a corporation or other entity that as a result of such transaction directly or indirectly owns the Company or all or substantially
all the Company’s assets) (the “Continuing Company”) in substantially the same proportions as their ownership, immediately prior to the
consummation of such Reorganization or Sale, of the outstanding Company Voting Securities (excluding any outstanding voting securities of
the Continuing Company that such beneficial owners hold immediately following the consummation of such Reorganization or Sale as a result
of their ownership prior to such consummation of voting securities of any corporation or other entity (other than the Company) involved in or
forming part of such Reorganization or Sale), (2) no Person (excluding (x) any employee benefit plan (or related trust or fiduciary) sponsored
or maintained by the Company or its Affiliates, (y) LGB and (z) the Company and its Affiliates) beneficially owns, directly or indirectly, 20%
or more of the combined voting power of the outstanding voting securities of the Continuing Company immediately following the
consummation of such Reorganization or Sale and (3) immediately following the consummation of such Reorganization or Sale, at least a
majority of the members of the board of directors (or equivalent body) of the Continuing Company are Incumbent Directors;

      (iii) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company, unless such liquidation or
dissolution is part of a transaction or series of transactions described in paragraph (ii) above that does not otherwise constitute a Change of
Control; or

      (iv) any Person or “group” (as used in Section 14(d)(2) of the Exchange Act) (excluding (x) any employee benefit plan (or related trust or
fiduciary) sponsored or maintained by the Company or its Affiliates, (y) LGB and (z) the Company and its Affiliates) becomes the beneficial
owner, directly or indirectly, of Company Voting Securities representing 20% or more of the combined voting power of the then
                                                                                                                                                 3

outstanding Company Voting Securities but only if the percentage so owned exceeds the aggregate voting power of the Company securities
beneficially owned, directly or indirectly, by LGB at such time; provided , however , that, for purposes of this subparagraph (iv), no acquisition
of the Company securities (x) directly from the Company, (y) by any employee benefit plan (or related trust or fiduciary) sponsored or
maintained by the Company or its Affiliates or (z) in connection with the initial public offering of Shares shall constitute a Change of Control.

   “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.

  “Committee” means the compensation committee of the Board, or such other committee of the Board as may be designated by the Board to
administer the Plan.

   “Deferred Share Unit” means a deferred share unit Award that represents an unfunded and unsecured promise to deliver Shares in
accordance with the terms of the applicable Award Agreement.

   “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute thereto.

   “Exercise Price” means (a) in the case of Options, the price specified in the applicable Award Agreement as the price-per-Share at which
Shares may be purchased pursuant to such Option or (b) in the case of SARs, the price specified in the applicable Award Agreement as the
reference price-per-Share used to calculate the amount payable to the Participant.

    “Fair Market Value” means (a) with respect to any property other than Shares, the fair market value of such property determined by such
methods or procedures as shall be established from time to time by the Committee and (b) with respect to the Shares, as of any date, (i) the
mean between the high and low sales prices of the Shares (A) as reported by the NYSE for such date or (B) if the Shares are listed on any other
national stock exchange, as reported on the stock exchange composite tape for securities traded on such stock exchange for such date or, with
respect to each of clauses (A) and (B), if there were no sales on such date, on the closest preceding date on which there were sales of Shares or
(ii) in the event there shall be no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by
the Committee.

   “Incentive Stock Option” means an option to purchase Shares from the Company that (a) is granted under Section 6 and (b) is intended to
qualify for special Federal income tax treatment pursuant to Sections 421 and 422 of the Code, as now constituted or subsequently amended, or
pursuant to a successor provision of the Code, and which is so designated in the applicable Award Agreement.

   “Independent Director” means a member of the Board who is neither (a) an employee of the Company nor (b) an employee of any Affiliate,
and who, at the time of acting, is a “Non-Employee Director” under Rule 16b-3.
                                                                                                                                                  4

   “IRS” means the Internal Revenue Service or any successor thereto and includes the staff thereof.

   “Nonqualified Stock Option” means an option to purchase Shares from the Company that (a) is granted under Section 6 and (b) is not an
Incentive Stock Option.

   “NYSE” means the New York Stock Exchange or any successor thereto.

   “Option” means an Incentive Stock Option or a Nonqualified Stock Option or both, as the context requires.

   “Participant” means any director, officer, employee or consultant (including any prospective director, officer, employee or consultant) of the
Company or its Affiliates who is eligible for an Award under Section 5 and who is selected by the Committee to receive an Award under the
Plan or who receives a Substitute Award pursuant to Section 4(c).

   “Performance Compensation Award” means any Award designated by the Committee as a Performance Compensation Award pursuant to
Section 6(e).

   “Performance Criteria” means the criterion or criteria that the Committee shall select for purposes of establishing a Performance Goal for a
Performance Period with respect to any Performance Compensation Award, Performance Unit or Cash Incentive Award under the Plan.

   “Performance Formula” means, for a Performance Period, the one or more objective formulas applied against the relevant Performance Goal
to determine, with regard to the Performance Compensation Award, Performance Unit or Cash Incentive Award of a particular Participant,
whether all, a portion or none of the Award has been earned for the Performance Period.

   “Performance Goal” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period
based upon the Performance Criteria.

   “Performance Period” means the one or more periods of time as the Committee may select over which the attainment of one or more
Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Compensation
Award, Performance Unit or Cash Incentive Award.

   “Performance Unit” means an Award under Section 6(f) that has a value set by the Committee (or that is determined by reference to a
valuation formula specified by the Committee or the Fair Market Value of Shares), which value may be paid to the Participant by delivery of
such property as the Committee shall determine, including without limitation, cash or Shares, or any combination thereof, upon achievement of
such Performance Goals during the relevant Performance Period as the Committee shall establish at the time of such Award or thereafter.
                                                                                                                                                    5

   “Plan” means this Pike Electric Corporation 2005 Omnibus Incentive Compensation Plan, as in effect from time to time.

   “Restricted Share” means a Share delivered under the Plan that is subject to certain transfer restrictions, forfeiture provisions and/or other
terms and conditions specified herein and in the applicable Award Agreement.

   “RSU” means a restricted stock unit Award that is designated as such in the applicable Award Agreement and that represents an unfunded
and unsecured promise to deliver Shares, cash, other securities, other Awards or other property in accordance with the terms of the applicable
Award Agreement.

   “Rule 16b-3” means Rule 16b-3 as promulgated and interpreted by the SEC under the Exchange Act or any successor rule or regulation
thereto as in effect from time to time.

   “SAR” means a stock appreciation right Award that represents an unfunded and unsecured promise to deliver Shares, cash, other securities,
other Awards or other property equal in value to the excess, if any, of the Fair Market Value per Share over the Exercise Price per Share of the
SAR, subject to the terms of the applicable Award Agreement.

   “SEC” means the Securities and Exchange Commission or any successor thereto and shall include the staff thereof.

   “Shares” means shares of common stock of the Company, $0.001 par value, or such other securities of the Company (a) into which such
shares shall be changed by reason of a recapitalization, merger, consolidation, split-up, combination, exchange of shares or other similar
transaction or (b) as may be determined by the Committee pursuant to Section 4(b).

   “Subsidiary” means any entity in which the Company, directly or indirectly, possesses fifty percent (50%) or more of the total combined
voting power of all classes of its stock.

   “Substitute Awards” shall have the meaning specified in Section 4(c).

   “Substituted Options” shall have the meaning specified in Section 6(c)(v).

   “Substitution SARs” shall have the meaning specified in Section 6(c)(v).

   SECTION 3. Administration. (a) Composition of Committee. The Plan shall be administered by the Committee, which shall be composed of
one or more directors, as determined by the Board; provided that after the date of the consummation of the initial public offering of Shares, to
the extent necessary to comply with the rules of the NYSE and Rule 16b-3 and to satisfy any applicable requirements of Section 162(m) of the
Code and any other applicable laws or rules, the Committee shall be composed of two or more directors, all of whom shall be Independent
Directors and all of whom shall
                                                                                                                                                 6

(i) qualify as “outside directors” under Section 162(m) of the Code and (ii) meet the independence requirements of the NYSE.

    (b) Authority of Committee. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have sole and plenary authority to administer the Plan, including, but not limited
to, the authority to (i) designate Participants, (ii) determine the type or types of Awards to be granted to a Participant, (iii) determine the
number of Shares to be covered by, or with respect to which payments, rights or other matters are to be calculated in connection with, Awards,
(iv) determine the terms and conditions of any Awards, (v) determine the vesting schedules of Awards and, if certain performance criteria must
be attained in order for an Award to vest or be settled or paid, establish such performance criteria and certify whether, and to what extent, such
performance criteria have been attained, (vi) determine whether, to what extent and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended and the method or methods by
which Awards may be settled, exercised, canceled, forfeited or suspended, (vii) determine whether, to what extent and under what
circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the holder thereof or of the Committee, (viii) interpret, administer, reconcile any
inconsistency in, correct any default in and supply any omission in, the Plan and any instrument or agreement relating to, or Award made
under, the Plan, (ix) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan, (x) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards, (xi) amend an
outstanding Award or grant a replacement Award for an Award previously granted under the Plan if, in its sole discretion, the Committee
determines that (A) the tax consequences of such Award to the Company or the Participant differ from those consequences that were expected
to occur on the date the Award was granted or (B) clarifications or interpretations of, or changes to, tax law or regulations permit Awards to be
granted that have more favorable tax consequences than initially anticipated and (xii) make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the Plan.

   (c) Committee Decisions. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other
decisions under or with respect to the Plan or any Award shall be within the sole and plenary discretion of the Committee, may be made at any
time and shall be final, conclusive and binding upon all persons, including the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award and any stockholder.

   (d) Indemnification. No member of the Board, the Committee or any employee of the Company (each such person, a “Covered Person”)
shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award
hereunder. Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability or
expense (including attorneys’ fees) that may be imposed upon or incurred by such Covered Person
                                                                                                                                                 7

in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered
Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all
amounts paid by such Covered Person, with the Company’s approval, in settlement thereof, or paid by such Covered Person in satisfaction of
any judgment in any such action, suit or proceeding against such Covered Person; provided that the Company shall have the right, at its own
expense, to assume and defend any such action, suit or proceeding, and, once the Company gives notice of its intent to assume the defense, the
Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be
available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case
not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted
from such Covered Person’s bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by
law or by the Company’s Certificate of Incorporation or Bylaws. The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which Covered Persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of
law, or otherwise, or any other power that the Company may have to indemnify such persons or hold them harmless.

   (e) Delegation of Authority to Senior Officers. The Committee may delegate, on such terms and conditions as it determines in its sole and
plenary discretion, to one or more senior officers of the Company the authority to make grants of Awards to officers (other than executive
officers), employees and consultants of the Company and its Affiliates (including any prospective officer, employee or consultant).

   (f) Awards to Independent Directors. Notwithstanding anything to the contrary contained herein, the Board may, in its sole and plenary
discretion, at any time and from time to time, grant Awards to Independent Directors or administer the Plan with respect to such Awards. In
any such case, the Board shall have all the authority and responsibility granted to the Committee herein.

   SECTION 4. Shares Available for Awards. (a) Shares Available. Subject to adjustment as provided in Section 4(b), (i) the aggregate number
of Shares that may be delivered pursuant to Awards granted under the Plan shall be 1,750,000, of which the maximum number of Shares that
may be delivered pursuant to Incentive Stock Options granted under the Plan shall be 500,000 and the maximum number of Shares that may be
delivered pursuant to Awards of Restricted Shares under the Plan shall be 450,000 and (ii) the maximum number of Shares with respect to
which Awards may be granted to any Participant in any fiscal year of the Company shall be 600,000. If, after the effective date of the Plan, any
Award granted under the Plan is forfeited, or otherwise expires, terminates or is canceled without the delivery of Shares, then the Shares
covered by such forfeited, expired, terminated or canceled Award shall again become available to be delivered pursuant to Awards under the
Plan. If Shares issued upon exercise, vesting or settlement of an Award, or Shares owned by a Participant (which are not subject to any pledge
or other security interest and which have been owned by the Participant for at
                                                                                                                                                  8

least six months), are surrendered or tendered to the Company in payment of the Exercise Price of an Award or any taxes required to be
withheld in respect of an Award, in each case, in accordance with the terms and conditions of the Plan and any applicable Award Agreement,
such surrendered or tendered Shares shall again become available to be delivered pursuant to Awards under the Plan; provided , however , that
in no event shall such Shares increase the number of Shares that may be delivered pursuant to Incentive Stock Options granted under the Plan.

   (b) Adjustments for Changes in Capitalization and Similar Events. In the event that the Committee determines that any dividend or other
distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company,
issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee in its discretion to be appropriate or desirable, then the Committee
may (i) in such manner as it may deem equitable or desirable, adjust any or all of (A) the number of Shares or other securities of the Company
(or number and kind of other securities or property) with respect to which Awards may be granted, including (1) the aggregate number of
Shares that may be delivered pursuant to Awards granted under the Plan, as provided in Section 4(a) and (2) the maximum number of Shares or
other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted to any
Participant in any fiscal year of the Company and (B) the terms of any outstanding Award, including (1) the number of Shares or other
securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards
relate and (2) the Exercise Price with respect to any Award, (ii) if deemed appropriate or desirable by the Committee, make provision for a cash
payment to the holder of an outstanding Award in consideration for the cancelation of such Award, including, in the case of an outstanding
Option or SAR, a cash payment to the holder of such Option or SAR in consideration for the cancelation of such Option or SAR in an amount
equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Shares subject to such Option or SAR over
the aggregate Exercise Price of such Option or SAR and (iii) if deemed appropriate or desirable by the Committee, cancel and terminate any
Option or SAR having a per Share Exercise Price equal to, or in excess of, the Fair Market Value of a Share subject to such Option or SAR
without any payment or consideration therefor.

   (c) Substitute Awards. Awards may, in the discretion of the Committee, be granted under the Plan in assumption of, or in substitution for,
outstanding awards previously granted by the Company or any of its Affiliates or a company acquired by the Company or any of its Affiliates
or with which the Company or any of its Affiliates combines (“Substitute Awards”). The number of Shares underlying any Substitute Awards
shall be counted against the aggregate number of Shares available for Awards under the Plan; provided , however , that Substitute Awards
issued in connection with the assumption of, or in substitution for, outstanding awards previously granted by an entity that is acquired by the
Company or any of its Affiliates or with which the Company or
                                                                                                                                                  9

any of its Affiliates combines shall not be counted against the aggregate number of Shares available for Awards under the Plan; provided
further , however , that Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding stock options
intended to qualify for special tax treatment under Sections 421 and 422 of the Code that were previously granted by an entity that is acquired
by the Company or any of its Affiliates or with which the Company or any of its Affiliates combines shall be counted against the aggregate
number of Shares available for Incentive Stock Options under the Plan.

   (d) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of
authorized and unissued Shares or of treasury Shares.

    SECTION 5. Eligibility. Any director, officer, employee or consultant (including any prospective director, officer, employee or consultant)
of the Company or any of its Affiliates shall be eligible to be designated a Participant.

   SECTION 6. Awards. (a) Types of Awards. Awards may be made under the Plan in the form of (i) Options, (ii) SARs, (iii) Restricted
Shares, (iv) RSUs, (v) Performance Units, (vi) Cash Incentive Awards, (vii) Deferred Share Units and (viii) other equity-based or
equity-related Awards that the Committee determines are consistent with the purpose of the Plan and the interests of the Company. Awards
may be granted in tandem with other Awards. No Incentive Stock Option (other than an Incentive Stock Option that may be assumed or issued
by the Company in connection with a transaction to which Section 424(a) of the Code applies) may be granted to a person who is ineligible to
receive an Incentive Stock Option under the Code.

    (b) Options. (i) Grant. Subject to the provisions of the Plan, the Committee shall have sole and plenary authority to determine the
Participants to whom Options shall be granted, the number of Shares to be covered by each Option, whether the Option will be an Incentive
Stock Option or a Nonqualified Stock Option and the conditions and limitations applicable to the vesting and exercise of the Option. In the case
of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with such rules as may be prescribed by
Section 422 of the Code and any regulations related thereto, as may be amended from time to time. All Options granted under the Plan shall be
Nonqualified Stock Options unless the applicable Award Agreement expressly states that the Option is intended to be an Incentive Stock
Option. If an Option is intended to be an Incentive Stock Option, and if for any reason such Option (or any portion thereof) shall not qualify as
an Incentive Stock Option, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a Nonqualified
Stock Option appropriately granted under the Plan; provided that such Option (or portion thereof) otherwise complies with the Plan’s
requirements relating to Nonqualified Stock Options.

     (ii) Exercise Price. Except as otherwise established by the Committee at the time an Option is granted and set forth in the applicable
Award Agreement, the Exercise Price of each Share covered by an Option shall be not less than 100% of the Fair
                                                                                                                                               10

Market Value of such Share (determined as of the date the Option is granted); provided , however , that (A) except as otherwise established by
the Committee at the time an Option is granted and set forth in the applicable Award Agreement, the Exercise Price of each Share covered by
an Option that is granted effective as of the Company’s initial public offering of Shares shall be the initial public offering price per Share and
(B) in the case of an Incentive Stock Option granted to an employee who, at the time of the grant of such Option, owns stock representing more
than 10% of the voting power of all classes of stock of the Company or any Affiliate, the per Share Exercise Price shall be no less than 110% of
the Fair Market Value per Share on the date of the grant. Options are intended to qualify as “qualified performance-based compensation” under
Section 162(m) of the Code.

       (iii) Vesting and Exercise. Each Option shall be vested and exercisable at such times, in such manner and subject to such terms and
conditions as the Committee may, in its sole and plenary discretion, specify in the applicable Award Agreement or thereafter. Except as
otherwise specified by the Committee in the applicable Award Agreement, an Option may only be exercised to the extent that it has already
vested at the time of exercise. Except as otherwise specified by the Committee in the Award Agreement, Options shall become vested and
exercisable with respect to one-third of the Shares subject to such Options on each of the first three anniversaries of the date of grant. An
Option shall be deemed to be exercised when written or electronic notice of such exercise has been given to the Company in accordance with
the terms of the Award by the person entitled to exercise the Award and full payment pursuant to Section 6(b)(iv) for the Shares with respect to
which the Award is exercised has been received by the Company. Exercise of an Option in any manner shall result in a decrease in the number
of Shares that thereafter may be available for sale under the Option and, except as expressly set forth in Section 4(c), in the number of Shares
that may be available for purposes of the Plan, by the number of Shares as to which the Option is exercised. The Committee may impose such
conditions with respect to the exercise of Options, including, without limitation, any relating to the application of Federal or state securities
laws, as it may deem necessary or advisable.

       (iv) Payment. (A) No Shares shall be delivered pursuant to any exercise of an Option until payment in full of the aggregate Exercise
Price therefor is received by the Company, and the Participant has paid to the Company an amount equal to any Federal, state, local and foreign
income and employment taxes required to be withheld. Such payments may be made in cash (or its equivalent) or, in the Committee’s sole and
plenary discretion, (1) by exchanging Shares owned by the Participant (which are not the subject of any pledge or other security interest and
which have been owned by such Participant for at least six months) or (2) if there shall be a public market for the Shares at such time, subject
to such rules as may be established by the Committee, through delivery of irrevocable instructions to a broker to sell the Shares otherwise
deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the aggregate Exercise Price, or by a
combination of the foregoing; provided that the combined value of all cash and cash equivalents and the Fair Market Value of any such Shares
so tendered to the Company as of the date of such tender is at
                                                                                                                                                 11

least equal to such aggregate Exercise Price and the amount of any Federal, state, local or foreign income or employment taxes required to be
withheld.

      (B) Wherever in the Plan or any Award Agreement a Participant is permitted to pay the Exercise Price of an Option or taxes relating to
the exercise of an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee, satisfy such delivery
requirement by presenting proof of beneficial ownership of such Shares, in which case the Company shall treat the Option as exercised without
further payment and shall withhold such number of Shares from the Shares acquired by the exercise of the Option.

      (v) Expiration. Except as otherwise set forth in the applicable Award Agreement, each Option shall expire immediately, without any
payment, upon the earlier of (A) the tenth anniversary of the date the Option is granted and (B) 90 days after the date the Participant who is
holding the Option ceases to be a director, officer, employee or consultant of the Company or one of its Affiliates. In no event may an Option
be exercisable after the tenth anniversary of the date the Option is granted.

    (c) SARs. (i) Grant. Subject to the provisions of the Plan, the Committee shall have sole and plenary authority to determine the Participants
to whom SARs shall be granted, the number of Shares to be covered by each SAR, the Exercise Price thereof and the conditions and limitations
applicable to the exercise thereof. SARs may be granted in tandem with another Award, in addition to another Award or freestanding and
unrelated to another Award. SARs granted in tandem with, or in addition to, an Award may be granted either at the same time as the Award or
at a later time.

       (ii) Exercise Price. Except as otherwise established by the Committee at the time a SAR is granted and set forth in the applicable Award
Agreement, the Exercise Price of each Share covered by a SAR shall be not less than 100% of the Fair Market Value of such Share (determined
as of the date the SAR is granted). SARs are intended to qualify as “qualified performance-based compensation” under Section 162(m) of the
Code.

      (iii) Exercise. A SAR shall entitle the Participant to receive an amount equal to the excess, if any, of the Fair Market Value of a Share
on the date of exercise of the SAR over the Exercise Price thereof. The Committee shall determine, in its sole and plenary discretion, whether a
SAR shall be settled in cash, Shares, other securities, other Awards, other property or a combination of any of the foregoing.

       (iv) Other Terms and Conditions. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine,
at or after the grant of a SAR, the vesting criteria, term, methods of exercise, methods and form of settlement and any other terms and
conditions of any SAR. Any such determination by the Committee may be changed by the Committee from time to time and may govern the
exercise of SARs granted or exercised thereafter. The Committee may impose such
                                                                                                                                                 12

conditions or restrictions on the exercise of any SAR as it shall deem appropriate or desirable.

      (v) Substitution SARs. The Committee may substitute, without the consent of the affected Participant or any holder or beneficiary of
SARs, SARs settled in Shares (or SARs settled in Shares or cash in the Committee’s discretion) (“ Substitution SARs ”) for outstanding
Nonqualified Stock Options (“ Substituted Options ”); provided that (A) the substitution shall not otherwise result in a modification of the
terms of any Substituted Option, (B) the number of Shares underlying the Substitution SARs shall be the same as the number of Shares
underlying the Substituted Options and (C) the Exercise Price of the Substitution SARs shall be equal to the Exercise Price of the Substituted
Options. If, in the opinion of the Company’s auditors, this provision creates adverse accounting consequences for the Company, it shall be
considered null and void.

   (d) Restricted Shares and RSUs. (i) Grant. Subject to the provisions of the Plan, the Committee shall have sole and plenary authority to
determine the Participants to whom Restricted Shares and RSUs shall be granted, the number of Restricted Shares and RSUs to be granted to
each Participant, the duration of the period during which, and the conditions, if any, under which, the Restricted Shares and RSUs may vest or
may be forfeited to the Company and the other terms and conditions of such Awards.

       (ii) Transfer Restrictions. Restricted Shares and RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered except
as provided in the Plan or as may be provided in the applicable Award Agreement; provided , however , that the Committee may in its
discretion determine that Restricted Shares and RSUs may be transferred by the Participant. Certificates issued in respect of Restricted Shares
shall be registered in the name of the Participant and deposited by such Participant, together with a stock power endorsed in blank, with the
Company or such other custodian as may be designated by the Committee or the Company, and shall be held by the Company or other
custodian, as applicable, until such time as the restrictions applicable to such Restricted Shares lapse. Upon the lapse of the restrictions
applicable to such Restricted Shares, the Company or other custodian, as applicable, shall deliver such certificates to the Participant or the
Participant’s legal representative.

       (iii) Payment/Lapse of Restrictions. Each RSU shall have a value equal to the Fair Market Value of a Share. RSUs shall be paid in cash,
Shares, other securities, other Awards or other property, as determined in the sole and plenary discretion of the Committee, upon the lapse of
restrictions applicable thereto, or otherwise in accordance with the applicable Award Agreement. If a Restricted Share or an RSU is intended to
qualify as “qualified performance-based compensation” under Section 162(m) of the Code, all requirements set forth in Section 6(e) must be
satisfied in order for the restrictions applicable thereto to lapse.

   (e) Performance Compensation Awards. (i) General. The Committee shall have the authority, at the time of grant of any Award, to
designate such Award (other than Options and SARs) as a Performance Compensation Award in order to
                                                                                                                                                13

qualify such Award as “qualified performance-based compensation” under Section 162(m) of the Code. Options and SARs granted under the
Plan shall not be included among Awards that are designated as Performance Compensation Awards under this Section 6(e).

       (ii) Eligibility. The Committee shall, in its sole discretion, designate within the first 90 days of a Performance Period (or, if shorter,
within the maximum period allowed under Section 162(m) of the Code) which Participants will be eligible to receive Performance
Compensation Awards in respect of such Performance Period. However, designation of a Participant eligible to receive an Award hereunder for
a Performance Period shall not in any manner entitle the Participant to receive payment in respect of any Performance Compensation Award
for such Performance Period. The determination as to whether or not such Participant becomes entitled to payment in respect of any
Performance Compensation Award shall be decided solely in accordance with the provisions of this Section 6(e). Moreover, designation of a
Participant eligible to receive an Award hereunder for a particular Performance Period shall not require designation of such Participant eligible
to receive an Award hereunder in any subsequent Performance Period and designation of one person as a Participant eligible to receive an
Award hereunder shall not require designation of any other person as a Participant eligible to receive an Award hereunder in such period or in
any other period.

      (iii) Discretion of Committee with Respect to Performance Compensation Awards. With regard to a particular Performance Period, the
Committee shall have full discretion to select the length of such Performance Period, the types of Performance Compensation Awards to be
issued, the Performance Criteria that will be used to establish the Performance Goals, the kinds and levels of the Performance Goals that are to
apply to the Company or any of its Subsidiaries, Affiliates, divisions or operational units, or any combination of the foregoing, and the
Performance Formula. Within the first 90 days of a Performance Period (or, if shorter, within the maximum period allowed under Section
162(m) of the Code), the Committee shall, with regard to the Performance Compensation Awards to be issued for such Performance Period,
exercise its discretion with respect to each of the matters enumerated in the immediately preceding sentence and record the same in writing.

       (iv) Performance Criteria. Notwithstanding the foregoing, the Performance Criteria that will be used to establish the Performance Goals
shall be based on the attainment of specific levels of performance of the Company or any of its Subsidiaries, Affiliates, divisions or operational
units, or any combination of the foregoing, and shall be limited to the following: (A) net income before or after taxes, (B) earnings before or
after taxes (including earnings before interest, taxes, depreciation and amortization), (C) operating income, (D) earnings per share, (E) return on
shareholders’ equity, (F) return on investment or capital, (G) return on assets, (H) level or amount of acquisitions, (I) share price,
(J) profitability and profit margins, (K) market share, (L) revenues or sales (based on units or dollars), (M) costs, (N) cash flow, (O) working
capital and (P) safety and accident rates. Such performance criteria may be applied on an absolute basis and/or be relative to one or more peer
companies of the Company or indices or any combination thereof. To the extent required under
                                                                                                                                               14

Section 162(m) of the Code, the Committee shall, within the first 90 days of the applicable Performance Period (or, if shorter, within the
maximum period allowed under Section 162(m) of the Code), define in an objective manner the method of calculating the Performance Criteria
it selects to use for such Performance Period.

       (v) Modification of Performance Goals. The Committee is authorized at any time during the first 90 days of a Performance Period (or, if
shorter, within the maximum period allowed under Section 162(m) of the Code), or any time thereafter (but only to the extent the exercise of
such authority after such 90-day period (or such shorter period, if applicable) would not cause the Performance Compensation Awards granted
to any Participant for the Performance Period to fail to qualify as “qualified performance-based compensation” under Section 162(m) of the
Code), in its sole and plenary discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period to the extent
permitted under Section 162(m) of the Code (A) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction,
event or development affecting the Company or any of its Affiliates, Subsidiaries, divisions or operating units (to the extent applicable to such
Performance Goal) or (B) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company or any of its
Affiliates, Subsidiaries, divisions or operating units (to the extent applicable to such Performance Goal), or the financial statements of the
Company or any of its Affiliates, Subsidiaries, divisions or operating units (to the extent applicable to such Performance Goal), or of changes in
applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles, law or
business conditions.

       (vi) Payment of Performance Compensation Awards. (A) Condition to Receipt of Payment. A Participant must be employed by the
Company on the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such
Performance Period. Notwithstanding the foregoing, in the discretion of the Committee, Performance Compensation Awards may be paid to
Participants who have retired or whose employment has terminated after the beginning of the Performance Period for which a Performance
Compensation Award is made or to the designee or estate of a Participant who died prior to the last day of a Performance Period.

   (B) Limitation. A Participant shall be eligible to receive payments in respect of a Performance Compensation Award only to the extent that
(1) the Performance Goals for such period are achieved and certified by the Committee in accordance with Section 6(e)(vi)(C) and (2) the
Performance Formula as applied against such Performance Goals determines that all or some portion of such Participant’s Performance
Compensation Award has been earned for the Performance Period.

   (C) Certification. Following the completion of a Performance Period, the Committee shall meet to review and certify in writing whether,
and to what extent, the Performance Goals for the Performance Period have been achieved and, if so, to calculate and certify in writing that
amount of the Performance Compensation Awards earned for the period based upon the Performance Formula. The Committee shall then
determine the actual size of each Participant’s Performance Compensation Award for the
                                                                                                                                             15

Performance Period and, in so doing, may apply negative discretion as authorized by Section 6(e)(vi)(D).

   (D) Negative Discretion. In determining the actual size of an individual Performance Compensation Award for a Performance Period, the
Committee may, in its sole and plenary discretion, reduce or eliminate the amount of the Award earned in the Performance Period, even if
applicable Performance Goals have been attained.

   (E) Timing of Award Payments. The Performance Compensation Awards granted for a Performance Period shall be paid to Participants as
soon as administratively possible following completion of the certifications required by Section 6(e)(vi)(C), unless the Committee shall
determine that any Performance Compensation Award shall be deferred.

    (F) Discretion. In no event shall any discretionary authority granted to the Committee by the Plan be used to (1) grant or provide payment
in respect of Performance Compensation Awards for a Performance Period if the Performance Goals for such Performance Period have not
been attained, (2) increase a Performance Compensation Award for any Participant at any time after the first 90 days of the Performance Period
(or, if shorter, the maximum period allowed under Section 162(m)) or (3) increase a Performance Compensation Award above the maximum
amount payable under Sections 4(a) or 6(g) of the Plan.

   (f) Performance Units. (i) Grant. Subject to the provisions of the Plan, the Committee shall have sole and plenary authority to determine the
Participants to whom Performance Units shall be granted.

       (ii) Value of Performance Units. Each Performance Unit shall have an initial value that is established by the Committee at the time of
grant. The Committee shall set Performance Goals in its discretion which, depending on the extent to which they are met during a Performance
Period, will determine the number and value of Performance Units that will be paid out to the Participant.

      (iii) Earning of Performance Units. Subject to the provisions of the Plan, after the applicable Performance Period has ended, the holder
of Performance Units shall be entitled to receive a payout of the number and value of Performance Units earned by the Participant over the
Performance Period, to be determined by the Committee, in its sole and plenary discretion, as a function of the extent to which the
corresponding Performance Goals have been achieved. No Performance Unit under the Plan shall permit a payment to any Participant in excess
of $2,000,000 during any Performance Period.

      (iv) Form and Timing of Payment of Performance Units. Subject to the provisions of the Plan, the Committee, in its sole and plenary
discretion, may pay earned Performance Units in the form of cash or in Shares (or in a combination thereof) that has an aggregate Fair Market
Value equal to the value of the earned Performance Units at the
                                                                                                                                              16

close of the applicable Performance Period. Such Shares may be granted subject to any restrictions in the applicable Award Agreement deemed
appropriate by the Committee. The determination of the Committee with respect to the form and timing of payout of such Awards shall be set
forth in the applicable Award Agreement. If a Performance Unit is intended to qualify as “qualified performance-based compensation” under
Section 162(m) of the Code, all requirements set forth in Section 6(e) must be satisfied in order for a Participant to be entitled to payment.

   (g) Cash Incentive Awards. Subject to the provisions of the Plan, the Committee, in its sole and plenary discretion, shall have the authority
to grant Cash Incentive Awards. The Committee shall establish Cash Incentive Award levels to determine the amount of a Cash Incentive
Award payable upon the attainment of Performance Goals. No Cash Incentive Award under the Plan for any Participant shall exceed
$2,000,000 during any Performance Period. If a Cash Incentive Award is intended to qualify as “qualified performance-based compensation”
under Section 162(m) of the Code, all requirements set forth in Section 6(e) must be satisfied in order for a Participant to be entitled to
payment.

   (h) Other Stock-Based Awards. Subject to the provisions of the Plan, the Committee shall have the sole and plenary authority to grant to
Participants other equity-based or equity-related Awards (including, but not limited to, Deferred Share Units and fully-vested Shares) in such
amounts and subject to such terms and conditions as the Committee shall determine, provided that any such Awards must comply, to the extent
deemed desirable by the Committee, with Rule 16b-3 and applicable law.

   (i) Dividend Equivalents. In the sole and plenary discretion of the Committee, an Award, other than an Option, SAR or Cash Incentive
Award, may provide the Participant with dividends or dividend equivalents, payable in cash, Shares, other securities, other Awards or other
property, on a current or deferred basis, on such terms and conditions as may be determined by the Committee in its sole and plenary
discretion, including, without limitation, payment directly to the Participant, withholding of such amounts by the Company subject to vesting of
the Award or reinvestment in additional Shares, Restricted Shares or other Awards.

    SECTION 7. Amendment and Termination. (a) Amendments to the Plan. Subject to any government regulation, to any requirement that
must be satisfied if the Plan is intended to be a shareholder approved plan for purposes of Section 162(m) of the Code and to the rules of the
NYSE or any successor exchange or quotation system on which the Shares may be listed or quoted, the Plan may be amended, modified or
terminated by the Board without the approval of the stockholders of the Company except that stockholder approval shall be required for any
amendment that would (i) increase the maximum number of Shares for which Awards may be granted under the Plan or increase the maximum
number of Shares that may be delivered pursuant to Incentive Stock Options granted under the Plan; provided , however , that any adjustment
under Section 4(b) shall not constitute an increase for purposes of this Section 7(a) or (ii) change the class of employees or other individuals
eligible to participate in the Plan. No modification, amendment or termination of the Plan may, without the consent of the
                                                                                                                                                 17

Participant to whom any Award shall theretofor have been granted, materially and adversely affect the rights of such Participant (or his or her
transferee) under such Award, unless otherwise provided by the Committee in the applicable Award Agreement.

   (b) Amendments to Awards. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate any Award theretofor granted, prospectively or retroactively; provided , however , that, except as set forth in the Plan,
unless otherwise provided by the Committee in the applicable Award Agreement, any such waiver, amendment, alteration, suspension,
discontinuance, cancelation or termination that would materially and adversely impair the rights of any Participant or any holder or beneficiary
of any Award theretofor granted shall not to that extent be effective without the consent of the impaired Participant, holder or beneficiary.

    (c) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4(b) or the occurrence of a Change of Control) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any
governmental body or securities exchange, accounting principles or law (i) whenever the Committee, in its sole and plenary discretion,
determines that such adjustments are appropriate or desirable, including, without limitation, providing for a substitution or assumption of
Awards, accelerating the exercisability of, lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise prior
to the occurrence of such event, (ii) if deemed appropriate or desirable by the Committee, in its sole and plenary discretion, by providing for a
cash payment to the holder of an Award in consideration for the cancelation of such Award, including, in the case of an outstanding Option or
SAR, a cash payment to the holder of such Option or SAR in consideration for the cancelation of such Option or SAR in an amount equal to the
excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Shares subject to such Option or SAR over the
aggregate Exercise Price of such Option or SAR and (iii) if deemed appropriate or desirable by the Committee, in its sole and plenary
discretion, by canceling and terminating any Option or SAR having a per Share Exercise Price equal to, or in excess of, the Fair Market Value
of a Share subject to such Option or SAR without any payment or consideration therefor.

   SECTION 8. Change of Control. Unless otherwise provided in the applicable Award Agreement, in the event of a Change of Control after
the date of the adoption of the Plan, unless provision is made in connection with the Change of Control for (a) assumption of Awards
previously granted or (b) substitution for such Awards of new awards covering stock of a successor corporation or its “parent corporation” (as
defined in Section 424(e) of the Code) or “subsidiary corporation” (as defined in Section 424(f) of the Code) with appropriate adjustments as to
the number and kinds of shares and the Exercise Prices, if applicable, (i) any outstanding Options or SARs then held by Participants that are
unexercisable or otherwise unvested shall automatically be
                                                                                                                                                  18

deemed exercisable or otherwise vested, as the case may be, as of immediately prior to such Change of Control, (ii) all Performance Units and
Cash Incentive Awards shall be paid out as if the date of the Change of Control were the last day of the applicable Performance Period and
“target” performance levels had been attained and (iii) all other outstanding Awards ( i.e. , other than Options, SARs, Performance Units and
Cash Incentive Awards) then held by Participants that are unexercisable, unvested or still subject to restrictions or forfeiture, shall
automatically be deemed exercisable and vested and all restrictions and forfeiture provisions related thereto shall lapse as of immediately prior
to such Change of Control.

    SECTION 9. General Provisions. (a) Nontransferability. Except as otherwise specified in the applicable Award Agreement, during the
Participant’s lifetime each Award (and any rights and obligations thereunder) shall be exercisable only by the Participant, or, if permissible
under applicable law, by the Participant’s legal guardian or representative, and no Award (or any rights and obligations thereunder) may be
assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant otherwise than by will or by the laws of
descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided that (i) the designation of a beneficiary shall not constitute an assignment,
alienation, pledge, attachment, sale, transfer or encumbrance and (ii) the Board or the Committee may permit further transferability, on a
general or specific basis, and may impose conditions and limitations on any permitted transferability; provided , however , that Incentive Stock
Options granted under the Plan shall not be transferable in any way that would violate Section 1.422-2(a)(2) of the Treasury Regulations. All
terms and conditions of the Plan and all Award Agreements shall be binding upon any permitted successors and assigns.

   (b) No Rights to Awards. No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s
determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively
among Participants, whether or not such Participants are similarly situated.

   (c) Share Certificates. All certificates for Shares or other securities of the Company or any Affiliate delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable
under the Plan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, the NYSE or any other stock
exchange or quotation system upon which such Shares or other securities are then listed or reported and any applicable Federal or state laws,
and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

   (d) Withholding. A Participant may be required to pay to the Company or any Affiliate, and the Company or any Affiliate shall have the
right and is hereby authorized to withhold from any Award, from any payment due or transfer made under
                                                                                                                                                   19

any Award or under the Plan or from any compensation or other amount owing to a Participant, the amount (in cash, Shares, other securities,
other Awards or other property) of any applicable withholding taxes in respect of an Award, its exercise or any payment or transfer under an
Award or under the Plan and to take such other action as may be necessary in the opinion of the Committee or the Company to satisfy all
obligations for the payment of such taxes.

   (e) Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement, which shall be delivered to the Participant and
shall specify the terms and conditions of the Award and any rules applicable thereto, including, but not limited to, the effect on such Award of
the death, disability or termination of employment or service of a Participant and the effect, if any, of such other events as may be determined
by the Committee.

    (f) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from
adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of options, restricted stock,
shares and other types of equity-based awards (subject to stockholder approval if such approval is required), and such arrangements may be
either generally applicable or applicable only in specific cases.

   (g) No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained as a director,
officer, employee or consultant of or to the Company or any Affiliate, nor shall it be construed as giving a Participant any rights to continued
service on the Board. Further, the Company or an Affiliate may at any time dismiss a Participant from employment or discontinue any
consulting relationship, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.

   (h) No Rights as Stockholder. No Participant or holder or beneficiary of any Award shall have any rights as a stockholder with respect to
any Shares to be distributed under the Plan until he or she has become the holder of such Shares. In connection with each grant of Restricted
Shares, except as provided in the applicable Award Agreement, the Participant shall not be entitled to the rights of a stockholder in respect of
such Restricted Shares. Except as otherwise provided in Section 4(b), Section 7(c) or the applicable Award Agreement, no adjustments shall be
made for dividends or distributions on (whether ordinary or extraordinary, and whether in cash, Shares, other securities or other property), or
other events relating to, Shares subject to an Award for which the record date is prior to the date such Shares are delivered.

   (i) Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of Delaware, without giving effect to the conflict of laws provisions
thereof.

    (j) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any Person
                                                                                                                                                 20

or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction,
Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

   (k) Other Laws. The Committee may refuse to issue or transfer any Shares or other consideration under an Award if, acting in its sole and
plenary discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or
regulation or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by
a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant,
holder or beneficiary. Without limiting the generality of the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and until the Committee in its sole and plenary discretion has
determined that any such offer, if made, would be in compliance with all applicable requirements of the U.S. Federal and any other applicable
securities laws.

   (l) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate, on one hand, and a Participant or any other Person, on the other hand. To the
extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or such Affiliate.

   (m) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

   (n) Requirement of Consent and Notification of Election Under Section 83(b) of the Code or Similar Provision. No election under Section
83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code) or under a similar
provision of law may be made unless expressly permitted by the terms of the applicable Award Agreement or by action of the Committee in
writing prior to the making of such election. If an Award recipient, in connection with the acquisition of Shares under the Plan or otherwise, is
expressly permitted under the terms of the applicable Award Agreement or by such Committee action to make such an election and the
Participant makes the election, the Participant shall notify the Committee of such election within ten days of filing notice of the election with
the IRS or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of
the Code or other applicable provision.
                                                                                                                                                 21

   (o) Requirement of Notification Upon Disqualifying Disposition Under Section 421(b) of the Code. If any Participant shall make any
disposition of Shares delivered pursuant to the exercise of an Incentive Stock Option under the circumstances described in Section 421(b) of
the Code (relating to certain disqualifying dispositions) or any successor provision of the Code, such Participant shall notify the Company of
such disposition within ten days of such disposition.

   (p) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

   SECTION 10. Term of the Plan. (a) Effective Date. The Plan shall be effective as of the date of its adoption by the Board; provided ,
however , that no Incentive Stock Options may be granted under the Plan unless it is approved by the Company’s stockholders within twelve
(12) months before or after the date the Plan is adopted.

   (b) Expiration Date. No Award shall be granted under the Plan after the tenth anniversary of the date the Plan is approved under
Section 10(a). Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted hereunder may, and
the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award or to waive any
conditions or rights under any such Award shall, nevertheless continue thereafter.
                                                               EXHIBIT 10.16

AMENDMENT (this "Amendment") dated July 21, 2005 to the Stockholders Agreement (as amended or modified from time to time the
"Agreement") dated as of April 18, 2002 among Pike Electric Corporation, a Delaware corporation, as successor by merger to Pike Holdings,
Inc., the Rollover Holders (as defined therein), the Management Stockholders (as defined therein) and LGB Pike II LLC, a Delaware limited
liability company, as successor to LGB Pike LLC. Capitalized terms used but not defined herein shall have the meanings assigned to them in
the Agreement.

1. Termination of Certain Sections. Sections 2.01, 2.02, 7.06, 7.07(a) and 7.07(b) of the Agreement shall terminate upon the closing of the
Initial Public Offering.

2. Except as otherwise provided for herein, this Amendment shall be governed in accordance with Article VII of the Agreement.

3. As of the date hereof, all references in any document to the Agreement shall be deemed to be references to the Agreement as modified by
this Amendment, and, except as specifically amended hereby, the Agreement shall continue in full force and effect in accordance with the
provisions thereof.
IN WITNESS WHEREOF, each of the undersigned has duly executed this Amendment as of the date first written above.

                                                PIKE ELECTRIC CORPORATION,

                                                                 by
                                                   /s/ J. Eric Pike
                                                ---------------------------------
                                                Name: J. Eric Pike
                                                Title: President and Chief
                                                       Executive Officer



                                                         LGB PIKE ii LLC,

                                          by LINDSAY GOLDBERG & BESSEMER L.P.,
                                                        its manager,

                                        by LINDSAY GOLDBERG & BESSEMER GP L.P.,
                                                     its general partner,

                                        by LINDSAY GOLDBERG & BESSEMER GP LLC,
                                                     its general partner,

                                                                 by
                                                  /s/ Alan E. Goldberg
                                                ---------------------------------
                                                Name: Alan E. Goldberg
                                                Title: Authorized Signatory



by
                                                  /s/ Robert D. Lindsay
                                                ---------------------------------
                                                Name: Robert D. Lindsay
                                                Title: Authorized Signatory
                                                                                            EXHIBIT 21.1

                                            Subsidiaries of the Pike Electric Corporation

Pike Electric, Inc. (North Carolina)


Pike Equipment and Supply Company (North Carolina)
Red Simpson, LLC (Louisiana)
Gillette Electric Construction, Inc. (Florida)
                                                                EXHIBIT 23.1

                            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the reference to our