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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC
20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN
PROXY
STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities
Exchange Act of 1934
Filed by the Registrant
[X]
Filed by a Party other than the Registrant [ ]
Check the appropriate
box:
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Preliminary Proxy Statement
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Confidential, for Use of
the Commission Only (as permitted by Rule 14a-6(e)(2))
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[X]
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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GRANITE CONSTRUCTION INCORPORATED
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing Fee (Check the appropriate box):
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[X]
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required
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computed on table below per Exchange Act Rules 14a-6(i)(1) and
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Aggregate number of securities to which transaction
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Per unit
price or other underlying value of transaction computed pursuant to
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registration statement number, or the Form or Schedule and the date of its
filing.
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Table of Contents
Notice of
2017 Annual Meeting of Shareholders
and Proxy
Statement
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Table of Contents
GRANITE CONSTRUCTION
INCORPORATED
585 West Beach Street
Watsonville, California 95076
Notice of Annual Meeting of
Shareholders
April 25, 2017
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Date:
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Thursday, June 8, 2017
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Time:
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10:30 a.m., Central Time
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Place:
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Rosewood Mansion on Turtle
Creek
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2821 Turtle Creek Boulevard
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Dallas, TX
75219
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Purposes of the Meeting:
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To elect four (4) directors for the
ensuing three-year term and to ratify the directorship of one (1) director
appointed by the Board on February 8, 2017;
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To hold an advisory vote on
executive compensation for the Named Executive Officers;
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To hold an advisory vote on
frequency of conducting an advisory vote on executive compensation;
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To ratify the appointment by the
Audit/Compliance Committee of PricewaterhouseCoopers LLP as Granite's
independent registered public accounting firm for the fiscal year ending
December 31, 2017; and
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To consider any other matters
properly brought before the meeting.
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Who May Attend the Meeting:
Only shareholders, persons holding proxies
from shareholders and invited representatives of the media and financial
community may attend the meeting.
What to Bring:
If you received a Notice of Internet
Availability of Proxy Materials, please bring that Notice with you. If your
shares are held in the name of a broker, trust, bank, or other nominee, you will
need to bring a proxy or letter from that broker, trust, bank, or other nominee
that confirms you are the beneficial owner of those shares. If you hold shares
through the Granite Construction Profit Sharing and 401(k) Plan, you will need
to bring proof of ownership of the shares.
Record Date:
The record date for the 2017 Annual
Meeting of Shareholders is April 12, 2017. This means that if you own Granite
stock at the close of business on that date, you are entitled to receive notice
of the meeting and vote at the meeting and any adjournments or postponements of
the meeting.
Annual Report:
We have included a copy of the Annual
Report on Form 10-K for the fiscal year ended December 31, 2016 with the proxy
materials on Granite's website.
Table of Contents
Shareholder List:
For 10 days prior to the meeting, a
complete list of shareholders entitled to vote at the meeting will be available
for examination by any shareholder for any purpose relative to the meeting
during regular business hours at Granite's headquarters located at 585 West
Beach Street, Watsonville, CA 95076. The shareholder list will also be available
at the annual meeting.
Information about the Notice of
Internet Availability of Proxy Materials:
Instead of mailing a printed copy of our
proxy materials, including our Annual Report, to each shareholder of record, we
will provide access to these materials online. This reduces the amount of paper
necessary to produce these materials, as well as the costs associated with
mailing these materials to all shareholders. Accordingly, on or about April 25,
2017, we will begin mailing a Notice of Internet Availability of Proxy Materials
to all shareholders of record as of April 12, 2017, other than persons who hold
shares in the Granite Construction Profit Sharing and 401(k) Plan (such persons,
the "401(k) Participants" and such plan, the "401(k) Plan"). We will also post
our proxy materials on the website referenced in the notice
(
https://www.proxyvote.com
). All 401(k)
Participants will receive a package in the mail that includes all proxy
materials. The proxy materials will be mailed to all 401(k) Participants on or
about April 25, 2017.
All shareholders may choose to access our
proxy materials online or may request to receive a printed set of our proxy
materials. In addition, the notice and website provide information regarding how
you may request to receive proxy materials in printed form by mail on an ongoing
basis.
Proxy Voting:
Your vote is important. Please vote your
proxy promptly so your shares can be represented at the annual meeting even if
you plan to attend the meeting. Shareholders, including 401(k) Participants, can
vote by Internet, telephone or mail. Shareholders, other than 401(k)
Participants, may revoke a proxy and vote in person if attending the meeting.
To get directions to the 2017 Annual
Meeting of Shareholders, call our Investor Relations Department at 831.724.1011
or visit our website at
www.graniteconstruction.com
at the
"Investors" site.
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By Order of the Board of
Directors,
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Richard A. Watts
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Senior Vice President, General
Counsel and Secretary
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Table of Contents
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Table of Contents
GRANITE CONSTRUCTION
INCORPORATED
585 West Beach Street
Watsonville, California 95076
As more fully described in the Notice of
Internet Availability of Proxy Materials, Granite Construction Incorporated, a
Delaware corporation (referred to herein
as "we," "us," "our," "Granite" or the "Company"), on behalf of its Board of
Directors, has made its proxy materials available to you on the Internet in
connection with Granite's 2017 Annual Meeting of Shareholders, which will take
place on June 8, 2017 at 10:30 a.m., Central Time, at the Rosewood Mansion on
Turtle Creek, 2821 Turtle Creek Boulevard, Dallas, Texas. The Notice of Internet
Availability of Proxy Materials was mailed to all Granite shareholders of
record, except 401(k) Participants, on or about April 25, 2017, and our proxy
materials were posted on the website referenced in the Notice of Internet
Availability of Proxy Materials and made available to shareholders on April 25,
2017. If you received a Notice of Internet Availability of Proxy Materials by
mail and would like to receive a printed copy of our proxy materials, please
follow the instructions included in the Notice of Internet Availability of Proxy
Materials. The proxy materials were mailed to all 401(k) Participants on or
about April 25, 2017.
Granite, on behalf of its Board of
Directors, is soliciting your proxy to vote your shares at the 2017 Annual
Meeting of Shareholders or any subsequent adjournment or postponement. We
solicit proxies to give all shareholders of record an opportunity to vote on the
matters listed in the accompanying notice and/or any other matters that may be
presented at the annual meeting. In this proxy statement you will find
information on these matters, which is provided to assist you in voting your
shares.
Granite was incorporated in Delaware in
January 1990 as the holding company for Granite Construction Company, which was
incorporated in California in 1922. All dates in this proxy statement referring
to service with Granite also include periods of service with Granite
Construction Company, if applicable.
Who Pays for This Solicitation?
Granite pays for the cost of this proxy
solicitation. We will request brokers, trusts, banks and other nominees to
solicit their customers who own our stock. We will reimburse their reasonable,
out-of-pocket expenses for doing this. Our directors, officers and employees may
also solicit proxies by mail, telephone, personal contact, or through online
methods without additional compensation.
Who Can Vote?
You will have received notice of the
annual meeting and can vote if you were a shareholder of record of Granite's
common stock as of the close of business on April 12, 2017. You are entitled to
one vote for each share of Granite common stock that you own. You may vote all
shares owned by you as of the record date, including shares held directly in
your name as the shareholder of record and shares held for you as the beneficial
owner through a broker, trust, bank or other nominee. As of the close of
business on April 12, 2017, there were 39,817,369 shares of common stock issued
and outstanding.
How Do I Vote and What Is the Deadline
for Voting My Shares?
Shareholders, other than 401(k)
Participants,
have the option to vote by
proxy in the following three ways:
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By Internet:
You can vote by Internet by
following the instructions in the Notice of Internet Availability of Proxy
Materials or by accessing the Internet at
https://www.proxyvote.com
and
following the instructions at that website at any time prior to 11:59
p.m., Eastern Time, on June 7, 2017;
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By telephone:
In the United States and Canada you
can vote by telephone using a touch-tone phone by following the
instructions in the Notice of Internet Availability of Proxy Materials or
by calling 1.800.690.6903 (toll free) and following the instructions at
any time prior to 11:59 p.m., Eastern Time, on June 7, 2017;
or
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By mail:
If you have received a paper copy of the proxy card by
mail you may submit your proxy by completing, signing and dating your
proxy card and mailing it in the accompanying pre-addressed envelope.
Instructions are also on the proxy card. Your proxy card must be received
prior to 11:59 p.m., Eastern Time, on June 7, 2017.
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Please refer to the Notice of Internet
Availability of Proxy Materials or the information your broker, trust, bank or
other nominee provides you for more information on the above options. If you
vote your shares over the Internet or by telephone, you should not return a
proxy card by mail (unless you are revoking your previous proxy).
All
401(k) Participants
have the
option to vote by proxy in the following three ways:
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By Internet:
You can vote by Internet by
following the instructions on your proxy card or by accessing the Internet
at
https://www.proxyvote.com
and
following the instructions at that website at any time prior to 12:00 p.m.
(noon), Eastern Time, on June 6, 2017;
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By telephone:
In the United States and Canada you
can vote by telephone using a touch-tone phone by following the
instructions on your proxy card or by calling 1.800.690.6903 (toll free)
and following the instructions at any time prior to 12:00 p.m. (noon),
Eastern Time, on June 6, 2017; or
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By mail:
You can submit your proxy by completing, signing and
dating your proxy card and mailing it in the accompanying pre-addressed
envelope. Instructions are also on the proxy card. Your proxy card must be
received prior to 12:00 p.m. (noon), Eastern Time, on June 6,
2017.
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If you vote your shares over the Internet
or telephone, you should not return a proxy card by mail (unless you are
revoking your previous proxy).
What Is the Voting Requirement To
Approve the Proposals?
If there is a quorum, nominees for
election to the Board who receive the affirmative vote of a majority of the
votes cast will be elected as members of our Board of Directors for the upcoming
three-year term and until his/her successor is elected and qualified or he/she
resigns or until his/her death, retirement or removal, or other cause identified
in Granite's bylaws. This means that a majority of votes cast "for" the election
of a nominee must exceed the number of votes cast "against" the nominee's
election. With respect to the advisory vote on the frequency of holding an
advisory vote on executive compensation, the option of every one year, every two
years or every three years that receives the highest number of votes cast by
shareholders voting on the matter will be deemed to be the frequency for the
say-on-pay advisory vote that has been selected by shareholders. Each of the
other matters identified in the Notice of Meeting will be approved if it
receives the affirmative vote of a majority of the votes cast on such matter.
Any other matters properly proposed at the meeting, including a motion to
adjourn the annual meeting to another time or place (including for the purpose
of soliciting additional proxies), will also be determined by a majority of the
votes cast, except as otherwise required by law or by Granite's Certificate of
Incorporation, as amended, or bylaws.
If you hold shares through a broker,
trust, bank or other nominee (
i.e.
, in "street name"), and you do
not provide your broker, trust, bank or other nominee with voting instructions,
"broker non-votes" may occur. Generally, a broker non-vote occurs when a broker,
trust, bank or other nominee who holds shares for a beneficial owner does not
vote on a particular matter (i.e., a non-routine matter) because the broker,
trust, bank or other nominee does not have discretionary voting power with
respect to that matter and has not received instructions on such matter from the
beneficial owner. Among our proposals, a broker, trust, bank or other nominee
will have discretionary voting power only with respect to the proposal to ratify
the appointment by the Audit/Compliance Committee of PricewaterhouseCoopers LLP
as Granite's independent registered public accounting firm for the fiscal year
ending December 31, 2017.
How Are Votes Counted?
In the election of directors and all
proposals, except for the proposal on the advisory vote on the frequency of
holding an advisory vote on executive compensation you may vote "For," "Against"
or "Abstain" with respect to each of the nominees and proposals. For the
proposal on the advisory vote on the frequency of holding an advisory vote on
executive compensation, you may vote for "Every One Year," "Every Two Years,"
"Every Three Years" or "Abstain" with respect to such proposal. If you elect to
abstain in the election of directors or any of the other matters, except for the
proposal on the advisory vote on the frequency of holding an advisory vote on
executive compensation identified in the Notice of Meeting, the abstention will
not impact the outcome of these matters. For the proposal on the advisory vote
on the frequency of holding an advisory vote on executive compensation, only the
votes for "Every One Year," "Every Two Years" and "Every Three Years" will be
counted for purposes of determining which option receives the highest number of
votes cast. In tabulating the voting results for the election of directors and
such other matters, only "For" and "Against" votes are counted for purposes of determining
whether a majority has been obtained. Abstentions and broker non-votes are not
considered to be votes cast and therefore will have no effect on the outcome of
the vote on any of these matters.
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If you vote by proxy card, telephone or
the Internet, your shares will be voted at the annual meeting in the manner you
indicated. James H. Roberts and Laurel J. Krzeminski are officers of the Company
and were named by our Board of Directors as proxy holders. They will vote all
proxies, or record an abstention, in accordance with the directions on the
proxy. If no contrary direction is given, the shares will be voted as
recommended by the Board of Directors. This proxy statement contains a
description of each item that you are to vote on along with our Board's
recommendations. Below is a summary of our Board's recommendations:
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For
election of each of the four (4) director nominees and
For
the ratification of the directorship of one (1) director appointed
by the Board on February 8, 2017;
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For
the approval of the compensation of the Named Executive
Officers as disclosed in this proxy statement;
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In favor of the option of
Every One Year
as the frequency with which shareholders are provided
an advisory vote on executive compensation; and
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For
the
ratification of the appointment by
the Audit/Compliance Committee of PricewaterhouseCoopers LLP as Granite's
independent registered public accounting firm for the fiscal year ending
December 31, 2017.
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As to any other matter that may be
properly proposed at the annual meeting, including a motion to adjourn the
annual meeting to another time or place, the shares will be voted in the
discretion of the persons named on your proxy card.
After I Vote by Proxy Can I Change or
Revoke My Proxy?
You can change your vote or revoke your
proxy at any time before the annual meeting. Shareholders, other than 401(k)
Participants, may change their vote by: (i) voting again by telephone at any
time prior to 11:59 p.m., Eastern Time, on June 7, 2017, if you originally voted
by telephone, (ii) voting again by Internet at any time prior to 11:59 p.m.,
Eastern Time, on June 7, 2017, if you originally voted by Internet, or (iii)
returning a later dated proxy card such that it is received prior to 11:59 p.m.,
Eastern Time, on June 7, 2017, if you voted by mail. Shareholders, other than
401(k) Participants, may revoke their proxy by filing with our Secretary a
written revocation that is received by us before the polls close at the annual
meeting. All 401(k) Participants may change their vote by: (i) voting again by
telephone at any time prior to 12:00 p.m. (noon), Eastern Time, on June 6, 2017,
if you originally voted by telephone, (ii) voting again by Internet at any time
prior to 12:00 p.m. (noon), Eastern Time, on June 6, 2017, if you originally
voted by Internet, or (iii) returning a later dated proxy card such that it is
received prior to 12:00 p.m. (noon), Eastern Time, on June 6, 2017, if you voted
by mail. Except for 401(k) Participants, shareholders may also change their vote
or revoke their proxy by attending the annual meeting and voting in person if
they are a shareholder of record.
If you hold your shares through a broker,
bank, trust or other nominee, please refer to the information forwarded by your
broker, bank, trust or other nominee for procedures on revoking your proxy.
Can I Vote at the Annual Meeting
Instead of Voting by Proxy?
You may attend the annual meeting and,
except for 401(k) Participants, vote in person instead of voting by proxy.
However, even if you intend to attend the meeting we strongly encourage you to
vote by Internet, telephone or mail prior to the meeting to ensure that your
shares are voted. Although Granite's 401(k) Participants may attend the meeting,
they cannot vote in person at the meeting.
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What Constitutes a Quorum?
Granite's bylaws require a quorum to be
present in order to transact business at the meeting. A quorum consists of a
majority of the shares entitled to vote, either in person or represented by
proxy. In determining a quorum, we count shares voted for or against,
abstentions and broker non-votes as being present.
Who Supervises the Voting at the
Meeting?
Granite's bylaws and policies specify
that, prior to the annual meeting; management will appoint an independent
Inspector of Elections to supervise the voting at the meeting and count the
votes for each proposal following the closing of the polls at the annual
meeting. The Inspector decides all questions as to the qualification of voters,
the validity of proxy cards and the acceptance or rejection of votes. Before
assuming his or her duties, the Inspector will take and sign an oath that he or
she will faithfully perform his or her duties both impartially and to the best
of his or her ability.
How Can I Find Out the Voting Results?
We will announce preliminary voting
results at the annual meeting, and final results will be published on a Form 8-K
to be filed with the Securities and Exchange Commission (the "SEC") within four
business days following the annual meeting. If the final results are not
available at that time, we will provide preliminary results in the Form 8-K, and
we will provide the final results in an amendment to the Form 8-K as soon as
they become available.
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PROPOSAL 1: ELECTION AND
RATIFICATION OF DIRECTORS
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The Board of Directors is divided into
three classes. We keep the classes as equal in number as reasonably possible;
however, the number of directors in a class depends on the total number of
directors at any given time. Each director serves for a term of three years. The
classes are arranged so that the terms of the directors in each class expire at
successive annual meetings. This means that shareholders annually elect
approximately one-third of the members of the Board. The Board currently
consists of eleven directors.
The terms of David C. Darnell, Celeste B.
Mastin, James H. Roberts, and Gaddi H. Vasquez will expire at the 2017 Annual
Meeting. The Board has nominated David C. Darnell, Celeste B. Mastin, James H.
Roberts, and Gaddi H. Vasquez for new terms. If elected, each of the nominees
will serve as a director until the 2020 Annual Meeting and until his or her
successor is elected and qualified or he/she resigns or until his/her death,
retirement or removal, or other cause identified in Granite's bylaws.
Following the retirement of Gary M.
Cusumano at the 2016 Annual Meeting, Patricia D. Galloway was appointed to the
Board of Directors effective February 8, 2017. The Board requests that
shareholders ratify her appointment and service as a director for a term
expiring at the 2019 Annual Meeting.
Management knows of no reason why any of
these nominees would be unable or unwilling to serve. All nominees have accepted
the nomination and agreed to serve as a director if elected by the shareholders.
However, if any nominee should for any reason become unable or unwilling to
serve between the date of the proxy statement and the annual meeting, the Board
may designate a new nominee and the persons named as proxies will vote for that
substitute nominee.
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BOARD OF DIRECTORS RECOMMENDATION
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The Board of Directors
unanimously recommends a vote "FOR" each of the above-named
nominees.
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Director Qualifications
The following paragraphs provide
information as of the date of this proxy statement about each director and
director nominee. The information presented includes information each director
or director nominee has given us about his or her age, all positions he or she
holds with Granite, his or her principal occupation and business experience for
the past five years, and the names of other publicly-held companies of which he
or she currently serves as a director or has served as a director during the
past five years. In addition to the information presented below regarding each
director's and nominee's specific experience, qualifications, attributes and
skills that led our Board to the conclusion the he or she should serve as a
director, the Board also believes that all of our directors and nominees have a
reputation for integrity, honesty and adherence to high ethical standards. The
Board also believes that all of our directors have demonstrated business acumen
and an ability to exercise sound judgment, as well as a commitment of service to
Granite and our Board.
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NOMINEES FOR DIRECTOR WITH TERMS EXPIRING
AT THE 2020 ANNUAL MEETING
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James H.
Roberts
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Director
since 2011
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Mr. Roberts joined Granite in 1981
and has served in various capacities, including President and Chief
Executive Officer since September 2010. He also served as Executive Vice
President and Chief Operating Officer from September 2009 to August 2010,
Senior Vice President from May 2004 to September 2009, Granite West
Manager from February 2007 to September 2009, Branch Division Manager from
May 2004 to February 2007, Vice President and Assistant Branch Division
Manager from 1999 to 2004, and Regional Manager of Nevada and Utah
Operations from 1995 to 1999. Mr. Roberts served as Chairman of The
National Asphalt Pavement Association in 2006. We believe that Mr.
Roberts’ knowledge of the construction industry, as well as his intimate
knowledge of our business, employees, culture, and competitors, his
understanding of the challenges and issues facing the Company and his
insider’s perspective of the Company’s day-to-day operations and the
strategic direction of the Company, qualify him to serve on our Board. He
received a B.S.C.E. in 1979 and an M.S.C.E. in 1980 from the University of
California, Berkeley, and an M.B.A. from the University of Southern
California in 1981. He also completed the Stanford Executive Program in
2009. Age
60.
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Gaddi H.
Vasquez
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Director
since 2012
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Mr. Vasquez has served as Senior
Vice President of Government Affairs of Edison International and Southern
California Edison, one of the nation’s largest investor owned utility
companies principally serving Southern California, since 2013. Prior to
that, Mr. Vasquez served as Senior Vice President of Public Affairs and
Vice President of Public Affairs from 1995-2013. Mr. Vasquez also served
as executive Director of the Annenberg Foundation Trust at Sunnylands in
2009, as U.S.
Ambassador to the United
Nations Agencies based in Rome, Italy from 2006-2009, and as Director of
the U.S. Peace Corps from 2002-2006. Mr. Vasquez is currently a member of
several national advisory boards, a member of the board of directors of
the California Public Policy Institute, the National Association of Latino
Elected and Appointed Officials Educational Fund and a member of the board
of governors of the California State University Foundation. We believe
that Mr. Vasquez’s executive level experience and his experience in public
service, including leading major organizations involved in the development
and construction of major public infrastructure and regional facilities,
qualify him to serve on our Board. Mr. Vasquez holds a B.A. degree in
Public Service Management from the University of Redlands. Age
62.
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NOMINEES FOR DIRECTOR WITH TERMS EXPIRING
AT THE 2020 ANNUAL MEETING
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David C.
Darnell
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Director
since 2017
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Mr. Darnell served as Vice Chairman
of Global Wealth & Investment Management at Bank of America
Corporation from September 2014 to December 2015 and served as its
Co-Chief Operating Officer from September 2011 to September 2014. From
July 2005 to September 2011, he served as the President of Global
Commercial Banking at Bank of America Corporation. Mr. Darnell held
various leadership positions at Bank of America since joining the company
in 1979, including Middle Market Banking group president; Central Banking
group president; and Midwest Region president. He also served as an
Executive Vice President and Commercial Division Executive for Bank of
America in Florida. Mr. Darnell brings significant operational,
acquisition, governmental, financial, leadership-development capabilities
and technology execution skills to our board. Mr. Darnell currently serves
on the boards of Watsco, Inc. and the Museum of the American Revolution.
Mr. Darnell holds an undergraduate degree from Wake Forest University and
an M.B.A. from the University of North Carolina at Chapel Hill. Age
64.
|
|
|
Celeste B.
Mastin
|
Director
since 2017
|
|
|
Ms. Mastin served as Chief Executive
Officer of Distribution International, Inc., a supplier of certain
construction equipment and environmental products from February 2013 to
April 2017. From 2007 to 2011, she served as chief executive officer and
as chief operating officer of MMI Products, Inc., a manufacturer and
distributor of certain building materials. At Ferro Corporation, Ms.
Mastin held the role of vice president of color and glass performance
materials and vice president of growth and development from 2004 to 2007.
Ms. Mastin started her career in sales at Shell Chemical. She held
European and later global sales management positions as well as a
management position at Bostik, Inc. We believe that Ms. Mastin’s global
chemicals and building materials sectors experience, as well as her
operating experience in sales and marketing and proven leadership ability
qualify her to serve on our Board. Ms. Mastin currently serves on the
board of directors of Distribution International, Inc. Ms. Mastin holds a
bachelor's degree in chemical engineering from Washington State University
and a master's degree in business administration from the University of
Houston. Age
48.
|
6
Table of Contents
|
CONTINUING DIRECTORS WITH TERMS EXPIRING
AT THE 2018 ANNUAL MEETING
|
|
|
David H.
Kelsey
|
Director
since 2003
|
|
|
Mr. Kelsey assumed the role of Chief
Financial Officer of Verdezyne, Inc. in July 2016. Verdezyne is a
privately-owned company that uses synthetic biology to produce high-value
chemicals. Prior to joining Verdezyne, Mr. Kelsey was the Chief Financial
Officer of Elevance Renewable Sciences, Inc., a privately-owned producer
of high performance specialty chemicals. From January 2002 to August 2011,
Mr. Kelsey served as Chief Financial Officer of Sealed Air Corporation, an
S&P 500 manufacturer of specialty packaging for food and other
protective applications. We believe that Mr. Kelsey’s experience as the
chief financial officer of a major NYSE-listed company, as well as his
in-depth knowledge and understanding of generally accepted accounting
principles, experience in preparing, auditing and analyzing financial
statements, understanding of internal control over financial reporting,
and his understanding of audit committee functions qualify him to serve on
our Board. Mr. Kelsey holds a B.S.E. degree in Civil and Geological
Engineering from Princeton University and an M.B.A. degree from Harvard
University Graduate School of Business. Age
66.
|
|
|
James W.
Bradford, Jr.
|
Director
since 2006
|
|
|
Mr. Bradford retired in June 2013 as
Dean and Ralph Owen Professor for the Practice of Management at Vanderbilt
University, Owen School of Management, in which capacities he served since
2005. Upon retirement from Vanderbilt, Mr. Bradford was awarded the title
of Dean Emeritus. Between 2002 and March 2005, Mr. Bradford served as
Acting Dean, Associate Dean Corporate Relations, Clinical Professor of
Management and Adjunct Professor at Vanderbilt University, Owen School of
Management. He has also served as President and Chief Executive Officer of
United Glass Corporation, and President and Chief Executive Officer of AFG
Industries. Mr. Bradford is currently also a member of the boards of
directors of Genesco, Inc. and Cracker Barrel Old Country Store, Inc. We
believe that Mr. Bradford’s perspective as an academic, his experience in
corporate compliance and governance matters and his knowledge of business
strategies and financial matters, combined with his executive-level and
legal experiences, qualify him to serve on our Board. Mr. Bradford holds a
B.A. degree from the University of Florida and a J.D. degree from
Vanderbilt University, and he has completed the Harvard Business School
Advanced Management Program. Age
69.
|
|
|
Michael F.
McNally
|
Director
since 2016
|
|
|
Mr. McNally retired in December 2014
as President and Chief Executive Officer of Skanska USA Inc., a subsidiary
of one of the world’s largest construction companies, a position he had
held since 2008. During that time, he also served as one of nine members
of Skanska AB’s senior executive team. Prior to his tenure at Skanska, Mr.
McNally held various management positions over a 38 year career with
Fluor, Marshall Contractors, Mobil Oil and J. Ray McDermott. Mr. McNally
is also currently a member of the boards of directors of Terracon, the
U.S. Green Building Council and the Rhode Island Commerce Corporation. We
believe that Mr.
McNally’s past experience
as an executive with a major multi-national construction firm and his
knowledge and understanding of the construction industry and Granite’s
customers qualify him to serve on our Board. Mr. McNally holds a B.S.
degree in Civil Engineering from the University of Notre Dame and an
M.B.A. from the University of Rhode Island. Age
62.
|
7
Table of Contents
|
CONTINUING DIRECTORS WITH TERMS EXPIRING
AT THE 2019 ANNUAL MEETING
|
|
|
William H.
Powell
|
Director
since 2004
|
|
|
Mr. Powell retired in 2006 as
Chairman and Chief Executive Officer of National Starch and Chemical
Company, a position he had held since 1999, and has served as Chairman of
our Board since September 2009. Mr. Powell is also currently a member of
the boards of directors of PolyOne Inc. and FMC Corporation. Until June
2009, Mr. Powell was Chairman, Board of Trustees, of State Theatre
Performing Arts Center in New Brunswick, New Jersey. We believe that Mr.
Powell’s knowledge and experience as chief executive officer of a major
global company qualify him to serve on our Board. Mr. Powell holds a B.A.
degree in Chemistry and an M.S. in Chemical Engineering from Case Western
Reserve University and an M.A. in Business Administration from the
University of North Dakota. Age
71.
|
|
|
Claes G.
Bjork
|
Director
since 2006
|
|
|
Mr. Bjork retired in 2002 as Chief
Executive Officer of Skanska AB, Sweden, one of the world’s largest
construction companies, a position he had held since 1997. Prior to such
time, Mr. Bjork held various executive and management positions within
Skanska and served as Chairman of Scancem Cement. He is also a former
Chairman and a current member of the board of directors of the Swedish
American Chamber of Commerce, and he previously served on the boards of
Consolidated Management Group and Qlik Technologies, Inc. We believe that
Mr. Bjork’s past experience as an executive with a major multi-national
construction firm and his knowledge and understanding of the construction
industry and Granite’s competitors and customers qualify him to serve on
our Board. Mr. Bjork studied Civil Engineering in Sweden. Age
71.
|
|
|
Patricia D.
Galloway
|
Director
since 2017
|
|
|
Dr. Galloway serves as Chief
Executive Officer of Pegasus Global Holdings, Inc., a firm that performs
risk management, management consulting and strategic consulting business
services since 2008. From 1981-2008, Dr. Galloway served in various
positions at The Nielsen-Wurster Group, Inc. including Chief Executive
Officer and Principal, and President and Chief Financial Officer. Dr.
Galloway was the first woman President of the American Society of Civil
Engineers and served from November 2003 to 2004. Dr. Galloway also serves
as an arbitrator on construction and energy litigation cases. Dr. Galloway
serves as a Director of the American Arbitration Association and the
Pacific Science Center and as a Trustee of the Central Washington
University Foundation Board. She served on the National Science Board from
2006 to 2012. We believe that Dr. Galloway’s experience in corporate risk
management, combined with her executive-level and dispute resolution
experiences, qualify her to serve on our Board. Dr. Galloway holds a Ph.D.
in Infrastructure Systems Engineering (Civil) from Kochi University of
Technology in Japan, an MBA from the NY Institute of Technology and a
Bachelor degree in civil engineering from Purdue University. Age 59.
|
8
Table of Contents
Retiring Director
Mr. Dorey retired in August 2010 as the
Chief Executive Officer and President of Granite, in which capacities he served
since 2004 and 2003, respectively. Mr. Dorey joined Granite in 1968 and, prior
to being named Chief Executive Officer and President, held a variety of
executive-level positions with Granite throughout his career, including Chief
Operating Officer, Executive Vice President, Senior Vice President and Branch
Division Manager. During this time, Mr. Dorey developed an intimate knowledge of
our business, employees, culture, competitors and the effect on our business of
various government policies. Mr. Dorey is also currently a member of the board
of directors of Astec Industries, Inc. We believe that his long history and
experience with Granite, and his in-depth knowledge of the construction
industry, demonstrate that Mr. Dorey is well qualified to serve on our Board.
Mr. Dorey holds a B.S. degree in Construction Engineering from Arizona State
University. Age 72.
|
INFORMATION ABOUT THE BOARD OF DIRECTORS
AND CORPORATE GOVERNANCE
|
Committees of the Board
The following chart shows the standing
committees of the Board of Directors, the current membership of the committees
and the number of meetings held by each committee in 2016.
|
|
|
Audit /
Compliance
(1)
|
|
Compensation
(2)
|
|
Nominating
and
Corporate
Governance
(3)
|
|
Executive
(4)
|
|
Claes G. Bjork
(5)
|
|
|
|
✓
|
|
Chair
|
|
✓
|
|
James W. Bradford, Jr.
(5)
|
|
✓
|
|
Chair
|
|
|
|
✓
|
|
David C. Darnell
(5)
|
|
✓
|
|
|
|
|
|
✓
|
|
William G. Dorey
(5)
|
|
|
|
|
|
|
|
✓
|
|
Patricia D. Galloway
(5)
|
|
✓
|
|
|
|
|
|
✓
|
|
David H. Kelsey
(5)
|
|
Chair
|
|
|
|
✓
|
|
|
|
Celeste B. Mastin
(5)
|
|
|
|
✓
|
|
✓
|
|
|
|
Michael F. McNally
(5)
|
|
✓
|
|
✓
|
|
|
|
✓
|
|
William H. Powell
(5)(6)
|
|
|
|
✓
|
|
✓
|
|
Chair
|
|
James H. Roberts
|
|
|
|
|
|
|
|
✓
|
|
Gaddi H. Vasquez
(5)
|
|
|
|
✓
|
|
✓
|
|
|
|
Number of
Meetings in 2016
|
|
8
|
|
7
|
|
5
|
|
9
|
|
(1)
|
Effective May 27, 2016, Mr. Dorey
resigned from the Audit/Compliance Committee and the Audit/Compliance
Committee was reconstituted to consist of Messrs. Kelsey, Bradford and
McNally. Mr. Darnell and Ms. Galloway were appointed to the Board of
Directors on February 8, 2017. Effective February 9, 2017, the
Audit/Compliance Committee was reconstituted to consist of Messrs. Kelsey,
Bradford, Darnell, McNally and Ms. Galloway.
|
|
(2)
|
Ms. Mastin was appointed to the
Board of Directors on February 8, 2017. Effective February 9, 2017, the
Compensation Committee was reconstituted to consist of Messrs. Bradford,
Bjork, McNally Powell, Vasquez and Ms. Mastin.
|
|
(3)
|
Effective May 27, 2016, Mr. Dorey
resigned from the Nominating and Corporate Governance Committee and the
Nominating and Corporate Governance Committee was reconstituted to consist
of Messrs. Bjork, Kelsey, Powel and Vasquez. Ms. Mastin was appointed to
the Board of Directors on February 8, 2017. Effective February 9, 2017,
the Nominating and Corporate Governance Committee was reconstituted to
consist of Messrs. Bjork, Kelsey, Powell, Vasquez and Ms. Mastin.
|
|
(4)
|
Mr. Darnell and Ms. Galloway were
appointed to the Board of Directors on February 8, 2017. Effective
February 10, 2017, the Executive Committee was reconstituted to consist of
Messrs. Powell, Bjork, Bradford, Darnell, Dorey, McNally, Roberts and Ms.
Galloway.
|
|
(5)
|
Independent directors pursuant to
the listing standards of the NYSE.
|
|
(6)
|
Chairman of the
Board.
|
9
Table of Contents
Audit/Compliance Committee
All members of the Audit/Compliance
Committee are non-employee directors who are determined by the Board to be
independent under the listing standards of the NYSE. Each member also satisfies
the independence requirements for audit committee members of public companies
established by the SEC. The Board has determined that Mr. Kelsey meets the
criteria as an audit committee financial expert as defined by the SEC rules. The
Board of Directors has also determined that all members of the Audit/Compliance
Committee are financially literate as required by the listing standards of the
NYSE. The Audit/Compliance Committee has direct responsibility for risk
oversight related to accounting matters, financial reporting, and enterprise,
legal and compliance risks. A more complete description of the risk
responsibility, functions and activities of the Audit/Compliance Committee can
be found under "Board Leadership Structure and its Role in Risk Oversight" on
page 12 of this proxy statement and in "Report of the Audit/Compliance
Committee" on page 41 as well as in the Audit/Compliance Committee charter. You
can view and print the Audit/Compliance Committee charter on Granite's website.
See "Granite Website" on page 15.
Compensation Committee
All members of the Compensation Committee
are non-employee directors who are determined by the Board to be independent
under the listing standards of the NYSE. The Compensation Committee reviews and
approves all aspects of compensation for our directors, our Chief Executive
Officer and our other executive officers. In addition, the Compensation
Committee is responsible for risks related to employment policies and our
compensation and benefit systems, including consideration of whether any risks
associated with such policies and systems are likely to have a material adverse
effect on Granite. The Compensation Committee also reviews our overall
compensation plans and strategies and makes recommendations to the Board for
their consideration and approval. The Chief Executive Officer attends
Compensation Committee meetings and recommends annual salary levels, incentive
compensation and payouts for other executive officers for the Compensation
Committee's approval. The Compensation Committee also administers the 2012
Equity Incentive Plan and the Amended and Restated 1999 Equity Incentive Plan,
as amended (the "1999 Equity Plan"), with respect to persons subject to Section
16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In
the case of awards intended to qualify for the performance-based compensation
exemption under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"), the Annual Incentive Plan, the Long Term
Incentive Plan, the 2012 Equity Incentive Plan and the 1999 Equity Plan are
administered only by the Compensation Committee, which includes at least two
"outside directors" within the meaning of Section 162(m). If you desire
additional information concerning the Compensation Committee, you can read the
Compensation Committee charter on Granite's website. See "Granite Website" on
page 15.
Nominating and Corporate Governance
Committee
All members of the Nominating and
Corporate Governance Committee are non-employee directors who are determined by
the Board to be independent under the listing standards of the NYSE. The
Nominating and Corporate Governance Committee recommends and nominates persons
to serve on the Board. The Nominating and Corporate Governance Committee also
develops and recommends corporate governance principles and practices to the
Board and oversees the annual evaluations of the Board and certain senior
executive officers of the Company. Additionally, the Nominating and Corporate
Governance Committee oversees risks associated with our Corporate Governance
Guidelines and Policies and Code of Conduct. The Nominating and Corporate
Governance Committee's policy for considering director candidates, including
shareholder recommendations, is discussed in more detail below under the heading
"Board of Directors' Nomination Policy." This policy and the Nominating and
Corporate Governance Committee charter are available on Granite's website. See
"Granite Website" on page 15.
Executive Committee
The Executive Committee's responsibility
is to carry out the powers and authority of the Board in the management of
Granite's business within limits set by the Board. The Executive Committee also
meets regularly to consider the approval of certain large project bidding
decisions, as well as to assess and monitor ongoing risks and contingencies
related to large projects. The scope of the Executive Committee's authority is
determined in accordance with the "Delegation of Authority and Policy" as
adopted and revised from time to time by the Board.
10
Table of Contents
Role of the Compensation Consultant
During 2016, the Compensation Committee
directly retained the services of Mercer (US) Inc. ("Mercer"), a wholly owned
subsidiary of Marsh & McLennan Companies, Inc., to provide advice and
recommendations to the Compensation Committee on executive officer and Board of
Director compensation programs. Mercer's fees paid for executive compensation
consulting to the Committee in 2016 were $206,724.
During 2016, Mercer provided the following
services to the Compensation Committee related to executive officer
compensation:
|
●
|
Attended meetings of the
Compensation Committee as the Committee’s advisor;
|
|
●
|
Evaluated the competitive
positioning of Granite’s executive officers' base salaries, annual
incentive and long-term incentive compensation relative to our peer
companies;
|
|
●
|
Advised on target award levels
within the annual and long-term incentive program and, as needed, on
actual compensation actions;
|
|
●
|
Assessed the alignment of executive
officer compensation levels relative to our performance against Granite's
peer companies and relative to the Compensation Committee's articulated
compensation philosophy;
|
|
●
|
Provided advice on the design of
Granite's annual and long-term incentive plans;
|
|
●
|
Advised on the performance measures
and performance targets for the annual and long-term incentive programs;
|
|
●
|
Assisted with the preparation of the
"Compensation Discussion and Analysis" for this proxy
statement;
|
|
●
|
Assessed the potential for material
risk within Granite's compensation policies and practices for all
employees, including executive officers.
|
During 2016, management retained the
services of Mercer to provide compensation consulting, and employee total
rewards communications. The fees paid for these services in 2016 were
$144,514.
Based in part on the policies and
procedures Mercer and the Compensation Committee have in place, the Compensation
Committee believes that the advice it receives from the executive compensation
consultant, a Mercer representative, is objective and not influenced by Mercer's
or its affiliates' relationships with Granite. These policies and procedures
include:
|
●
|
Mercer's professional standards
prohibit the executive compensation consultant from considering any other
relationships Mercer or any of its affiliates may have with Granite in
rendering his or her advice and recommendations;
|
|
●
|
The executive compensation
consultant receives no incentive or other compensation based on the fees
charged to Granite for other services provided by Mercer or any of its
affiliates;
|
|
●
|
The executive compensation
consultant is only responsible for selling compensation consulting
services to Granite, not any other services provided by Mercer or
affiliate companies;
|
|
●
|
The Compensation Committee has the
sole authority to retain and terminate the executive compensation
consultant;
|
|
●
|
The executive compensation
consultant has direct access to the Compensation Committee without
management intervention;
|
|
●
|
The Compensation Committee evaluates
the quality and objectivity of the services provided by the executive
compensation consultant each year and determines whether to continue to
retain the consultant; and
|
|
●
|
The protocols for the engagement
(described below) limit how the executive compensation consultant may
interact with management.
|
11
Table of Contents
In retaining Mercer, the Compensation
Committee considered the six factors set forth in Section 10C-1(b)(4)(i) through
(vi) of the Exchange Act, and concluded that no conflict of interest exists that
would prevent Mercer from serving as an independent compensation consultant to
the Compensation Committee.
While it is necessary for the executive
compensation consultant to interact with management to gather information, the
Compensation Committee has adopted protocols governing if and when the executive
compensation consultant's advice and recommendations can be shared with
management. These protocols are included in the Compensation Committee’s
engagement letter with Mercer. The Compensation Committee also determines the
appropriate forum for receiving the executive compensation consultant's
recommendations. Where appropriate, management invitees are present to provide
context for the recommendations.
The Lead Director and Executive
Sessions
Our bylaws provide that in the event the
Chairman of the Board does not meet the independence requirements of the rules
and regulations of the SEC and the listing standards of the NYSE, the directors
shall elect a Lead Director to serve for a two-year term or until such time, if
earlier, at which an independent Chairman is elected. Because William H. Powell,
the current Chairman of the Board, is an independent director, we currently do
not have a Lead Director. In his capacity as Chairman, Mr. Powell chairs all
Board meetings and presides over all executive sessions of the non-employee
members of the Board.
Board Leadership Structure and Its Role
in Risk Oversight
The Board of Directors has determined that
having an independent director serve as the Chairman of the Board is in the best
interest of Granite and its shareholders at this time. The Board believes that
having a strong independent director serve as Chairman promotes greater
oversight of Granite by the independent directors and provides for greater
management accountability. The structure ensures more active participation by
the independent directors in setting the Board's agenda and establishing the
Board's priorities. However, the Board, in accordance with its Corporate
Governance Guidelines and Policies, retains the flexibility to decide, as new
circumstances arise, whether or not to combine or separate the position of
Chairman and Chief Executive Officer.
As with all companies, we face a variety
of risks in our business. Our Board of Directors is responsible for oversight of
our Company's risks and effective risk management is a top priority of the Board
and management. The Board believes that having a system in place for risk
management and implementing strategies responsive to our risk profile and
exposures will adequately identify in a timely manner our material risks. In
order to more efficiently manage these risks, the Board has delegated certain
risk management oversight responsibilities to relevant Board committees, as
follows below.
The Audit/Compliance Committee has the
direct responsibility for risk oversight relating to accounting matters,
financial reporting and enterprise, legal and compliance risks. Our Chief
Financial Officer (who is responsible for managing the risk management
function), General Counsel (who serves as our Corporate Compliance Officer),
Director of Internal Audit, management and independent registered public
accounting firm, PricewaterhouseCoopers LLP, all report directly to, and meet
with, the Audit/Compliance Committee on a regular basis. The Audit/Compliance
Committee and the Board also meet periodically with management to review
Granite's major financial risk exposures and the steps that management has taken
to monitor and control such exposures, which include Granite's risk assessment
and risk management policies.
The Executive Committee is responsible for
overseeing management's efforts to assess risks related to the decision to bid
on large projects and monitor ongoing risks and contingencies related to those
projects. The Compensation Committee is responsible for overseeing risks related
to employment policies and our compensation and benefits systems, and the
Nominating and Corporate Governance Committee oversees risks associated with our
Corporate Governance Guidelines and Policies and Code of Conduct, including
compliance with listing standards for independent directors and committee
assignments. The committee chairs report on risk related matters to the full
Board from time to time as appropriate.
12
Table of Contents
|
BOARD OF DIRECTORS' NOMINATION
POLICY
|
Evaluation Criteria and Procedures
Members of the Board of Directors of
Granite are divided into three classes and are nominated for election for
staggered three-year terms. The Board, its members, its committee structure, its
governance performance and its overall performance are continuously reviewed.
Included in this review is a careful evaluation of the diversity of skills and
experience of Board members weighed against Granite's current and emerging
operating and strategic challenges and opportunities. The Board of Directors
makes every effort to nominate individuals who bring a variety of complementary
skills and, as a group, possess the appropriate skills and experience to oversee
our business. Accordingly, although diversity is a consideration in the
nominating and evaluation process, the Nominating and Corporate Governance
Committee and the Board of Directors do not have a formal policy with respect to
the consideration of diversity. Evaluations are made on the basis of
observations and interviews with management and with Board members conducted
annually by the Nominating and Corporate Governance Committee.
Current Board members whose performance,
capabilities, and experience meet Granite's expectations and needs are nominated
for re-election in the year of their respective term's completion. In accordance
with Granite's Corporate Governance Guidelines and Policies, Board members will
not stand for re-nomination and no proposed candidate will be re-nominated if
the nominee’s 72
nd
birthday occurs prior to the annual meeting of
shareholders in the year of re-nomination or nomination. Moreover Directors will
retire no later than the first annual meeting of shareholders immediately
following their 72
nd
birthday. Mr. Dorey is retiring at the 2017
Annual Meeting as required by Granite’s bylaws.
Each member of the Board of Directors must
meet a set of core criteria, referred to as the "three C's": Character,
Capability and Commitment. Granite was founded by persons of outstanding
character, and it is Granite's intention to ensure that it continues to be
governed by persons of high integrity and worthy of the trust of its
shareholders. Further, Granite intends to recruit and select persons whose
capabilities, including their educational background, their work and life
experiences, and their demonstrated records of performance will ensure that
Granite's Board will have the balance of expertise and judgment required for its
long-term performance and growth. Finally, Granite will recruit and select only
those persons who demonstrate they have the commitment to devote the time,
energy, and effort required to guarantee Granite will have the highest possible
level of leadership and governance.
In addition to the three C's, the Board
recruitment and selection process assures that the Board composition meets all
of the relevant standards for independence and specific expertise. For each new
recruitment process, a set of specific criteria is determined by the Nominating
and Corporate Governance Committee with the assistance of the Chairman of the
Board and an executive search firm, if the Committee deems engagement of such a
firm appropriate. These criteria may specify, for example, the type of industry
or geographic experience that would be useful to maintain and improve the
balance of skills and knowledge on the Board. After the search criteria are
established, an executive search firm is typically engaged to use its
professional skills and its data sources and contacts, including current Granite
Board members and officers, to seek appropriate candidates. The credentials of a
set of qualified candidates provided by the search process are submitted for
review by the Nominating and Corporate Governance Committee, the Chairman of the
Board and senior officers. Based on this review, the Nominating and Corporate
Governance Committee invites the top candidates for personal interviews with the
Nominating and Corporate Governance Committee and Granite's executive management
team.
Normally, the search, review and interview
process results in a single nominee to fill a specific vacancy. However, a given
search may be aimed at producing more than one nominee and the search for a
single nominee may result in multiple candidates of such capability and
character that might be nominated and the Board may be expanded accordingly.
It is Granite's intention that this search
and nomination process consider qualified candidates referred by a wide variety
of sources, including all of Granite's constituents - its customers, employees
and shareholders and members of the communities in which it operates. The
Nominating and Corporate Governance Committee is responsible for assuring that
relevant sources of potential candidates have been appropriately canvassed.
The Board used the evaluation criteria and
procedures listed in this section to identify, nominate and approve the director
candidates who joined the Board on February 8, 2017.
13
Table of Contents
Shareholder Recommendation and Direct
Nomination of Board Candidates
Consistent with our bylaws and the
Nominating and Corporate Governance Committee charter, Granite will review and
consider for nomination any candidate for membership to the Board recommended by
a shareholder, utilizing the same evaluation criteria and selection process
described in “Evaluation Criteria and Procedures” on page 13. The Committee will
consider nominees to the Board recommended by shareholders so long as the
shareholder gives timely notice in writing of his or her recommendation. To be
timely, a shareholder recommendation for a director to be elected at the 2018
Annual Meeting of Shareholders must be received at Granite's principal office,
addressed to the Corporate Secretary, on or before December 26, 2017.
In addition, Granite's bylaws provide that
any shareholder entitled to vote in the election of directors may directly
nominate a candidate or candidates for election at a meeting provided that
timely notice of his or her intention to make such nomination is given. To be
timely, a shareholder nomination for a director to be elected at an annual
meeting must be received at Granite's principal office, addressed to the
Corporate Secretary, not less than 120 days prior to the first anniversary of
the date the proxy statement for the preceding year's annual meeting of
shareholders was released to shareholders and must contain the information
specified in our bylaws. If no meeting was held in the previous year, the date
of the annual meeting is changed by more than 30 calendar days from the previous
year, or in the event of a special meeting, to be on time, the notice must be
delivered by the close of business on the tenth day following the day on which
notice of the date of the meeting was mailed or public announcement of the date
of the meeting was made.
To be timely, a shareholder nomination for
a director to be elected at the 2018 Annual Meeting of Shareholders must be
received at Granite's principal office, addressed to the Corporate Secretary, on
or before December 26, 2017. For further information, see "Shareholder Proposals
to be Presented at the 2018 Annual Meeting of Shareholders" on page 45.
Director Independence
Under the listing standards of the NYSE, a
director is considered independent if the Board determines that the director has
no material relationship with Granite. In determining independence, the Board
considers pertinent facts and circumstances including commercial, industrial,
banking, consulting, legal, accounting, charitable and familial relationships,
among others. The Board follows these guidelines, established by the NYSE, when
assessing the independence of a director:
|
●
|
A director who, within the last
three years is, or has been, an employee of Granite or whose immediate
family member is, or has been within the last three years, an executive
officer of Granite, may not be deemed independent until three years after
the end of such employment relationship. Employment as an interim Chairman
or Chief Executive Officer or other executive officer shall not disqualify
a director from being considered independent following that employment.
|
|
●
|
A director who has received, or has
an immediate family member who has received, during any twelve-month
period within the last three years more than $120,000 in direct
compensation from Granite, other than director and committee fees and
pension or other forms of deferred compensation for prior service
(provided such compensation is not contingent in any way on continued
service), may not be deemed independent. Compensation received by a
director for former service as an interim Chairman or Chief Executive
Officer or other management and compensation received by an immediate
family member for service as an employee of Granite (other than an
executive officer) will not be considered in determining independence
under this test.
|
|
●
|
The following directors may not be
deemed independent: (a) a director who is a current partner or employee of
a firm that is Granite's internal or external auditor; (b) a director who
has an immediate family member who is a current partner of such a firm;
(c) a director who has an immediate family member who is a current
employee of such a firm and who personally works on Granite's audit; or
(d) a director or immediate family member who was within the last three
years a partner or employee of such a firm and personally worked on
Granite's audit within that time.
|
|
●
|
A director who or whose immediate
family member is, or has been within the last three years, employed as an
executive officer of another company where any of Granite's present
executive officers at the same time serves or served on that company's
compensation committee may not be deemed independent.
|
|
●
|
A director who is a current employee
or whose immediate family member is a current executive officer of a
company that has made payments to, or received payments from, Granite for
property or services in an amount which, in any of the last three fiscal
years, exceeds the greater of $1 million, or 2% of such other company's
consolidated gross revenues for that fiscal year may not be deemed
independent.
|
14
Table of Contents
The Board reviews the independence of all
non-employee directors every year. For the review, the Board relies on
information from responses to questionnaires completed by directors and other
sources. Directors are required to immediately inform the Nominating and
Corporate Governance Committee of any material changes in their or their
immediate family members' relationships or circumstances that could impact or
change their independence status.
The following non-employee directors are
independent under the listing standards of the NYSE: Claes G. Bjork, James W.
Bradford, Jr., David C. Darnell, William G Dorey, Patricia D. Galloway, David H.
Kelsey, Celeste B. Mastin, Michael F. McNally, William H. Powell and Gaddi H.
Vasquez.
Board and Annual Shareholder Meeting
Attendance
During 2016, the Board of Directors held
six regular meetings and one telephonic meeting. Each of the directors attended
at least 75% of the aggregate of the total number of meetings of the Board and
the total number of meetings of any committee(s) on which he or she served.
Except for irreconcilable conflicts, directors are expected to attend the annual
meeting of shareholders.
The annual meeting attendance policy is a
part of Granite's Board of Directors Corporate Governance Guidelines and
Policies and is posted on Granite's website. See "Granite Website" below. All
nine directors then in office attended Granite's 2016 Annual Meeting of
Shareholders.
Communications with the Board
Any shareholder or other interested party
wishing to communicate with the Board of Directors, or any particular director,
including the Chairman of the Board or the Lead Director, if there is one, can
do so by following the process described in the Communications with the Board of
Directors Policy. The policy is posted on Granite's website. See "Granite
Website" below.
Corporate Governance Guidelines and
Policies
Granite's Board of Directors is subject to
the Board of Directors Corporate Governance Guidelines and Policies. The Board
of Directors Corporate Governance Guidelines and Policies is available on our
website. See "Granite Website" below.
Code of Conduct
Granite's Code of Conduct applies to all
Granite employees, including the Chief Executive Officer and the Chief Financial
Officer, and to all directors, including the Chairman of the Board. The Code of
Conduct is available on Granite's website. We will also post any amendments to
the Code of Conduct, or waivers of the application of provisions of the Code of
Conduct to any of our directors or executive officers, on our website. See
"Granite Website" below.
Granite Website
The following charters and policies are
available on Granite's website at
www.graniteconstruction.com
at the
"Investors" site, then under "Corporate Governance": the Audit/Compliance
Committee Charter, the Nominating and Corporate Governance Committee Charter,
the Compensation Committee Charter, the Board of Directors Corporate Governance
Guidelines and Policies, the Board of Directors' Nomination Policy, and the
Communication with the Board of Directors Policy. You can also obtain copies of
these charters and policies, without charge, by contacting Granite's Investor
Relations Department at 831.724.1011. The Code of Conduct is available on
Granite's website at
www.graniteconstruction.com
at the "Our
Company" site under "Code of Conduct." You can obtain a copy of the Code of
Conduct and any amendments to the Code of Conduct, without charge, by contacting
Granite's Human Resources Department at 831.724.1011.
15
Table of Contents
|
EXECUTIVE AND DIRECTOR COMPENSATION AND OTHER
MATTERS
|
|
COMPENSATION DISCUSSION AND
ANALYSIS
|
Objective of the Compensation Program
The market for executive talent is highly
competitive and the objective of our executive compensation program is to
attract and retain talented, creative, and experienced executives with the
skills and leadership qualities necessary to compete in the marketplace, deliver
consistent financial performance and grow shareholder value. The Compensation
Committee believes that an effective way to enhance Granite's performance is
through variable compensation structured to align our executives’ interests with
the Company’s short and long-term performance objectives. Key elements of the
program are as follows:
|
●
|
Market competitive base salaries at
the 50th percentile of comparable positions in the market as the
goal;
|
|
●
|
Actual pay levels reflecting market
data, individual experience, tenure and ability to impact business and
financial results;
|
|
●
|
Short-term and long-term goals
aligned with the best interests of shareholders, with cash and stock-based
incentives earned upon the attainment of pre-established financial and
safety goals;
|
|
●
|
A comprehensive benefits program
which is available to all salaried employees and includes: medical,
dental, vision, life, accidental death and dismemberment insurance,
short-term and long-term disability insurance, paid vacation, holiday pay;
and
|
|
●
|
Eligibility, along with other
management employees, to participate in our Non-Qualified Deferred
Compensation Program.
|
Executive Officer Compensation Program
During fiscal year 2016, we conducted our annual “Say on Pay” shareholder
advisory vote, as required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 and Securities Exchange Commission (“SEC”) rules. This
resulted in the approval of our 2015 compensation of the Named Executive
Officers by approximately 98% of the votes cast. The Compensation Committee
considers these voting results when planning compensation for subsequent years
and believes the results affirm shareholder approval of the Company’s executive
compensation program. Accordingly, the Compensation Committee did not adopt any
changes to this program as a result of this vote, although the Compensation
Committee is continually evaluating our executive compensation to further align
the program with shareholders’ interests. In addition to this endorsement by our
shareholders of our executive compensation programs and practices, management
values the views of our largest institutional shareholders and proxy advisory
firms on our compensation practices and disclosures.
The key components of the 2016 program for
compensating our Chief Executive Officer, Chief Financial Officer and the next
three highest paid executive officers during 2016 (the “Named Executive
Officers”) are as follows:
|
●
|
Adjustments to align total direct
compensation closer with market median levels if deemed necessary by the
Compensation Committee;
|
|
●
|
An Annual Incentive Plan (“AIP”)
with Net Income, Operating Income and Safety as the key performance
measures;
|
|
●
|
A Long-Term Incentive Plan (“LTIP”)
that includes a performance-based component and a service-based component.
The LTIP performance measure is Relative Total Shareholder Return (“TSR”);
and
|
|
●
|
Stock ownership guidelines.
|
The specific provisions of the
compensation opportunity, plan design, and performance objectives are described
in greater detail in the remainder of this Compensation Discussion and Analysis.
16
Table of
Contents
Role of the Compensation Committee and
Chief Executive Officer in Determining Executive Compensation
The Compensation Committee is actively
engaged in the design and approval of all elements of the compensation program
for our executive officers. Compensation and potential payouts are determined
with assistance and recommendations from the compensation consultant as
discussed below. The Compensation Committee determines the compensation of the
Chief Executive Officer. The annual salary levels, incentive compensation
targets and potential payouts of the other executive officers are reviewed and
approved by the Compensation Committee based on recommendations of the Chief
Executive Officer and the compensation consultant. See "Information About the
Board of Directors and Corporate Governance — Committees of the Board —
Compensation Committee" on page 10.
Role of the Compensation Consultant
The Compensation Committee has retained
Mercer as its compensation consultant to provide information, analysis, and
advice with regard to executive officer compensation. Representatives of the
compensation consultant attend Compensation Committee meetings and provide
guidance and expertise on competitive pay practices and plan designs that are
consistent with the key objectives of the compensation program. See "Information
About the Board of Directors and Corporate Governance — Role of the Compensation
Consultant" on page 11.
Annual Risk Assessment
The Compensation Committee annually
reviews the balance between risk and reward in the design of the executive
officer and employee incentive compensation programs. The AIP and LTIP utilize a
portfolio of performance metrics across the company designed to balance short
and long-term financial objectives and generate shareholder value. Performance
goals are set as a range for each objective with a maximum payout opportunity
assigned to each performance goal. The Compensation Committee carefully reviews
incentive plan goals to ensure the appropriate levels of difficulty, and reviews
Granite and its peer groups’ financial performance to ensure performance goals
and payout opportunities are appropriately calibrated. The performance measures,
maximum payout opportunities and the calibration of achievability of incentive
plan goals are all designed to help ensure that the incentive plans
appropriately balance risk and reward, limiting excessive risk-taking and the
potential for windfall payouts.
Market Data Considered in Determining
Executive Compensation
The Compensation Committee reviews
available industry compensation data to establish competitive compensation
levels which will reward our executive officers if performance targets are
achieved. Benchmark data is obtained from a single peer group consisting of
eleven public companies representing the construction, engineering and
construction materials industries. The Compensation Committee believes that
industry-specific companies are the most appropriate source of benchmark data as
they are most representative of Granite’s market for talent. The data from the
peer group of eleven public companies is used by the Compensation Committee to
establish base salary, target total cash and long-term incentive compensation
levels and as the comparative group for measuring relative Total Shareholder
Return performance. See “Long Term Incentive Compensation – Performance Awards”
on page 23.
17
Table of Contents
Peer Group of Public
Companies
The eleven public companies selected for
the peer group are in the construction, engineering and/or construction
materials industries and compete for executive talent in the same market as
Granite. The table below names each of the companies and its respective annual
revenues and total assets for its 2016 fiscal year.
|
Company
Name
|
Revenues
($ Millions)
|
Total Assets
($ Millions)
|
|
Quanta Services, Inc.
|
$7,651
|
$5,354
|
|
EMCOR Group, Inc.
|
$7,552
|
$3,894
|
|
MasTec, Inc.
|
$5,135
|
$3,183
|
|
Tutor Perini Corporation
|
$4,973
|
$4,039
|
|
Martin Marietta Materials, Inc.
|
$3,819
|
$7,301
|
|
Vulcan Materials Company
|
$3,593
|
$8,471
|
|
Dycom Industries, Inc.
|
$2,673
|
$1,720
|
|
Primoris Services Corporation
|
$1,997
|
$1,171
|
|
Aegion Corporation
|
$1,222
|
$1,194
|
|
MYR Group, Inc.
|
$1,142
|
$574
|
|
Layne Christensen Company
|
$683
|
$489
|
Granite's fiscal 2016 revenues and total
assets at December 31, 2016 were $2,514,617,000 and $1,733,453,000 respectively.
Base Salaries
Effective January 1, 2016, Mr. Roberts’s
base salary increased from $750,000 to $800,000, Mr. Matheson’s base salary
increased from $375,000 to $400,000, and Mr. Richards’ base salary increased
from $375,000 to $400,000. These increases are based on individual performance
and are supported by market data from Granite’s peer group shown in the table
above and by the peer group median in the following Base Salary Positioning
Chart. Salary increases also reflect increased tenure and performance in
respective positions. No other changes to the base salaries of our Named
Executive Officers were made for 2016.
For amounts paid as base salary during
2016, see the Summary Compensation Table appearing on page 30.
|
Base Salary
Positioning Chart
|
Named
Executive Officer
|
|
Title During
2016
|
|
2016
Base
Salary
|
|
Peer
Group
Median
(1)
|
|
%
Variance
|
|
James H. Roberts
|
|
President & Chief Executive Officer
(CEO)
|
|
$800,000
|
|
$979,000
|
|
(18%)
|
|
Laurel J. Krzeminski
|
|
Executive Vice President & Chief Financial Officer
(CFO)
|
|
$475,000
|
|
$489,000
|
|
(3%)
|
|
Michael F. Donnino
|
|
Senior Vice President & Large Projects
Group Manager
|
|
$475,000
|
|
$438,000
|
|
8%
|
|
James D. Richards
|
|
Senior
Vice President & Northwest Group Manager
|
|
$400,000
|
|
$438,000
|
|
(9%)
|
|
Martin P. Matheson
|
|
Senior Vice President & California Group
Manager
|
|
$400,000
|
|
$438,000
|
|
(9%)
|
|
(1)
Peer Group median compensation data
as used by the Committee in making 2016 compensation decisions was based
on peer group data reported in 2015 proxy
filings.
|
18
Table of
Contents
Annual Incentive
Compensation
The Named Executive Officers participate
in the AIP pursuant to which annual incentive compensation is determined by
overall company performance and/or applicable group performance. As described in
more detail below, each Named Executive Officer's targeted annual incentive
opportunity is based on external benchmark data for similar positions and is
expressed as a percentage of base salary. Maximum cash payouts cannot exceed the
lesser of three times the target opportunity or $2,500,000.
Annual Incentive Opportunity
|
|
|
|
|
Annual Incentive Opportunity
(1)
|
|
Named Executive Officer
|
|
2016
Base
Salary
|
|
% of Base
Salary
Target
|
|
Target
|
|
Maximum
|
|
James H. Roberts
|
|
$800,000
|
|
115%
|
|
$920,000
|
|
$2,500,000
|
|
Laurel J. Krzeminski
|
|
$475,000
|
|
75%
|
|
$356,250
|
|
$1,068,750
|
|
Michael F. Donnino
|
|
$475,000
|
|
75%
|
|
$356,250
|
|
$1,068,750
|
|
James D. Richards
|
|
$400,000
|
|
75%
|
|
$300,000
|
|
$900,000
|
|
Martin P.
Matheson
|
|
$400,000
|
|
75%
|
|
$300,000
|
|
$900,000
|
(1)
The “target” annual incentive opportunity is competitive with those
offered by peer group companies, and is the basis for establishing the maximum
annual incentive.
2016 Annual Incentive
Plan
Individual awards under the AIP are paid
out/determined based on a pre-determined percentage (funding ratio) of Company
Net Income and/or Group Operating Income.
Named Executive Officer AIP awards
incorporate two funding ratio levels. The initial funding ratio applies once
Company Net Income and/or Group Operating Income achieve “threshold” performance
levels. A higher funding ratio level is applied once financial performance is at
or above “expectations” performance levels for Company Net Income and/or Group
Operating Income. The “expectations” performance levels of Company Net Income
and Group Operating Income are typically greater than budgeted amounts and are
intended to encourage plan participants to deliver superior financial
performance. No funding of individual bonuses will occur if the performance of
the Company and/or Group is below the specified “threshold” level of
performance.
2016 Annual Incentive Plan Performance
Measure Definitions
|
●
|
Company Net
Income
Company Net Income is actual
consolidated net income for Granite Construction Incorporated calculated
in accordance with Generally Accepted Accounting Principles (“GAAP”);
|
|
●
|
Company Pre-Bonus Net Income
Company Pre-Bonus Net Income is
defined as Company Net Income before the cost of annual incentive plan
cash bonuses which are calculated based on Company performance;
|
|
●
|
Operating
Income
Operating Income is actual
operating income for the applicable Group calculated in accordance with
GAAP, excluding allocated Selling, General & Administrative Expense
(“SG&A”);
|
|
●
|
Operating
Profit
Operating Profit is defined
as Operating Income after the cost of pre-bonus allocated SG&A and
before the cost of annual incentive plan cash bonuses which are calculated
based on the performance of the applicable Group;
|
19
Table of
Contents
|
●
|
Safety
Granite uses the OSHA Recordable Incident Rate (“ORIR”),
a nationally recognized metric, to benchmark its safety performance
against the construction industry. ORIR tracks all injuries serious enough
to require OSHA documentation (i.e., those that result in medical
treatment, restricted duty or lost time) and represents the number of
events per 100 full-time employees. It is calculated by multiplying the
number of OSHA recordable injuries (total injuries or lost time injuries)
by 200,000 (2,000 hours per employee per year x 100 employees) and
dividing by the total number of hours of employee exposure. The ORIR
target and payout levels are reviewed and approved annually by the
Compensation Committee.
|
2016 Annual Incentive Plan Performance
Objectives
At the
beginning of the annual performance period (January 1
st
– December
31
st
), the Compensation Committee approved the 2016 AIP financial
performance goals. Named Executive Officer annual incentive bonuses are funded
once threshold performance levels are achieved. Higher funding levels are
applied once performance is at or above expectations. Bonus payouts are
calculated as a percentage of Company pre-bonus net income and Group operating
profit.
Company Performance
|
|
Net Income
Threshold
|
Net Income
Expectations
|
|
Granite Construction Incorporated
|
$24.1M
|
$58.5M
|
Group Performance
|
|
Group
Operating
Income
Threshold
|
Group
Operating
Income
Expectations
|
|
Large Projects Group
|
$41.4M
|
$70.1M
|
|
Northwest Group
|
$37.7M
|
$61.4M
|
|
California Group
|
$40.4M
|
$64.5M
|
2016 Annual Incentive Plan Company and
Group Funding Ratios
Funding ratios are individualized to
account for the Named Executive Officer’s respective roles and responsibilities.
Mr. Roberts and Ms. Krzeminski’s bonus opportunities are based on Company
financial performance. Mr. Donnino, Mr. Richards and Mr. Matheson have two
funding ratios with a larger ratio tied to their Group’s performance and a
smaller ratio tied to overall Company performance. This is intended to relate
bonus opportunities for Mr. Donnino, Mr. Richards and Mr. Matheson to both their
Group’s performance, as well as the overall results of the Company. Bonuses are
adjusted based on a safety multiplier from -10% to +10%, with safety at target
performance resulting in no adjustment.
Company Bonus Funding Ratios
(Percentage of Company Pre-Bonus Net
Income)
|
Named
Executive Officer
|
Company Net Income
At or Above
Threshold
|
Company Net Income
At or Above
Expectations
|
|
James H. Roberts
|
1.100%
|
1.650%
|
|
Laurel J. Krzeminski
|
0.440%
|
0.660%
|
|
Michael F. Donnino
|
0.100%
|
0.150%
|
|
James D. Richards
|
0.100%
|
0.150%
|
|
Martin P. Matheson
|
0.100%
|
0.150%
|
20
Table of Contents
Group Bonus Funding Ratios
(Percentage of Group Operating Profit)
|
Named
Executive Officer
|
Group Operating Income
At or Above
Threshold
|
Group Operating Income
At or Above
Expectations
|
|
Michael F. Donnino
|
0.600%
|
0.900%
|
|
James D. Richards
|
0.600%
|
0.900%
|
|
Martin P. Matheson
|
0.600%
|
0.900%
|
Safety Multiplier
2016 Annual Incentive Plan bonus awards
are subject to adjustment by a safety multiplier, which is calculated based on
year-end safety results. Awards for Mr. Roberts and Ms. Krzeminski are subject
to adjustment based on the overall safety results of the Company. Awards for Mr.
Donnino, Mr. Richards and Mr. Matheson are subject to adjustment based upon both
the overall safety results of the Company and of their assigned Groups.
The values of the 2016 AIP awards are
subject to adjustment based on safety results as follows:
|
●
|
If Safety ORIR is 2.0 or more, or if
an employee fatality occurred, the annual incentive performance award is
multiplied by 90% and reduced accordingly.
|
|
●
|
If Safety ORIR is at the 1.2 target
level, no adjustment is made.
|
|
●
|
If Safety ORIR is 1.0 or less, the
annual incentive performance award is multiplied by 110% and increased
accordingly.
|
|
●
|
Linear interpolation is used to
determine the magnitude of the adjustment for Safety ORIR falling between
2.0 and 1.0.
|
2016 Company and Group Safety Goals
|
|
Threshold
|
Target
|
Maximum
|
|
Safety ORIR
|
2.0
|
1.2
|
1.0
|
|
Multiplier
|
90%
|
100%
|
110%
|
|
2016 ANNUAL INCENTIVE PLAN COMPANY AND
GROUP PERFORMANCE RESULTS AND BONUS PAYOUTS
|
2016 year-end Company and Group safety
performance results were as follows:
2016 Safety Performance
Results
|
|
|
Company
Safety ORIR
Results
|
|
Company
Safety
Multiplier
|
|
Group
Safety ORIR
Results
|
|
Group
Safety
Multiplier
(1)
|
|
James H. Roberts
|
|
1.18
|
|
101%
|
|
-
|
|
-
|
|
Laurel J. Krzeminski
|
|
1.18
|
|
101%
|
|
-
|
|
-
|
|
Michael F. Donnino
|
|
1.18
|
|
101%
|
|
1.51
|
|
96.1%
|
|
James D. Richards
|
|
1.18
|
|
101%
|
|
1.30
|
|
98.8%
|
|
Martin P. Matheson
|
|
1.18
|
|
101%
|
|
1.13
|
|
103.5%
|
21
Table of Contents
Based on actual performance, individual
incentives earned by the Named Executive Officers were as follows:
2016 AIP Company Bonus Payouts
|
Named
Executive Officer
|
|
Company
Bonus
Payout at
Threshold
|
|
Company
Bonus
Payout at
Expectations
|
|
Company
Bonus
Payout
(before
Safety
Multiplier)
|
|
Company
Safety
Multiplier
|
|
Actual
Company
Payout
|
|
James H. Roberts
|
|
$279,000
|
|
$1,047,000
|
|
$652,744
|
|
101.00%
|
|
$659,271
|
|
Laurel J. Krzeminski
|
|
$112,000
|
|
$419,000
|
|
$261,097
|
|
101.00%
|
|
$263,708
|
|
Michael F. Donnino
|
|
$25,000
|
|
$95,000
|
|
$59,340
|
|
101.00%
|
|
$59,934
|
|
James D. Richards
|
|
$25,000
|
|
$95,000
|
|
$59,340
|
|
101.00%
|
|
$59,934
|
|
Martin P. Matheson
|
|
$25,000
|
|
$95,000
|
|
$59,340
|
|
101.00%
|
|
$59,934
|
2016 AIP Group Bonus Payouts
|
Named
Executive Officer
|
|
Group
Bonus
Payout at
Threshold
|
|
Group
Bonus
Payout at
Expectations
|
|
Group
Bonus
Payout
(before Safety
Multiplier)
|
|
Group
Safety
Multiplier
|
|
Actual
Group
Payout
|
|
Michael F. Donnino
|
|
$115,000
|
|
$450,000
|
|
$0
|
|
96.13%
|
|
$0
|
|
James D. Richards
|
|
$84,000
|
|
$354,000
|
|
$383,445
|
|
98.75%
|
|
$378,652
|
|
Martin P. Matheson
|
|
$83,000
|
|
$356,000
|
|
$474,681
|
|
103.50%
|
|
$491,295
|
2016 Actual AIP Total Bonus
Payouts
(1)
|
Named
Executive Officer
|
|
Actual
Company
Bonus Payout
|
|
Actual
Group
Bonus Payout
|
|
Total
Actual
AIP Bonus Payout
|
|
James H. Roberts
|
|
$659,271
|
|
-
|
|
$659,271
|
|
Laurel J. Krzeminski
|
|
$263,708
|
|
-
|
|
$263,708
|
|
Michael F. Donnino
|
|
$59,934
|
|
$0
|
|
$59,934
|
|
James D. Richards
|
|
$59,934
|
|
$378,652
|
|
$438,586
|
|
Martin P. Matheson
|
|
$59,934
|
|
$491,295
|
|
$551,229
|
(1)
Represents the sum of 2016 Company bonus payouts and 2016 Group bonus
payouts.
22
Table of Contents
|
LONG TERM INCENTIVE
COMPENSATION
|
In order to emphasize sustained long term
performance, all Named Executive Officers participated in the 2016 LTIP. The
Compensation Committee reviewed peer group compensation data for comparable
positions and established incentive target opportunities which approximate peer
group median compensation levels. Effective January 1, 2016, Mr. Roberts’s LTIP
incentive target opportunity increased from $1,700,000 to $2,000,000, and Ms.
Krzeminski’s LTIP incentive target opportunity increased from $550,000 to
$650,000. No other changes to the LTIP incentive target opportunity of our Named
Executive Officers were made for 2016.
The LTIP incentive target opportunities
for the Named Executive Officers under the 2016 LTIP are presented below:
|
Named
Executive Officer
|
2016 LTIP Incentive Target Opportunity
|
|
James H. Roberts
|
$2,000,000
|
|
Laurel J. Krzeminski
|
$650,000
|
|
Michael F. Donnino
|
$600,000
|
|
James D. Richards
|
$450,000
|
|
Martin P. Matheson
|
$450,000
|
Each Named Executive Officer’s target
award is divided into two components – Performance Awards and Service Awards.
The table below reflects the weighting of the two components:
LTIP Components Weighting
|
|
Weighting
|
|
Performance Award
|
66.7%
|
|
Service Award
|
33.3%
|
|
Total
|
100%
|
Performance Awards
The Compensation Committee approved
payouts for the 2016 – 2018 performance period to be calculated based on
Granite’s TSR rank relative to a peer group of companies in the Standard &
Poor’s Construction Materials and Construction Equipment classification. The
higher the overall performance ranking, the greater the payout percentage.
The following are the 2016 – 2018 peer
group companies and funding mechanism.
|
2016 – 2018 TSR Peer Group (12 companies, including
Granite)
|
|
●
Aegion
Corporation
|
●
Martin Marietta
Materials
|
●
Quanta Services
Inc.
|
|
●
Dycom Industries
Inc.
|
●
MasTec
Inc.
|
●
Tutor Perini
Corp
|
|
●
Emcor Group
Inc.
|
●
MYR Group
Inc.
|
●
Vulcan Materials
Co.
|
|
●
Layne Christensen
Company
|
●
Primoris
Services
|
|
23
Table of Contents
2016 – 2018 TSR Funding Mechanism
(Utilizes a Relative TSR Percentile
Ranking System to determine payout as a percentage of Target.)
|
Relative TSR
|
|
|
Percentile Rank
|
Payout (% of Target)
|
|
90
th
Percentile or better
|
200%
|
|
75
th
Percentile
|
150%
|
|
50
th
Percentile
|
100%
|
|
25
th
Percentile
|
50%
|
|
Below 25
th
Percentile
|
0%
|
Payouts for the 2013 – 2015 TSR
performance period are reflected in the 2016 Summary Compensation and 2016 Grant
Plan Based Award tables on pages 30 and 32. TSR was calculated on Granite’s
performance relative to the industry peer group of construction, engineering and
construction materials used for benchmarking data as approved by the
Compensation Committee effective January 1, 2013. TSR for the 2013 – 2015
performance period was calculated using a discrete ranking system.
The following are the 2013 – 2015 peer
group companies and funding mechanism:
|
2013 – 2015 TSR Peer Group (13 companies, including
Granite)
|
|
|
●
|
Aegion Corporation
|
|
●
|
Headwaters Inc.
|
|
●
|
Texas Industries
|
|
|
●
|
Dycom Industries
Inc.
|
|
●
|
Jacobs Engineering Group
Inc.
|
|
●
|
Tutor Perini Corp
|
|
|
●
|
Emcor Group Inc.
|
|
●
|
Martin Marietta Materials
|
|
●
|
URS Corp.
|
|
|
●
|
Fluor Corp.
|
|
●
|
Quanta Services Inc.
|
|
●
|
Vulcan Materials
Co.
|
2013 – 2015 TSR Funding
Mechanism
(Utilizes a Discrete Number Ranking System
to determine payout as a percentage of target.)
|
Discrete Number Ranking
|
Payout (% of Target)
|
|
1
– 2 of 13
|
200%
|
|
3 of 13
|
180%
|
|
4
of 13
|
160%
|
|
5 of 13
|
140%
|
|
6
of 13
|
120%
|
|
7 of 13
|
100%
|
|
8
of 13
|
83.3%
|
|
9 of 13
|
66.7%
|
|
10 of 13
|
50%
|
|
11 – 13 of 13
|
0%
|
Total Shareholder Return Performance
Calculation
TSR is calculated by dividing (i) the sum
of the closing price on the last trading day of the performance period and all
dividends and per-share cash equivalents paid during the performance period, by
(ii) the closing price on the day before the first day of the performance
period. The performance awards are calculated at the end of a three-year
performance period. The 2013 performance awards were calculated for the
three-year period ending December 31, 2015 with vesting and payment in 2016. The
2014 performance awards will be calculated for the three-year period ending
December 31, 2016 with vesting and payment the following year. The 2015
performance awards will be calculated for the three-year period ending December
31, 2017 with vesting and payment the following year. The 2016 performance
awards will be calculated for the three-year period ending December 31, 2018
with vesting and payment the following year.
24
Table of Contents
|
|
|
|
|
Payout Timing
|
|
TSR
Performance Period
|
|
Award Opportunity
|
|
(if award earned based on
performance)
|
|
January 1, 2013 – December 31, 2015
|
|
0% – 200% of 2013 Performance
Award
|
|
Q1 2016
|
|
January 1, 2014 – December 31, 2016
|
|
0% – 200% of 2014 Performance Award
|
|
Q1 2017
|
|
January 1, 2015 – December 31, 2017
|
|
0% – 200% of 2015 Performance
Award
|
|
Q1 2018
|
|
January 1, 2016 – December
31, 2018
|
|
0% – 200% of 2016 Performance
Award
|
|
Q1
2019
|
|
2016 PERFORMANCE AWARD
PAYOUTS
|
Total Shareholder Return Awards Earned
in 2013 – 2015 and Paid in 2016
Granite’s three-year TSR ranking as of
December 31, 2015 for the performance period from January 1, 2013 through
December 31, 2015 was 8 out of 13 companies, or 83% of the TSR target
opportunity. See “2013 - 2015 TSR Funding Mechanism” on page 24. The earned
awards for the performance period are presented in the following
table.
TSR Performance Period January 1, 2013
– December 31, 2015
|
|
Target TSR
|
Actual TSR
|
Restricted Stock
|
|
Named
Executive Officer
|
Incentive
|
Incentive
|
Units Awarded
(1)
|
|
James H. Roberts
|
$1,133,333
|
$944,066
|
26,828
|
|
Laurel J. Krzeminski
|
$366,667
|
$305,434
|
8,680
|
|
Michael F. Donnino
|
$400,000
|
$333,200
|
9,469
|
|
James D. Richards
|
$266,667
|
$222,134
|
6,312
|
|
Martin P. Matheson
(2)
|
-
|
-
|
-
|
|
(1)
|
Awards are denominated as a cash value until earned based on
performance. The number of restricted stock units awarded was calculated
by dividing the actual long-term incentive value by $35.19, which was the
average stock price over the first 30 days of January
2013.
|
|
|
|
|
(2)
|
Mr. Matheson was
not eligible to participate in the 2013 - 2015 TSR
program.
|
Service Awards
The Compensation Committee believes granting a portion of equity awards
as Restricted Stock Units assists in maintaining competitive levels of
compensation, encourages the continued retention of key management, and aligns
the interest of Named Executive Officers with that of the shareholders. Service
Awards vest ratably over three years.
Service Awards Paid in
2016
|
Named
Executive Officer
|
Service Award
|
Restricted Stock Units
Awarded
(1)
|
|
James H. Roberts
|
$666,678
|
15,461
|
|
Laurel J. Krzeminski
|
$216,678
|
5,025
|
|
Michael F. Donnino
|
$199,991
|
4,638
|
|
James D. Richards
|
$150,014
|
3,479
|
|
Martin P. Matheson
|
$150,014
|
3,479
|
|
(1)
|
The
number of restricted stock units awarded was calculated by dividing the
service award by the closing stock price of $43.12 on March 14,
2016.
|
25
Table of Contents
Policy Regarding Recovery of Award if
Basis Changes Because of Restatement
If the basis upon which a previous
compensation award was made is determined to have been in error due to a
restatement of a prior year's financial results, it is Granite's policy to
either recover the amount overpaid or to offset the overpayment against future
incentive compensation earned. There were no adjustments to calculations that
affected incentive compensation calculated or paid in 2016.
Stock Ownership Guidelines
Our Board of Directors has adopted Stock
Ownership Guidelines to align the interests of Granite's Named Executive
Officers with the interests of shareholders and to promote Granite's commitment
to sound corporate governance. Named Executive Officers are expected to own and
hold a minimum number of shares of Granite common stock based on relevant market
standards. Stock ownership guidelines are determined as a multiple of the Named
Executive Officer's base salary, and are as follows:
|
●
|
Chief Executive Officer: 3 x annual
base salary
|
|
|
|
|
●
|
Other Named Executive Officers: 2 x
annual base salary
|
Minimum stock ownership levels are to be
achieved within five years following the later of the May 13, 2009 adoption of
the Stock Ownership Guidelines and the date an individual becomes a Named
Executive Officer. Compliance with the guidelines is reviewed by the
Compensation Committee on an annual basis. Shares that count toward the
satisfaction of the guidelines include:
|
●
|
Shares owned outright by the Named
Executive Officer or his or her immediate family members residing in the
same household, whether held individually or jointly;
|
|
|
|
|
●
|
Shares represented by restricted
stock awards or units where the restrictions have lapsed;
|
|
|
|
|
●
|
Shares held for the Named Executive
Officer's account in the Granite Construction Incorporated Profit Sharing
and 401(k) Plan (“401(k) Plan”); and
|
|
|
|
|
●
|
Shares held in trust for the benefit
of the Named Executive Officer or his or her family.
|
Until the applicable guideline is
achieved, the Named Executive Officer is required to retain an amount equal to
25% of net shares received as a result of the vesting of restricted stock or
restricted stock units through Granite's stock incentive plans.
Stock Ownership
|
|
|
|
|
Stock
|
|
Required
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
Ownership
|
|
Value of
|
|
|
|
# Vested
|
|
Value of
|
|
|
|
Named
|
|
Base
|
|
as Multiple
|
|
Stock
|
|
Date to be
|
|
Shares
|
|
Shares
|
|
Percentage
|
|
Executive
Officer
|
|
Salary
|
|
of Base
|
|
Ownership
|
|
Achieved
(1)
|
|
Owned
(2)
|
|
Owned
(3)
|
|
of Attainment
|
|
James H. Roberts
|
|
$800,000
|
|
3
x
|
|
$2,400,000
|
|
May 2014
|
|
136,011
|
|
$6,350,354
|
|
265%
|
|
Laurel J. Krzeminski
|
|
$475,000
|
|
2 x
|
|
$950,000
|
|
Nov. 2015
|
|
45,158
|
|
$2,108,427
|
|
222%
|
|
Michael F. Donnino
|
|
$475,000
|
|
2
x
|
|
$950,000
|
|
May 2014
|
|
57,280
|
|
$2,674,403
|
|
282%
|
|
James D. Richards
|
|
$400,000
|
|
2 x
|
|
$800,000
|
|
April 2019
|
|
19,990
|
|
$933,333
|
|
117%
|
|
Martin P. Matheson
|
|
$400,000
|
|
2 x
|
|
$800,000
|
|
April 2021
|
|
7,402
|
|
$345,599
|
|
43%
|
|
(1)
|
To be achieved within five years
after becoming a Named Executive Officer.
|
|
|
|
(2)
|
As of January 1,
2017.
|
|
|
|
(3)
|
Based on the 2016 annual average
stock price of $46.69.
|
26
Table of Contents
The Company’s Insider Trading Policy,
which applies to employees, officers and directors of the Company and their
family members and affiliates, provides that such individuals are prohibited
from engaging in hedging transactions involving the Company’s securities.
Non-Qualified Deferred
Compensation
Granite offers its executive officers and
other key executives participation in the Granite Construction Key Management
Deferred Compensation Plan II (the "NQDC"), which:
|
●
|
Allows executive officers to defer
up to 50% of their base compensation and up to 100% of their incentive
compensation (cash and equity);
|
|
|
|
|
●
|
Allows participants to choose from a
menu of investment options. Granite determines the investment options for
the NQDC menu and may add or remove investment options based on a review
of the performance of the particular investment;
|
|
|
|
|
●
|
Includes a Rabbi Trust, which
provides participants a measure of added security that benefit obligations
will be satisfied;
|
|
|
|
|
●
|
Includes an option under which
participants can voluntarily direct Granite to purchase life insurance on
their behalf and are eligible for a survivor benefit equal to one year's
base salary payable in the event of death. The survivor benefit is payable
only while the participant is employed with Granite.
|
Flexible Bonus Policy
The Compensation Committee has the
authority to award discretionary bonuses to employees of the Company. In 2013,
our Compensation Committee determined that it would be beneficial to define and
limit its authority to award discretionary bonuses and adopted the Flexible
Bonus Policy pursuant to which employees of the Company, including our Named
Executive Officers, are eligible to receive a discretionary bonus, which may be
based on Company performance, individual performance or such other factors as
our Compensation Committee may consider appropriate. In determining Company
performance, our Compensation Committee may consider the achievement of
corporate financial, strategic and operational objectives including, but not
limited to, revenue, income, and backlog. In determining individual performance,
our Compensation Committee may consider the achievement of personal objectives
including, but not limited to, business targets, budgetary targets, succession
planning, and safety targets. The aggregate amount of any bonus or bonuses
payable under the Flexible Bonus Policy to any one participant in any calendar
year may not exceed $250,000. Our Compensation Committee believes that the
flexible design of the Flexible Bonus Policy is necessary in order to consider
the effects of unanticipated events and circumstances on the Company’s business
or on a participant’s performance. A discretionary bonus award of $50,000 was
approved by the Compensation Committee in recognition of Mr. Matheson’s
contribution to the California Group’s performance in 2016.
Other Compensation
The Named Executive Officers are eligible
to participate in the 401(k) Plan. Granite provides matching contributions up to
6% of IRS qualified compensation. Under the terms of a policy applicable to Mr.
Roberts, Ms. Krzeminski and Mr. Donnino, each is required to maintain a
$5,000,000 personal umbrella liability insurance policy to provide coverage
while conducting company business. They are reimbursed for the costs incurred to
purchase and maintain the required insurance policy. Mr. Roberts, Ms. Krzeminski
and Mr. Donnino receive a $1,417 per month vehicle allowance which includes
reimbursement for the personal umbrella liability insurance. Mr. Richards
receives a $1,000 per month vehicle allowance. Mr. Matheson is provided a
company vehicle and receives a $60 per month vehicle allowance.
Impact of Accounting and Tax Treatments
of a Particular Form of Compensation
In connection with its determination of
the various elements of compensation for our executive officers, the
Compensation Committee takes into account the impact of Section 162(m) of the
Internal Revenue Code on the deductibility of compensation for federal income
tax purposes. Section 162(m) limits the deductibility of "nonperformance-based"
compensation paid to our chief executive officer and our next three highest paid
individuals, other than our chief financial officer, to $1 million annually.
Some of the elements of our executive compensation package, including certain
payments under our AIP, are intended to qualify as "performance-based"
compensation, which is exempt from the limitation on deductibility under Section
162(m). The Compensation Committee has the discretion to design and implement
elements of executive compensation that may not qualify as "performance based"
compensation and to approve compensation packages for individual executive
officers that may not be fully deductible.
27
Table of Contents
Change-in-Control Arrangements
All of our Named Executive Officers are
participants in the Executive Retention and Severance Plan. The purpose of the
plan is to:
|
●
|
Provide an incentive to the existing management to continue
their employment with Granite during the pendency of a potential
change-in-control transaction; and
|
|
|
|
|
●
|
Attract and retain executives by
reducing their concerns regarding future employment following a
change-in-control.
|
The Executive Retention and Severance Plan
originally provided that if a participant’s employment with Granite is
terminated by Granite within three years after a "change-in-control" of Granite
other than for cause, or if the participant resigns from such employment within
three years after a “change-in-control” of Granite for "good reason," the
participant would be entitled to the following benefits:
|
●
|
A lump sum payment equal to three
times the participant’s annual base salary rate in effect immediately
prior to the participant’s termination;
|
|
|
|
|
●
|
A lump sum payment equal to three
times the average of the aggregate of all annual incentive bonuses earned
by the participant for the three fiscal years immediately preceding the
fiscal year of the change-in-control;
|
|
|
|
|
●
|
A lump sum payment equal to three
times the average of the aggregate annual employer contribution, less
applicable withholding, made on behalf of the participant for the three
fiscal years preceding the fiscal year of the change-in-control to the
401(k) Plan, and any other retirement plan in effect immediately prior to
the change-in-control;
|
|
|
|
|
●
|
A lump sum payment equal to three
times the average annual premium cost for group health, life, and
long-term disability benefits, provided for the three fiscal years
preceding the fiscal year of termination;
|
|
|
|
|
●
|
Accelerated vesting of equity awards
in accordance with the provisions contained in such plans; and
|
|
|
|
|
●
|
Reasonable professional outplacement
services for the participant until the earlier of two years following the
date of termination or the date on which the participant obtains
employment.
|
Payments made to the terminated
participant do not include tax gross-up payments, and are capped. The amount of
the payment will not exceed, and will be reduced if required in order not to
exceed, the "safe harbor" amount allowable under Section 4999 of the Internal
Revenue Code, but only if the reduction would increase the net after-tax amount
received by the participant.
In August, 2010, the Compensation
Committee approved changes to the Executive Retention and Severance Plan that
are believed to be in alignment with emerging best practices. The benefits
provided to then-current participants under the Executive Retention and
Severance Plan were not changed. Benefits to subsequent new participants will be
dependent upon their level of responsibility within the organization and will
include the following severance multiples:
|
Position
|
Severance Multiple
|
|
Chief Executive Officer
|
2.99 x
|
|
Chief Financial Officer
|
2 x
|
|
Chief Operating Officer
|
2
x
|
|
Senior Vice Presidents and
Officers
|
1
x
|
28
Table of Contents
|
●
|
A "change-in-control" is defined as
(i) a merger, consolidation or acquisition of Granite where our
shareholders do not retain a majority interest in the surviving or
acquiring corporation; (ii) the transfer of substantially all of our
assets to a corporation not controlled by Granite or its shareholders; or
(iii) the transfer to affiliated persons of more than 30% of our voting
stock, which leads to a change of a majority of the members of the Board
of Directors; and
|
|
|
|
|
●
|
"Good reason" means (i) a material
diminution in the participant's authority, duties or responsibilities,
causing the participant's position to be of materially lesser rank or
responsibility within Granite or an equivalent business unit of its
parent; (ii) a decrease in the participant's base salary rate; (iii)
relocation of the participant's work place that increases the regular
commute distance between the participant's residence and work place by
more than 30 miles (one way); or (iv) any material breach of the plan by
Granite with respect to the participant during a change-in-control period.
|
The 2012 Equity Incentive Plan authorizes
the Compensation Committee to set the terms of any equity award to provide that
there will be no acceleration of the exercisability, vesting or payment
of such award upon the occurrence of a change-in-control unless the
change-in-control is accompanied by the award recipient’s involuntary
termination without cause or the award recipient’s resignation for good reason.
However, under the Executive Retention and Severance Plan, restricted stock and
restricted stock unit awards vest in full upon the consummation of a
change-in-control, provided the award recipient remains an employee prior to the
change-in-control. In addition, the Executive Retention and Severance Plan
provides that if the surviving, successor or acquiring corporation does not
either assume, continue or substitute outstanding option awards and the award
recipient remains an employee prior to the change-in-control, then the vesting
and exercisability of such option awards will be accelerated in full upon the
consummation of the change-in-control.
|
COMPENSATION COMMITTEE
REPORT
|
The Compensation Committee has reviewed
and discussed with management the "Compensation Discussion and Analysis"
contained in this proxy statement. Based on such review and discussions, the
Committee recommended to the Board of Directors that the "Compensation
Discussion and Analysis" be included in this proxy statement and incorporated by
reference into Granite's Annual Report on Form 10-K for the fiscal year ended
December 31, 2016.
Members of the Compensation Committee:
|
|
James W. Bradford, Jr., Chair
|
Celeste B. Mastin
|
|
|
Claes G. Bjork
|
William H. Powell
|
|
|
Michael F. McNally
|
Gaddi H.
Vasquez
|
This Report of the Compensation
Committee does not constitute soliciting material and shall not be deemed filed
or incorporated by reference into any other filing made by us under the
Securities Act of 1933, as amended, or the Exchange Act, except to the extent
that we specifically incorporate this Report of the Compensation Committee by
reference therein.
29
Table of Contents
Summary Compensation Table
2016
The following table summarizes, for the
years specified, the compensation for our Chief Executive Officer, our Chief
Financial Officer and other Named Executive Officers for the fiscal year ended
December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Incentive Plan
|
|
All Other
|
|
|
|
Named Executive Officer
|
|
Year
|
|
Salary
|
|
Bonus
(1)
|
|
Awards
(2)
|
|
Compensation
(3)
|
|
Compensation
(4)
|
|
Total
|
|
and Position
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
James H. Roberts
|
|
2016
|
|
$800,000
|
|
-
|
|
$1,823,501
|
|
$659,271
|
|
$132,096
|
|
$3,414,868
|
|
President & CEO
|
|
2015
|
|
$750,000
|
|
-
|
|
$975,859
|
|
$980,422
|
|
$124,653
|
|
$2,830,934
|
|
(Principal Executive Officer)
|
|
2014
|
|
$750,000
|
|
-
|
|
$1,133,374
|
|
$312,937
|
|
$126,166
|
|
$2,322,477
|
|
|
|
Laurel J. Krzeminski
|
|
2016
|
|
$475,000
|
|
-
|
|
$590,960
|
|
$263,708
|
|
$52,247
|
|
$1,381,915
|
|
EVP & Chief Financial Officer
|
|
2015
|
|
$475,000
|
|
-
|
|
$333,342
|
|
$392,169
|
|
$44,212
|
|
$1,244,723
|
|
(Principal Financial Officer)
|
|
2014
|
|
$450,000
|
|
-
|
|
$385,719
|
|
$125,175
|
|
$45,436
|
|
$1,006,330
|
|
|
|
Michael F. Donnino
|
|
2016
|
|
$475,000
|
|
-
|
|
$608,294
|
|
$59,934
|
|
$60,803
|
|
$1,204,031
|
|
Senior Vice President
|
|
2015
|
|
$475,000
|
|
-
|
|
$363,681
|
|
$89,129
|
|
$54,138
|
|
$981,948
|
|
& Large Projects Group Mgr.
|
|
2014
|
|
$475,000
|
|
-
|
|
$426,701
|
|
$148,531
|
|
$54,629
|
|
$1,104,861
|
|
|
|
James D. Richards
|
|
2016
|
|
$400,000
|
|
-
|
|
$422,187
|
|
$438,586
|
|
$50,927
|
|
$1,311,700
|
|
Senior Vice President
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
& Northwest Group Manager
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
Martin P. Matheson
|
|
2016
|
|
$400,000
|
|
$50,000
|
|
$150,014
|
|
$551,229
|
|
$37,737
|
|
$1,188,980
|
|
Senior Vice President
|
|
2015
|
|
$375,000
|
|
-
|
|
$250,019
|
|
$467,499
|
|
$29,303
|
|
$1,121,821
|
|
& California Group Manager
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1)
|
The amount in column (d) reflects
a discretionary bonus award approved by the Compensation Committee in
recognition of Mr. Matheson’s contribution to the California Group’s
performance in 2016.
|
|
|
|
(2)
|
The awards in column (e) reflect
the grant date fair value of stock awards granted for (i) service in the
stated year based on the Service Award feature of the LTIP and (ii) the
grant date fair value of stock awards granted in the stated year based on
performance for the three-year performance period, including the prior
year pursuant to the performance based component of the LTIP. For
additional information regarding restricted stock units granted during
2016 to the Named Executive Officers, please refer to the Grants of
Plan-Based Awards table beginning on page 32. The grant date fair value is
determined in accordance with FASB Accounting Standards Codification Topic
718, without regard to potential forfeitures. For additional information
about the assumptions used in these calculations, see Note 14 to the
audited consolidated financial statements of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2016.
Please refer to the "Compensation Discussion and Analysis — Compensation
Elements — Long Term Incentive Compensation" beginning on page 23 for a
detailed explanation of the LTIP.
|
|
|
|
(3)
|
The amounts in column (f) reflect
(i) for 2016, the cash awards earned for performance in 2016 and paid in
March 2017; (ii) for 2015, the cash awards earned for performance in 2015
and paid in March 2016; and (iii) for 2014, the cash awards earned for
performance in 2014 and paid in March 2015. For a detailed explanation of
cash awards for performance in 2016, see "Compensation Discussion and
Analysis — Compensation Elements — Annual Incentive Compensation"
beginning on page 19.
|
|
|
|
(4)
|
Please refer to the Other
Compensation Table below for details with respect to all other
compensation.
|
30
Table of Contents
Other Compensation
Table
2016
|
|
|
401(k)
|
|
|
|
Vehicle
|
|
|
|
|
|
|
|
Named Executive
|
|
Match
(1)
|
|
Dividends
(2)
|
|
Allowances
(3)
|
|
Insurance
(4)
|
|
Other
|
|
Total
|
|
Officer
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
James H. Roberts
|
|
$15,900
|
|
$83,264
|
|
$17,004
|
|
$15,928
|
|
-
|
|
$132,096
|
|
Laurel J. Krzeminski
|
|
$15,900
|
|
$5,486
|
|
$17,004
|
|
$13,857
|
|
-
|
|
$52,247
|
|
Michael F. Donnino
(5)
|
|
$14,250
|
|
$11,656
|
|
$17,004
|
|
$11,864
|
|
$6,029
|
|
$60,803
|
|
James D. Richards
|
|
$15,900
|
|
$7,280
|
|
$12,000
|
|
$15,747
|
|
-
|
|
$50,927
|
|
Martin P. Matheson
|
|
$15,900
|
|
$5,493
|
|
$720
|
|
$15,624
|
|
-
|
|
$37,737
|
|
(1)
|
The amounts in column (b) reflect
the company matching contribution, not to exceed 6% on compensation
deferred into the 401(k) Plan.
|
|
|
|
(2)
|
The amounts in column (c) reflect
Restricted Stock and ESOP dividends, and Restricted Stock dividend
equivalent units.
|
|
|
|
(3)
|
The amounts in column (d) reflect
the vehicle allowances provided to the Named Executive Officers. For a
detailed explanation, please refer to “Other Compensation” on page
31.
|
|
|
|
(4)
|
The amounts in column (e) reflect
the company expense for medical, dental, vision, life, short and long-term
disability insurance, Accidental Death & Dismemberment, Executive
Liability Insurance, and Employee Assistance Program.
|
|
|
|
(5)
|
The amount in column (f) includes
(i) $3,500 for income imputed to Mr. Donnino in connection with the
attendance of his guests at an event in which he received an industry
award and (ii) $2,529 for a tax reimbursement for the imputed
income.
|
31
Table of Contents
Grants of Plan-Based Awards
Table
2016
The following table provides additional
information about incentive plan awards and other equity awards granted to our
Named Executive Officers during the year ended December 31, 2016.
|
|
|
|
|
Estimated Future Payouts
under
Non-Equity Incentive Plan Awards
(1)
|
|
Estimated Future Payouts under
Equity
Incentive Plan Awards
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Fair Value
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Stock
|
|
of Stock
|
|
Named Executive
|
|
Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Units
|
|
Awards
(3)
|
|
Officer (a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
James H. Roberts
|
|
-
|
|
$279,000
|
|
$920,000
|
|
$2,500,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$1,333,333
|
|
$2,666,667
|
|
-
|
|
-
|
|
|
|
03/14/16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
15,461
(4)
|
|
$666,678
|
|
|
|
03/14/16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
26,828
(5)
|
|
$1,156,823
|
|
Laurel J. Krzeminski
|
|
-
|
|
$112,000
|
|
$356,250
|
|
$1,068,750
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$433,333
|
|
$866,667
|
|
-
|
|
-
|
|
|
|
03/14/16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
5,025
(4)
|
|
$216,678
|
|
|
|
03/14/16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
8,680
(5)
|
|
$374,282
|
|
Michael F. Donnino
|
|
-
|
|
$140,000
|
|
$356,250
|
|
$1,068,750
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$400,000
|
|
$800,000
|
|
-
|
|
-
|
|
|
|
03/14/16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
4,638
(4)
|
|
$199,991
|
|
|
|
03/14/16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
9,469
(5)
|
|
$408,303
|
|
James D. Richards
|
|
-
|
|
$109,000
|
|
$300,000
|
|
$900,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$300,000
|
|
$600,000
|
|
-
|
|
-
|
|
|
|
03/14/16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
3,479
(4)
|
|
$150,014
|
|
|
|
03/14/16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6,312
(5)
|
|
$272,173
|
|
Martin P. Matheson
|
|
-
|
|
$108,000
|
|
$300,000
|
|
$900,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$300,000
|
|
$600,000
|
|
-
|
|
-
|
|
|
|
03/14/16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
3,479
(4)
|
|
$150,014
|
|
(1)
|
Amounts in columns (c) through (e) reflect threshold,
target and maximum incentives, as applicable (subject to rounding), under
the 2016 AIP. Under the 2016 AIP, each Named
Executive Officer had the opportunity to earn up to 300% of their target
annual incentive compensation based on achievement of performance goals
(not to exceed a maximum award payout of $2,500,000). For a more detailed
discussion of annual incentive compensation and the payout actually
received by each Named Executive Officer under the 2016 AIP, please refer
to "Compensation Discussion and Analysis — Compensation Elements — Annual
Incentive Compensation" beginning on page 19 and "Compensation Discussion
and Analysis — Compensation Elements — Annual Incentive Compensation —
2016 Annual Incentive Plan Company and Group Performance Results and Bonus
Payouts" beginning on page 21.
|
|
|
|
|
(2)
|
Amounts in columns (f) through (h)
reflect the threshold, target and maximum award amounts applicable to the
performance based (TSR) component of our 2016 LTIP. Each of our Named
Executive Officers has the ability to earn from 0% to 200% of the TSR
component of the LTIP target opportunity. Any payouts under the LTIP are
made in the form of restricted stock units. Payouts on the TSR component
of the LTIP are made after the end of the year.
For more detailed discussion of the 2015 LTIP and payouts thereunder,
please refer to “Compensation Discussion and Analysis — Compensation
Elements — Long Term Incentive Compensation” beginning on page 23.
|
32
Table of Contents
|
(3)
|
Amounts in column
(j) reflect all restricted stock unit awards granted on March 14, 2016 the
grant date fair market value was calculated by multiplying the number of stock units awarded by the closing price
of our common stock of $43.12 on the date of the grant.
|
|
|
|
|
(4)
|
The restricted stock units granted
on March 14, 2016 reflect the service awards granted under the LTIP. The
number of restricted stock units granted for the service award was
calculated by dividing the service award by the closing price of our
common stock of $43.12 on the date of the grant. The restricted stock
units granted as service awards vest in three equal annual installments
beginning on March 14, 2016; unless retirement eligibility per the 2012
Equity Plan is met, in which case vesting is accelerated. The holders of
restricted stock units are entitled to receive dividends equivalent units
in lieu of cash dividends declared by the Board on the outstanding common
stock of the Company.
|
|
|
|
|
(5)
|
The restricted stock units granted
on March 14, 2016 reflect the performance awards granted under the LTIP.
The number of restricted stock units granted for the 2013 - 2015 Total
Shareholder Return performance award was calculated by dividing the
performance award by the average stock price over the first 30 days of
January 2013 of $35.19. The restricted stock units granted as performance
awards are fully vested on the date of grant. The holders of restricted
stock units are entitled to receive dividends equivalent units in lieu of
cash dividends declared by the Board on the outstanding common stock of
the Company.
|
Outstanding Equity Awards at Fiscal
Year-End Table
2016
The following table summarizes equity
awards made to the Named Executive Officers that were outstanding as of December
31, 2016.
|
|
Stock Awards
|
|
Named Executive Officer
(a)
|
Number of Shares or Units
of
Stock That Have Not Vested
(1)
(b)
|
|
Market Value of Shares or Units
of
Stock That Have Not Vested
(2)
(c)
|
|
James H. Roberts
|
32,670
(3)
|
|
$1,796,850
|
|
Laurel J. Krzeminski
|
10,593
(3)
|
|
$582,615
|
|
Michael F. Donnino
(4)
|
-
|
|
-
|
|
James D. Richards
|
7,955
(3)
|
|
$437,525
|
|
Martin P. Matheson
|
9,889
(3)
|
|
$543,895
|
|
(1)
|
Upon death or disability, all of
the equity awards of a Named Executive Officer would vest
immediately.
|
|
|
|
(2)
|
The amounts shown in column (c)
are based on the December 31, 2016 closing price of our common stock of
$55.00.
|
|
|
|
(3)
|
Vesting dates for each
outstanding Restricted Stock Unit (RSU) awards for the Named Executive
Officers are as follows:
|
|
|
|
Number of
Shares Underlying Vesting Awards
|
|
|
|
James H.
|
Laurel J.
|
James D.
|
Martin P.
|
|
Vesting
Date
|
Award Type
|
Roberts
|
Krzeminski
|
Richards
|
Matheson
|
|
2017
|
|
|
|
|
|
|
03/13/17
|
RSU
|
5,981
|
1,935
|
1,584
|
1,584
|
|
03/14/17
|
RSU
|
10,315
|
3,345
|
2,450
|
2,373
|
|
09/09/17
|
RSU
|
-
|
-
|
-
|
1,005
|
|
09/10/17
|
RSU
|
-
|
-
|
-
|
-
|
|
2018
|
|
|
|
|
|
|
03/13/18
|
RSU
|
5,982
|
1,935
|
1,583
|
1,583
|
|
03/14/18
|
RSU
|
5,196
|
1,689
|
1,169
|
1,169
|
|
09/09/18
|
RSU
|
-
|
-
|
-
|
1,006
|
|
2019
|
|
|
|
|
|
|
03/14/19
|
RSU
|
5,196
|
1,689
|
1,169
|
1,169
|
|
(4)
|
Pursuant to the terms of the Granite
Construction Incorporated 2012 Equity Plan, Mr. Donnino qualifies as
retirement eligible and his equity awards
vest
immediately.
|
33
Table of Contents
Stock Vested
Table
2016
The following table reflects the number of
shares our Named Executive Officers acquired upon the vesting of stock awards
during 2016 and the value realized before payment of any applicable withholding
tax and broker commissions.
|
|
Stock Awards
|
|
Named Executive Officer
(a)
|
Number of Shares
Acquired on
Vesting
(b)
|
|
Value Realized
Upon
Vesting
(1)
(c)
|
|
James H. Roberts
|
44,172
|
|
$1,995,189
|
|
Laurel J. Krzeminski
|
14,291
|
|
$645,524
|
|
Michael F. Donnino
(2)
|
26,234
|
|
$1,193,934
|
|
James D. Richards
|
11,291
|
|
$508,174
|
|
Martin P. Matheson
|
5,224
|
|
$231,562
|
|
(1)
|
The
amounts in column (c) are based on the fair market value of our common
stock on the applicable vesting date.
|
|
|
|
|
(2)
|
Pursuant to the terms of the Granite
Construction Incorporated 2012 Equity Plan, Mr. Donnino qualifies as
retirement eligible and his equity awards vest
immediately.
|
Nonqualified Deferred Compensation
Table
2016
The following table summarizes our Named
Executive Officers' compensation under our nonqualified deferred compensation
plan for the year ended December 31, 2016, which is also reflected in the
Summary Compensation Table on page 30.
|
Named Executive
Officer
(a)
|
|
Executive
Contribution
in
Last Fiscal
Year
(1)(2)
(b)
|
|
Registrant
Contributions
in
Last Fiscal Year
(c)
|
|
Aggregate
Earnings in
Last
Fiscal Year
(3)
(d)
|
|
Aggregate
Withdrawals/
Distributions
(e)
|
|
Aggregate
Balance at
Last
Fiscal Year End
(f)
|
|
James H. Roberts
|
|
$39,962
|
|
-
|
|
$80,720
|
|
-
|
|
$679,266
|
|
Laurel J. Krzeminski
|
|
$78,434
|
|
-
|
|
$21,124
|
|
-
|
|
$255,456
|
|
Michael F. Donnino
|
|
$326,629
|
|
-
|
|
$381,562
|
|
-
|
|
$3,251,843
|
|
James D. Richards
(4)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Martin P. Matheson
(4)
|
|
-
|
|
-
|
|
$5,692
|
|
-
|
|
$75,492
|
|
(1)
|
The Granite
Construction Key Management Deferred Compensation Plan II allows Named
Executive Officers to defer equity and non-equity
incentive compensation. Participants are required to make an
election each plan year with respect to the amount to be deferred, future
distribution date, and form of distribution. A distribution election is
irrevocable on the first day of each plan year. For a detailed discussion
of the Key Management Deferred Compensation Plan II, please refer to
“Compensation Discussion and Analysis — Non-Qualified Deferred
Compensation” on page 27.
|
|
|
|
|
(2)
|
The amounts in column (b) include $39,962 of Mr. Roberts’s
non-equity base salary plan, $78,434 of Ms. Krzeminski’s non-equity
incentive plan award, $237,500 of Mr. Donnino’s base salary and $89,129 of
Mr. Donnino’s non-equity incentive plan award.
|
|
|
|
|
(3)
|
The amounts in column (d) do not
include above market or preferential earnings (of which there were none)
and, accordingly, such amounts are not reported in the Summary
Compensation Table on page 30 as above market or preferential earnings.
|
|
|
|
|
(4)
|
Messrs. Richards and Matheson
elected to not participate in the Nonqualified Deferred Compensation Plan
in 2016.
|
34
Table of Contents
Potential Payments Upon
Change-in-Control
Except in the case of a change-in-control,
Granite is not obligated to pay severance or other enhanced benefits to any of
the Named Executive Officers in connection with a termination of their
employment. Upon death or disability, all of the equity awards of a Named
Executive Officer would vest immediately.
The following table sets forth an example
of the potential payments and benefits under Granite's compensation and benefit
plans and arrangements to which the Named Executive Officers would be entitled
upon termination of employment under certain circumstances within three years
following a change-in-control of Granite. The amounts set forth in the table are
based on the assumption that such termination event occurred on the last
business day of fiscal year 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
Section
|
|
|
|
|
|
Cash
|
|
|
|
|
|
Accelerated
|
|
|
|
280G
|
|
|
|
|
|
Severance
|
|
Insurance
|
|
Other
|
|
Equity
|
|
|
|
Safe Harbor
|
|
Adjusted
|
|
Named Executive
|
|
Payment
(1)
|
|
Benefits
(2)
|
|
Compensation
(3)
|
|
Awards
(4)
|
|
Total
|
|
Provision
(5)
|
|
Total
|
|
Officer (a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
James H. Roberts
|
|
$3,790,659
|
|
$48,232
|
|
$7,607
|
|
$1,796,850
|
|
$5,643,348
|
|
-
|
|
$5,643,348
|
|
Laurel J. Krzeminski
|
|
$1,959,561
|
|
$41,546
|
|
$7,607
|
|
$582,615
|
|
$2,591,329
|
|
-
|
|
$2,591,329
|
|
Michael F. Donnino
|
|
$1,776,468
|
|
$36,977
|
|
$7,607
|
|
-
|
|
$1,821,052
|
|
-
|
|
$1,821,052
|
|
James D. Richards
|
|
$513,754
|
|
$16,854
|
|
$6,450
|
|
$437,525
|
|
$974,583
|
|
-
|
|
$974,583
|
|
Martin P. Matheson
|
|
$566,895
|
|
$15,589
|
|
$7,424
|
|
$543,895
|
|
$1,133,803
|
|
-
|
|
$1,133,803
|
|
(1)
|
The
amounts in column (b) for Mr. Roberts, Ms. Krzeminski and Mr. Donnino
reflect a lump sum payment equal to (i) three times the annual average of the aggregate annual incentive bonuses earned
for the three fiscal years preceding the fiscal year of the
change-in-control plus (ii) three times the annual base salary rate in
effect immediately prior to the termination. The amounts in column (b) for
Mr. Richards and Mr. Matheson reflect a lump sum payment equal to one
times the annual average of the aggregate annual incentive bonuses earned
for the three fiscal years preceding the fiscal year of the
change-in-control plus (ii) one times the current annual base salary rate
in effect immediately prior to the termination.
|
|
|
|
|
(2)
|
The amounts in column (c) for Mr.
Roberts, Ms. Krzeminski and Mr. Donnino reflect a lump sum payment equal
to three times the average annual cost to Granite of the Named Executive
Officer's group insurance benefits, such as life, health and long-term
disability, for the three fiscal years ending before the date of
termination. The amounts in column (c) for Mr. Richards and Mr. Matheson
reflect a lump sum payment equal to one times the annual average cost to
Granite of his group insurance benefits.
|
|
|
|
|
(3)
|
The amounts in column (d) for Mr.
Roberts, Ms. Krzeminski and Mr. Donnino reflect a lump sum payment equal
to three times the annual average cash equivalent of contributions which
were made on behalf of the Named Executive Officer for the three fiscal
years ending before the date of termination to the 401(k) Plan and any
other retirement plan provided by Granite and in effect as of the date of
termination. The amounts in column (d) for Mr. Richards and Mr. Matheson
reflect a lump sum payment of one times the annual average cash
equivalents of such contributions. These amounts do not include additional
amounts that may be payable for reasonable professional outplacement
services for the Named Executive Officer to which the Named Executive
Officer is entitled under the plan until the earlier of (i) two years
following the date of termination and (ii) the date on which the Named
Executive Officer obtains other employment.
|
|
|
|
|
(4)
|
In the event of a change-in-control,
if the acquiring person does not assume or replace outstanding equity
awards, all non-exercisable, unvested or unpaid portions of the
outstanding equity awards would become immediately exercisable and fully
vested. If the Named Executive Officer's service is terminated under
certain circumstances within 12 months following a change-in-control, the
exercisability, vesting, and payment of the outstanding equity awards
would be accelerated effective immediately as of the date of termination.
The amounts in column (e) reflect the outstanding equity awards valued at
the December 30, 2016 closing price of our common stock of $55.00.
|
|
|
|
|
(5)
|
Payments under the Executive
Retention and Severance Plan are subject to reduction to the extent
necessary not to exceed the “safe harbor” amount under Section 4999 of the
Internal Revenue Code, but only if the reduction would increase the net
after-tax amount received by the participant.
|
35
Table of Contents
Stock Ownership
All non-employee directors are required to
own and maintain three times their Annual Board Cash Retainer from Granite in
Granite common stock within five years after joining the Board. As of December
31, 2016, all non-employee directors with 5 or more years of service to the
Board had achieved the stock ownership levels.
Cash and Equity Compensation Policy
Granite's non-employee directors receive
annual cash retainers and equity grants as set forth in the table below. Key
highlights of the director compensation program are as follows:
|
|
1.
|
Cash retainers are paid in
quarterly installments. No additional fees are paid for attendance at
meetings whether in person or telephonically;
|
|
|
|
|
|
2.
|
The Chairman of the Board's
retainer is inclusive of all Committee retainers; and
|
|
|
|
|
|
3.
|
Directors, other than the
Chairman of the Board, receive an annual grant of Restricted Stock Units
valued at $100,000 on the date of grant. The Chairman of the Board
receives an annual grant of Restricted Stock Units equal to $175,000 in
value on the date of grant. All Restricted Stock Units vest in full on the
first anniversary of the date of grant (typically May 20
th
of
each year).
|
|
Annual Board
Retainers
|
|
|
|
|
|
|
Member
|
$70,000
|
|
|
|
|
|
Chairman of the
Board
|
$175,000
|
|
|
|
|
|
|
|
|
|
|
|
Annual
Committee Retainers
|
|
|
|
|
|
|
Audit/Compliance
|
$10,000
|
|
|
|
|
|
Audit/Compliance Chair
|
$20,000
|
|
|
|
|
|
Nominating and Corporate Governance
|
$5,000
|
|
|
|
|
|
Nominating and Corporate Governance Chair
|
$15,000
|
|
|
|
|
|
Compensation
|
$5,000
|
|
|
|
|
|
Compensation Chair
|
$17,000
|
|
|
|
|
|
Executive
|
$5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Equity Grants
|
|
|
|
|
|
|
Member
|
$100,000
|
|
Restricted Stock Units
|
|
|
|
Chairman of the Board
|
$175,000
|
|
Restricted Stock Units
|
|
|
36
Table of Contents
Director Compensation Table
2016
The following table presents the
compensation provided by Granite to our directors for the year ended December
31, 2016.
|
|
|
Fees Earned
|
|
|
|
All Other
|
|
|
|
|
|
or Paid in Cash
(1)
|
|
Unit Award
(2)
|
|
Compensation
(3)
|
|
Total
|
|
Name
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
Claes G. Bjork
(4)
|
|
$95,000
|
|
$100,000
|
|
$9,726
|
|
$204,726
|
|
James W. Bradford, Jr.
(4)
|
|
$102,000
|
|
$100,000
|
|
$6,034
|
|
$208,034
|
|
Gary M. Cusumano
(4)(5)
|
|
$33,134
|
|
-
|
|
$353
|
|
$33,487
|
|
William G. Dorey
(4)
|
|
$79,962
|
|
$100,000
|
|
$3,786
|
|
$183,748
|
|
David H. Kelsey
(4)
|
|
$95,000
|
|
$100,000
|
|
$10,721
|
|
$205,721
|
|
Michael F. McNally
(4)
|
|
$80,021
|
|
$100,000
|
|
$892
|
|
$180,913
|
|
William H. Powell
(4)
|
|
$175,000
|
|
$175,000
|
|
$2,180
|
|
$352,180
|
|
Gaddi H.
Vasquez
(4)
|
|
$81,096
|
|
$100,000
|
|
$5,065
|
|
$186,161
|
|
(1)
|
The amounts in column (b) reflect
the annual cash retainer paid to non-employee directors for the year ended
December 31, 2016. In 2016 each non-
employee director was paid an annual retainer as a member of the
Board and additional retainers for service as a member of a Board
committee. The cash retainer was paid quarterly in equal payments; no
meeting fees were paid. Mr. McNally’s annual retainer and retainers for
service as a member of a Board committee were prorated to reflect his
appointment to the Board effective February 10, 2016. Messrs. Bradford,
Dorey, and Vasquez retainers for service as a member of the Board were
prorated due to the reconstitution of the committees effective February
11, 2016.
|
|
|
|
|
(2)
|
The amounts in column (c) reflect
the grant date fair market value of the 2016 Restricted Stock Unit awards.
The grant date fair value is determined in accordance with Financial
Accounting Standards Code Topic 718, without regard to potential
forfeitures. For additional information about the assumptions used in
these calculations, see Note 14 to the audited consolidated financial
statements of the Company included in the Company's Annual Report on Form
10-K for the year ended December 31, 2016. These awards have a one year
vesting schedule. On June 10, 2016, Messrs. Bjork, Bradford, Dorey,
Kelsey, McNally and Vasquez received an annual grant of 2,282 Restricted
Stock Units with a grant date fair market value of $43.83 per share. As
Chairman of the Board, Mr. Powell received a grant of 3,993 Restricted
Stock Units with a grant date fair market value of $43.83 per share. As of
December 31, 2016: Mr. Bjork had an outstanding balance of 5,815 options,
17,056 deferred units and 2,294 Restricted Stock Units; Mr. Bradford had
an outstanding balance of 3,163 options, 9,934 deferred units and 2,294
Restricted Stock Units; Mr. Dorey had an outstanding balance of 5,587
deferred units and 2,294 Restricted Stock Units; Mr. Kelsey had an
outstanding balance of 18,977 deferred units and 2,294 Restricted Stock
Units; Mr. McNally had an outstanding balance of 2,294 Restricted Stocks
Units; Mr. Powell had an outstanding balance of 4,015 Restricted Stock
Units; and Mr. Vasquez had an outstanding balance of 8,056 deferred units,
and 2,294 Restricted Stock Units.
|
|
|
|
|
(3)
|
The amounts in column (d) include
the cash value of dividend equivalents from deferred units in prior years
and restricted stock units.
|
|
|
|
|
(4)
|
The Granite Construction Key
Management Deferred Compensation Plan II allows non-employee directors to
defer receipt of their annual cash retainer and Restricted Stock Unit
awards into the Nonqualified Deferred Compensation Plan (in which case,
the Restricted Stock Units are referred to as "deferred units"). Granite
does not provide a matching contribution to non-employee director
deferrals. Participants are required to make an election each plan year
with respect to the amount to be deferred, future payment date and form of
distribution. A distribution election is irrevocable on the first day of
each plan year. Mr. Bjork deferred 100% of both his annual cash retainer
and Restricted Stock Unit awards into the Key Management Deferred
Compensation Plan II. Mr. Bradford deferred 100% of his Restricted Stock
Unit award into the Key Management Deferred Compensation Plan II. Mr.
Dorey deferred 100% of both his annual cash retainer and Restricted Stock
Unit awards into the Key Management Deferred Compensation Plan II. Mr.
Kelsey deferred 100% of his Restricted Stock Unit award into the Key
Management Deferred Compensation Plan II. Mr. Vasquez deferred 65% of his
annual cash retainer award and 100% of his Restricted Stock Unit award
into the Key Management Deferred Compensation Plan II. Messrs. Bradford,
Cusumano, Kelsey, McNally and Powell made no deferrals of their annual
cash retainers into the Key Management Deferred Compensation Plan II.
Messrs. McNally and Powell made no deferrals of their Restricted Stock
Units into the Key Management Deferred Compensation Plan
II.
|
|
|
|
|
(5)
|
Mr. Cusumano retired from the Board
effective June 9, 2016. Board fees were prorated according to his
retirement date and all outstanding stock was distributed on May 20,
2016.
|
37
Table of Contents
|
STOCK OWNERSHIP OF BENEFICIAL
OWNERS AND CERTAIN MANAGEMENT
|
The following table provides information
regarding the ownership of our common stock as of March 1, 2017 by each person
known to us to beneficially own 5% or more of our common stock, each of our
directors and nominees, each of our Named Executive Officers who were employed
by Granite on March 1, 2017, and all of our current directors and executive
officers as a group.
|
|
|
Amount and Nature Beneficial
|
|
Percentage
(%)
|
|
Name
|
|
Ownership
(1)
|
|
of Common
Stock Outstanding
(2)
|
|
BlackRock, Inc
(3)
|
|
3,876,777
|
|
9.8%
|
|
55 East 52nd
Street
|
|
|
|
|
|
New York, NY
10055
|
|
|
|
|
|
Dimensional Fund Advisors LP
(4)
|
|
2,462,475
|
|
6.2%
|
|
Building One
|
|
|
|
|
|
6300 Bee Cave
Road
|
|
|
|
|
|
Austin, TX 78746
|
|
|
|
|
|
The Vanguard Group
(5)
|
|
3,093,417
|
|
7.9%
|
|
100 Vanguard
Blvd.
|
|
|
|
|
|
Malvern, PA 19355
|
|
|
|
|
|
Claes G. Bjork
(6)
|
|
34,517
|
|
*
|
|
James W. Bradford, Jr.
(7)
|
|
17,588
|
|
*
|
|
David C. Darnell
|
|
0
|
|
*
|
|
William G. Dorey
(8)
|
|
27,719
|
|
*
|
|
Patricia D. Galloway
|
|
0
|
|
*
|
|
David H. Kelsey
|
|
0
|
|
*
|
|
Celeste B. Mastin
|
|
0
|
|
*
|
|
Michael F. McNally
|
|
893
|
|
*
|
|
William H. Powell
|
|
45,308
|
|
*
|
|
Gaddi H. Vasquez
(9)
|
|
2,140
|
|
*
|
|
Michael F. Donnino
(10)
|
|
55,643
|
|
*
|
|
Laurel J. Krzeminski
(11)
|
|
65,214
|
|
*
|
|
Martin P. Matheson
(12)
|
|
22,105
|
|
*
|
|
Christopher S. Miller
(13)
|
|
7,633
|
|
*
|
|
James D. Richards
(14)
|
|
35,454
|
|
*
|
|
James H. Roberts
(15)
|
|
197,996
|
|
*
|
|
All
Executive Officers and Directors As a Group
|
|
|
|
|
|
(17 Persons)
(6-15)
(16)
|
|
513,655
|
|
1.30%
|
|
*
|
Less than
1%
|
|
|
|
|
(1)
|
Except as indicated in the
footnotes to this table, the persons named in the table have sole voting
and investment power with respect to all shares of common stock shown as
beneficially owned by them, subject to community property laws where
applicable. Such shares do not include the individuals’ NQDC shares, if
any.
|
|
|
|
|
(2)
|
Calculated on the basis of
39,626,583 shares of common stock issued and outstanding as of March 1,
2017. For all executive officers and directors as a group the percentage
is calculated on the basis of the number of shares of common stock issued
and outstanding as of March 1, 2017 and includes 8,978 shares of common
stock underlying options exercisable within 60 days after March 1, 2017
and 70,702 shares of common stock issuable upon the vesting of restricted
stock units within 60 days after March 1, 2017 that are deemed outstanding
in accordance with the rules of the Securities and Exchange Commission.
|
38
Table of Contents
|
(3)
|
Based upon a Schedule13G/A filed by
BlackRock, Inc. (“BlackRock”) with the SEC (i) the number of shares
beneficially owned is as of December 31, 2016, and (ii) BlackRock has sole
voting power with respect to 3,789,858 shares and sole dispositive power
with respect to all 3,876,777 shares.
|
|
|
|
|
(4)
|
Based upon a Schedule 13G filed by
Dimensional Fund Advisors LP (“Dimensional”) with the SEC (i) the number
of shares beneficially owned is as of December 31, 2016, and (ii)
Dimensional has sole voting power with respect to 2,408,616 shares and
shared dispositive power with respect to all 2,462,475 shares.
|
|
|
|
|
(5)
|
Based on a Schedule 13G/A filed by
The Vanguard Group (“Vanguard”) with the SEC (i) the number of shares
beneficially owned is as of December 31, 2016, and (ii) Vanguard has sole
voting power with respect to 71,297 shares, shared voting power with
respect to 5,580 shares, sole dispositive power with respect to 3,018,500
shares and shared dispositive power with respect to 74,917.
|
|
|
|
|
(6)
|
Includes 5,815 shares of common
stock which Mr. Bjork has the right to acquire within 60 days after March
1, 2017 as a result of vested and exercisable options.
|
|
|
|
|
(7)
|
Includes 3,163 shares of common
stock which Mr. Bradford has the right to acquire within 60 days after
March 1, 2017 as a result of vested and exercisable options and 14,425
shares of common stock that Mr. Bradford holds jointly with his wife.
|
|
|
|
|
(8)
|
Includes 11,897 shares of common
stock that Mr. Dorey holds in trust for the benefit of his family as to
which shares Mr. Dorey and his wife share voting and investment power.
|
|
|
|
|
(9)
|
The 2,120 shares of common stock are
held in trust for the benefit of Mr. Vasquez and his wife as to which Mr.
Vasquez and his wife share voting and investment power.
|
|
|
|
|
(10)
|
Includes 18,467 shares of common
stock issuable to Mr. Donnino upon the vesting of restricted stock units
within 60 days after March 1, 2017.
|
|
|
|
|
(11)
|
Includes 20,056 shares of common
stock issuable to Ms. Krzeminski upon the vesting of restricted stock
units within 60 days after March 1, 2017.
|
|
|
|
|
(12)
|
Includes 81 shares of common stock
owned by the ESOP but allocated to Mr. Matheson’s account as of March 1,
2017 and 14,702 shares of common stock issuable upon the vesting of
restricted stock units within 60 days after March 1, 2017. Subject to
continued employment by Granite, Mr. Matheson will become eligible to make
withdrawals of his ESOP shares when he attains age 55.
|
|
|
|
|
(13)
|
Includes 4,375 shares of common
stock issuable to Mr. Miller upon the vesting of restricted stock units
within 60 days after March 1, 2017 and 3,258 shares of common stock held
in trust as to which shares Mr. Miller and his wife share voting and
investment power.
|
|
|
|
|
(14)
|
Includes 6,116 shares of Common
Stock owned by the ESOP but allocated to Mr. Richards account as of March
1, 2017 and 15,450 shares of common stock issuable upon the vesting of
restricted stock units within 60 days after March 1, 2017.
|
|
|
|
|
(15)
|
Includes 127,584 shares of common
stock owned by the ESOP but allocated to Mr. Roberts’ account as of March
1, 2017, 61,968 shares of common stock issuable upon the vesting of
restricted stock units within 60 days after March 1, 2017 and 8,426 shares
of common stock held in trust for the benefit of Mr. Roberts’ family as to
which shares Mr. Roberts and his wife share voting and investment power.
As a result of having attained age 55 and continuing to be employed by
Granite, Mr. Roberts is currently eligible to make withdrawals of his ESOP
shares.
|
|
|
|
|
(16)
|
Also includes 1,445 shares of common
stock issuable to other executive officer not listed above upon the
vesting of restricted stock units within 60 days after March 1,
2017.
|
|
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
|
Section 16(a) of the Exchange Act requires
our executive officers, directors and any persons who beneficially own more than
10% of our common stock to report ownership of, and transactions in, Granite
stock with the SEC. Our executive officers, directors and any persons who
beneficially own more than 10% of our common stock are required by SEC
regulation to furnish to Granite copies of all Section 16(a) reports they file.
Based solely on our review of these
reports and written representations from all of our executive officers and
directors that no other reports were required with respect to their beneficial
ownership of our common stock during fiscal year 2016, we believe that all
reporting requirements applicable to our executive officers, directors and any
persons who beneficially own more than 10% of our common stock pursuant to
Section 16(a) of the Exchange Act were satisfied.
39
Table of Contents
|
EQUITY COMPENSATION PLAN
INFORMATION
|
The following table contains information
as of December 31, 2016 regarding stock authorized for issuance under the 2012
Equity Incentive Plan:
|
|
|
|
|
|
Number
of
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
remaining available
|
|
|
Number of
|
|
|
|
for future issuance
|
|
|
Securities to be
|
|
|
|
under equity
|
|
|
issued upon exercise
|
|
Weighted average
|
|
compensation plans
|
|
|
of outstanding
|
|
exercise price of
|
|
(excluding stock
|
|
|
options, warrants
|
|
outstanding options,
|
|
reflected in column
|
|
|
and rights
|
|
warrants and rights
|
|
(a))
|
|
Plan
Category
|
(a)
(1)
|
|
(b)
(2)
|
|
(c)
|
|
Equity Compensation Plans Approved by Shareholders
|
688,990
|
|
$51.28
|
|
1,140,446
|
|
Equity Compensation Plans
Not Approved by Shareholders
|
-
|
|
-
|
|
-
|
|
Total
|
688,990
|
|
$51.28
|
|
1,140,446
|
|
(1)
|
Reflects options to purchase
8,978 shares of common stock and Restricted Stock Units covering 680,012
shares of common stock.
|
|
|
|
|
(2)
|
Reflects the exercise price per
share of common stock purchasable upon the exercise of stock options
only.
|
|
TRANSACTIONS WITH RELATED
PERSONS
|
Granite's legal staff is primarily
responsible for the development and implementation of processes and controls to
obtain information from the directors and executive officers with respect to
related person transactions (transactions involving an executive officer,
director, director nominee or greater than 5% beneficial owner of Granite common
stock or an immediate family member of, or anyone (other than a tenant or
employee) residing in the home of, an executive officer, director, director
nominee or greater than 5% beneficial owner of Granite common stock). They also
determine, based on the facts and circumstances, whether a related person has a
direct or indirect interest in the transaction. In addition, the Board of
Directors has adopted a written policy and written procedures for review and
approval or ratification of related party transactions involving Granite. The
policy requires the Audit/Compliance Committee's review and approval or
ratification of any related party transaction (as defined in the policy) in
which Granite is a participant. This includes, among other things, any related
party transaction that would be required to be disclosed under the rules and
regulations of the SEC.
Under the policy, the Audit/Compliance
Committee reviews the material facts of all related party transactions that
require the Audit/Compliance Committee's approval and either approves or
disapproves of the entry into the related party transaction. If advance
Audit/Compliance Committee approval of a related party transaction is not
feasible, the transaction may only be entered into subject to the
Audit/Compliance Committee's later approval. Thereafter, the Audit/Compliance
Committee will consider the transaction, and, if the Audit/Compliance Committee
determines it to be appropriate, ratify it at the next regularly scheduled
meeting of the Audit/Compliance Committee. In determining whether to approve or
ratify a related party transaction, the Audit/Compliance Committee takes into
account, among other factors it deems appropriate, whether the related party
transaction is on terms no less favorable than terms generally available to an
unaffiliated third party under the same or similar circumstances and the extent
of the related person's interest in the transaction.
40
Table of Contents
The Audit/Compliance Committee has
determined that the following transactions shall be deemed to be pre-approved:
(i) employment of an executive officer if (a) the executive officer's
compensation is required to be reported in Granite's proxy statement or (b) the
executive officer is not an immediate family member of another executive officer
or director of Granite, the executive officer's compensation would be reported
in Granite's proxy statement if the executive officer were a "named executive
officer" and the Compensation Committee approved (or recommended that the Board
approve) such compensation; (ii) compensation to a director required to be
disclosed in Granite's proxy statement; (iii) any transaction with another
company at which the related person's only relationship is as an employee (other
than an executive officer), director or beneficial owner of less than 10% of
that company's shares, if the aggregate amount involved does not exceed the
greater of $1,000,000 or 2% of that company's annual revenues; (iv) any
charitable contribution, grant or endowment by Granite to a charitable
organization, foundation or university at which a related person's only
relationship is as an employee (other than an executive officer) or a director,
if the aggregate amount involved does not exceed the lesser of $100,000 or 2% of
the charitable organization's total annual receipts; (v) any transaction where
the related person's interest arises solely from the ownership of Granite common
stock and all holders of Granite common stock receive the same benefit on a pro
rata basis; and (vi) any transaction with a related person involving services as
a bank depositary of funds, transfer agent, registrar or trustee under a trust
indenture or similar services.
In addition, the Board has delegated to
the Chair of the Audit/Compliance Committee the authority to pre-approve or
ratify (as applicable) any related person transaction in which the aggregate
amount involved is expected to be less than $100,000.
No director who has an interest in the
transaction under consideration may participate in the approval process. All
related party transactions approved by the Audit/Compliance Committee must be
disclosed to the full Board of Directors.
|
REPORT OF THE
AUDIT/COMPLIANCE COMMITTEE
|
The Audit/Compliance Committee is
appointed by the Board of Directors and reports to the Board at each meeting.
Its purpose is to (a) assist the Board in its oversight of (1) Granite's
accounting and financial reporting principles and policies, and internal and
disclosure controls and procedures, including the internal audit function, (2)
Granite's system of internal control over financial reporting as required by
Section 404 of the Sarbanes-Oxley Act of 2002, (3) the integrity of Granite's
financial statements, (4) the qualifications and independence of Granite's
independent registered public accounting firm, (5) Granite's compliance with
legal and regulatory requirements, and (6) Granite's Corporate Compliance
Program and Code of Conduct; and (b) serve as the Qualified Legal Compliance
Committee of the Board of Directors as required. The Audit/Compliance Committee
is solely responsible for selecting, evaluating, setting the compensation of,
and, where deemed appropriate, replacing the independent registered public
accounting firm.
Management has the primary responsibility
for the financial statements and the reporting process, including the systems of
internal controls and the effectiveness of the internal control over financial
reporting. In fulfilling its oversight responsibilities, the Audit/Compliance
Committee reviewed and discussed with management the audited financial
statements in the Annual Report on Form 10-K for fiscal year ended December 31,
2016, including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The Audit/Compliance Committee also
oversees our Ethics and Compliance Program, participates in the annual
evaluation of our Corporate Compliance Officer and the Director of Internal
Audit, and provides a detailed Annual Report to the Board on the progress of the
program and plans for future activities.
The Director of Internal Audit reports
directly to the Chairman of the Audit/Compliance Committee and has direct access
and meets regularly with the Audit/Compliance Committee to discuss the results
of internal audits and the quality of internal controls. The Corporate
Compliance Officer also reports directly to the Audit/Compliance Committee.
The Audit/Compliance Committee reviewed
and discussed with the independent registered public accounting firm, who is
responsible for expressing an opinion on the conformity of Granite's audited
financial statements with generally accepted accounting principles, its
judgments as to the quality of Granite's accounting principles, the clarity of
disclosures in the financial statements and such other matters as are required
to be discussed with the Committee under generally accepted auditing standards,
including Auditing Standards No. 1301, as amended (AICPA,
Professional Standards,
Vol. 1, AU Section 380, as adopted by the Public Company Accounting
Oversight Board in Rule 3200T). In addition, the Audit/Compliance Committee has
discussed with the independent registered public accounting firm the auditor's
independence from Granite and its management, and the matters in the written
disclosures and the letter received by the Audit/Compliance Committee from the
independent registered public accounting firm required by the Public Company
Accounting Oversight Board Rule 3526.
41
Table of Contents
The Audit/Compliance Committee discussed
with the independent registered public accounting firm the overall scope and
plans for their audit. The Audit/Compliance Committee meets with the independent
registered public accounting firm, with and without management present, to
discuss the results of their examination, their evaluation of Granite's internal
controls, including internal control over financial reporting, and the overall
quality of Granite's financial reporting. In addition, the Audit/Compliance
Committee reviewed with management and the independent registered public
accounting firm drafts of Granite's quarterly and annual financial statements
and press releases prior to the public release of the quarterly earnings. In
addition to the quarterly review, the Audit/Compliance Committee met with the
Chief Executive Officer and the Chief Financial Officer to discuss the process
adopted by management to enable them to sign the certifications that are
required to accompany reports filed with the SEC.
Based on the review and discussions
referred to above, the Audit/Compliance Committee recommended to Granite's Board
of Directors that Granite's audited financial statements be included in
Granite's Annual Report on Form 10-K for the fiscal year ended December 31,
2016.
|
Members of the
Audit/Compliance Committee:
|
|
|
David H. Kelsey, Chair
|
Patricia D. Galloway
|
|
|
James W. Bradford, Jr.
|
Michael F. McNally
|
|
|
David C. Darnell
|
|
This Report of the Audit/Compliance
Committee does not constitute soliciting material and shall not be deemed filed
or incorporated by reference into any other filing made by us under the
Securities Act of 1933, as amended, or the Exchange Act, except to the extent
that we specifically incorporate this Report of the Audit/Compliance Committee
by reference therein.
|
INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS
|
Principal Accountant Fees and Services
Aggregate fees for professional services
rendered for us by PricewaterhouseCoopers LLP for the years ended December 31,
2016 and December 31, 2015 were:
|
|
2016
|
2015
|
|
Audit Fees
(1)
|
$2,880,000
|
$3,116,000
|
|
Audit-Related Fees
(2)
|
$80,333
|
$53,000
|
|
All Other Fees
(3)
|
$7,100
|
$6,800
|
|
Total
|
$2,967,433
|
$3,175,800
|
|
(1)
|
Audit Fees paid in 2015 and 2016
were for professional services rendered for the audits of Granite's
consolidated financial statements, including audits of internal control
over financial reporting, audits of subsidiary financial statements,
quarterly financial reviews and audit related expenses.
|
|
|
|
|
(2)
|
Audit-Related Fees paid in 2015 and
2016 were for pre-qualifications and other professional services support.
Audit-Related Fees billed for 2016 included professional services rendered
in connection with the adoption of the new revenue recognition standard
which is scheduled to be adopted by the Company in fiscal 2018.
|
|
|
|
|
(3)
|
All Other Fees include software
licenses paid in 2015 and 2016.
|
Audit/Compliance Committee Pre-Approval
Policies and Procedures
The Audit/Compliance Committee's policy is
to pre-approve all audit and permissible non-audit services provided by the
independent registered public accounting firm. During 2016, no services were
provided to us by PricewaterhouseCoopers LLP other than in accordance with the
pre-approval policies and procedures.
Based on its review of the non-audit
services provided by PricewaterhouseCoopers LLP, the Audit/Compliance Committee
believes that PricewaterhouseCoopers LLP's provision of such non-audit services
is compatible with maintaining their independence.
42
Table of Contents
|
PROPOSAL 2: ADVISORY VOTE ON
EXECUTIVE COMPENSATION
|
The Board of Directors is asking
shareholders to approve an annual advisory resolution on executive compensation.
The Board of Directors is providing such vote pursuant to Section 14A of the
Exchange Act. The advisory vote is a non-binding vote on the compensation of our
Named Executive Officers. The vote is not intended to address any specific item
of compensation, but rather the overall compensation of our Named Executive
Officers and the philosophy, policies and practices described in this proxy
statement. We received a favorable vote on a similar resolution at our 2016
Annual Meeting of Shareholders, with approximately 98% of our shareholders
approving the resolution. The text of the resolution to be voted on at the
annual meeting is as follows:
R
ESOLVED
,
that the shareholders of Granite Construction Incorporated approve, on
an advisory basis, the compensation of the Company's Named Executive Officers as
disclosed in the proxy statement for the Company's 2017 Annual Meeting of
Shareholders pursuant to the compensation disclosure rules of the Securities
Exchange Act of 1934, as amended (which disclosure includes the Compensation
Discussion and Analysis section, the Summary Compensation Table for 2016 and the
related compensation tables and narrative disclosure within the Executive and
Director Compensation and Other Matters section of the proxy statement).
The Company urges you to read the
disclosure under "Compensation Discussion and Analysis," which begins on page 16
and discusses how our compensation policies and procedures implement our
pay-for-performance compensation philosophy. You should also read the Summary
Compensation Table and other related compensation tables and narrative
disclosure which provide additional details about the compensation of each
individual who served as our Chief Executive Officer, our Chief Financial
Officer, our three other most highly-compensated executive officers for fiscal
2016 who were serving as such at December 31, 2016. We have designed our
executive compensation structure to attract, motivate and retain executives with
the skills required to formulate and implement the Company's strategic
objectives and create shareholder value. We believe that our executive
compensation program is reasonable, competitive and strongly focused on pay for
performance principles, and provides an appropriate balance between risk and
incentives. In particular, key elements of our executive compensation program
are:
|
●
|
Market competitive base salaries,
with the 50th percentile of comparable positions in the market as the
starting point;
|
|
●
|
Actual pay levels reflecting market
data, individual experience, tenure and ability to impact business and
financial results;
|
|
●
|
Short-term and long-term goals
aligned with the best interests of shareholders, with cash and stock-based
incentives earned upon the attainment of pre-established financial and
non-financial goals;
|
|
●
|
A comprehensive benefits program
which is available to all salaried employees and includes: medical,
dental, vision, life, accidental death and dismemberment insurance,
short-term and long-term disability insurance, paid vacation and holiday
pay; and
|
|
●
|
Eligibility, along with other key
management employees, to participate in our Non-Qualified Deferred
Compensation Program and a program offering periodic medical examinations.
|
The vote regarding the compensation of the
Named Executive Officers described above, referred to as a "say-on-pay advisory
vote," is advisory, and is therefore not binding on the Company, the
Compensation Committee or the Board of Directors. Although non-binding, the
Compensation Committee and the Board of Directors value the opinions that
shareholders express in their votes and will review the voting results and take
them into consideration when making future decisions regarding our executive
compensation programs as they deem appropriate.
|
BOARD OF DIRECTORS RECOMMENDATION
|
|
The
Board of Directors unanimously recommends a vote "FOR" the approval of the
compensation of the Named Executive Officers as disclosed in this proxy
statement and as described above pursuant to the compensation disclosure
rules of the Exchange Act.
|
43
Table of Contents
|
PROPOSAL 3: ADVISORY VOTE ON
FREQUENCY OF THE SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION
|
In accordance with Section 14A of the
Exchange Act, the Board of Directors is asking shareholders to approve an
advisory resolution on the frequency with which the advisory vote on executive
compensation set forth above, referred to as the "say-on-pay advisory vote,"
will be held.
The advisory vote on the frequency of the
say-on-pay advisory vote is a non-binding vote as to how often the say-on-pay
advisory vote should occur: 1) Every One Year, 2) Every Two Years or 3) Every
Three Years. You may either vote for one of these alternative frequencies or, if
you desire, abstain from voting on this matter. The text of the resolution to be
voted upon is as follows:
RESOLVED, that the shareholders of Granite
Construction Incorporated approve, on an advisory basis, having the shareholder
vote on the compensation of the Company's named executive officers listed in the
annual proxy statement occur with the frequency (i.e., every one year, every two
years or every three years) for which the highest number of votes are cast at
the Company's 2017 annual meeting of shareholders.
After considering the benefits and
consequences of each option for the frequency of the say-on-pay advisory vote,
the Board of Directors has determined that an annual advisory vote on executive
compensation is the most appropriate alternative for the Company. Therefore, the
Board recommends that you vote for having the say-on-pay advisory vote occur
Every One Year.
The Board believes that an annual
say-on-pay advisory vote provides the highest level of accountability and
communication. An annual vote will allow shareholders to provide the Company
with direct input on the executive compensation information presented in the
proxy statement each year. Additionally, an annual advisory vote is consistent
with the Company's policy of engaging in discussions with shareholders on
corporate governance and compensation matters. We understand that shareholders
may have different views as to what the most desirable frequency is, and we look
forward to hearing from shareholders on this matter.
The option of "Every One Year," "Every Two
Years" or "Every Three Years" that receives the highest number of votes cast by
shareholders will be deemed to be the frequency for the say-on-pay advisory vote
that has been selected by shareholders. However, because this vote is advisory
and not binding on the Board of Directors or the Company in any way, the Board
may decide that it is in the best interests of the shareholders and the Company
to hold the say-on-pay advisory vote more or less frequently than the option
approved by shareholders.
|
BOARD OF DIRECTORS RECOMMENDATION
|
|
The
Board of Directors unanimously recommends a vote for the option of "EVERY
ONE YEAR" as the frequency with which shareholders are provided an
advisory vote on executive compensation.
|
44
Table of Contents
|
PROPOSAL 4: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
|
The Audit/Compliance Committee of the
Board of Directors has appointed PricewaterhouseCoopers LLP to serve as
Granite's independent registered public accounting firm to perform the audit of
our financial statements for the fiscal year ending December 31, 2017.
PricewaterhouseCoopers LLP and its predecessor, Coopers & Lybrand, have been
our auditors since 1982.
A representative of PricewaterhouseCoopers
LLP will be present at the annual meeting. He or she will be given the
opportunity to make a statement if he or she desires and will be available to
respond to appropriate shareholder questions.
Although ratification is not required by
Granite's bylaws or otherwise, the Board is submitting the selection of PricewaterhouseCoopers LLP to our
shareholders for ratification as a matter of good corporate practice. If
shareholders do not ratify the appointment of PricewaterhouseCoopers LLP as
Granite's independent registered public accounting firm, the Audit/Compliance
Committee will reconsider the appointment. Even if the selection is ratified,
the Audit/Compliance Committee, in its discretion, may select a different
independent registered public accounting firm at any time during the year if it
determines that such a change would be in the best interest of Granite and our
shareholders.
|
BOARD OF DIRECTORS RECOMMENDATION
|
|
The
Board of Directors unanimously recommends a vote "FOR" the ratification of
the appointment by the Audit/Compliance Committee of
PricewaterhouseCoopers LLP as Granite's independent registered public
accounting firm for the fiscal year ending December 31,
2017.
|
|
SHAREHOLDER PROPOSALS TO BE PRESENTED AT THE 2018 ANNUAL MEETING OF
SHAREHOLDERS
|
Under Granite's bylaws, director
nominations and proposals for other business to be presented at the annual
shareholder meeting by a shareholder may be made only if that shareholder is
entitled to vote at the meeting, timely gave the required notice, and was a
shareholder of record at the time when he or she gave the required notice. The
required notice must be in writing, must contain the information specified in
our bylaws, and must be received at our principal executive offices, addressed
to the Corporate Secretary, not less than 120 days prior to the first
anniversary of the date the proxy statement for the preceding year's annual
meeting of shareholders was released to shareholders. If no meeting was held in
the previous year, the date of the annual meeting is changed by more than 30
calendar days from the previous year, or in the event of a special meeting, to
be on time, the notice must be delivered by the close of business on the tenth
day following the day on which notice of the date of the meeting was mailed or
public announcement of the date of the meeting was made.
Separate from the requirements in our
bylaws, you may submit proposals on matters appropriate for shareholder action
at our annual meeting of shareholders in accordance with Rule 14a-8 promulgated
under the Exchange Act ("Rule 14a-8"). Rule 14a-8 entitles a shareholder to
require us to include certain shareholder proposals in Granite's proxy materials
if the shareholder meets certain eligibility and timing requirements set forth
in Rule 14a-8.
Pursuant to Granite's bylaws and Rule
14a-8, to be considered for inclusion in Granite's proxy statement or otherwise
presented at our 2018 annual meeting of shareholders, a shareholder nomination
or proposal must be received by our Secretary at Granite's principal executive
offices on or before Tuesday, December 26, 2017.
45
Table of Contents
As permitted by the Exchange Act, only one
copy of the Notice of Internet Availability of Proxy Materials or proxy
materials is being delivered to shareholders residing at the same address,
unless any shareholder has notified us of its desire to receive multiple copies
of the Notice of Internet Availability of Proxy Materials or proxy materials, as
applicable. This is known as householding. We will promptly deliver, upon oral
or written request, a separate copy of the Notice of Internet Availability of
Proxy Materials or the proxy materials, as applicable, to any shareholder
residing at a shared address to which only one copy was mailed. Requests for
additional copies of the Notice of Internet Availability of Proxy Materials or
proxy materials, or requests to receive multiple or single copies of the Notice
of Internet Availability of Proxy Materials or proxy materials at a shared
address in the future, should be directed to: Granite Construction Incorporated,
585 West Beach Street, Watsonville, California 95076, Attention: Investor
Relations Department, Telephone: 831.724.1011.
Copies of our Annual Report on Form
10-K for the fiscal year ended December 31, 2016 (excluding exhibits) filed with
the SEC are available, without charge, upon written request to Granite
Construction Incorporated, 585 West Beach Street, Watsonville, California 95076,
Attention: Investor Relations Department.
Exhibits to the Annual Report on Form 10-K will be furnished upon payment
of a fee of $0.25 per page to cover our expenses in furnishing the exhibits.
As of the date of this proxy statement,
the only matters that management intends to present or knows that others will
present at the meeting have been included in this proxy statement. If any other
matters are properly presented at the meeting, or any adjournment, your shares
will be voted in the discretion of the persons named on your proxy card.
Dated: April 25, 2017
|
|
|
|
Richard A. Watts
Senior Vice President, General Counsel and Secretary
|
46
Table of
Contents
Granite
Construction Incorporated
585 West Beach Street
Watsonville, CA
95076
ATTN: Betty Kwong
VOTE BY INTERNET -
www.proxyvote.com
Use the Internet to
transmit your voting instructions and for electronic delivery of information up
until 11:59 PM Eastern Time on June 7, 2017 (until 12:00 PM (noon) EDT on June
6, 2017 if you are a 401(k) Participant). Have your proxy card in hand when you
access the web site and follow the instructions to obtain your records and to
create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company
in mailing proxy materials, you can consent to receiving all future proxy
statements, proxy cards and annual reports electronically via e-mail or the
Internet. To sign up for electronic delivery, please follow the instructions
above to vote using the Internet and, when prompted, indicate that you agree to
receive or access proxy materials electronically in future
years.
VOTE BY PHONE -
1-800-690-6903
Use any touch-tone
telephone to transmit your voting instructions up until 11:59 PM Eastern Time on
June 7, 2017 (until 12:00 PM (noon) EDT on June 6, 2017 if you are a 401(k)
Participant). Have your proxy card in hand when you call and then follow the
instructions.
VOTE BY
MAIL
Mark, sign and date your proxy card
and return it in the postage-paid envelope we have provided or return it to Vote
Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717.
|
TO VOTE, MARK
BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|
|
|
KEEP THIS PORTION FOR YOUR
RECORDS
|
|
|
DETACH AND
RETURN THIS PORTION ONLY
|
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED.
|
|
The Board of Directors recommends you vote FOR the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Election of
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominees
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
1a.
|
James H.
Roberts
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
1b.
|
Gaddi H.
Vasquez
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
1c.
|
David C.
Darnell
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
1d.
|
Celeste B. Mastin
|
|
☐
|
|
☐
|
|
☐
|
|
The Board of Directors recommends you
vote FOR proposals 1e and 2:
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
1e.
|
To ratify
the directorship of Patricia D. Galloway, appointed by the Board on
February 8, 2017.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
2.
|
Advisory
vote to approve executive compensation of the named executive
officers.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
Yes
|
|
No
|
|
|
|
|
|
|
|
|
|
|
|
|
Please indicate if you plan to attend this meeting
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
Please sign exactly as your name(s)
appear(s) hereon. When signing as attorney, executor, administrator, or
other fiduciary, please give full title as such. Joint owners should each
sign personally. All holders must sign. If a corporation or partnership,
please sign in full corporate or partnership name, by authorized
officer.
|
|
|
|
|
|
|
|
|
|
|
The Board of Directors recommends you vote 1 YEAR on the following
proposal:
|
|
1 year
|
|
2 years
|
|
3 Years
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
To
recommend, by non-binding vote, the frequency of executive compensation
votes.
|
|
☐
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
The Board of Directors recommends you vote FOR the following
proposal:
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
To
ratify the appointment by the Audit/Compliance Committee of
PricewaterhouseCoopers LLP as Granite's independent registered public
accounting firm for the fiscal year ending December 31, 2017.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
Signature
[PLEASE SIGN WITHIN BOX]
|
|
Date
|
|
Signature (Joint
Owners)
|
|
Date
|
Table of
Contents
|
Important Notice
Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting &
Proxy Statement and, Annual Report (which includes a copy of the Form
10-K) is/are available at
www.proxyvote.com
.
|
|
|
GRANITE
CONSTRUCTION INCORPORATED
Annual Meeting of Shareholders
June 8, 2017
10:30 AM CDT
This proxy is solicited by
the Board of Directors
SPECIAL INSTRUCTIONS FOR 401(k)
PARTICIPANTS: In accordance with the terms of the Trust Agreement for each of
the 401(k) Plan, T. Rowe Price has delegated its authority to vote all the
shares of stock in GRANITE CONSTRUCTION INCORPORATED beneficially held for the
401(k) Participant, as applicable, to Broadridge. Any shares allocable to the
participant’s 401(k) account on the record date will be voted by Broadridge in
accordance with the instructions of the participant received via telephone or
the Internet or indicated on the reverse. IF THIS PROXY CARD IS RECEIVED BEFORE
12:00 PM (noon) Eastern Daylight Time on June 6, 2017, BUT A CHOICE IS NOT
SPECIFIED, BROADRIDGE WILL VOTE SHARES ALLOCABLE TO THE PARTICIPANT’S 401(k) AS
THE BOARD OF DIRECTORS RECOMMENDS. IF THIS FORM IS NOT RECEIVED BEFORE 12:00 PM
(noon) Eastern Daylight Time on June 6, 2017, AND NO VOTE WAS SUBMITTED VIA
TELEPHONE OR THE INTERNET BY THAT DATE, SHARES ALLOCABLE TO THE PARTICIPANT’S
401(k) WILL NOT BE VOTED. The 401(k) Participants may revoke a prior vote by
following the instructions described in Granite’s Proxy Statement dated April
25, 2017. The voting direction submitted to Broadridge by the 401(k)
Participants will be confidential.
This proxy, when properly executed,
will be voted in the manner directed herein. If no such direction is made, this
proxy will be voted in accordance with the Board of Directors'
recommendations.
Continued and to be signed on reverse
side
Table of
Contents
Granite
Construction Incorporated
585 West Beach Street
Watsonville, CA
95076
ATTN: Betty Kwong
VOTE BY INTERNET -
www.proxyvote.com
Use the Internet to
transmit your voting instructions and for electronic delivery of information up
until 11:59 PM Eastern Time on June 7, 2017 (until 12:00 PM (noon) EDT on June
6, 2017 if you are a 401(k) Participant). Have your proxy card in hand when you
access the web site and follow the instructions to obtain your records and to
create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company
in mailing proxy materials, you can consent to receiving all future proxy
statements, proxy cards and annual reports electronically via e-mail or the
Internet. To sign up for electronic delivery, please follow the instructions
above to vote using the Internet and, when prompted, indicate that you agree to
receive or access proxy materials electronically in future
years.
VOTE BY PHONE -
1-800-690-6903
Use any touch-tone
telephone to transmit your voting instructions up until 11:59 PM Eastern Time on
June 7, 2017 (until 12:00 PM (noon) EDT on June 6, 2017 if you are a 401(k)
Participant). Have your proxy card in hand when you call and then follow the
instructions.
VOTE BY
MAIL
Mark, sign and date your proxy card
and return it in the postage-paid envelope we have provided or return it to Vote
Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717.
|
TO VOTE, MARK
BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|
|
|
KEEP THIS PORTION FOR YOUR
RECORDS
|
|
|
DETACH AND
RETURN THIS PORTION ONLY
|
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED.
|
|
The Board of Directors recommends you vote FOR the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Election of
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominees
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
1a.
|
James H.
Roberts
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
1b.
|
Gaddi H.
Vasquez
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
1c.
|
David C.
Darnell
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
1d.
|
Celeste B. Mastin
|
|
☐
|
|
☐
|
|
☐
|
|
The Board of Directors recommends you
vote FOR proposals 1e and 2:
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
1e.
|
To ratify
the directorship of Patricia D. Galloway, appointed by the Board on
February 8, 2017.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
2.
|
Advisory
vote to approve executive compensation of the named executive
officers.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
Yes
|
|
No
|
|
|
|
|
|
|
|
|
|
|
|
|
Please indicate if you plan to attend this meeting
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
Please sign exactly as your name(s)
appear(s) hereon. When signing as attorney, executor, administrator, or
other fiduciary, please give full title as such. Joint owners should each
sign personally. All holders must sign. If a corporation or partnership,
please sign in full corporate or partnership name, by authorized
officer.
|
|
|
|
|
|
|
|
|
|
|
The Board of Directors recommends you vote 1 YEAR on the following
proposal:
|
|
1 year
|
|
2 years
|
|
3 Years
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
To
recommend, by non-binding vote, the frequency of executive compensation
votes.
|
|
☐
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
The Board of Directors recommends you vote FOR the following
proposal:
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
To
ratify the appointment by the Audit/Compliance Committee of
PricewaterhouseCoopers LLP as Granite's independent registered public
accounting firm for the fiscal year ending December 31, 2017.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
Signature
[PLEASE SIGN WITHIN BOX]
|
|
Date
|
|
Signature (Joint
Owners)
|
|
Date
|
Table of
Contents
|
Important Notice
Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting &
Proxy Statement and, Annual Report (which includes a copy of the Form
10-K) is/are available at
www.proxyvote.com
.
|
|
|
GRANITE
CONSTRUCTION INCORPORATED
Annual Meeting of Shareholders
June 8, 2017
10:30 AM CDT
This proxy is solicited by
the Board of Directors
The shareholder(s) hereby appoint(s) James
H. Roberts and Laurel J. Krzeminski and each of them with full power of
substitution to represent and to vote all the shares of stock in GRANITE
CONSTRUCTION INCORPORATED which the shareholder(s) is/are entitled to vote at
the Annual Meeting of Shareholders to be held at 10:30 AM Central Daylight Time
on June 8, 2017, at the Rosewood Mansion on Turtle Creek, 2821 Turtle Creek
Boulevard, Dallas, Texas 75219, and any adjournment or postponement thereof, (1)
as specified upon the proposals listed on the reverse side of this card and as
more particularly described in Granite's Proxy Statement dated April 25, 2017,
and (2) in their discretion upon such other matters as may properly come before
the meeting or any adjournment thereof.
This proxy, when properly executed,
will be voted in the manner directed herein. If no such direction is made, this
proxy will be voted in accordance with the Board of Directors'
recommendations.
Continued and to be signed on reverse
side
Table of
Contents
*** Exercise Your
Right
to
Vote ***
Important Notice Regarding the
Availability of Proxy Materials for the
Shareholder Meeting to Be Held
on
June 08, 2017
GRANITE CONSTRUCTION
INCORPORATED
Granite
Construction Incorporated
585 West Beach Street
Watsonville, CA
95076
ATTN: Betty Kwong
|
Meeting Information
|
|
Meeting Type:
Annual
Meeting
|
|
For
holders as of:
April 12,
2017
|
|
Date:
June 08, 2017
|
Time:
10:30 AM CDT
|
|
Location:
|
Rosewood Mansion
on Turtle Creek
|
|
|
2821 Turtle
Creek Boulevard
|
|
|
Dallas, TX
75219
|
|
|
For directions
please call:
|
|
|
831-724-1011
|
You are receiving this communication
because you hold shares in the above named company.
This is not a ballot. You cannot use this
notice to vote these shares. This communication presents only an overview of the
more complete proxy materials that are available to you on the Internet. You may
view the proxy materials online at
www.proxyvote.com
or easily request a
paper copy (see reverse side).
We encourage you to access and review all
of the important information contained in the proxy materials before
voting.
|
See the
reverse side of this notice to obtain proxy materials and voting
instructions.
|
Table of
Contents
— Before
You Vote —
How to Access the Proxy
Materials
Proxy Materials Available to VIEW or RECEIVE:
1. Notice of
Annual Meeting & Proxy Statement and 2. Annual
Report (which includes a copy of the Form 10-K)
How to View
Online:
Have the information that is printed in the box marked by the
arrow ➔
xxxx xxxx xxxx xxxx
(located on the following page) and visit:
www.proxyvote.com.
How
to Request and Receive a PAPER or E-MAIL Copy:
If you want to receive a
paper or e-mail copy of these documents, you must request one. There is NO
charge for requesting a copy. Please choose one of the following methods to make
your request:
|
|
1)
|
BY
INTERNET
:
|
www.proxyvote.com
|
|
|
2)
|
BY
TELEPHONE
:
|
1-800-579-1639
|
|
|
3)
|
BY
E-MAIL*
:
|
sendmaterial@proxyvote.com
|
* If requesting materials by e-mail, please send a blank e-mail with the
information that is printed in the box marked by the arrow ➔
xxxx xxxx xxxx xxxx
(located on the following page) in the subject line.
Requests, instructions and other inquiries sent to this e-mail address
will NOT be forwarded to your investment advisor. Please make the request as
instructed above on or before May 25, 2017 to facilitate timely
delivery.
— How To
Vote —
Please Choose One of the Following Voting
Methods
Vote In Person:
Many shareholder
meetings have attendance requirements including, but not limited to, the
possession of an attendance ticket issued by the entity holding the meeting.
Please check the meeting materials for any special requirements for meeting
attendance. At the meeting, you will need to request a ballot to vote these
shares.
Vote By
Internet:
To vote now by Internet, go to
www.proxyvote.com.
Have the information that is printed in the box marked by the arrow ➔
xxxx xxxx xxxx xxxx
available and follow the instructions.
Vote By
Mail:
You can vote by mail by requesting a
paper copy of the materials, which will include a proxy
card.
Table of
Contents
The Board of Directors recommends you
vote FOR the following:
|
1.
|
|
Election of Directors
|
|
|
|
Nominees
|
|
1a.
|
|
James H. Roberts
|
|
|
|
|
|
1b.
|
|
Gaddi H. Vasquez
|
|
|
|
|
|
1c.
|
|
David C. Darnell
|
|
|
|
|
|
1d.
|
|
Celeste B. Mastin
|
|
|
|
|
|
The Board of Directors recommends
you vote FOR proposals 1e and 2:
|
|
|
|
|
|
1e.
|
|
To ratify the directorship of
Patricia D. Galloway, appointed by the Board on February 8,
2017.
|
|
|
|
|
|
2.
|
|
Advisory vote to approve executive compensation of the named
executive officers.
|
|
|
|
|
|
The Board of Directors
recommends you vote 1 YEAR on the following
proposal:
|
|
|
|
|
|
3.
|
|
To
recommend, by non-binding vote, the frequency of executive compensation
votes.
|
|
The Board of Directors recommends you vote
FOR the following proposal:
|
|
|
|
4.
|
|
To ratify the appointment by the Audit/Compliance
Committee of PricewaterhouseCoopers LLP as Granite's independent
registered public accounting firm for the fiscal year ending December 31,
2017.
|
Table of
Contents
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