GRANITE CONSTRUCTION INC appointed Mr. Larkin as new CEO

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 



 
Appointment of New Directors

 

On June 3, 2021, the Board of Directors (the "Board") of Granite Construction Incorporated (the "Company"), upon the recommendation of the Nominating and Corporate Governance Committee, appointed Louis E. Caldera, Kyle T. Larkin and Laura M. Mullen as directors, effective June 3, 2021. Mr. Caldera joins the class of directors whose terms expire at the Company's 2022 Annual Meeting of Shareholders. Mr. Caldera will serve on the Company's Nominating and Corporate Governance Committee and Risk Committee. Mr. Larkin joins the class of directors whose terms expire at the Company's 2023 Annual Meeting of Shareholders. Ms. Mullen joins the class of directors whose terms expire at the Company's 2024 Annual Meeting of Shareholders. Ms. Mullen will serve on the Company's Audit/Compliance Committee and Compensation Committee.

 

The Board has determined that Mr. Caldera and Ms. Mullen meet the independence requirements of the listing standards of the New York Stock Exchange.

 

As non-employee directors, Mr. Caldera and Ms. Mullen will receive compensation in the same manner as the Company's other non-employee directors, which director compensation program is described under "Executive and Director Compensation and Other Matters" in the Company's definitive proxy statement on Schedule 14A, which was filed with the Securities and Exchange Commission on April 21, 2021 (the "2021 Proxy Statement"). Mr. Larkin will not receive additional compensation for his service as a director.

 

The Company will enter into its standard form of Indemnification Agreement (the "Indemnification Agreement") with Mr. Caldera and Ms. Mullen. The Company previously entered into an Indemnification Agreement with Mr. Larkin upon his appointment as an officer of the Company. The Company's form of Indemnification Agreement is attached hereto as Exhibit 10.1.

 

There are no arrangements or understandings between Mr. Caldera, Mr. Larkin and Ms. Mullen and any other person pursuant to which they were selected as a director. There are no transactions involving Mr. Caldera, Mr. Larkin and Ms. Mullen that would be required to be reported under Item 404(a) of Regulation S-K.

 

Retirement of Director

 

At the conclusion of the 2021 Annual Meeting of Shareholders on June 2, 2021, Claes G. Bjork retired from the Board.

 

Appointment of Mr. Larkin as Chief Executive Officer

 

On June 3, 2021, the Board appointed Mr. Larkin as Chief Executive Officer and President of the Company effective immediately. Mr. Larkin, age 49, joined Granite in 1996, and has served as President since September 2020. Mr. Larkin has held a variety of positions within the Company, including serving as Executive Vice President and Chief Operating Officer from February 2020 to September 2020, as Senior Vice President and Manager of Construction and Material Operations from October 2019 to February 2020 and as Senior Vice President and Group Manager from 2017 to 2019. Mr. Larkin also previously served as Vice President and Regional Manager in Nevada from January 2014 to September 2017 and President of Granite's wholly owned subsidiary, Intermountain Slurry Seal, Inc. from 2011 to 2014. He also served as Manager of Construction for the Company's Reno area office from 2008 to 2011, Chief Estimator from 2004 to 2008 and Project Manager, Project Engineer and Estimator at Granite's Nevada Branch between 1996 and 2003. Mr. Larkin holds a Bachelor of Science degree in Construction Management from California Polytechnic State University, San Luis Obispo and a Master of Business Administration from the University of Massachusetts, Amherst.

 

In connection with Mr. Larkin's appointment as Chief Executive Officer, his compensation package was adjusted to: (i) increase his annual base salary from $800,000 to $900,000, effective as of June 3, 2021 and (ii) increase his target annual incentive opportunity under the Company's Annual Incentive Plan from $800,000 to $900,000, with the increased annual incentive opportunity being prorated for the time during 2021 during which Mr. Larkin served as Chief Executive Officer. Additionally, Mr. Larkin received a $1.0 million time-based restricted stock unit grant under the Granite Construction Incorporated 2021 Equity Incentive Plan, which will vest ratably on each of the first three anniversaries of the grant date. Mr. Larkin also participates in the Executive Retention and Severance Plan III and receives a vehicle allowance of $1,000 per month. Under the Executive Retention and Severance Plan III, Mr. Larkin will be entitled to a severance multiple of 2x in the event his employment is terminated without cause by the Company or he resigns with good reason, in either case, within two years after a change in control. For more information on the Company's executive compensation plans and policies, see the disclosure under "Executive and Director Compensation and Other Matters" in the Company's 2021 Proxy Statement.

 


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Granite Construction Incorporated 2021 Equity Incentive Plan

 

On April 1, 2021, the Board approved and adopted the Granite Construction Incorporated 2021 Equity Incentive Plan (the "2021 Plan"), subject to the approval of the 2021 Plan by the Company's shareholders, and directed that the matter be submitted to the Company's shareholders for their approval. On June 2, 2021, the Company held its 2021 Annual Meeting of Shareholders. At the 2021 Annual Meeting of Shareholders, the Company's shareholders approved the 2021 Plan, as more specifically described in Item 5.07 below.

 

The material terms and conditions of the 2021 Plan are described in the Company's 2021 Proxy Statement. This description is qualified in its entirety by reference to the full text of the 2021 Plan, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

 

Under the 2021 Plan, the Company may grant awards of stock options, restricted stock, restricted stock units, performance shares, performance units, and other stock-based awards. The forms of award agreements for certain of these awards are attached hereto as Exhibits 10.3, 10.4 and 10.5.