Exhibit 10.3

 

GRANITE CONSTRUCTION INCORPORATED

LONG TERM INCENTIVE PLAN

2020-2022 PARTICIPATION AGREEMENT

 

[Name of Executive]:

 

The Compensation Committee of the Board of Directors of Granite Construction
Incorporated (the "Compensation Committee") has selected you for participation
in the Granite Construction Incorporated Long Term Incentive Plan (the "LTIP").
Under the terms of the LTIP (a copy of which is attached as Exhibit A to this
Agreement) you may earn a bonus payable in restricted stock units upon the
achievement of certain performance targets as determined by the Compensation
Committee and described in Exhibit B to this Agreement. Unless otherwise defined
herein, capitalized terms shall have the meanings set forth in the LTIP.

 

1.

ADMINISTRATION

 

All questions of interpretation concerning this Agreement shall be determined by
the Compensation Committee. All determinations by the Compensation Committee
shall be final and binding upon all persons having an interest in your
Individual Target Award. Any officer of the Company shall have the authority to
act on behalf of the Company with respect to any matter, right, obligation, or
election which is the responsibility of or which is allocated to the Company
herein, provided the officer has apparent authority with respect to such matter,
right, obligation, or election.

 

2.

INDIVIDUAL TARGET AWARD

 

In accordance with Section 5 of the LTIP, the Compensation Committee has
established an Individual Target Award for the 2020-2022 Performance Period on
your behalf as follow:

 

TSR Target Award     $[___]

 

Your TSR Target Award stated above does not include the service-based restricted
stock award granted to you by the Compensation Committee as part of your overall
long-term compensation package for the 2020-2022 Performance Period.

 

3.

PERFORMANCE GOALS

 

3.1     Payment of your Individual Target Award is conditioned upon satisfaction
during the 2020-2022 Performance Period of the Performance Goals set forth in
Exhibit B.

 

3.2     The actual level of achievement of the Performance Goals attained for
the Performance Period will be computed in a consistent manner throughout the
Performance Period.

 

4.

PAYMENT OF AWARD

 

4.1     Determination and Certification of Attainment of Performance Goal. As
soon as practicable following the completion of the 2020-2022 Performance
Period, and prior to the Payment Date, the Compensation Committee shall
determine and certify in writing the extent to which each Performance Goal has
been attained. The Company will notify you of the Compensation Committee's
determination and the resulting dollar amount of your award as soon as
practicable following the Compensation Committee's certification.

 

 

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4.2     Discretion to Adjust Award. Notwithstanding the provisions of Section
4.1 to the contrary, the Compensation Committee shall have the discretion to
increase your award or reduce your award (including to zero dollars).

 

4.3     Payment in Restricted Stock Units. Your award under the LTIP shall be
paid in restricted stock units in accordance with the Granite Construction
Incorporated 2020 Equity Incentive Plan (or the 2012 Equity Incentive Plan if
the 2020 Equity Incentive Plan is not approved by stockholders prior to the end
of the Performance Period) and the form of Restricted Stock Unit Agreement
attached hereto as Exhibit C. The number of units awarded to you with respect to
the Total Shareholder Return component of your award is equal to the dollar
amount of your award determined in accordance herewith divided by the thirty-day
average of the Company's stock price measured during the first 30 days of the
2020-2022 Performance Period.

 

4.4     Form and Timing of Payment of Award. Except as provided in Section 4.5
below, as soon as practicable following the Compensation Committee's
certification pursuant to Section 4.1 and subject to any adjustment determined
by the Compensation Committee pursuant to Section 4.2, the Company shall issue
your award of restricted stock units no later than ninety (90) days following
the end of the Performance Period.

 

4.5     Election to Defer. You may elect to defer receipt of your award that
otherwise would have been paid to you pursuant to Section 4.4 above. Any such
deferral shall be subject to and in compliance with Section 409A of the Code as
follows:

 

(a)     Deferral Election.

 

(i)     You must sign and date any election to defer your award and must
designate the time and form of payment of your deferred award. Your election is
irrevocable upon receipt of the deferral election by the Company.

 

(ii)     Your election to defer receipt of your award must be received by the
Company in accordance with the terms of the Granite Construction Incorporated
Key Management Deferred Compensation Plan II ("NQDC").

 

(b)     Distribution. Your deferred award will be distributed to you in shares
of the Company's common stock in accordance with your election or the NQDC.

 

(c)     Dividend Equivalents. During the deferral period, on each dividend
payment date, dividend equivalents will be credited in accordance with the terms
of the NQDC. Such dividend equivalents shall be converted into stock units as of
the dividend payment date by dividing the amount of the dividend equivalents by
the closing price of the Company's common stock on the dividend payment date.
All such stock units shall be distributed in accordance with Section 4.5(b)
above.

 

4.6     Recoupment. Any award paid under this Agreement will be subject to any
recoupment or "clawback" policy of the Company.

 

5.

CHANGE IN CONTROL

 

5.1     In the event of a Change in Control, restricted stock unit awards will
be issued as follows:

 

5.2     If a Change in Control occurs within the first year of an applicable
Performance Period, restricted stock units will be issued as if you earned your
Individual Target Award and such restricted stock units shall be converted into
time-based vesting restricted stock units. Such restricted stock units shall be
assumed or substituted by the acquiring company on a value equivalent basis,
vest on the last day of the applicable Performance Period and shall be payable,
on the vesting date, in the common stock of the acquiring company or in cash
based on the fair market value of the common stock of the acquiring company
determined on the vesting date.

 

 

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5.3     If a Change in Control occurs within the second or third year of an
applicable Performance Period, restricted stock units will be issued based on
the actual performance of the Company through the effective date of the Change
in Control and such restricted stock units shall be converted into time-based
vesting restricted stock units. Such restricted stock units shall be assumed or
substituted by the acquiring company on a value equivalent basis, vest on the
last day of the applicable Performance Period and shall be payable, on the
vesting date, in the common stock of the acquiring company or in cash based on
the fair market value of the common stock of the acquiring company determined on
the vesting date.

 

5.4     If you are terminated without Cause or resign for Good Reason within
twenty-four (24) months of the effective date of the Change in Control, all
unvested outstanding restricted stock units issued pursuant to this Section 5
shall become 100% vested and payable as of your termination date.

 

5.5     Notwithstanding the foregoing, if, effective with a Change in Control,
the acquiring company does not substitute or assume outstanding equity incentive
awards, including restricted stock units, issued by the Company, then all
outstanding restricted stock units issued pursuant to this Section 5 shall
become 100% vested and payable on the effective date of the Change in Control,
or, in the Committee's discretion, you may receive the cash value of such
restricted stock units.

 

6.

TAX WITHHOLDING

 

All payments made under the LTIP are subject to income and employment tax
withholding and reporting as required by Federal, state and local law, as
applicable.

 

7.

EFFECT OF TERMINATION OF SERVICE DURING THE PERFORMANCE PERIOD

 

7.1     Employed on Payment Date. Except as provided in Section 7.2 below, you
must be actively employed by the Company on the payment date of your award in
order to receive your award.

 

7.2     Death, Disability or Retirement. If your service is terminated prior to
the payment date of your award by reason of your death, Disability or
Retirement, you will be entitled to receive payment of a prorated award. Your
award will be prorated on the basis of the ratio of the number of whole months
of your service during the Performance Period to the total number of months in
the Performance Period. Your award shall be payable following the end of the
applicable Performance Period based on the actual performance of the Company.

 

8.

MISCELLANEOUS PROVISIONS

 

8.1     Beneficiary Designation. You may name, from time to time, any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the award is to be paid in case of your death before you
receive any or all of your award. Each designation will revoke all prior
designations, shall be in a form prescribed by the Company, and will be
effective only when filed by you in writing with the Company during your
lifetime. In the absence of any such designation, benefits remaining unpaid at
your death shall be paid to your estate.

 

 

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8.2     Unfunded Obligation. Any amounts payable to you pursuant to the LTIP
shall be unfunded obligations for all purposes, including, without limitation,
Title I of the Employee Retirement Income Security Act of 1974. The Company
shall not be required to establish a separate fund under the LTIP. Any right of
any person, including you, to receive any payment under the LTIP is no greater
than the right of any other unsecured creditor of the Company.

 

8.3     Binding Effect. This Agreement together with the LTIP shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.

 

8.4     Termination or Amendment. Any termination or amendment of this Agreement
or your award that may adversely affect your award is subject to your written
consent unless such termination or amendment is necessary to comply with any
applicable law or government regulation; otherwise, the Compensation Committee
may terminate or amend this Agreement or your award at any time. No amendment or
addition to this Agreement shall be effective unless in writing.

 

8.5     Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given (except to the extent that this
Agreement provides for effectiveness only upon actual receipt of such notice)
upon personal delivery or upon deposit in the United States Post Office, by
registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address shown below that party's signature or at such other
address as such party may designate in writing from time to time to the other
party.

 

8.6     Integrated Agreement. This Agreement and the LTIP constitute the entire
understanding and agreement between you and the Company with respect to the
subject matter contained herein and supersede any prior agreements,
understandings, restrictions, representations, or warranties between you and the
Company with respect to such subject matter other than those as set forth or
provided for herein. To the extent contemplated herein, the provisions of this
Agreement shall survive any payment of your award and shall remain in full force
and effect.

 

8.7     Applicable Law. This Agreement shall be governed by the laws of the
State of California as such laws are applied to agreements between California
residents entered into and to be performed entirely within the State of
California.

 

8.8     Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

8.9     Acknowledgement. By signing this Agreement, you: (a) represent that you
have read and are familiar with the terms and conditions of this Agreement and
the LTIP, (b) accept the award subject to all of the terms and conditions of
this Agreement and the LTIP, (c) agree to accept as binding, conclusive and
final all decisions or interpretations of the Compensation Committee upon any
questions arising under this Agreement and the LTIP, and (d) acknowledge receipt
of a copy of this Agreement, the LTIP, Exhibit B, and the Restricted Stock Unit
Agreement.

 

GRANITE CONSTRUCTION INCORPORATED

By:                                                                   

                            Signature

Title:                                                                

Date:                                                                

EXECUTIVE

By:                                                                   

                            Signature

Date: