Exhibit 10.02



 Exhibit 10.01 
 



 
  
  

2017 Short-Term Incentive Plan 

Centuri Construction Group 







 Table of Contents 

 
  

							
		 	SECTION	  	 	PAGE	 
			
	 1.
	 	SHORT TERM INCENTIVE PLAN OBJECTIVES	  	 	1	 
			
	 2.
	 	PLAN STATUS	  	 	1	 
			
	 3.
	 	ELIGIBILITY AND INCENTIVE OPPORTUNITY	  	 	1	 
			
	 4.
	 	FAIL SAFE	  	 	2	 
			
	 5.
	 	PERFORMANCE MEASURES, WEIGHTS, AND GOALS	  	 	2	 
			
	 6.
	 	PLAN DESCRIPTION AND TEMPLATE	  	 	3	 
			
	 7.
	 	PAYOUT TABLE	  	 	4	 
			
	 8.
	 	INCENTIVE CALCULATION EXAMPLE	  	 	5	 
			
	 9.
	 	TERMS AND CONDITIONS	  	 	5	 








 Short Term Incentive Plan (“Plan”) Objectives 

 
  

	 	•	 	 Attract, motivate and retain top talent 



 

	 	•	 	 Align incentives with short-term business strategies and priorities 



 

	 	•	 	 Energize employees to achieve company objectives 



 

	 	•	 	 Provide an adequate financial return at reasonable cost 



Plan Status 
 The Plan is a bonus
plan and has been designed to fit into the Department of Labor Regulation Section 2510.3-2(c) bonus program exception to an employee pension benefit plan status under the Employee Retirement Income Security Act of 1974, as amended. The Plan
pays bonus compensation shortly after the year in which it is earned and is not intended to systematically defer the receipt of compensation until termination of employment or to provide retirement income. The Plan is also designed to not be subject
to Section 409A of the Internal Revenue Code of 1986, (the “Code”) as amended, because the Plan fits into the Treasury Regulation Section 1.409A-1(b)(4) short term deferral exception
to the application of Code Section 409A. For purposes of this Plan, the rules, regulations, and published guidance of the Internal Revenue Service promulgated for Code Section 409A are hereinafter collectively referred to as
“Section 409A.” 
 Eligibility and Incentive Opportunity 

 
 This Plan applies to Centuri
Construction Group, Inc. (“Centuri”) and its subsidiaries. As used herein: a “Plan Year” means the calendar year; the term “CEO” means Centuri’s President & CEO; “Company”
means Centuri and any of its subsidiaries and, unless the context clearly indicates otherwise, refers to each in the singular and not collectively; and “Committee” means Centuri’s Compensation Steering Committee, which group
shall be comprised of the CEO, Centuri’s Executive Vice-President/Chief Financial Officer, and Centuri’s Senior Vice-President of Human Resources (SVPHR) , along with such others as the CEO may appoint as Committee members from time to
time. The CEO may remove one or more Committee members at any time. 
 Employees eligible for participation under this Plan are those whose
jobs are deemed to be exempt positions as defined by the Fair Labor Standards Act (FSLA) and so designated by the Committee; eligibility starts upon hire or promotion into a Plan-designated position (subject to written confirmation by the SVPHR or
his/her designee, by way of an offer letter or notice of such Plan eligibility to the newly promoted). Regarding any partial year (meaning an employee with a hire date or promotion date that is other than January 1), Plan participation will be
proportionately based on a ratio of days in the Plan-







 
designated position to 365 days for the Plan Year. A Company employee shall not be eligible to receive a Plan bonus for a Plan Year under this Plan if the employee is eligible for a bonus for
such Plan Year under any other Company short term incentive plan. A Plan bonus earned by an eligible employee/participant in one Plan Year will be paid in the following Plan Year to such eligible employee/participant only if employee remains
actively employed by the Company at time of payout unless, in the Plan Year to which a Plan bonus is earned, the employee’s Company employment terminates due to the employee’s death, or his or her total and permanent disability.
For purposes of this Plan, an employee will not be considered to have terminated employment due to a total and permanently disability unless, by no later than two months after the end of the Plan Year in which the employee’s employment
terminates, the employee has been determined to be totally and permanently disabled by the Company’s long term disability insurer. 

Plan bonus payouts are salary-based (and subject to the goals attainment, measures and weightings discussed elsewhere in this Plan), and the
salary used for such shall be pegged to the employee’s base salary, as well as the percentage associated with their position, as of October 1 of the Plan Year at issue. 

Fail Safe 
  

If Centuri does not achieve a minimum threshold of its annual net profit before incentives and taxes goal for a Plan Year, the Plan will not
pay any bonuses for such Plan Year. 
 Performance Measures, Weights, and Goals 

 
 The calculation of bonuses payable
under this Plan is based on four performance measures or components: 
  

	 	1.	 Corporate annual pre-tax profit (Appendix I); 



 

	 	2.	 Safety DART (Appendix II); 



 

	 	3.	 Area, Region, and Division Level Targets (Appendix III); 



 

	 	4.	 Individual goals 



At or near the beginning of the Plan Year, or as soon thereafter as practicable, the Centuri executive team will set a Plan Year corporate
profitability goal (on a consolidated basis), as reviewed and approved by the CEO, representing the aggregate pre-tax profit at the Area, Regional and Division levels (Division targets will be set by Division
management, subject to review and approval by the CEO), each of which shall be used for measuring and calculating payout of the profits 







 
component for each level depicted on the appendices (as amended from time to time with regard to any particular Plan Year). 

The safety goal will be based on the American Gas Association (“AGA”) industry days away from work, restricted or transferred
(“DART”) incident rate standard measurement for safety. 
 Attainment of targeted goals from each component comprises one-hundred percent (100%) of the total target incentive opportunity. Metrics and weighting are amended from time to time with regard to any particular Plan Year. 

Plan Description and Template 
  

 
 



 

 


					
	 Performance
	 	Award
	 Excellence
	  	125%	 	170%
	 Target
	  	100%	 	100%
	 Threshold
	  	70%	 	65%
	 Not Qual.
	  	<70%	 	0%
	 Fail Safe
	  	TBD:
 50%
	 	No
Bonus

 


					
	 Performance
	  	Award
	 Excellence
	  	TBD	  	170%
	 Target
	  	1.0	  	100%
	 Threshold
	  	TBD	  	65%

 


					
	 Performance
	  	Award
	 Excellence
	  	5 of 5	  	170%
	 Good
	  	4 of 5	  	120%
	 Target
	  	3 of 5	  	100%
	 OK
	  	2 of 5	  	80%
	 Threshold
	  	1 of 5	  	65%

 
 








 Pre-tax Profit Performance Incentive 

Subject to the above-referenced Fail Safe, the Plan pays for profit achievement if, for the participating employee, no less than 70% of
the profit goal is met at the level applicable to that employee. At 70% achievement, the payout would be 65% of the participant’s target award. Excellence is defined as achievement of 125% of the pre-tax
profit goal with payouts of 170% of the target award. Awards for levels of performance between threshold and excellence are enumerated in the payout tables in this Plan document. 

Safety or Area Performance Index Incentive 

The safety goal will be based on DART. The peer group data will be used as a benchmark for establishing this goal. The target is consistent
annually at 1.0, representing a significantly lower score than the industry peer group. The threshold is set at the 3-year median of scores and the maximum is set at the
3-year average minimum score reported to the AGA by the industry peer group. 
 Individual Goals
Incentives. Individual components of the Plan pay for employee achievement of individual goals set by supervision, ranging from 65% attainment of the individual component if one goal is achieved to 170% if all are successfully achieved.
Individual goals are equally weighted. 







 Payout Table 

Payout Schedule Based on Achievement Level 

 


									
	 Level
	  	Achievement	 	  	Award	 
	 Excellence
	  	 	125%+	 	  	 	170.00%	 
		  	 	124%	 	  	 	167.20%	 
		  	 	123%	 	  	 	164.40%	 
		  	 	122%	 	  	 	161.60%	 
		  	 	121%	 	  	 	158.80%	 
		  	 	120%	 	  	 	156.00%	 
		  	 	119%	 	  	 	153.20%	 
		  	 	118%	 	  	 	150.40%	 
		  	 	117%	 	  	 	147.60%	 
		  	 	116%	 	  	 	144.80%	 
		  	 	115%	 	  	 	142.00%	 
		  	 	114%	 	  	 	139.20%	 
		  	 	113%	 	  	 	136.40%	 
		  	 	112%	 	  	 	133.60%	 
		  	 	111%	 	  	 	130.80%	 
		  	 	110%	 	  	 	128.00%	 
		  	 	109%	 	  	 	125.20%	 
		  	 	108%	 	  	 	122.40%	 
		  	 	107%	 	  	 	119.60%	 
		  	 	106%	 	  	 	116.80%	 





									
	 Level
	  	Achievement	 	  	Award	 
	 Target
	  	 	100%	 	  	 	100.00%	 
		  	 	99%	 	  	 	98.83%	 
		  	 	98%	 	  	 	97.67%	 
		  	 	97%	 	  	 	96.50%	 
		  	 	96%	 	  	 	95.33%	 
		  	 	95%	 	  	 	94.17%	 
		  	 	94%	 	  	 	93.00%	 
		  	 	93%	 	  	 	91.83%	 
		  	 	92%	 	  	 	90.67%	 
		  	 	91%	 	  	 	89.50%	 
		  	 	90%	 	  	 	88.33%	 
		  	 	89%	 	  	 	87.17%	 
		  	 	88%	 	  	 	86.00%	 
		  	 	87%	 	  	 	84.83%	 
		  	 	86%	 	  	 	83.67%	 
		  	 	85%	 	  	 	82.50%	 
		  	 	84%	 	  	 	81.33%	 
		  	 	83%	 	  	 	80.17%	 
		  	 	82%	 	  	 	79.00%	 
		  	 	81%	 	  	 	77.83%	 

 
 


  










									
		  	 	105%	 	  	 	114.00%	 
		  	 	104%	 	  	 	111.20%	 
		  	 	103%	 	  	 	108.40%	 
		  	 	102%	 	  	 	105.60%	 
		  	 	101%	 	  	 	102.80%	 
	 Target
	  	 	100%	 	  	 	100.00%	 

 


									
		  	 	80%	 	  	 	76.67%	 
		  	 	79%	 	  	 	75.50%	 
		  	 	78%	 	  	 	74.33%	 
		  	 	77%	 	  	 	73.17%	 
		  	 	76%	 	  	 	72.00%	 
		  	 	75%	 	  	 	70.83%	 
		  	 	74%	 	  	 	69.67%	 
		  	 	73%	 	  	 	68.50%	 
		  	 	72%	 	  	 	67.33%	 
		  	 	71%	 	  	 	66.17%	 
	 Threshold
	  	 	70%	 	  	 	65.00%	 

 
 

  
 Incentive Calculation Example for
Area Employees 
  
 Example: 

A Plan participant has a Salary of $50,000 and an incentive target of ten percent (10%). Profit achievement was 110% of its net profit goal.
Safety achievement was 135% of the goal, and the participant achieved 4 out of 5 individual goals. 
  

							
	 Step One:
	 	 Calculate target incentive opportunity

		 	 Opportunity
	  	 $50,000 x 10%
	  	 = $5,000

		
	 Step Two:
	 	 Calculate amount for each component

		 	 Profit
	  	 $5,000 x 60% Weight
	  	 = $3,000

		 	 Safety
	  	 $5,000 x 20% Weight
	  	 = $1,000

		 	 Individual
	  	 $5,000 x 20% Weight
	  	 = $1,000

		
	 Step Three:
	 	 See achievement and award percentages on payout tables, given the following
results:

		 	 Profit
	  	 110% Achievement
	  	 = 128% Award

		 	 Safety
	  	 135% Achievement
	  	 = 170% Award

		 	 Individual
	  	 4 out of 5
	  	 = 120% Award










							
				
	 Step Four:
	 	 Calculate total incentive award
	  		  	
		 	 Profit
	  	 $3,000 x 128%
	  	 = $3,840.00

		 	 Safety
	  	 $1,000 x 170%
	  	 = $1,700.00

		 	 Individual
	  	 $1,000 x 120%
	  	 = $1,200.00

		 	 	 
		 	 Total earned
	  		  	 = $6,740.00

		 	 Incentive earned as % of Base Pay
	  	 = 13.48%


 Terms and Conditions 

 
 The following Terms and Conditions are
applicable to all Company employees who for a given Plan Year are eligible to receive a Plan bonus payment. This document supersedes any and all prior or existing Company short term incentive bonus plans, programs, agreements, or contracts. 

This Plan is a statement of compensation guidelines and is not a guarantee to any particular employee that any amount of Plan bonus will be
paid out for any given Plan Year. 
 Expression of Salary or any other form of compensation in terms of an annual period or any other period
shall not be construed as a contract of employment for the duration of the annual period or any other period. 
 TIMING AND FORM OF PLAN PAYMENTS

 Plan bonus payments for a given Plan Year will in all events be paid in a one-time lump sum
payment by the Company, through payroll and subject to all legally-required payroll withholdings, on or before March 15th of the calendar year following the Plan Year in which the Plan bonus payment is earned. Any Plan bonus payment that is payable
with respect to a deceased employee shall be paid to the deceased employee’s estate and/or survivors within thirty (30) days of notice to Centuri of both the death of the employee and the legally-appropriate payee. 







 ENTRY, TRANSFER, AND EXIT FROM THE INCENTIVE PLAN 

If an employee is not eligible at the start of a Plan Year but becomes eligible later, employee will be eligible to receive a prorated portion
of any incentive Plan bonus payment that employee would otherwise earn for the Plan Year, based on the number of days worked while eligible. 

When a Plan participant changes jobs to a position with a different target incentive opportunity, the participant’s incentive
opportunities will be proportionately determined (in a manner determined by the Committee in its discretion) on the basis of days worked in the different positions. However, if an employee is hired into a Plan-eligible position after October 1
of a given Plan Year, or otherwise becomes eligible to participate in the Plan after October 1 of a given Plan Year, the employee will not be eligible to receive a Plan bonus for the current Plan Year. 

Claims or disputes are time-barred under this Plan if not raised within thirty (30) days immediately following termination of Company
employment. 
 NON-PAYMENT AND RECOVERY OF INCENTIVES 

The Company reserves the right to recover, through whatever means it deems appropriate, part or all of any Plan bonus payment that Company
subsequently determines was paid in error. 
 PLAN AMENDMENT AND ADMINISTRATION 

Centuri’s Board of Directors (the “Board”) may, at any time, and in its discretion, alter, amend, modify, suspend or
terminate the Plan or any portion thereof, provided that no such amendment, modification, suspension or termination may be retroactive with regard to any Plan Year. 

The Plan shall be administered by the “Committee” or its express delegate, which shall have the authority to: 

 

	 	(a)	 designate such job positions as may be eligible for participation in the Plan; 



 

	 	(b)	 construe and interpret the Plan and apply its provisions; 



  









	 	(c)	 promulgate, amend, and rescind rules and regulations relating to administration of the Plan; and



  

	 	(d)	 exercise discretion to make any and all other determinations deemed by the Committee as necessary or advisable
for administration of the Plan. 


 Board/Committee determinations need not be uniform and any such determinations may be
made selectively among participants. 
 All decisions by the Board or Committee shall be final and binding upon any participating company or
employee. 
 SECTION 409A 
 It is
intended that the time and form of Plan payments will fit into the short term deferral exception to the application of Code Section 409A. In the event that one or more Plan payments are determined to be subject to Section 409A: 

 

	 	(a)	 Neither Centuri nor any of its affiliates shall be liable for any additional tax, interest or penalties that
may be imposed on a participant as a result of Section 409A or any damages for failing to comply with Section 409A (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A); and



  

	 	(b)	 Notwithstanding any provision in this Plan to the contrary, (i) the Plan shall be interpreted and
administered such that such payment(s) comply(ies) to the fullest extent possible with Section 409A, and (ii) each Plan payment shall be deemed to be a separate and distinct payment for purposes of Section 409A. 



—- END OF PLAN DOCUMENT —-