Employment Agreement with William G. Dorey

Amendment to the Employment Agreement

 Severance Plan                                                                  

 

 

Exhibit 10.14

 

                              EMPLOYMENT AGREEMENT

 

      THIS AGREEMENT is made and entered into effective as of the 20th day of

April, 1990, by and between Granite Construction Company (the "Company") and

William G. Dorey (the Executive").

 

      The Company recognizes that the Executive's contribution to the betterment

of the Company has been substantial, and believes it to be important both to the

Company's future prosperity and to its general interests to obtain assurances

concerning the continuation of the Executive's employment and to provide the

Executive with performance incentives. In order to accomplish the foregoing, the

Company and the Executive enter into this Agreement.

 

      1. At Will Employment. The Company and the Executive understand and agree

the Executive is employed "at will" and either the Executive or the Company can

terminate their employment relationship at any time, for any reason, with or

without cause, upon written notice. The Executive understands and agrees that

the Company has the right, in its sole discretion, to make personnel changes for

its own purposes, without limitation, and without incurring liability except as

otherwise set forth below.

 

      2. Position and Duties. The Executive will serve in the capacity of Vice

President, Chief Financial Officer with such duties and responsibilities that

exist as of the date hereof, and/or as may later be assigned by the Company

(subject to the terms of Section 5(b) of this Agreement). The Executive agrees

to devote the Executive's best efforts to the performance of the Executive's

duties and to follow all lawful direction given to the Executive by the Company.

 

      3. Duration of Employment. The Executive's employment under this Agreement

will commence on the date hereof and will continue until termination by the

Company or the Executive.

 

      4. Compensation and Benefits.

 

            (a) During the Executive's employment under this Agreement the

Company shall pay the Executive a salary of $8,000

 

per month. The Executive's salary may, from time to time, be increased or

decreased by the Company as appropriate (subject to the terms of Section 5(b) of

this Agreement). The Executive's salary shall be subject to applicable

withholding and will be paid in accordance with the Company's normal payroll

procedures.

 

            (b) During the Executive's employment under this Agreement, the

Executive shall be eligible to participate in any Company bonus programs made

available to employees of similar status in accordance with the terms and

conditions of such programs.

 

            (c) The Executive will be entitled to participate and receive

benefits under such of the Company's employee benefit plans and policies as are

in effect from time to time and in which the Executive is eligible to

participate, subject to the applicable terms and conditions of the particular

benefit plan or policy. The Company may change, amend, or modify any or all of

its benefit plans and policies from time to time.

 

      5. Termination.

 

            (a) The Company may terminate the Executive's employment at any time

for any of the following Business Reasons:

 

                  (i) an act of gross negligence related to the Company's

business (defined as actions which are not covered by the Company's Directors

and Officers insurance or indemnity arrangements between the Company and the

Executive);

 

                  (ii) repeated failure to report to work during normal hours

other than for customarily excused absences for personal illness or other

reasonable causes;

 

                  (iii) conviction of theft or felony;

 

                  (iv) wrongful disclosure of the Company's trade secrets or

other proprietary information;

 

                  (v) any other dishonest or intentional action which has a

detrimental effect upon the Company,

 

                  (vi) habitual and repeated non-performance by the Executive of

the Executive's duties; or

 

                  (vii) material breach of this Agreement by the Executive.

 

            (b) The Executive may terminate the Executive's employment with the

Company at any time for any of the following Good Reasons.

 

                  (i) a ten percent (10%) or greater reduction, that is not tied

to the Company's performance, in the present or potential future value of the

Executive's compensation and benefits (set forth in Section 4 above);

 

                  (ii) a substantial reduction in the Executive's job

responsibilities, duties or status;

 

                  (iii) a relocation of the Executive's place of work, without

the Executive's prior approval, to a location outside of the Monterey Bay area;

or

 

                  (iv) a material breach of this Agreement by the Company.

 

            (c) "Date of Termination" shall mean:

 

                  (i) if the Executive's employment is terminated pursuant to

Section 6(b) below, ninety (90) days after the Executive receives written notice

of termination (provided that such notice of termination is not rescinded during

such ninety (90) day period); or

 

                  (ii) if the Executive's employment is terminated by the

Company or the Executive pursuant to Section 6(f) below, the date specified in

the written notice of termination, which date shall be at least thirty (30) days

after the date of such notice.

 

      6. Benefits Upon Termination.

 

            (a) For purposes of this Agreement, a "Change in Control" shall be

deemed to have occurred in the event of:

 

                  (i) an acquisition, consolidation or merger of the Company

with or into any other corporation or corporations unless the shareholders of

the Company retain, directly or

 

indirectly at least a majority of the beneficial interest in the voting stock of

the surviving or acquiring corporation or corporations;

 

                  (ii) the sale, exchange or transfer of all or substantially

all of the assets of the Company to a transferee other than a corporation or

partnership controlled by the Company or the shareholders of the Company; or

 

                  (iii) a transaction or series of related transactions in which

stock of the Company representing more than thirty percent (30%) of the

outstanding voting power of the Company is sold, exchanged, or transferred to a

single person or affiliated persons, leading to a change of a majority of the

members of the Board of Directors.

 

            (b) Upon termination of the Executive's employment within two and a

half (2 1/2) years after a Change in Control (i) by the Company for a reason

other than a Business Reason or (ii) by the Executive for a Good Reason, the

Company will provide the Executive with the following compensation and benefits

within thirty (30) days of the Date of Termination:

 

                  (i) a lump sum payment, less applicable withholding, equal to

three (3) times the Executive's average gross annual compensation, including

salary and incentive bonuses, during the prior three (3) years ending before the

Date of Termination (or, if the Executive was employed by the Company for less

than three (3) years, three (3) times the Executive's average gross annual

compensation, including salary and incentive bonuses, during such period as the

Executive was employed by the Company):

 

                  (ii) a lump sum payment, less applicable withholding, equal to

the cost to the Company of the Executive's group insurance benefits for the

three (3) years prior to the Date of Termination;

 

                  (iii) a lump sum payment, less applicable withholding, equal

to the cash equivalent of the contributions which would have been made on behalf

of the Executive for the three (3) years compensation (as determined under

Section 6(b)(i) above) to the ESOP, profit sharing plan, or other retirement

plan in effect as the Executive's Date of Termination;

 

                  (iv) benefits under long term incentive plans in existence at

the Date of Termination in accordance with the provisions contained in such

plans; and

 

                  (v) reasonable professional outplacement services for the

Executive until the earlier of one (1) year following the Date of Termination or

the date on which the Executive obtains other employment.

 

            (c) The amount of payments made pursuant to Sections 6(b)(i), (ii),

(iii) above shall each be reduced, if the Executive is at least age sixty-two

(62) at the Date of Termination, by multiplying the amount of payments which

would otherwise be made pursuant to such sections by a fraction, the numerator

of which is the time in years, or fraction thereof,

 

from the Date of Termination to the date upon which the Executive would reach

age sixty-five (65) and the denominator of which is three (3).

 

            (d) Notwithstanding any other provision of this Agreement to the

contrary, in the event that any payment made to the Executive pursuant to

Section 6(b) above (as adjusted by. Section 6(c) above) will be treated as an

"excess parachute payment" as described in section 280G of the Internal Revenue

Code of 1986, as in effect on the date such payment is made, then the amount

payable to the Executive pursuant to Section 6(b) above (as adjusted by Section

6(c) above) shall be reduced by the minimum amount necessary to prevent such

payment from constituting an excess parachute payment. A copy of section 280G of

the Internal Revenue Code of 1986, as in effect on the date hereof, is attached

hereto as Exhibit A. For purposes of the foregoing, the minimum amount necessary

to prevent shall be determined by the Company in a fair and equitable manner.

 

            (e) For purposes of Section 6(d) of this Agreement, all payments in

the nature of compensation made to the Executive, whether or not provided for in

this Agreement (including, but not limited to, the value of options on Company

stock that accelerate upon a Change in Control), shall be considered in

determining whether a payment made to the Executive pursuant to this Agreement

will be treated as an excess parachute payment.

 

            (f) Upon termination of the Executive's employment other than

pursuant to Section 6(b) above the Executive will be entitled to no benefits

other than compensation and benefits, as provided for in Section 4 above,

through the Date of Termination.

 

      7. Successors. The Company will require any successor (whether or direct

or indirect, by purchase, merger consolidation or otherwise) to all or

substantially all of the business and/or assets of the Company to expressly

assume and agree to perform this Agreement in the same manner and to the same

extent that the Company would be required to perform it if no such succession

has taken place. Failure to the Company to obtain such assumption and agreement

prior to the effectiveness of any such succession shall entitle the Executive to

the benefits listed in Section 6(b) above to be paid within thirty (30) days

after the date such succession is effective.

 

      8. Arbitration. In the event of any dispute or claim relating to or

arising out of the employment relationship between the Company and the

Executive, the Company and the Executive agree that all such disputes or claims

shall be fully and finally resolved by binding arbitration conducted by the

American Arbitration Association in San Jose, California. HOWEVER, the Company

and the Executive agree that this arbitration provision shall not apply to any

disputes or claims relating to or arising out of the misuse or misappropriation

of the Company's trade secrets or proprietary information.

 

      9. Governing Law. This Agreement shall be construed and enforced in

accordance with and be governed by the laws of the State of California.

 

      10. Entire Agreement. This Agreement sets forth the entire Agreement and

understanding between the Executive and the Company, and supersedes any other

negotiations, agreements, understandings, oral agreements, representations and

past or future practices whether written or oral, with the exception of any

agreements between the Company and the Executive regarding the Company's

proprietary information.

 

      11. Modification. This Agreement may not be amended, modified, changed or

discharged in any respect except as agreed in writing and signed by the

Executive and the Company.

 

      12. Severability and Interpretation. In the event that any provision or

any portion of this Agreement is held invalid or unenforceable by a court of

competent jurisdiction, such provision or portion thereof shall be considered

separate and apart from the remainder of this Agreement and the other provisions

shall remain fully valid and enforceable In the event that any provision is held

to be overly broad as written, such provision shall be deemed amended to narrow

its application to the extent necessary to make the provision enforceable

according to applicable law and enforced as amended.

 

      13. Notices. All notices required by this Agreement shall be given in

writing either by personal delivery or by first class mail, return receipt

requested. Notice given by mail shall be deemed given five (5) days following

the date of mailing.

 

      14. Waiver. A waiver by either party of any of the terms

 

or conditions of this Agreement in any instance shall not be deemed or construed

to be a waiver of such term or condition for the future, or of any subsequent

breach thereof. The Company and the Executive agree that if either party

terminates the Executive's employment, the Executive's sole remedy for such

termination shall be the benefits provided in this Agreement.

 

      15. Attorneys' Fees. In the event either party shall bring any action or

legal proceeding for an alleged breach of any provision of this Agreement or to

enforce, protect or establish any term or covenant of this Agreement or right of

either party under this Agreement, the prevailing party shall be entitled to

recover as part of such action or proceeding, or in a separate action brought

for that purpose, reasonable attorneys' fees and court costs as may be fixed by

the court.

 

 

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement

effective as of the day and year first above written.

 

                                                    GRANITE CONSTRUCTION COMPANY

 

                                                    By /s/ David H. Watts

                                                       -------------------------

 

                                                    EXECUTIVE

 

                                                    /s/ William G. Dorey

                                                    ----------------------------

                                                    William G. Dorey

 

                                       

 

                                   EXHIBIT A

 

                        GOLDEN PARACHUTE PAYMENTS - 280G

 

Sec. 280G (1986 Code) (a) GENERAL RULE - No deduction shall be allowed under

this chapter for any excess parachute payment.

 

(b) EXCESS PARACHUTE PAYMENT - For purposes of this section -

 

      (1)   IN GENERAL. - The term "excess parachute payment" means an amount

            equal to the excess of any parachute payment over the portion of the

            base amount allocated to such payment.

 

      (2)   PARACHUTE PAYMENT DEFINED -

 

            (A) In general. - The term "parachute payment" means any payment

                in the nature of compensation to (or for the benefit of) a

                disqualified individual if -

 

                (i) such payment is contingent on a change -

 

                        (I)   in the ownership or effective control of the

                              corporation, or

 

                        (II)  in the ownership of a substantial portion of the

                              assets of the corporation, and

 

                  (ii) the aggregate present value of the payments in the nature

            of compensation to (or for the benefit of) such individual which are

            contingent on such change equals or exceeds an amount equal to 3

            times the base amount.

 

      For purposes of clause (ii), payments not treated as parachute payments

      under paragraph (4)(A), (5) or (6) shall not be taken into account.

 

            (B) AGREEMENTS - the term "parachute payment" shall also include any

      payment in the nature of compensation to (or for the benefit of) a

      disqualified individual if such payment is made pursuant to an agreement

      which violates any generally enforced securities laws or regulations. In

      any proceeding involving the issue of whether any payment made to a

      disqualified individual is a parachute payment on account of a violation

      of any generally enforced securities laws or regulations, the burden of

      proof with respect to establishing the occurrence of a violation of such a

      law or regulation shall be upon the Secretary.

 

            (C) TREATMENT OF CERTAIN AGREEMENTS ENTERED INTO WITHIN 1 YEAR

      BEFORE CHANGE OF OWNERSHIP - For purposes of subparagraph (A)(i). any

      payment pursuant to-

 

                  (i) an agreement entered into within 1 year before the change

            described in subparagraph (A)(i) or

 

                  (ii) an amendment made within such 1-year period of a previous

            agreement.

 

      shall be presumed to be contingent on such change unless the contrary is

      established by clear and convincing evidence.

 

      (3)   BASE AMOUNT -

 

            (A) IN GENERAL. - The term "base amount" means the individual's

      annualized includible compensation for the base period.

 

            (B) ALLOCATION. - The portion of the base amount allocated to any

      parachute payment shall be an amount which bears the same ratio to the

      base amount as -

 

                  (i)   the present value of such payment, bears to

 

                  (ii)  the aggregate present value of all such payments.

 

      (4) TREATMENT OF AMOUNTS WHICH TAXPAYER ESTABLISHES AS REASONABLE

COMPENSATION - In the case of any payment described in paragraph (2)(A) -

 

            (A) The amount treated as a parachute payment shall not include the

      portion of such payment which the taxpayer established by clear and

      convincing evience is reasonable compensation for personal services to be

      rendered on or after the date of the change described in paragraph

      (2)(A)(i), and

 

            (B) The amount treated as an excess parachute payment shall be

      reduced by the portion of such payment which the taxpayer established by

      clear and convincing evidence is reasonable compensation for personal

      services actually rendered before the date of the change described in

      paragraph (2)(A)(i).

 

For purposes of subparagraph (B), reasonable compensation for services actually

rendered before the date of the change described in paragraph (2)(A)(i) shall be

first offset against the base amount.

 

      (5) EXEMPTION FOR SMALL BUSINESS CORPORATIONS, ETC. -

 

            (A) IN GENERAL. - Notwithstanding paragraph (2), the term "parachute

      payment" does not include -

 

                  (i) any payment to a disqualified individual with respect to a

            corporation which (immediately before the change described in

            paragraph (2)(A)(i)) was a small business corporation (as defined in

            section 1361(b) but without regard to paragraph (1)(C) thereof), and

 

                  (ii) any payment to a disqualified individual with respect to

            a corporation (other than a corporation described in clause (i))

            if -

 

                        (I) immediately before the change described in paragraph

                  (2)(A)(i) no stock in such corporation was readily tradeable

                  on an established securities market or otherwise, and

 

                        (II) the shareholder approval requirements of

                  subparagraph (BO are met with respect to such payment.

 

      The Secretary may, by regulations, prescribe that the requirements of

      subclause (I) of clause (ii) are not met where a substantial portion of

      the assets of any entity consists (directly or indirectly) of stock in

      such corporation and interests in such other entity are readily tradeable

      on an established securities market, or otherwise Stock described in

      section 1504(a)(4) shall not be taken into account under clause (ii)(I) if

      the payment does not adversely affect the shareholder's redemption and

      liquidation rights.

 

            (B) SHAREHOLDER APPROVAL REQUIREMENTS - The shareholder approval

      requirements of this subparagraph are met with respect to any payment if -

 

                  (i) such payment was approved by a vote of the persons who

      owned, immediately before the change described in paragraph (2)(A)(i),

      more than 75 percent of the voting power of all outstanding stock of the

      corporation, and

 

                  (ii) there was adequate disclosure to shareholders of all

      material facts concerning all payments which (but for this paragraph)

      would be parachute payments with respect to a disqualified individual.

 

      The regulations prescribed under subsection (e) shall include regulations

      providing for the application of this subparagraph in the case of

      shareholders which are not individuals (including the treatment of

      nonvoting interests in an entity which is a shareholder) and where an

      entity holds a de minimis amount of stock in the corporation.

 

      (6) EXEMPTION FOR PAYMENTS UNDER QUALIFIED PLANS. - Notwithstanding

paragraph (2), the term "parachute payment" shall not include any payment to or

from -

 

            (A) a plan described in section 401(a) which includes a trust exempt

      from tax under section 501(a),

 

            (B) an annuity plan described in section 403(a), or

 

            (C) a simplified employee pension (as defined in section 408(k)).

 

(c) DISQUALIFIED INDIVIDUALS. - For purposes of this section, the term

"disqualified individual" means any individual who is -

 

      (1) an employee, independent contractor, or other person specified in

regulations by the Secretary who performs personal services for any corporation,

and

 

      (2) is an officer, shareholder, or highly-compensation individual.

 

For purposes of this section, a personal service corporation (or similar entity)

shall be treated as an individual. For purposes of paragraph (2), the term

"highly-compensated individual" only includes an individual who is (or would be

if the individual were an employee) a member of the group consisting of the

highest paid 1 percent of the employees of the corporation or, if less, the

highest paid 250 employees of the corporation.

 

(d) OTHER DEFINITIONS AND SPECIAL RULES. - For purposes of this section -

 

      (1) ANNUALIZED INCLUDIBLE COMPENSATION FOR BASE PERIOD - The term

"annualized includible compensation for the base period" means the average

annual compensation which -

 

            (A) was payable by the corporation with respect to which the change

      in ownership or control described in paragraph (2)(A) of subsection (b)

      occurs, and

 

            (B) was includible in the gross income of the disqualified

      individual for taxable years in the base period.

 

      (2) BASE PERIOD - The term "base period" means the period consisting of

the most recent 5 taxable years ending before the date on which the change in

ownership or control described in paragraph (2)(A) of subsection (b) occurs (or

such portion of such period during which the disqualified individual performed

personal services for the corporation).

 

      (3) PROPERTY TRANSFERS. -Any transfer of property -

 

            (A)   shall be treated as a payment, and

 

            (B)   shall be taken into account as its fair market value.

 

      (4) PRESENT VALUE. - Present value shall be determined by using a discount

rate equal to 120 percent of the applicable Federal rate (determined under

section 1274(d)), compounded semiannually.

 

      (5) TREATMENT OF AFFILIATED GROUPS - Except as otherwise provided in

regulations, all members of the same affiliated group (as defined in section

1504, determined without regard to section 1504(b)) shall be treated as 1

corporation for purposes of this section. Any person who is an officer of any

member of such group shall be treated as an officer of such 1 corporation.

 

(e) REGULATIONS - The Secretary shall prescribe such regulations as may be

necessary or appropriate to carry out the purposes of this section (including

regulations for the application of this section in the case of related

corporations and in the case of personal service corporations).

 

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                                                                 Exhibit 10.14.a

 

                            ASSIGNMENT AND AMENDMENT

                            TO EMPLOYMENT AGREEMENT

 

      This Assignment and Amendment to Employment Agreement is entered into

effective as of February 1, 1997 by and among Granite Construction Company

("Granite Co."), Granite Construction Incorporated ("Granite Inc.") and William

G. Dorey (the "Executive").

 

      WHEREAS, Granite Co. and the Executive entered into an Employment

Agreement effective as of April 20, 1990 (the "Agreement").

 

      WHEREAS, subsequent to execution of the Agreement, Executive, along with

other executives of Granite Co., was formally employed by Granite Inc., the

parent of Granite Co.

 

      WHEREAS, the parties desire to transfer the obligations of Granite Co.

under the Agreement to Granite Inc.

 

      NOW THEREFORE, the parties agree as follows:

 

      1.    Assignment. All obligations of Granite Co. under the Agreement are

      hereby assigned to and assumed by Granite Inc.

 

      2.    Meaning of "Company". All references to "Company" in the Agreement

      as hereby amended, including expressly the references relating to change

      in control in Section 6 of the Agreement, are hereinafter references to

      Granite Inc.

 

 

      3.    No Further Changes. Except as set forth herein the Agreement shall

            remain in full force and effect as originally written.

 

      IN WITNESS WHEREOF, the parties have executed this Assignment and

Amendment to Employment Agreement effective as the day and year first above

written.

 

GRANITE CONSTRUCTION COMPANY                       GRANITE CONSTRUCTION

                                                   INCORPORATED

 

By: /s/  David H. Watts                            By: /s/  David H. Watts

    ------------------------                           -------------------------

 

Title: David H. Watts                              Title: David H. Watts

 

EXECUTIVE

 

/s/  William G. Dorey

----------------------------

 

William G. Dorey

----------------------------

    Name (Please Print)

 

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Exhibit 99.1

GRANITE CONSTRUCTION INCORPORATED
EXECUTIVE RETENTION AND SEVERANCE PLAN

     1. Establishment and Purpose

          1.1 Establishment. The Granite Construction Incorporated Executive Retention and Severance Plan (the Plan) is hereby established by the Board of Directors of Granite Construction Incorporated, effective September 20, 2007 (the Effective Date).

          1.2 Purpose. The Company draws upon the knowledge, experience and advice of the officers and key employees of the Company and its subsidiaries in order to manage its business for the benefit of the Company’s stockholders. Due to the widespread awareness of the possibility of mergers, acquisitions and other strategic alliances in the Company’s industry, the topic of compensation and other employee benefits in the event of a Change in Control is an issue in competitive recruitment and retention efforts. The Committee recognizes that the possibility or pending occurrence of a Change in Control could lead to uncertainty regarding the consequences of such an event and could adversely affect the Company’s ability to attract, retain and motivate officers and key employees. The Committee has therefore determined that it is in the best interests of the Company and its stockholders to provide for the continued dedication of officers and key employees notwithstanding the possibility or occurrence of a Change in Control by establishing this Plan to provide designated officers and key employees with enhanced financial security in the event of a Change in Control. The purpose of this Plan is to provide its Participants with specified compensation and benefits in the event of termination of employment under circumstances specified herein upon or following a Change in Control. The Company intends that all payments pursuant to the Plan be exempt from or comply with all applicable requirements of Section 409A (as defined below), and the Plan shall be so construed.

     2. Definitions and Construction

          2.1 Definitions. Whenever used in this Plan, the following terms shall have the meanings set forth below:

               (a) Annual Bonus Ratemeans an amount equal to the annual average of the aggregate of all annual incentive bonuses earned by the Participant (whether or not actually paid) under the terms of the programs, plans or agreements providing for such bonuses for the three (3) fiscal years of the Company immediately preceding the fiscal year of the Change in Control (or the portion of such three fiscal years during which the Participant was employed by the Company). For this purpose, annual incentive bonuses shall not include signing bonuses or other nonrecurring cash incentive awards.

               (b) Base Salary Ratemeans the Participant’s annual base salary rate in effect immediately prior to the Participant’s Termination Upon a Change in Control, without giving effect to any reduction in the Participant’s base salary rate which constitutes Good Reason. For this purpose, base salary does not include any bonuses, commissions, fringe benefits, car allowances, other irregular payments or any other compensation except base salary.

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               (c) Boardmeans the Board of Directors of the Company.

               (d) Causemeans the occurrence of any of the following: (1) the Participant’s theft, dishonesty, misconduct, breach of fiduciary duty for personal profit, or falsification of any documents or records of the Company Group; (2) the Participant’s material failure to abide by the code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct) of any member of the Company Group; (3) misconduct by the Participant within the scope of Section 304 of the Sarbanes-Oxley Act of 2002 as a result of which of the Company is required to prepare an accounting restatement; (4) the Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of a member of the Company Group (including, without limitation, the Participant’s improper use or disclosure of the confidential or proprietary information of a member of the Company Group); (5) any intentional act by the Participant which has a material detrimental effect on the reputation or business of a member of the Company Group; (6) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written notice from a member of the Company Group of, and a reasonable opportunity to cure, such failure or inability; (7) any material breach by the Participant of any employment, non-disclosure, non-competition, non-solicitation or other similar agreement between the Participant and a member of the Company Group, which breach is not cured pursuant to the terms of such agreement; or (8) the Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with a member of the Company Group.

               (e) Change in Controlmeans, except as otherwise provided in the Participation Agreement applicable to a given Participant, the occurrence of any of the following:

                    (1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act)), other than a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) “beneficial ownership” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of stock of the Company representing more than percent (30%) of the total combined voting power of the Company’s then-outstanding stock entitled to vote generally in the election of directors;

                    (2) the Company is party to a merger or consolidation which results in the holders of the voting stock of the Company outstanding immediately prior thereto failing to retain immediately after such merger or consolidation direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the stock entitled to vote generally in the election of directors of the Company or the surviving entity outstanding immediately after such merger or consolidation;

                    (3) the sale or disposition of all or substantially all of the Company’s assets or consummation of any transaction having similar effect (other than a sale or disposition to one or more subsidiaries of the Company); or

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                    (4) a change in the composition of the Board within any consecutive 12-month period as a result of which fewer than a majority of the directors are Incumbent Directors;

provided, however, that a Change in Control shall be deemed not to include a transaction described in subsections (1) or (2) of this Section in which a majority of the members of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately after such transaction is comprised of Incumbent Directors. Notwithstanding the foregoing, to the extent that any amount constituting Section 409A Deferred Compensation would become payable under this Plan by reason of a Change in Control, such amount shall become payable only if the event constituting a Change in Control would also constitute a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A.

               (f) Change in Control Periodmeans a period commencing upon the consummation of a Change in Control and ending on the date occurring three (3) years thereafter.

               (g) Codemeans the Internal Revenue Code of 1986, as amended, or any successor thereto and any applicable regulations promulgated thereunder.

               (h) Committeemeans the Compensation Committee of the Board.

               (iCompanymeans Granite Construction Incorporated, a Delaware corporation, and, following a Change in Control, a Successor that agrees to assume all of the terms and provisions of this Plan or a Successor which otherwise becomes bound by operation of law to this Plan.

               (j) Company Groupmeans the group consisting of the Company and each present or future parent and subsidiary corporation or other business entity thereof.

               (k) Disabilitymeans a Participant’s permanent and total disability within the meaning of Section 22(e)(3) of the Code.

               (l) Employer Contribution Ratemeans an amount equal to the annual average of the aggregate employer contributions (excluding contributions deducted from the Participant’s compensation and treated as employer contributions) made on behalf of the Participant for the three (3) fiscal years of the Company immediately preceding the fiscal year of the Change in Control (or the portion of such three fiscal years during which the Participant was employed by the Company) to the Employee Stock Ownership Plan, profit sharing plan and any other retirement plan of the Company Group in effect immediately prior to the Change in Control.

               (m) Equity Awardmeans any Option, Restricted Stock, Restricted Stock Units, performance shares, performance units or other stock-based compensation award granted by the Company or any other Company Group member to a Participant, including any such award which is assumed by, or for which a replacement award is substituted by, the successor or any other member of the Company Group in connection with a Change in Control.

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               (n) Good Reasonmeans the occurrence during a Change in Control Period of any of the following conditions without the Participant’s informed written consent, which condition(s) remain(s) in effect thirty (30) days after written notice to the Company from the Participant of such condition(s) and which notice must have been given within sixty (60) days following the initial occurrence of such condition(s):

                    (1) 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 the Company or an equivalent business unit of its parent; or;

                    (2) a decrease in the Participant’s Base Salary Rate;

                    (3) the relocation of the Participant’s work place for the Company Group to a location that increases the regular commute distance between the Participant’s residence and work place by more than thirty (30) miles (one-way); or

                    (4) any material breach of this Plan by the Company with respect to the Participant.

The existence of Good Reason shall not be affected by the Participant’s temporary incapacity due to physical or mental illness not constituting a Disability. The Participant’s continued employment for a period not exceeding one hundred twenty (120) days following the occurrence of any condition constituting Good Reason shall not constitute consent to, or a waiver of rights with respect to, such condition. For the purposes of any determination regarding the existence of Good Reason hereunder, any claim by the Participant that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board that Good Reason does not exist, and the Board, acting in good faith, affirms such determination by a vote of not less than two-thirds of its entire membership (excluding the Participant if the Participant is a member of the Board).

               (o) Incumbent Directormeans a director who either (1) is a member of the Board as of the Effective Date, or (2) is elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination, but (3) was not elected or nominated in connection with an actual or threatened proxy contest relating to the election of directors of the Company.

               (p) Optionmeans any option to purchase shares of the capital stock of the Company or of any other member of the Company Group granted to a Participant by the Company or any other Company Group member, whether granted before or after a Change in Control, including any such option which is assumed by, or for which a replacement option is substituted by, the Successor or any other member of the Company Group in connection with the Change in Control.

               (q) Participantmeans each officer and each key employee designated by the Committee to participate in the Plan, provided such individual has executed a Participation Agreement.

               (r) Participation Agreementmeans an Agreement to Participate in the Plan in the form attached hereto as Exhibit A or in such other form as the Committee may

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approve from time to time; provided, however, that, after a Participation Agreement has been entered into between a Participant and the Company, it may be modified only by a supplemental written agreement executed by both the Participant and the Company. The terms of such forms of Participation Agreement need not be identical with respect to each Participant. For example, a Participation Agreement may limit the duration of a Participant’s participation in the Plan or may modify the definition of “Change in Control” with respect to a Participant.

               (s) Releasemeans a general release of all known and unknown claims against the Company and its affiliates and their stockholders, directors, officers, employees, agents, successors and assigns substantially in the form attached hereto as Exhibit B (“General Release of Claims [Age 40 and over]”) or Exhibit C (“General Release of Claims [Under age 40]”), whichever is applicable, with any modifications thereto determined by legal counsel to the Company to be necessary or advisable to comply with applicable law or to accomplish the intent of Section 8 (Exclusive Remedy) hereof.

               (t) Restricted Stockmeans any compensatory award of shares of the capital stock of the Company or of any other member of the Company Group granted to a Participant by the Company or any other Company Group member, whether such shares are granted or acquired before or after a Change in Control, including any shares issued in exchange for any such shares by a Successor or any other member of the Company Group in connection with a Change in Control.

               (u) Restricted Stock Unitsmean any compensatory award of rights to receive shares of the capital stock or cash in an amount measured by the value of shares of the capital stock of the Company or of any other member of the Company Group granted to a Participant by the Company or any other Company Group member, whether such rights are granted before or after a Change in Control, including any such rights issued in exchange for any such rights by a Successor or any other member of the Company Group in connection with a Change in Control.

               (v) Section 409Ameans Section 409A of the Code and any applicable regulations and other administrative guidance promulgated thereunder.

               (w) Section 409A Deferred Compensationmeans compensation and benefits provided by the Plan that constitute deferred compensation subject to and not exempted from the requirements of Section 409A.

               (x) Separation from Servicemeans a separation from service within the meaning of Section 409A.

               (y) Specified Employeemeans a specified employee within the meaning of Section 409A.

               (z) Successormeans any successor in interest to substantially all of the business and/or assets of the Company.

               (aaTermination Upon a Change in Controlmeans the occurrence of any of the following events during the Change in Control Period:

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                    (1) termination by the Company Group of the Participant’s employment for any reason other than Cause; or

                    (2) the Participant’s resignation for Good Reason from all capacities in which the Participant is then rendering service to the Company Group, provided that such resignation occurs no later than one hundred twenty (120) days following the occurrence of the condition constituting Good Reason;

provided, however, that Termination Upon a Change in Control shall not include any termination of the Participant’s employment which is (i) for Cause, (ii) a result of the Participant’s death or Disability, or (iii) a result of the Participant’s voluntary termination of employment other than for Good Reason.

          2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

     3. Eligibility

          The Board or Committee shall designate those officers and key employees of the Company or any other member of the Company Group who shall be eligible to become Participants in the Plan. To become a Participant, the designated officer or key employee must execute a Participation Agreement.

     4. Treatment of Equity Awards Upon a Change in Control

          4.1 Options. Notwithstanding any provision to the contrary contained in any plan or agreement evidencing an Option granted to a Participant, in the event of a Change in Control in which the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the Acquiring Corporation), does not assume or continue the Company’s rights and obligations under the then-outstanding Option held by the Participant or substitute for such Option a substantially equivalent option for the Acquiring Corporation’s stock, then the vesting and exercisability of such Option which is not assumed, continued or substituted for shall be accelerated in full effective immediately prior to but conditioned upon the consummation of the Change in Control, provided that the Participant remains an employee or other service provider with the Company Group immediately prior to the Change in Control. For purposes of this Section, an Option shall be deemed assumed if, and only if, following the Change in Control, the Option confers the right to receive, subject to the terms and conditions of the stock plan and stock option agreement pursuant to which such Option was granted which are not inconsistent with this Section, for each share of stock of the Company subject to the Option immediately prior to the consummation of the Change in Control (and not previously issued upon the exercise of such Option), stock of the Acquiring Corporation having a fair market value equal to the fair market value of the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a share of stock

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of the Company on the effective date of the Change in Control was entitled, such fair market values being determined as of the date of the Change in Control.

          4.2 Restricted Stock and Restricted Stock Units. Notwithstanding any provision to the contrary contained in any plan or agreement evidencing Restricted Stock or Restricted Stock Units held by a Participant, such Restricted Stock and Restricted Stock Units shall vest in full upon the consummation of a Change in Control, provided that the Participant remains an employee or other service provider with the Company Group immediately prior to the Change in Control.

          4.3 Other Equity Awards. Except as set forth in Sections 4.1 and 4.2 above, the treatment of stock-based compensation upon the consummation of a Change in Control shall be determined in accordance with the terms of the plans or agreements providing for such awards.

The provisions of this Section 4 with respect to all amounts that constitute Section 409A Deferred Compensation shall be subject to, limited by and construed in accordance with the requirements of Section 409A and Section 6.2 below.

     5. Termination Upon a Change in Control

          In the event of a Participant’s Termination Upon a Change in Control, the Participant shall be entitled to receive:

          5.1 Accrued Obligations. The Participant shall be entitled to receive:

               (a) all salary, commissions and accrued but unused vacation earned through the date of the Participant’s termination of employment;

               (b) reimbursement within ten (10) business days of submission, within thirty (30) days following the Participant’s termination of employment, of proper expense reports of all expenses reasonably and necessarily incurred by the Participant in connection with the business of the Company Group prior to his or her termination of employment; and

               (c) the benefits, if any, under any Company Group retirement plan, nonqualified deferred compensation plan or stock-based compensation plan or agreement (other than any such plan or agreement pertaining to Equity Award whose treatment is prescribed by Section 5.2(c) below), health benefits plan or other Company Group benefit plan to which the Participant may be entitled pursuant to the terms of such plans or agreements.

          5.2 Severance Benefits. Provided that on or before the sixtieth (60th) day following the Participant’s Termination Upon a Change in Control, the Participant executes the Release applicable to such Participant and the period for revocation, if any, of such Release has expired without the Release having been revoked, the Participant shall be entitled to receive the following severance payments and benefits:

               (a) Salary, Bonus and Employer Contributions. Subject to Section 6.2, the Company shall pay to the Participant in a lump sum cash payment on the

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seventy-fifth (75th) day following the Participant’s Termination Upon a Change in Control an amount equal to the product of three (3) and the sum of (a) the Participant’s Base Salary Rate, (b) the Participant’s Annual Bonus Rate and (c) the Participant’s Employer Contribution Rate.

               (b) Health , Life and Long-Term Disability Insurance Benefits. Subject to Section 6.2, the Company shall pay to the Participant in a lump sum cash payment on the seventy-fifth (75th) day following the Participant’s Termination Upon a Change in Control an amount equal to the product of three (3) and the average annual premium cost to the Company Group for health (including medical and dental), life and long-term disability insurance benefits provided to the Participant (including his or her dependents covered by such insurance benefits immediately prior to the Termination Upon a Change in Control) for the three (3) fiscal years of the Company immediately preceding the fiscal year of the Termination Upon a Change in Control (or the portion of such three fiscal years during which the Participant was employed by the Company).

               (c) Acceleration of Vesting of Equity Awards. Notwithstanding any provision to the contrary contained in any plan or agreement evidencing an Equity Award granted to a Participant but subject to Section 6.2, the vesting, exercisability and settlement of each of the Participant’s outstanding Equity Awards which were not otherwise accelerated pursuant to Section 4 shall be accelerated in full effective as of the date of the Participant’s Termination Upon a Change in Control so that each Equity Award held by the Participant shall be immediately exercisable and fully vested (and, in the case of Restricted Stock Units, performance shares, performance units and similar stock-based compensation, shall be settled in full), as of the date of the Participant’s Termination Upon a Change in Control.

               (d) Outplacement Services. Subject to Section 6.2, the Company shall provide at its expense reasonable professional outplacement services to the Participant until the earlier of two (2) years following the Participant’s Termination Upon a Change in Control or the date on which the Participant obtains other employment.

          5.3 Indemnification; Insurance.

               (a) In addition to any rights a Participant may have under any indemnification agreement previously entered into between the Company and such Participant (a Prior Indemnity Agreement), from and after the date of the Participant’s Termination Upon a Change in Control, the Company shall indemnify and hold harmless the Participant against any costs or expenses (including attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, by reason of the fact that the Participant is or was a director, officer, employee or agent of the Company Group, or is or was serving at the request of the Company Group as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, whether asserted or claimed prior to, at or after the date of the Participant’s termination of employment, to the fullest extent permitted under applicable law, and the Company shall also advance fees and expenses (including attorneys’ fees) as incurred by the Participant to the fullest extent permitted under applicable law. In the event of a conflict between the provisions of a Prior Indemnity Agreement and the provisions of this Plan, the Participant may elect which provisions shall govern.

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               (b) For a period of six (6) years from and after the date of the Termination Upon a Change in Control of a Participant who was an officer and/or director of the Company at any time prior to such termination of employment, the Company shall maintain a policy of directors’ and officers’ liability insurance for the benefit of such Participant which provides him or her with coverage no less favorable than that provided for the Company’s continuing officers and directors.

     6. Certain Federal Tax Considerations

          6.1 Federal Excise Tax Under Section 4999 of the Code.

               (a) Treatment of Excess Parachute Payments. In the event that any payment or benefit received or to be received by a Participant pursuant to this Plan or otherwise payable to the Participant (collectively, the Payments) would subject the Participant to any excise tax pursuant to Section 4999 of the Code, or any similar or successor provision (the Excise Tax), due to the characterization of the Payments as “excess parachute payments” under Section 280G of the Code or any similar or successor provision (Section 280G), then, if the present value determined in accordance with Section 280G (the “Parachute Value”) of those portions of the Payments that constitute “parachute payments” under Section 280G would exceed an amount (the “Safe Harbor Amount”) equal to 2.99 times the Participant’s “base amount” within the meaning of Section 280G, then the aggregate amount of the Payments to be paid to the Participant shall be reduced to the extent necessary so that the Parachute Value of such Payments does not exceed the Safe Harbor Amount.

               (b) Determination of Amounts. All computations and determinations called for by this Section 6.1 shall be promptly determined and reported in writing to the Company and the Participant by independent public accountants or other independent advisors selected by the Company and reasonably acceptable to the Participant (the Accountants), and all such computations and determinations shall be conclusive and binding upon the Participant and the Company. For the purposes of such determinations, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make their required determinations. The Company shall bear all fees and expenses charged by the Accountants in connection with such services.

          6.2 Compliance with Section 409A. Notwithstanding any other provision of the Plan to the contrary, the provision, time and manner of payment or distribution of all compensation and benefits provided by the Plan that constitute Section 409A Deferred Compensation shall be subject to, limited by and construed in accordance with the requirements of Section 409A, including the following:

               (a) Separation from Service. Payments and benefits constituting Section 409A Deferred Compensation otherwise payable or provided pursuant to Sections 5 upon a Participant’s Termination Upon a Change in Control shall be paid or provided only at the time of a termination of Participant’s employment which constitutes a Separation from Service.

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               (b) Six-Month Delay Applicable to Specified Employees. Payments and benefits constituting Section 409A Deferred Compensation to be paid or provided pursuant to Sections 5 or 6.1 pursuant to the Separation from Service of a Participant who is a Specified Employee shall be paid or provided commencing on the later of (1) the date that is six (6) months after the date of such Separation from Service or, if earlier, the date of death of the Participant (in either case, the Delayed Payment Date), or (2) the date or dates on which such Section 409A Deferred Compensation would otherwise be paid or provided in accordance with Section 5 or 6.1, as applicable. All such amounts that would, but for this Section 6.2(b), become payable prior to the Delayed Payment Date shall be accumulated and paid on the Delayed Payment Date.

               (c) Restricted Stock Units and Other Stock-Based Awards. The vesting of any Restricted Stock Units or other stock-based compensation awards which constitute Section 409A Deferred Compensation and are held by a Participant who is a Specified Employee shall be accelerated in accordance with Section 5.2(c) to the extent applicable; provided, however, that the payment in settlement of any such awards shall occur on the Delayed Payment Date. Restricted Stock Units and other stock-based compensation which vests and becomes payable upon a Change in Control in accordance with Section 4.2 or Section 4.3 shall not be subject to this Section 6.2(c).

     7. Conflict in Benefits; Noncumulation of Benefits

          7.1 Effect of Plan. The terms of this Plan, when accepted by a Participant pursuant to an executed Participation Agreement, shall supersede all prior arrangements, whether written or oral, and understandings regarding the subject matter of this Plan and, subject to Section 7.2, shall be the exclusive agreement for the determination of any payments and benefits due to the Participant upon the events described in Sections 4, 5 and 6.

          7.2 Noncumulation of Benefits. Except as expressly provided in a written agreement between a Participant and the Company entered into after the date of such Participant’s Participation Agreement and which expressly disclaims this Section 7.2 and is approved by the Board or the Committee, the total amount of payments and benefits that may be received by the Participant as a result of the events described in Sections 4, 5 and 6 pursuant to (a) the Plan, (b) any agreement between the Participant and the Company or (c) any other plan, practice or statutory obligation of the Company, shall not exceed the amount of payments and benefits provided by this Plan upon such events (plus any payments and benefits provided pursuant to an agreement evidencing a Prior Indemnity Agreement), and the aggregate amounts payable under this Plan shall be reduced to the extent of any excess (but not below zero).

     8. Exclusive Remedy

          The payments and benefits provided by Section 5 and Section 6 (plus any payments and benefits provided pursuant to an agreement evidencing a Prior Indemnity Agreement), if applicable, shall constitute the Participant’s sole and exclusive remedy for any alleged injury or other damages arising out of the cessation of the employment relationship between the Participant and the Company in the event of the Participant’s Termination Upon a Change in Control. The Participant shall be entitled to no other compensation, benefits, or other payments from the Company as a result of any Termination Upon a Change in Control with

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respect to which the payments and benefits described in Section 5 and Section 6 (plus any payments and benefits provided pursuant to an agreement evidencing a Prior Indemnity Agreement), if applicable, have been provided to the Participant, except as expressly set forth in this Plan or, subject to the provisions of Sections 7.2, in a duly executed employment agreement between Company and the Participant.

     9. Proprietary and Confidential Information

          The Participant agrees to continue to abide by the terms and conditions of the confidentiality and/or proprietary rights agreement between the Participant and the Company.

     10. Nonsolicitation

          If the Company performs its obligations to deliver the payments and benefits set forth in Section 5 and Section 6 (plus any payments and benefits provided pursuant to an agreement evidencing an Equity Award or a Prior Indemnity Agreement), then for a period equal to the Benefit Period applicable to a Participant following the Participant’s Termination Upon a Change in Control, the Participant shall not, directly or indirectly, recruit, solicit or invite the solicitation of any employees of the Company or any other member of the Company Group to terminate their employment relationship with the Company.

     11. No Contract of Employment

          Neither the establishment of the Plan, nor any amendment thereto, nor the payment of any benefits shall be construed as giving any person the right to be retained by the Company, a Successor or any other member of the Company Group. Except as otherwise established in an employment agreement between the Company and a Participant, the employment relationship between the Participant and the Company is an “at-will” relationship. Accordingly, either the Participant or the Company may terminate the relationship at any time, with or without cause, and with or without notice except as otherwise provided by Section 14. In addition, nothing in this Plan shall in any manner obligate any Successor or other member of the Company Group to offer employment to any Participant or to continue the employment of any Participant which it does hire for any specific duration of time.

     12. Arbitration

          12.1 Disputes Subject to Arbitration. Any claim, dispute or controversy arising out of this Plan, the interpretation, validity or enforceability of this Plan or the alleged breach thereof shall be submitted by the parties to binding arbitration by the American Arbitration Association; provided, however, that (a) the arbitrator shall have no authority to make any ruling or judgment that would confer any rights with respect to trade secrets, confidential and proprietary information or other intellectual property; and (b) this arbitration provision shall not preclude the parties from seeking legal and equitable relief from any court having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse or misappropriation of intellectual property. Judgment may be entered on the award of the arbitrator in any court having jurisdiction.

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          12.2 Site of Arbitration. The site of the arbitration proceeding shall be in Santa Clara, California or any other site mutually agreed to by the Company and the Participant.

          12.3 Costs and Expenses Borne by Company. All costs and expenses of arbitration, including but not limited to reasonable attorneys’ fees and other costs reasonably incurred by the Participant in connection with an arbitration in accordance with this Section 12, shall be paid by the Company. Notwithstanding the foregoing, if the Participant initiates the arbitration, and the arbitrator finds that the Participant’s claims were totally without merit or frivolous, then the Participant shall be responsible for the Participant’s own attorneys’ fees and costs.

     13. Successors and Assigns

          13.1 Successors of the Company. The Company shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, expressly, absolutely and unconditionally to assume and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place.

          13.2 Acknowledgment by Company. If, after a Change in Control, the Company fails to reasonably confirm that it has performed the obligation described in Section 13.1 within twenty (20) business days after written notice from the Participant, such failure shall be a material breach of this Plan and shall entitle the Participant to resign for Good Reason and to receive the benefits provided under this Plan in the event of Termination Upon a Change in Control.

          13.3 Heirs and Representatives of Participant. This Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devises, legatees or other beneficiaries. If the Participant should die while any amount would still be payable to the Participant hereunder (other than amounts which, by their terms, terminate upon the death of the Participant) if the Participant had continued to live, then all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to the executors, personal representatives or administrators of the Participant’s estate.

     14. Notices

          14.1 General. For purposes of this Plan, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States certified mail, return receipt requested, or by overnight courier, postage prepaid, as follows:

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               (a) if to the Company:

Granite Construction Incorporated
585 West Beach Street
Watsonville CA 95076
Attention: President

               (b) if to the Participant, at the home address which the Participant most recently communicated to the Company in writing.

Either party may provide the other with notices of change of address, which shall be effective upon receipt.

          14.2 Notice of Termination. Any termination by the Company of the Participant’s employment during the Change in Control Period or any resignation by the Participant during the Change in Control Period shall be communicated by a notice of termination or resignation to the other party hereto given in accordance with Section 14.1. Such notice shall indicate the specific termination provision in this Plan relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date.

     15. Termination and Amendment of Plan

          This Plan and/or any Participation Agreement executed by a Participant may not be terminated with respect to such Participant without the written consent of the Participant and the approval of the Board or the Committee. This Plan and/or any Participation Agreement executed by a Participant may be modified, amended or superseded with respect to such Participant only by a supplemental written agreement between the Participant and the Company approved by the Board or the Committee. Notwithstanding any other provision of the Plan to the contrary, the Board or the Committee may, in its sole and absolute discretion and without the consent of any Participant, amend the Plan or any Participation Agreement, to take effect retroactively or otherwise, as it deems necessary or advisable for the purpose of conforming the Plan or such Participation Agreement to any present or future law relating to plans of this or similar nature (including, but not limited to, Section 409A of the Code), and to the administrative regulations and rulings promulgated thereunder.

     16. Miscellaneous Provisions

          16.1 Unfunded Obligation. Any amounts payable to Participants pursuant to the Plan are unfunded obligations. The Company shall not be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Board or the Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of the Company.

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          16.2 No Duty to Mitigate; Obligations of Company. A Participant shall not be required to mitigate the amount of any payment or benefit contemplated by this Plan by seeking employment with a new employer or otherwise, nor shall any such payment or benefit be reduced by any compensation or benefits that the Participant may receive from employment by another employer. Except as otherwise provided by this Plan, the obligations of the Company to make payments to the Participant and to make the arrangements provided for herein are absolute and unconditional and may not be reduced by any circumstances, including without limitation any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Participant or any third party at any time.

          16.3 No Representations. By executing a Participation Agreement, the Participant acknowledges that in becoming a Participant in the Plan, the Participant is not relying and has not relied on any promise, representation or statement made by or on behalf of the Company which is not set forth in this Plan.

          16.4 Waiver. No waiver by the Participant or the Company of any breach of, or of any lack of compliance with, any condition or provision of this Plan by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

          16.5 Choice of Law. The validity, interpretation, construction and performance of this Plan shall be governed by the substantive laws of the State of California, without regard to its conflict of law provisions.

          16.6 Validity. The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which shall remain in full force and effect.

          16.7 Benefits Not Assignable. Except as otherwise provided herein or by law, no right or interest of any Participant under the Plan shall be assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including, without limitation, by execution, levy, garnishment, attachment, pledge or in any other manner, and no attempted transfer or assignment thereof shall be effective. No right or interest of any Participant under the Plan shall be liable for, or subject to, any obligation or liability of such Participant.

          16.8 Tax Withholding. All payments made pursuant to this Plan will be subject to withholding of applicable income and employment taxes.

          16.9 Consultation with Legal and Financial Advisors. By executing a Participation Agreement, the Participant acknowledges that this Plan confers significant legal rights, and may also involve the waiver of rights under other agreements; that the Company has encouraged the Participant to consult with the Participant’s personal legal and financial advisors; and that the Participant has had adequate time to consult with the Participant’s advisors before executing the Participation Agreement.

          16.10 Further Assurances. From time to time, at the Company’s request and without further consideration, the Participant shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be

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necessary or desirable to make effective, in the most expeditious manner possible, the terms of the Plan, the Participant’s Participation Agreement and the Release, and to provide adequate assurance of the Participant’s due performance thereunder.

     17. Agreement

          By executing a Participation Agreement, the Participant acknowledges that the Participant has received a copy of this Plan and has read, understands and is familiar with the terms and provisions of this Plan. This Plan shall constitute an agreement between the Company and the Participant executing a Participation Agreement.

          IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing Plan was duly adopted by the Board on September 20, 2007.

 

 

 

 

 

 

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EXHIBIT A

FORM OF

AGREEMENT TO PARTICIPATE IN THE

GRANITE CONSTRUCTION INCORPORATED

EXECUTIVE RETENTION AND SEVERANCE PLAN

 


 

AGREEMENT TO PARTICIPATE IN THE
GRANITE CONSTRUCTION INCORPORATED
EXECUTIVE RETENTION AND SEVERANCE PLAN
As Adopted September 20, 2007

     In consideration of the benefits provided by the Granite Construction Incorporated Executive Retention and Severance Plan, as adopted September 20, 2007 (the Plan), the undersigned employee of Granite Construction Incorporated (the Company) or any of its subsidiaries and the Company agree that, as of the date written below, the undersigned shall become a Participant in the Plan and shall be fully bound by and subject to all of its provisions. All references to a “Participant” in the Plan shall be deemed to refer to the undersigned.

     The undersigned employee acknowledges that the Plan confers significant legal rights and may also constitute a waiver of rights under other agreements with the Company; that the Company has encouraged the undersigned to consult with the undersigned’s personal legal and financial advisors; and that the undersigned has had adequate time to consult with the undersigned’s advisors before executing this agreement.

     The undersigned employee acknowledges that he or she has received a copy of the Plan and has read, understands and is familiar with the terms and provisions of the Plan. The undersigned employee further acknowledges that (1) by accepting the arbitration provision set forth in Section 12 of the Plan, the undersigned is waiving any right to a jury trial in the event of any dispute covered by such provision and (2) except as otherwise established in an employment agreement between a member of the Company Group and the undersigned, the employment relationship between the undersigned and his or her employer is an “at-will” relationship.

     Executed on                                                             .

 

 

 

 

 

 

 

PARTICIPANT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name Printed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GRANITE CONSTRUCTION INCORPORATED

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 


 

EXHIBIT B

FORM OF

GENERAL RELEASE OF CLAIMS

[Age 40 and over]

 


 

GENERAL RELEASE OF CLAIMS

[Age 40 and over]

     This Agreement is by and between [Employee Name] (“Employee”) and [Granite Construction Incorporated or successor that agrees to assume the Executive Retention and Severance Plan following a Change in Control] (the “Company”). This Agreement will become effective on the eighth (8th) day after it is signed by Employee (the “Effective Date”), provided that the Company has signed this Agreement and Employee has not revoked this Agreement (by written notice to [Company Contact Name] at the Company) prior to that date.

RECITALS

     A. Employee was employed by the Company or its                                         subsidiary as of                     , ___.

     B. Employee and the Company entered into an Agreement to Participate in the Granite Construction Incorporated Executive Retention and Severance Plan (such agreement and plan being referred to herein as the “Plan”) effective as of                     , ___wherein Employee is entitled to receive certain benefits in the event of a Termination Upon a Change in Control (as defined by the Plan), provided Employee signs and does not revoke a Release (as defined by the Plan).

     C. A Change in Control (as defined by the Plan) has occurred as a result of [briefly describe change in control]

     D. Employee’s employment is being terminated as a result of a Termination Upon a Change in Control. Employee’s last day of work and termination are effective as of                     , ___. Employee desires to receive the payments and benefits provided by the Plan by executing this Release.

     NOW, THEREFORE, the parties agree as follows:

     1. Commencing on the Effective Date, the Company shall provide Employee with the applicable payments and benefits set forth in the Plan in accordance with the terms of the Plan. Employee acknowledges that the payments and benefits made pursuant to this paragraph are made in full satisfaction of the Company’s obligations under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued, unused vacation that Employee earned during his or her employment with the Company or its subsidiary.

     2. Employee and Employee’s successors release the Company, its respective subsidiaries, stockholders, investors, directors, officers, employees, agents, attorneys, insurers, legal successors and assigns of and from any and all claims, actions and causes of action, whether now known or unknown, which Employee now has, or at any other time had, or shall or may have against those released parties based upon or arising out of any matter, cause, fact, thing, act or omission whatsoever directly related to Employee’s employment by the Company or a subsidiary or the termination of such employment and occurring or existing at any time up to and including the Effective Date, including, but not limited to, any claims of breach of written

 


 

contract, wrongful termination, retaliation, fraud, defamation, infliction of emotional distress, or national origin, race, age, sex, sexual orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967, the Americans with Disabilities Act, the Fair Employment and Housing Act or any other applicable law. Notwithstanding the foregoing, this release shall not apply to any right of the Employee pursuant to Section 5.3 of the Plan or pursuant to a Prior Indemnity Agreement (as such term is defined by the Plan).

     3. Employee acknowledges that he or she has read Section 1542 of the Civil Code of the State of California, which states in full:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

Employee waives any rights that Employee has or may have under Section 1542 and comparable or similar provisions of the laws of other states in the United States to the full extent that he or she may lawfully waive such rights pertaining to this general release of claims, and affirms that Employee is releasing all known and unknown claims that he or she has or may have against the parties listed above.

     4. Employee and the Company acknowledge and agree that they shall continue to be bound by and comply with the terms and obligations under the following agreements: (i) any proprietary rights or confidentiality agreements between the Company or its subsidiary and Employee, (ii) the Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to which Employee is a party, and (iv) any agreement between the Company or its subsidiary and Employee evidencing an Equity Award (as such term is defined by the Plan), as modified by the Plan.

     5. This Agreement shall be binding upon, and shall inure to the benefit of, the parties and their respective successors, assigns, heirs and personal representatives.

     6. The parties agree that any and all disputes that both (i) arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement or the interpretation of the terms of this Agreement shall be subject to binding arbitration pursuant to Section 12 of the Plan.

     7. The parties agree that any and all disputes that (i) do not arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement or any of the matters herein released or herein described shall be subject to binding arbitration, to the extent permitted by law, in Santa Clara, California or any other site mutually agreed to by the Company and Employee, before the American Arbitration Association, as provided in this paragraph. The parties agree to and hereby waive their rights to jury trial as to such matters to the extent permitted by law; provided however, that (a) the arbitrator shall have no authority to make any ruling or judgment that would confer any rights with respect to trade secrets,

-2-


 

confidential and proprietary information or other intellectual property; and (b) this arbitration provision shall not preclude the parties from seeking legal and equitable relief from any court having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse or misappropriation of intellectual property. The Company shall bear the costs of the arbitrator, forum and filing fees and each party shall bear its own respective attorney fees and all other costs, unless otherwise provided by law and awarded by the arbitrator.

     8. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether written or oral, with the exception of any agreements described in paragraph 4 of this Agreement. This Agreement may not be modified or amended except by a document signed by an authorized officer of the Company and Employee. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected.

EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE FURTHER UNDERSTANDS THAT EMPLOYEE MAY HAVE UP TO 45 DAYS TO CONSIDER THIS AGREEMENT, THAT EMPLOYEE MAY REVOKE IT AT ANY TIME DURING THE 7 DAYS AFTER EMPLOYEE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1.

 

 

 

Dated:

 

 

 

 

 

 

 

[Employee Name]

 

 

 

 

 

[Company]

 

 

 

Dated:

 

By:

 

 

 

-3-


 

EXHIBIT C

FORM OF

GENERAL RELEASE OF CLAIMS
[Under age 40]

 


 

GENERAL RELEASE OF CLAIMS
[Under age 40]

     This Agreement is by and between [Employee Name] (“Employee”) and [Granite Construction Incorporated or successor that agrees to assume the Executive Retention and Severance Plan following a Change in Control] (the “Company”). This Agreement is effective on the day it is signed by Employee (the “Effective Date”).

RECITALS

     A. Employee was employed by the Company or its                                          subsidiary as of                     , ___.

     B. Employee and the Company entered into an Agreement to Participate in the Granite Construction Incorporated Executive Retention and Severance Plan (such agreement and plan being referred to herein as the “Plan”) effective as of                     , ___wherein Employee is entitled to receive certain benefits in the event of a Termination Upon a Change in Control (as defined by the Plan), provided Employee signs a Release (as defined by the Plan).

     C. A Change in Control (as defined by the Plan) has occurred as a result of [briefly describe change in control]

     D. Employee’s employment is being terminated as a result of a Termination Upon a Change in Control. Employee’s last day of work and termination are effective as of                     , ___(the “Termination Date”). Employee desires to receive the payments and benefits provided by the Plan by executing this Release.

     NOW, THEREFORE, the parties agree as follows:

     1. Commencing on the Effective Date, the Company shall provide Employee with the applicable payments and benefits set forth in the Plan in accordance with the terms of the Plan. Employee acknowledges that the payments and benefits made pursuant to this paragraph are made in full satisfaction of the Company’s obligations under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued, unused vacation that Employee earned during his or her employment with the Company or its subsidiary.

     2. Employee and Employee’s successors release the Company, its respective subsidiaries, stockholders, investors, directors, officers, employees, agents, attorneys, insurers, legal successors and assigns of and from any and all claims, actions and causes of action, whether now known or unknown, which Employee now has, or at any other time had, or shall or may have against those released parties based upon or arising out of any matter, cause, fact, thing, act or omission whatsoever directly related to Employee’s employment by the Company or a subsidiary or the termination of such employment and occurring or existing at any time up to and including the Termination Date, including, but not limited to, any claims of breach of written contract, wrongful termination, retaliation, fraud, defamation, infliction of emotional distress, or national origin, race, age, sex, sexual orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967, the

 


 

Americans with Disabilities Act, the Fair Employment and Housing Act or any other applicable law. Notwithstanding the foregoing, this release shall not apply to any right of the Employee pursuant to Sections 5.3 of the Plan or pursuant to a Prior Indemnity Agreement (as such term is defined by the Plan).

     3. Employee acknowledges that he or she has read Section 1542 of the Civil Code of the State of California, which states in full:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

Employee waives any rights that Employee has or may have under Section 1542 and comparable or similar provisions of the laws of other states in the United States to the full extent that he or she may lawfully waive such rights pertaining to this general release of claims, and affirms that Employee is releasing all known and unknown claims that he or she has or may have against the parties listed above.

     4. Employee and the Company acknowledge and agree that they shall continue to be bound by and comply with the terms and his obligations under the following agreements: (i) any proprietary rights or confidentiality agreements between the Company or its subsidiary and Employee, (ii) the Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to which Employee is a party, and (iv) any agreement between the Company or its subsidiary and Employee evidencing an Equity Award (as such term is defined by the Plan), as modified by the Plan.

     5. This Agreement shall be binding upon, and shall inure to the benefit of, the parties and their respective successors, assigns, heirs and personal representatives.

     6. The parties agree that any and all disputes that both (i) arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement or the interpretation of the terms of this Agreement shall be subject to binding arbitration pursuant to Section 12 of the Plan.

     7. The parties agree that any and all disputes that (i) do not arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement or any of the matters herein released or herein described shall be subject to binding arbitration, to the extent permitted by law, in Santa Clara, California or any other site mutually agreed to by the Company and Employee, before the American Arbitration Association, as provided in this paragraph. The parties agree to and hereby waive their rights to jury trial as to such matters to the extent permitted by law; provided however, that (a) the arbitrator shall have no authority to make any ruling or judgment that would confer any rights with respect to trade secrets, confidential and proprietary information or other intellectual property; and (b) this arbitration provision shall not preclude the parties from seeking legal and equitable relief from any court having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse

-2-


 

or misappropriation of intellectual property. The Company shall bear the costs of the arbitrator, forum and filing fees and each party shall bear its own respective attorney fees and all other costs, unless otherwise provided by law and awarded by the arbitrator.

     8. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether written or oral, with the exception of any agreements described in paragraph 4 of this Agreement. This Agreement may not be modified or amended except by a document signed by an authorized officer of the Company and Employee. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected.

EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1.

 

 

 

Dated:

 

 

 

 

 

 

 

[Employee Name]

 

 

 

 

 

[Company]

 

 

 

Dated:

 

By:

 

 

 

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