Document:

ex10_1.htm

    Exhibit
10.1

    AMENDMENT
NUMBER ONE TO THE

    GRANITE
CONSTRUCTION INCORPORATED

    AMENDED
AND RESTATED

    1999
EQUITY INCENTIVE PLAN

     

    The Granite Construction Incorporated
Amended and Restated 1999 Equity Incentive Plan (the “Plan”) is hereby amended
as follows:

     

    1.           Section
3.3(d) of the Plan is hereby replaced in its entirety as follows:

     

    (d)           Performance
Shares and Performance Units.  Subject to adjustment as
provided in Section 5.3, no Employee may be granted (i) Performance Shares which
could result in such Employee receiving more than one hundred thousand (100,000)
shares of Stock for each full fiscal year of the Company contained in the
Performance Period for such Award, or (ii) Performance Units which could result
in such Employee receiving more than one million five hundred thousand dollars
($1,500,000) in cash and more than one hundred thousand (100,000) shares of
stock, for each full fiscal year of the Company contained in the Performance
Period for such Award.

     

    2.           Section
9.4 of the Plan is hereby replaced in its entirety as follows:

     

    9.4           Measurement of Performance
Goals.  Performance Goals shall be established by the Committee
on the basis of targets to be attained (“Performance Targets”) with respect one
or more measures of business or financial performance (each, a “Performance
Measure”).  Performance Measures shall have the same meanings as used
in the Company’s financial statements, or if such terms are not used in the
Company’s financial statements, they shall have the meaning applied pursuant to
generally accepted accounting principles, or as used generally in the Company’s
industry.  Performance Targets may include a minimum, maximum, target
level and intermediate levels of performance, with the ultimate value of a
Performance Share or Performance Unit Award determined by the level attained
during the applicable Performance Period.  A Performance Target may be
stated as an absolute value or as a value determined relative to a standard
selected by the Committee.  Performance Measures shall be calculated
with respect to the Company and each Subsidiary Corporation consolidated
therewith for financial reporting purposes or such division or other business
unit thereof as may be selected by the Committee.  For purposes of the
Plan, the Performance Measures applicable to an Award shall be calculated in
accordance with generally accepted accounting principles, but prior to the
accrual or payment of any Performance Share or Performance Unit Award for the
same Performance Period and excluding the effect (whether positive or negative)
of any change in accounting standards or any extraordinary, unusual or
nonrecurring item, as determined by the Committee, occurring after the
establishment of the Performance Goals applicable to the
Award.  Performance Measures may be one or more of the following as
determined by the Committee: (a) revenue, (b) operating income, (c) pre-tax
profit, (d) net income, (e) gross margin, (f) operating margin, (g) earnings per
share, (h) return on stockholder equity, (i) return on capital, (j) return on
net assets, (k) economic value added, (l) cash flow and operating cash flow, (m)
net operating profits after taxes, (n) net asset value, (o) cost of capital and
weighted average cost of capita, (p) economic profit, (q) return on assets, (r)
earnings before income tax and depreciation (EBITDA), (s) earnings before income
tax (EBIT), (t) return on equity, (u) operating income and adjusted operating
income, (v) gross income, (w) return on invested capital, (x) overhead, (y) net
operating assets, and (z) safety incident rate (including total injury incident
rate, OSHA recordable injury rate and lost time injury rate).

     

    3.           All
other provisions of the Plan shall remain in full force and effect.

     

    To record the adoption of this
Amendment Number One, Granite Construction Incorporated has caused the execution
of the same by its duly authorized officer.

     

    Dated:  May
19,
2008                                                                          GRANITE
CONSTRUCTION INCORPORATED

    

    

     /s/ William G.
Dorey                           
                    
                                                                

    William G. Dorey

    President & CEOex10_2.htm

    Exhibit
10.2

    GRANITE
CONSTRUCTION INCORPORATED

     

    AMENDED
AND RESTATED

     

    1999
EQUITY INCENTIVE PLAN

     

    (As
Adopted Effective May 24, 2004)

     

    (As
Amended Effective January 1, 2005)

     

    (As
Amended Effective January 1, 2008)

     

    (As
Amended Effective May 19, 2008)

     

     

    
      	
              SECTION
      1.

            	
              ESTABLISHMENT,
      PURPOSE, AND TERM OF PLAN

            

    

     

    1.1 Establishment.  The
Granite Construction Incorporated 1999 Equity Incentive Plan was initially
established effective May 24, 1999 (the “Initial
Plan”).  The Initial Plan was amended and restated in its
entirety as the Granite Construction Incorporated Amended and Restated 1999
Equity Incentive Plan (the “Plan”) effective as of May
24, 2004, the date of its approval by the stockholders of the Company (the “Effective
Date”).  The Plan was amended effective January 1, 2005 to
incorporate the requirements of Section 409A of the Code and further amended
effective January 1, 2008 to reflect changes in Nonemployee Director
compensation.

     

    1.2 Purpose.  The
purpose of the Plan is to advance the interests of the Company, by encouraging
and providing for the acquisition of an equity interest in the success of the
Company by Employees and Directors, by providing additional incentives and
motivation toward superior performance of the Company, and by enabling the
Company to attract and retain the services of Employees and Directors upon whose
judgment, interest, and special effort the successful conduct of its operations
is largely dependent.  The Plan seeks to achieve this purpose by
providing for Awards in the form of Options, Restricted Stock, Restricted Stock
Units, Performance Shares and Performance Units and by providing for payments in
the form of shares of Stock or cash.

     

    1.3 Term of Plan.  The
Plan shall remain in effect until the earlier of (a) its termination by the
Committee pursuant to Section 14 or (b) the date on which all of the shares of
Stock available for issuance under the Plan have been issued and all
restrictions on such shares under the terms of the Plan and the agreements
evidencing Awards granted under the Plan have lapsed.  However, all
Awards shall be granted, if at all, within ten (10) years from the Effective
Date.

     

     

    
      	
              SECTION
      2.

            	
              DEFINITIONS
      AND CONSTRUCTION

            

    

     

    2.1 Definitions.  Whenever
used herein, the following terms shall have their respective meanings set forth
below:

     

    (a) “Award”
means any Option, Restricted Stock, Restricted Stock Unit, Performance
Share, or Performance Unit granted under the Plan.

     

    (b) “Award Agreement”
means a written agreement between the Company and a Participant setting
forth the terms, conditions and restrictions of the Award granted to the
Participant.  An Award Agreement may be an “Option Agreement,” a
“Restricted Stock Agreement,” a “Restricted Stock Units Agreement,” a
“Performance Share Agreement,” or a “Performance Unit Agreement.”

     

    (c) “Board”
means the Board of Directors of the Company.

     

    (d) “Cause”
means, unless otherwise defined by the Participant’s Award Agreement or
contract of employment or service, any of the following: (i) the Participant’s
theft, dishonesty, or falsification of any Participating Company documents or
records; (ii) the Participant’s repeated failure to report to work during normal
hours, other than for customarily excused absences for personal illness or other
reasonable cause; (iii) the Participant’s conviction (including any plea of
guilty or nolo contendere) of theft or felony; (iv) the Participant’s wrongful
disclosure of a Participating Company’s trade secrets or other proprietary
information; (v) any other dishonest or intentional action by the Participant
which has a detrimental effect on a Participating Company; or (vi) the
Participant’s habitual and repeated nonperformance of the Participant’s
duties.

     

    (e) “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.

    
      
        
        

      

      
        1

        
        

      

      
        
        

      

    

     

    (f) “Committee”
means the Compensation Committee or other committee of the Board duly
appointed to administer the Plan and having such powers as shall be specified by
the Board.  If no committee of the Board has been appointed to
administer the Plan, the Board shall exercise all of the powers of the Committee
granted herein, and, in any event, the Board may in its discretion exercise any
or all of such powers.

     

    (g) “Company”
means Granite Construction Incorporated, a Delaware corporation, or any
successor corporation thereto.

     

    (h) “Director”
means a member of the Board.

     

    (i) “Disability”
means a permanent and total disability as defined under the Company’s
Long Term Disability Plan or any successor plan, regardless of whether the
Participant is covered by such Long Term Disability Plan.

     

    (j) “Dividend
Equivalent” means a credit, made at the discretion of the Committee or as
otherwise provided by the Plan, to the account of a Participant in an amount
equal to the cash dividends paid on one share of Stock for each share of Stock
represented by an Award held by such Participant.

     

    (k) “Employee”
means any person treated as an employee (including an officer or a
Director who is also treated as an employee) in the records of a Participating
Company and, with respect to any Incentive Stock Option granted to such person,
who is an employee for purposes of Section 422 of the Code; provided, however,
that neither service as a Director nor payment of a director’s fee shall be
sufficient to constitute employment for purposes of the Plan.  The
Company shall determine in good faith and in the exercise of its discretion
whether an individual has become or has ceased to be an Employee and the
effective date of such individual’s employment or termination of employment, as
the case may be.  For purposes of an individual’s rights, if any,
under the Plan as of the time of the Company’s determination, all such
determinations by the Company shall be final, binding and conclusive,
notwithstanding that the Company or any court of law or governmental agency
subsequently makes a contrary determination.

     

    (l) “Exchange Act”
means the Securities Exchange Act of 1934, as amended.

     

    (m) “Fair Market
Value” means, as of any relevant date, the closing sale price of a share
of Stock (or the mean of the closing bid and asked prices if the Stock is so
quoted instead) on the relevant date on the New York Stock Exchange or such
other national or regional securities exchange or market system constituting the
primary market for the Stock, as reported in The Wall Street Journal or such
other source as the Company deems reliable.  If the relevant date does
not fall on a day on which the Stock has traded on such securities exchange or
market system, the date on which the Fair Market Value shall be established
shall be the last day on which the Stock was so traded prior to the relevant
date, or such other appropriate day as shall be determined by the Committee, in
its discretion.  If, on such date, there is no public market for the
Stock, the Fair Market Value of a share of Stock shall be as determined by the
Committee.

     

    (n) “Incentive Stock
Option” means an Option intended to be (as set forth in the Award
Agreement) and which qualifies as an incentive stock option within the meaning
of Section 422(b) of the Code.

     

    (o) “Insider”
means an officer, a Director or any other person whose transactions in
Stock are subject to Section 16 of the Exchange Act.

     

    (p) “Nonemployee
Director” means a Director who is not an Employee.

     

    (q) “Nonstatutory
Stock Option” means an Option not intended to be (as set forth in the
Award Agreement) or which does not qualify as an Incentive Stock
Option.

     

    (r) “Option”
means the right to purchase Stock at a stated price for a specified
period of time pursuant to the terms and conditions of the Plan.  An
Option may be either an Incentive Stock Option or a Nonstatutory Stock
Option.

     

    (s) “Parent
Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.

     

    (t) “Participant”
means any eligible person who has been granted one or more
Awards.

     

    (u) “Participating
Company” means the Company or any Parent Corporation or Subsidiary
Corporation.

     

    (v) “Participating
Company Group” means, at any point in time, all corporations collectively
which are then Participating Companies.

     

    (w) “Performance
Goal” means a performance goal established by the Committee pursuant to
Section 9.3.

    
      
        
          
          

        

        
          2

          
          

        

        
          
          

        

      

    

     

    (x) “Performance
Period” means a period established by the Committee pursuant to Section
9.3 at the end of which one or more Performance Goals are to be
measured.

     

    (y) “Performance
Share” means a bookkeeping entry representing a right granted to a
Participant pursuant to the terms and conditions of Section 9 to receive a
payment equal to the value of a Performance Share, as determined by the
Committee, based on performance.

     

    (z) “Performance
Unit” means a bookkeeping entry representing a right granted to a
Participant pursuant to the terms and conditions of Section 9 to receive a
payment equal to the value of a Performance Unit, as determined by the
Committee, based upon performance.

     

    (aa) “Restricted
Stock” means Stock granted to a Participant pursuant to the terms and
conditions of Section 7.

     

    (bb) “Restricted Stock
Unit” means a bookkeeping entry representing a right granted to a
Participant pursuant to Section 8 to receive a share of Stock on a date
determined in accordance with the provisions of Section 8 and the Participant’s
Award Agreement.

     

    (cc) “Restriction
Period” means the period established in accordance with Section 7.3 of
the Plan during which shares subject to a Restricted Stock Award are subject to
Vesting Conditions.

     

    (dd) “Retirement”
means (i) with respect to an Employee, termination of employment for
retirement under the terms of the Company’s defined contribution plans, and (ii)
with respect to a Nonemployee Director, resignation from Service on the Board
after attaining the age of 55 and after at least ten years of Service on the
Board.

     

    (ee) “Rule 16b-3”
means Rule 16b-3 under the Exchange Act, as amended from time to time, or
any successor rule or regulation.

     

    (ff) “Section 162(m)”
means Section 162(m) of the Code.

     

    (gg) “Securities Act”
means the Securities Act of 1933, as amended.

     

    (hh) “Service”
means a Participant’s employment or service with the Participating
Company Group, whether in the capacity of an Employee or a
Director.  A Participant’s Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Participant
renders such Service or a change in the Participating Company for which the
Participant renders such Service, provided that there is no interruption or
termination of the Participant’s Service.  Furthermore, a
Participant’s Service shall not be deemed to have terminated if the Participant
takes any military leave, sick leave, or other bona fide leave of absence
approved by the Company; provided, however, that if any such leave exceeds three
(3) months, on the first day immediately following such three-month period any
Incentive Stock Option held by the Participant shall cease to be treated as an
Incentive Stock Option and instead shall be treated thereafter as a Nonstatutory
Stock Option unless the Participant’s right to return to Service with the
Participating Company Group is guaranteed by statute or
contract.  Notwithstanding the foregoing, unless otherwise designated
by the Company or required by law, a leave of absence shall not be treated as
Service for purposes of determining vesting under the Participant’s Award
Agreement.  A Participant’s Service shall be deemed to have terminated
either upon an actual termination of Service or upon the corporation for which
the Participant performs Service ceasing to be a Participating
Company.  Subject to the foregoing, the Company, in its discretion,
shall determine whether a Participant’s Service has terminated and the effective
date of such termination.

     

    (ii) “Stock”
means the Common Stock of the Company, as adjusted from time to time in
accordance with Section 5.3.

     

    (jj) “Subsidiary
Corporation” means any present or future “subsidiary corporation” of the
Company, as defined in Section 424(f) of the Code.

     

    (kk) “Ten Percent
Owner” means a Participant who, at the time an Option is granted to the
Participant, owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of a Participating Company within
the meaning of Section 422(b)(6) of the Code.

     

    (ll) “Vesting
Conditions” mean those conditions established in accordance with Section
7.3, Section 8.3 or Section 10.4(a) of the Plan prior to the satisfaction of
which shares or share equivalents subject to a Restricted Stock Award or
Restricted Stock Unit Award, respectively, remain subject to forfeiture or a
repurchase option in favor of the Company upon the Participant’s termination of
Service.

     

    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, words in the masculine gender, when used in
the Plan shall include the feminine gender, 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

        
        

      

      
        
        

      

    

     

    
      	
              SECTION
      3.

            	
              ELIGIBILITY
      AND AWARD LIMITATIONS

            

    

     

    3.1 Persons Eligible for Incentive Stock
Options.  Incentive Stock Options may be granted only to
Employees.  For purposes of the foregoing sentence, the term
“Employees” shall include prospective Employees to whom Options are granted in
connection with written offers of employment with the Participating Company
Group, provided that any such Option shall be deemed granted effective on the
date that the Participant commences Service as an Employee, with an exercise
price determined as of such date in accordance with Section 6.2.

     

    3.2 Persons Eligible for Other
Awards.  Awards other than Incentive Stock Options may be
granted only to Employees and Directors.  For purposes of the
foregoing sentence, the terms “Employees” and “Directors” shall include
prospective Employees and prospective Directors to whom Awards are granted in
connection with written offers of employment or service as a Director with the
Participating Company Group, provided that no Stock subject to any such Award
shall vest, become exercisable or be issued prior to the date on which the
Participant commences Service.  Eligible persons may be granted more
than one (1) Award.

     

    3.3 Section 162(m) Award
Limits.  The following limitations shall apply to the grant of
any Award if, at the time of grant, the Company is a “publicly held corporation”
within the meaning of Section 162(m).

     

    (a) Stock Options.
Subject to adjustment as provided in Section 5.3, no Employee shall be
granted one or more Options within any fiscal year of the Company which in the
aggregate are for the purchase of more than one hundred thousand (100,000)
shares; provided, however, that the Company may make an additional one-time
grant to any newly-hired Employee of an Option for the purchase of up to two
hundred fifty thousand (250,000) shares.  An Option which is canceled
in the same fiscal year of the Company in which it was granted shall continue to
be counted against the limits described in this subsection for such
period.

     

    (b) Restricted
Stock.  Subject to adjustment as provided in Section 5.3, no
Employee may be granted within any fiscal year of the Company more than one
hundred thousand (100,000) shares of Restricted Stock, provided that such limit
shall apply only to Awards of Restricted Stock which are granted or subject to
Vesting Conditions based upon the attainment of Performance Goals.

     

    (c) Restricted Stock
Units.  Subject to adjustment as provided in Section 5.3, no
Employee shall be granted within any fiscal year of the Company more than one
hundred thousand (100,000) Restricted Stock Units, provided that such limit
shall apply only to Awards of Restricted Stock Units which are granted or
subject to Vesting Conditions based upon the attainment of Performance
Goals.

     

    (d) Performance
Shares and Performance Units.  Subject to adjustment as
provided in Section 5.3, no Employee may be granted (i) Performance Shares which
could result in such Employee receiving more than one hundred thousand (100,000)
shares of Stock for each full fiscal year of the Company contained in the
Performance Period for such Award, or (ii) Performance Units which could result
in such Employee receiving more than two million five hundred thousand dollars
($2,500,000) in cash and more than one hundred thousand (100,000) shares of
stock, for each full fiscal year of the Company contained in the Performance
Period for such Award.

     

    3.4 Maximum Number of Shares Issuable
Pursuant to Incentive Stock Options.  Subject to adjustment as
provided in Section 5.3, the maximum aggregate number of shares of Stock that
may be issued under the Plan pursuant to the exercise of incentive Stock Options
shall not exceed four million two hundred fifty thousand (4,250,000)
shares.  The maximum aggregate number of shares of Stock that may be
issued under the Plan pursuant to all Awards other than Incentive Stock Options
shall be the number of shares determined in accordance with Section 5.1, subject
to adjustment as provided in Section 5.2 and Section 5.3.

     

    3.5 Aggregate Limit on Restricted Stock,
Restricted Stock Unit, Performance Share and Performance Unit Awards Not
Providing for Certain Minimum Vesting.  Notwithstanding any
provision of the Plan to the contrary, no more than five percent (5%) of the
maximum aggregate number of shares of Stock that may be issued under the Plan,
determined in accordance with Section 5.1 (as adjusted from time to time
pursuant to Sections 5.2 and 5.3), shall be issued pursuant to the following
Awards granted on or after the Effective Date: (a) Restricted Stock or
Restricted Stock Unit Awards having Vesting Conditions which (i) if based upon a
Service requirement, provide for vesting more rapid than annual pro rata vesting
over a period of three (3) years or (ii) if based upon the attainment of one or
more Performance Goals, provide for a Performance Period of less than twelve
(12) months, or (b) Performance Share or Performance Unit Awards having a
Performance Period of less than twelve (12) months.

    
       

       

    

    
      	
              SECTION
      4.

            	
              ADMINISTRATION

            

    

     

    4.1 Administration by the
Committee.  The Plan shall be administered by the
Committee.  All questions of interpretation of the Plan or of any
Award shall be determined by the Committee, and such determinations shall be
final, binding and conclusive for all purposes and upon all persons
whomsoever.

    
      
        
        

      

      
        4

        
        

      

      
        
        

      

    

     

    4.2 Authority of
Officers.  Any officer of a Participating Company shall have
the authority to act on behalf of the Company with respect to any matter, right,
obligation, determination or election which is the responsibility of or which is
allocated to the Company herein, provided the officer has apparent authority
with respect to such matter, right, obligation, determination or
election.

    
       

    

    4.3 Administration with Respect to
Insiders.  With respect to participation by Insiders in the
Plan, at any time that any class of equity security of the Company is registered
pursuant to Section 12 of the Exchange Act, the Plan shall be administered in
compliance with the requirements, if any, of Rule 16b-3.

     

    4.4 Committee Complying with Section
162(m).  If the Company is a “publicly held corporation” within
the meaning of Section 162(m), the Board may establish a Committee of “outside
directors” within the meaning of Section 162(m) to approve the grant of any
Award which might reasonably be anticipated to result in the payment of employee
remuneration that would otherwise exceed the limit on employee remuneration
deductible for income tax purposes pursuant to Section 162(m).

     

    4.5 Powers of the
Committee.  In addition to any other powers set forth in the
Plan and subject to the provisions of the Plan, the Committee shall have the
full and final power and authority, in its discretion:

     

    
      	
              (a)  

            	
              to
      determine the persons to whom, and the time or times at which, Awards
      shall be granted and the number of shares of Stock or units to be subject
      to each Award and the value of a
unit;

            

    

     

    
      	
              (b)  

            	
              to
      determine the type of Award granted and to designate Options as Incentive
      Stock Options or Nonstatutory Stock
Options;

            

    

     

    
      	
              (c)  

            	
              to
      determine the Fair Market Value of shares of Stock or other
      property;

            

    

     

    
      	
              (d)  

            	
              to
      determine the terms, conditions and restrictions applicable to each Award
      (which need not be identical) and any shares acquired pursuant thereto,
      including, without limitation, (i) the exercise price of any Option, (ii)
      the method of payment for shares purchased upon the exercise of any
      Option, (iii) the method for satisfaction of any tax withholding
      obligation arising in connection with any Award, including by the
      withholding or delivery of shares of stock, (iv) the timing, terms and
      conditions of the exercisability or vesting of any Award or any shares
      acquired pursuant thereto, (v) the Performance Goals applicable to any
      Award and the extent to which such Performance Goals have been attained,
      (vi) the time of the expiration of any Award, (vii) the effect of the
      Participant’s termination of Service on any of the foregoing, and (viii)
      all other terms, conditions and restrictions applicable to the Award or
      shares acquired pursuant thereto not inconsistent with the terms of the
      Plan;

            

    

     

    
      	
              (e)  

            	
              to
      determine whether an Award of Performance Shares or Performance Units will
      be settled in shares of Stock, cash, or in any combination
      thereof;

            

    

     

    
      	
              (f)  

            	
              to
      approve one or more forms of Award
Agreement;

            

    

     

    
      	
              (g)  

            	
              to
      amend, modify, extend, cancel or renew any Award or to waive any
      restrictions or conditions applicable to any Award or any shares acquired
      pursuant thereto;

            

    

     

    
      	
              (h)  

            	
              to
      accelerate, continue, extend or defer the exercisability or vesting of any
      Award or any shares acquired pursuant thereto, including with respect to
      the period following a Participant’s termination of
    Service;

            

    

     

    
      	
              (i)  

            	
              to
      prescribe, amend or rescind rules, guidelines and policies relating to the
      Plan, or to adopt sub-plans or supplements to, or alternative versions
      of  the Plan, including, without limitation, as the Committee
      deems necessary or desirable to comply with the laws or regulations of, or
      to accommodate the tax policy, accounting principles or custom of, foreign
      jurisdictions whose citizens may be granted Awards;
  and

            

    

     

    
      	
              (j)  

            	
              to
      correct any defect, supply any omission or reconcile any inconsistency in
      the Plan or any Award Agreement and to make all other determinations and
      take such other actions with respect to the Plan or any Award as the
      Committee may deem advisable to the extent not inconsistent with the
      provisions of the Plan or applicable
law.

            

    

     

    4.6 Option
Repricing.  Without the affirmative vote of holders of a
majority of the shares of Stock cast in person or by proxy at a meeting of the
stockholders of the Company at which a quorum representing a majority of all
outstanding shares of Stock is present or represented by proxy, the Board shall
not approve a program providing for either (a) the cancellation of outstanding
Options and the grant in substitution therefor of new Options having a lower
exercise price or (b) the amendment of outstanding Options to reduce the
exercise price thereof.  This paragraph shall not be construed to
apply to “issuing or assuming a stock option in a transaction to which section
424(a) applies,” within the meaning of Section 424 of the Code.

    
       

      
        5

        
        

      

      
        
        

      

    

     

    
      	
              SECTION
      5.

            	
              STOCK
      SUBJECT TO PLAN

            

    

     

    5.1 Maximum Number of Shares
Issuable.  Subject to adjustment as provided in Section 5.3,
the maximum aggregate number of shares of Stock that may be issued under the
Plan shall be four million two hundred fifty thousand (4,250,000) and shall
consist of authorized but unissued or reacquired shares of Stock not reserved
for any other purpose, or any combination thereof.

     

    5.2 Share
Accounting.  If an outstanding Award for any reason expires or
is terminated or canceled without having been exercised or settled in full, or
if shares of Stock acquired pursuant to an Award subject to forfeiture or
repurchase are forfeited or repurchased by the Company at the Participant’s
purchase price, the shares of Stock allocable to the terminated portion of such
Award or such forfeited or repurchased shares of Stock shall again be available
for issuance under the Plan.  Shares of Stock shall not be deemed to
have been issued pursuant to the Plan (a) with respect to any portion of an
Award that is settled in cash or (b) to the extent such shares are withheld in
satisfaction of tax withholding obligations pursuant to Section
13.2.  If the exercise price of an Option is paid by tender to the
Company, or attestation to the ownership, of shares of Stock owned by the
Participant, the number of shares available for issuance under the Plan shall be
reduced by the net number of shares for which the Option is
exercised.

     

    5.3 Adjustment in
Capitalization.  In the event of any stock dividend, stock
split, reverse stock split, recapitalization, merger, combination, exchange of
shares, reclassification or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number and class of shares
subject to the Plan and to any outstanding Awards, in the Award limits set forth
in Sections 3.3, 3.4 and 3.5, and in the exercise price per share of any
outstanding Options.  If a majority of the shares which are of the
same class as the shares that are subject to outstanding Awards are exchanged
for, converted into, or otherwise become (whether or not pursuant to a Change in
Control, as defined in Section 11.3) shares of another corporation (the “New Shares”), the Committee
may unilaterally amend the outstanding Awards to provide that such Awards are
for New Shares.  In the event of any such amendment, the number of
shares subject to outstanding Awards and the exercise price per share of
outstanding Options shall be adjusted in a fair and equitable manner as
determined by the Committee, in its discretion.  Notwithstanding the
foregoing, any fractional share resulting from an adjustment pursuant to this
Section 5.3 shall be rounded down to the nearest whole number, and in no event
may the exercise price of any Option be decreased to an amount less than the par
value, if any, of the stock subject to the Option.  The adjustments
determined by the Committee pursuant to this Section 5.3 shall be final, binding
and conclusive.

     

     

    
      	
              SECTION
      6.

            	
              STOCK
      OPTIONS

            

    

     

    6.1 Grant of
Options.  Subject to the provisions of Sections 1.3, 3 and 5,
Options may be granted to Participants at any time and from time to time as
shall be determined by the Committee.  Each Option shall be evidenced
by an Award Agreement that shall specify the type of Option granted, the
exercise price, the duration of the Option, the number of shares of Stock to
which the Option pertains, and such other provisions as the Committee shall
determine.  No Option or purported Option shall be a valid and binding
obligation of the Company unless evidenced by a fully executed Award
Agreement.  Award Agreements evidencing Options may incorporate all or
any of the terms of the Plan by reference and shall comply with and be subject
to the terms and conditions set forth in Sections 6.2 through 6.6
below.

     

    6.2 Exercise Price.  The
exercise price for each Option shall be established in the discretion of the
Committee; provided, however, that (a) the exercise price per share shall be not
less than the Fair Market Value of a share of Stock on the effective date of
grant of the Option and (b) no Incentive Stock Option granted to a Ten Percent
Owner shall have an exercise price per share less than one hundred ten percent
(110%) of the Fair Market Value of a share of Stock on the effective date of
grant of the Option.  Notwithstanding the foregoing, an Option
(whether an Incentive Stock Option or a Nonstatutory Stock Option) may be
granted with an exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under the provisions of Section 409A of
the Code and Section 424(a) of the Code.

     

    6.3 Exercise
Period.  Options shall be exercisable at such time or times, or
upon such event or events, and subject to such terms, conditions, performance
criteria and restrictions as shall be determined by the Committee and set forth
in the Award Agreement evidencing such Option; provided, however, that (a) no
Option shall be exercisable after the expiration of ten (10) years after the
effective date of grant of such Option, (b) no Incentive Stock Option granted to
a Ten Percent Owner shall be exercisable after the expiration of five (5) years
after the effective date of grant of such Option, and (c) no Option granted to a
prospective Employee or prospective Director may become exercisable prior to the
date on which such person commences Service.  Subject to the
foregoing, unless otherwise specified by the Committee in the grant of an
Option, any Option granted hereunder shall have a term of ten (10) years from
the effective date of grant of the Option, unless earlier terminated in
accordance with its provisions.

    
      
         

      

    

    6.4 Payment of Exercise
Price.  The purchase price of Stock upon exercise of any Option
shall be paid in full by such methods as shall be permitted by the Committee or
as provided in a Participant’s Award Agreement, which need not be the same for
all Participants, and subject to the following:

    
      
        
        

      

      
        6

        
        

      

      
        
        

      

    

     

    (a) Forms of
Consideration Authorized.  Except as otherwise provided below,
payment of the exercise price for the number of shares of Stock being purchased
pursuant to any Option shall be made (i) in cash, by check, or cash equivalent,
(ii) by tender to the Company, or attestation to the ownership, of shares of
Stock owned by the Participant having a Fair Market Value not less than the
exercise price, (iii) by delivery of a properly executed notice of exercise
together with irrevocable instructions to a broker providing for the assignment
to the Company of the proceeds of a sale or loan with respect to some or all of
the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a “Cashless Exercise”), (iv) by such other consideration as may be
approved by the Committee from time to time to the extent permitted by
applicable law, or (v) by any combination thereof.  The Committee may
at any time or from time to time grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the exercise price or
which otherwise restrict one or more forms of consideration.  The
proceeds from payment of the Option exercise prices shall be added to the
general funds of the Company and shall be used for general corporate
purposes.

     

    (b) Limitations
on Forms of Consideration.

     

    (i) Tender of
Stock.  Notwithstanding the foregoing, an Option may not be
exercised by tender to the Company, or attestation to the ownership, of shares
of Stock to the extent such tender or attestation would constitute a violation
of the provisions of any law, regulation or agreement restricting the redemption
of the Company’s stock.  Unless otherwise provided by the Committee,
an Option may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock unless such shares either have been owned by the
Participant for more than six (6) months (and not used for another Option
exercise by attestation during such period) or were not acquired, directly or
indirectly, from the Company.

     

    (ii) Cashless
Exercise.  The Company reserves, at any and all times, the
right, in the Company’s sole and absolute discretion, to establish, decline to
approve or terminate any program or procedures for the exercise of Options by
means of a Cashless Exercise, including with respect to one or more Participants
specified by the Company notwithstanding that such program or procedures may be
available to other Participants.

     

    6.5 Effect
of Termination of Service.

     

    (a) Option
Exercisability.  Subject to earlier termination of the Option
as otherwise provided herein and unless otherwise provided by the Committee in
the grant of an Option and set forth in the Award Agreement, an Option shall be
exercisable after a Participant’s termination of Service only during the
applicable time period determined in accordance with this Section and thereafter
shall terminate:

     

    (i) Death or
Disability.  If the Participant’s Service is terminated by
reason of the death or Disability of the Participant, the Option, to the extent
unexercised and exercisable on the date on which the Participant’s Service
terminated, may be exercised by the Participant (or the Participant’s guardian
or legal representative or other person who acquired the right to exercise the
Option by reason of the Participant’s death) at any time prior to the expiration
of six (6) months (or such longer period of time as determined by the Committee,
in its discretion) after the date on which the Participant’s Service terminated,
but in any event no later than the date of expiration of the Option’s term as
set forth in the Award Agreement evidencing such Option (the “Option
Expiration Date”).  If an Option intended to be an Incentive
Stock Option is exercised by a Participant more than three (3) months following
the Participant’s termination of Service by reason of a Disability which is not
a “permanent and total disability” as defined in Section 22(e)(3) of the Code,
such exercise will be treated as the exercise of a Nonstatutory Stock Option to
the extent required by Section 422 of the Code.  The Participant’s
Service shall be deemed to have terminated on account of death if the
Participant dies within three (3) months after the Participant’s termination of
Service.

     

    (ii) Retirement.  If the
Participant’s Service is terminated by reason of the Retirement of the
Participant, the Option may be exercised at such time (but in any event no later
than the Option Expiration Date) and in such amounts as shall be determined by
the Committee at the time of grant of the Option and set forth in the Award
Agreement.

     

    (iii) Termination for
Cause.  Notwithstanding any other provision of the Plan to the
contrary, if the Participant’s Service is terminated for Cause, the Option shall
terminate and cease to be exercisable immediately upon such termination of
Service.

     

    (iv) Other Termination of
Service.  If the Participant’s Service terminates for any
reason, except death, Disability, Retirement or Cause, the Option, to the extent
unexercised and exercisable by the Participant on the date on which the
Participant’s Service terminated, may be exercised by the Participant within
thirty (30) days (or such longer period of time as determined by the Committee,
in its discretion) after the date on which the Participant’s Service terminated,
but in any event no later than the Option Expiration Date.

    
      
         

      

    

    (b) Extension if
Exercise Prevented by Law.  Notwithstanding the foregoing,
other than termination of Service for Cause, if the exercise of an Option within
the applicable time periods set forth in Section 6.5(a) is prevented by the
provisions of Section 12.1 below regarding compliance with securities laws, the
Option shall remain exercisable until thirty (30) days after the date the
Participant is notified by the Company that the Option is exercisable, but in
any event no later than the Option Expiration Date.

    
      
        
        

      

      
        7

        
        

      

      
        
        

      

    

     

    (c)           Extension if
Participant Subject to Section 16(b).  Notwithstanding the
foregoing, other than termination of Service for Cause, if a sale within the
applicable time periods set forth in Section 6.5(a) of shares acquired upon the
exercise of the Option would subject the Participant to suit under Section 16(b)
of the Exchange Act, the Option shall remain exercisable until the earliest to
occur of (i) the tenth (10th) day following the date on which a sale of such
shares by the Participant would no longer be subject to such suit, (ii) the one
hundred and ninetieth (190th) day after the Participant’s termination of
Service, or (iii) the Option Expiration Date.

     

    6.6 Transferability of
Options.  During the lifetime of the Participant, an Option
shall be exercisable only by the Participant or the Participant’s guardian or
legal representative.  No Option shall be assignable or transferable
by the Participant, except by will or by the laws of descent and
distribution.  Notwithstanding the foregoing, to the extent permitted
by the Committee, in its discretion, and set forth in the Award Agreement
evidencing such Option, a Nonstatutory Stock Option shall be assignable or
transferable subject to the applicable limitations, if any, described in the
General Instructions to Form S-8 Registration Statement under the Securities
Act.

     

     

    
      	
              SECTION
      7.

            	
              RESTRICTED
      STOCK

            

    

     

    7.1 Grant of Restricted
Stock.  Subject to the provisions of Sections 1.3, 3, 5 and 10,
Awards of Restricted Stock may be granted to Participants at any time and from
time to time as shall be determined by the Committee, including, without
limitation, upon the attainment of one or more Performance Goals as described in
Section 9.4.  If either the grant of Restricted Stock or the lapsing
of the Restriction Period is to be contingent upon the attainment of one or more
Performance Goals, the Committee shall follow procedures substantially
equivalent to those set forth in Sections 9.3 through 9.5.  Each grant
of Restricted Stock shall be evidenced by an Award Agreement that shall specify
the number of shares of Stock subject to and the other terms, conditions and
restrictions of such Award as the Committee shall determine.  No
Restricted Stock Award or purported Restricted Stock Award shall be a valid and
binding obligation of the Company unless evidenced by a fully executed Award
Agreement.  Award Agreements evidencing Restricted Stock Awards may
incorporate all or any of the terms of the Plan by reference and, except as
otherwise set forth in Section 10 with respect to a Nonemployee Director
Restricted Stock Award, shall comply with and be subject to the terms and
conditions set forth in Sections 7.2 through 7.6 below.

     

    7.2 Purchase Price.  No
monetary payment (other than applicable tax withholding) shall be required as a
condition of receiving shares of Restricted Stock, the consideration for which
shall be services actually rendered to a Participating Company or for its
benefit.  Notwithstanding the foregoing, the Participant shall furnish
consideration in the form of cash or past services rendered to a Participating
Company or for its benefit having a value not less than the par value of the
shares of Stock subject to such Restricted Stock Award.

     

    7.3 Vesting and Restrictions on
Transfer.  Shares issued pursuant to any Restricted Stock Award
may or may not be made subject to Vesting Conditions based upon the satisfaction
of such Service requirements, conditions, restrictions or performance criteria,
including, without limitation, Performance Goals as described in Section 9.4, as
shall be established by the Committee and set forth in the Award Agreement
evidencing such Award.  During any Restriction Period in which shares
acquired pursuant to a Restricted Stock Award remain subject to Vesting
Conditions, such shares may not be sold, exchanged, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than pursuant to an
Ownership Change Event, as defined in Section 14.1.  Upon request by
the Company, each Participant shall execute any agreement evidencing such
transfer restrictions prior to the receipt of shares of Stock hereunder and
shall promptly present to the Company any and all certificates representing
shares of Stock acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.  All
rights with respect to Restricted Stock granted to a Participant hereunder shall
be exercisable during his or her lifetime only by such Participant.

     

    7.4 Other
Restrictions.  The Committee may impose such other restrictions
on any shares of Restricted Stock granted hereunder as it may deem advisable,
including, without limitation, restrictions under applicable Federal securities
law and under any blue sky or state securities laws applicable to such shares,
and may legend the certificates representing the Restricted Stock to give
appropriate notice of such restrictions.

     

    7.5 Voting Rights; Dividends and
Distributions.  Except as provided in this Section, Section 7.4
and any Award Agreement, during the Restriction Period applicable to shares
subject to a Restricted Stock Award, the Participant shall have all of the
rights of a stockholder of the Company holding shares of Stock, including the
right to vote such shares and to receive all dividends and other distributions
paid with respect to such shares.  However, in the event of a dividend
or distribution paid in shares of Stock or any other adjustment made upon a
change in the capital structure of the Company as described in Section 5.3, then
any and all new, substituted or additional securities or other property (other
than normal cash dividends) to which the Participant is entitled by reason of
the Participant’s Restricted Stock Award shall be immediately subject to the
same Vesting Conditions as the shares subject to the Restricted Stock Award with
respect to which such dividends or distributions were paid or adjustments were
made.

    
      
         

      

    

    7.6 Effect of Termination of
Service.  Unless otherwise provided by the Committee in the
grant of a Restricted Stock Award and set forth in the Award Agreement, the
effect of a Participant’s termination of Service on his or her Restricted Stock
Award shall be as follows:

    
      
        
        

      

      
        8

        
        

      

      
        
        

      

    

     

    (a) Death or
Disability.  If the Participant’s Service is terminated by
reason of the death or Disability of the Participant during the Restriction
Period, the restrictions applicable to the shares of Restricted Stock pursuant
to Section 7.3 shall terminate automatically with respect to all such
shares.

     

    (b) Other Termination
of Service.  If the Participant’s Service terminates during the
Restriction Period for any reason except death or Disability, any shares of
Restricted Stock still subject to restrictions pursuant to Section 7.3 at the
date of such termination shall be forfeited and automatically reacquired by the
Company; provided, however, that, in the event of an involuntary termination of
the Participant’s Service, the Committee, in its sole discretion, may waive the
automatic forfeiture of any or all such shares and/or add such new restrictions
to such shares of Restricted Stock as it deems appropriate.

     

     

    
      	
              SECTION
      8.

            	
              RESTRICTED
      STOCK UNITS

            

    

     

    8.1 Grant of Restricted Stock
Units.  Subject to the provisions of Sections 1.3, 3 and 5,
Awards of Restricted Stock Units may be granted to Participants at any time and
from time to time as shall be determined by the Committee, including, without
limitation, upon the attainment of one or more Performance Goals as described in
Section 9.4.  If either the grant of a Restricted Stock Unit Award or
the Vesting Conditions with respect to such Award is to be contingent upon the
attainment of one or more Performance Goals, the Committee shall follow
procedures substantially equivalent to those set forth in Sections 9.3 through
9.5.  Restricted Stock Unit Awards shall be evidenced by Award
Agreements specifying the number of Restricted Stock Units subject to the Award,
in such form as the Committee shall from time to time establish.  No
Restricted Stock Unit Award or purported Restricted Stock Unit Award shall be a
valid and binding obligation of the Company unless evidenced by a fully executed
Award Agreement.  Award Agreements evidencing Restricted Stock Units
may incorporate all or any of the terms of the Plan by reference and shall
comply with and be subject to the terms and conditions set forth in Sections 8.2
through 8.7 below.

     

    8.2 Purchase Price.  No
monetary payment (other than applicable tax withholding, if any) shall be
required as a condition of receiving a Restricted Stock Unit Award, the
consideration for which shall be services actually rendered to a Participating
Company or for its benefit.

     

    8.3 Vesting.  Restricted
Stock Units may or may not be made subject to Vesting Conditions based upon the
satisfaction of such Service requirements, conditions, restrictions or
performance criteria, including, without limitation, Performance Goals as
described in Section 9.4, as shall be established by the Committee and set forth
in the Award Agreement evidencing such Award.

     

    8.4 Voting, Dividend Equivalent Rights
and Distributions.  Participants shall have no voting rights
with respect to shares of Stock represented by Restricted Stock Units until the
date of the issuance of such shares (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the
Company).  However, the Committee, in its discretion, may provide in a
Participant’s Award Agreement that the Participant shall be entitled to receive
Dividend Equivalents with respect to the payment of cash dividends on Stock
having a record date prior to date on which Restricted Stock Units held by such
Participants are settled.  Such Dividend Equivalents, if any, shall be
paid by crediting the Participant with additional whole Restricted Stock Units
as of the date of payment of such cash dividends on Stock.  The number
of additional Restricted Stock Units (rounded to the nearest whole number) to be
so credited shall be determined by dividing (a) the amount of cash dividends
paid on such date with respect to the number of shares of Stock represented by
the Restricted Stock Units previously credited to the Participant by (b) the
Fair Market Value per share of Stock on such date.  Such additional
Restricted Stock Units shall be subject to the same terms and conditions and
shall be settled in the same manner and at the same time (or within forty-five
(45) days thereafter) as the Restricted Stock Units originally subject to the
Restricted Stock Unit Award.  In the event of a dividend or
distribution paid in shares of Stock or any other adjustment made upon a change
in the capital structure of the Company as described in Section 5.3, appropriate
adjustments shall be made in the Participant’s Restricted Stock Unit Award so
that it represents the right to receive upon settlement any and all new,
substituted or additional securities or other property (other than normal cash
dividends) to which the Participant would entitled by reason of the shares of
Stock issuable upon settlement of the Award, and all such new, substituted or
additional securities or other property shall be immediately subject to the same
Vesting Conditions as are applicable to the Award.

    
       

    

    8.5 Effect of Termination of
Service.  Unless otherwise provided by the Committee in the
grant of a Restricted Stock Unit Award and set forth in the Award Agreement, if
a Participant’s Service terminates for any reason, whether voluntary or
involuntary (including the Participant’s death or disability), then the
Participant shall forfeit to the Company any Restricted Stock Units pursuant to
the Award which remain subject to Vesting Conditions as of the date of the
Participant’s termination of Service.

    
       

    

    8.6 Settlement of
Awards.  The Company shall issue to a Participant on the date
on which Restricted Stock Units subject to the Participant’s Restricted Stock
Unit Award vest or on such other date determined by the Committee, in its
discretion, and set forth in the Award Agreement one (1) share of Stock (and/or
any other new, substituted or additional securities or other property pursuant
to an adjustment described in Section 8.4) for each Restricted Stock Unit then
becoming vested or otherwise to be settled on such date, subject to the
withholding of applicable taxes.  Notwithstanding the foregoing, if
permitted by the Committee and set forth in the Award Agreement, the Participant
may elect in accordance with terms specified in the Award Agreement to defer
receipt of all or any portion of the shares of Stock or other property otherwise
issuable to the Participant pursuant to this Section.  Any deferral
election made pursuant to the terms of this Section 8.6 shall be made by giving
notice in a manner and within the time prescribed by the Company and in
compliance with Section 409A of the Code.

    
       

      
        9

        
        

      

      
        
        

      

    

     

    8.7 Nontransferability of Restricted
Stock Unit Awards.  Prior to the issuance of shares of Stock in
settlement of a Restricted Stock Unit Award, the Award shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s
beneficiary, except transfer by will or by the laws of descent and
distribution.

     

     

    
      	
              SECTION
      9.

            	
              PERFORMANCE
      SHARES AND PERFORMANCE UNITS

            

    

     

    9.1 Grant of Performance Shares or
Performance Units.  Subject to the provisions of Sections 1.3,
3 and 5, the Committee, at any time and from time to time, may grant Awards of
Performance Shares or Performance Units to such Participants and in such amounts
as it shall determine.  Each grant of a Performance Share or
Performance Unit Award shall be evidenced by an Award Agreement that shall
specify the number of Performance Shares or Performance Units subject thereto,
the value of each Performance Share or Performance Unit, the Performance Goals
and Performance Period applicable to the Award, and the other terms, conditions
and restrictions of the Award as the Committee shall determine.  No
Performance Share or Performance Unit Award or purported Award shall be a valid
and binding obligation of the Company unless evidenced by a fully executed Award
Agreement.  Award Agreements evidencing Performance Share or
Performance Unit Awards may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the terms and conditions set
forth in Sections 9.2 through 9.10 below.

     

    9.2 Value of Performance Shares and
Performance Units.  Unless otherwise provided by the Committee
in granting an Award, each Performance Share shall have an initial value equal
to the Fair Market Value of one (1) share of Stock, subject to adjustment as
provided in Section 5.3, on the effective date of grant of the Performance
Share, and each Performance Unit shall have an initial value of one hundred
dollars ($100).  The final payable to the Participant in settlement of
a Performance Share or Performance Unit will depend on the extent to which
Performance Goals established by the Committee are attained within the
applicable Performance Period established by the Committee.

     

    9.3 Establishment of Performance Goals
and Performance Period.  The Committee, in its discretion,
shall establish in writing the Performance Period and Performance Goal(s)
applicable to each Performance Share or Performance Unit
Award.  Unless otherwise permitted in compliance with the requirements
under Section 162(m) with respect to “performance-based compensation,” the
Committee shall establish the Performance Goal(s) applicable to each Award no
later than the earlier of (a) the date ninety (90) days after the commencement
of the applicable Performance Period or (b) the date on which 25% of the
Performance Period has elapsed, and, in any event, at a time when the outcome of
the Performance Goals remains substantially uncertain.  Such
Performance Goal(s), when measured at the end of the Performance Period, shall
determine the ultimate value of the Award to be paid to the
Participant.  Once established, the Performance Goals shall not be
changed during the Performance Period.  The Company shall notify each
Participant granted a Performance Share or Performance Unit Award of the terms
of such Award, including the Performance Period and applicable Performance
Goal(s).

     

    9.4 Measurement of Performance
Goals.  Performance Goals shall be established by the Committee
on the basis of targets to be attained (“Performance Targets”) with respect one
or more measures of business or financial performance (each, a “Performance
Measure”).  Performance Measures shall have the same meanings as used
in the Company’s financial statements, or if such terms are not used in the
Company’s financial statements, they shall have the meaning applied pursuant to
generally accepted accounting principles, or as used generally in the Company’s
industry.  Performance Targets may include a minimum, maximum, target
level and intermediate levels of performance, with the ultimate value of a
Performance Share or Performance Unit Award determined by the level attained
during the applicable Performance Period.  A Performance Target may be
stated as an absolute value or as a value determined relative to a standard
selected by the Committee.  Performance Measures shall be calculated
with respect to the Company and each Subsidiary Corporation consolidated
therewith for financial reporting purposes or such division or other business
unit thereof as may be selected by the Committee.  For purposes of the
Plan, the Performance Measures applicable to an Award shall be calculated in
accordance with generally accepted accounting principles, but prior to the
accrual or payment of any Performance Share or Performance Unit Award for the
same Performance Period and excluding the effect (whether positive or negative)
of any change in accounting standards or any extraordinary, unusual or
nonrecurring item, as determined by the Committee, occurring after the
establishment of the Performance Goals applicable to the
Award.  Performance Measures may be one or more of the following as
determined by the Committee: (a) revenue, (b) operating income, (c) pre-tax
profit, (d) net income, (e) gross margin, (f) operating margin, (g) earnings per
share, (h) return on stockholder equity, (i) return on capital, (j) return on
net assets, (k) economic value added, (l) cash flow and operating cash flow, (m)
net operating profits after taxes, (n) net asset value, (o) cost of capital and
weighted average cost of capital, (p) economic profit, (q) return on assets, (r)
earnings before income tax and depreciation (EBITDA), (s) earnings before income
tax (EBIT), (t) return on equity, (u) operating income and adjusted operating
income, (v) gross income, (w) return on invested capital, (x) overhead, (y) net
operating assets, and (z) safety incident rate (including total injury incident
rate, OSHA recordable injury rate and lost time injury rate).

    
      
        
        

      

      
        10

        
        

      

      
        
        

      

    

     

    9.5 Determination of Value of Performance
Shares and Performance Units.  As soon as practicable following
the completion of the Performance Period for each Performance Share and
Performance Unit Award, the Committee shall certify in writing the extent to
which the applicable Performance Goals have been attained and the resulting
final value of the Award earned by the Participant and to be paid upon its
settlement in accordance with the terms of the Award Agreement.  The
Committee shall have no discretion to increase the value of an Award payable
upon its settlement in excess of the amount called for by the terms of the Award
Agreement on the basis of the degree of attainment of the Performance Goals as
certified by the Committee.  However, notwithstanding the attainment
of any Performance Goal, if permitted under a Participant’s Award Agreement
evidencing a Performance Share or Performance Unit Award, the Committee shall
have the discretion, on the basis of such criteria as may be established by the
Committee, to reduce some or all of the value of an Award that would otherwise
be paid upon its settlement.  No such reduction may result in an
increase in the amount payable upon settlement of another Participant’s
Award.  As soon as practicable following the Committee’s
certification, the Company shall notify the Participant of the determination of
the Committee.

    
       

    

    9.6 Dividend
Equivalents.  The Committee may, in its discretion, provide
that any Performance Share shall include a right to Dividend Equivalents with
respect to cash dividends paid on Stock for which the record date is prior to
the date on which the Performance Share is settled or
forfeited.  Dividend Equivalents may be paid currently or may be
accumulated and paid to the extent that Performance Shares become
nonforfeitable, as determined by the Committee and set forth in the Award
Agreement.  Settlement of Dividend Equivalents may be in cash, shares
of Stock, or a combination thereof as determined by the Committee, and may be
paid on the same basis as settlement of the related Performance Share as
provided in Section 9.7.  Dividend Equivalents shall not be paid with
respect to Performance Units.

     

    9.7 Form and Timing of
Payment.  Payment of the ultimate value of a Performance Share
or Performance Unit Award earned by a Participant as determined following the
completion of the applicable Performance Period pursuant to Sections 9.5 and 9.6
may be made in cash, shares of Stock, or a combination thereof as determined by
the Committee.  Payments in shares of Stock shall be determined by the
Fair Market Value of a share of Stock on the last day of such Performance
Period.  Payment may be made in a lump sum or installments as
prescribed by the Committee and set forth in the Award Agreement.  If
any payment is to be made on a deferred basis, the Committee may, but shall not
be obligated to, provide for the payment of Dividend Equivalents or interest
during the deferral period.  Any payment made on a deferred basis
shall be made in a manner and within the time prescribed by the Committee and in
compliance with Section 409A of the Code.

     

    9.8 Restrictions Applicable to Payment in
Shares.  Shares of Stock issued in payment of any Performance
Share or Performance Unit Award may be fully vested and freely transferable
shares or may be shares of Restricted Stock subject to Vesting Conditions as
provided in Section 7.3.  Any such shares of Restricted Stock shall be
evidenced by an Award Agreement and shall be subject to the terms and conditions
set forth in Sections 7.3 through 7.6 above.

     

    9.9 Effect of Termination of
Service.  Unless otherwise provided by the Committee in the
grant of a Performance Share or Performance Unit Award and set forth in the
Award Agreement, the effect of a Participant’s termination of Service on his or
her Performance Share or Performance Unit Award shall be as
follows:

     

    (a) Death, Disability
or Retirement.  If the Participant’s Service is terminated by
reason of the death, Disability or Retirement of the Participant while he or she
is the holder of a Performance Share or Performance Unit Award but before the
completion of the applicable Performance Period, the value of the Participant’s
Award shall be determined by the extent to which the applicable Performance
Goals have been attained with respect to the entire Performance Period and shall
be prorated based on the number of months of the Participant’s Service during
the Performance Period.  Payment shall be made following the end of
the Performance Period in any manner permitted by Section 9.7.

     

    (b) Other Termination
of Service.  If the Participant’s Service terminates for any
reason except death, Disability or Retirement before the completion of the
Performance Period applicable to a Performance Share or Performance Unit Award
held by such Participant, such Award shall be forfeited in its entirety;
provided, however, that in the event of an involuntary termination of the
Participant’s Service, the Committee, in its sole discretion, may waive the
automatic forfeiture of all or any portion of any such Award and provide for
payment of such Award or portion thereof on the same basis as if the
Participant’s Service had terminated by reason of Retirement.

     

    9.10 Nontransferability.  Prior
to settlement in accordance with the provisions of the Plan, no Performance
Share or Performance Unit may be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and
distribution.  All rights with respect to a Performance Share or
Performance Unit Award granted to a Participant hereunder shall be exercisable
during his or her lifetime only by such Participant or the Participant’s
guardian or legal representative.

    
      
        
        

      

      
        11

        
        

      

      
        
        

      

    

     

    
      	
              SECTION
      10.

            	
              NONEMPLOYEE
      DIRECTOR RESTRICTED STOCK AWARDS

            

    

     

    10.1 Effective
Date and Duration of this Section.

     

    (a) Effective
Date.  This Section 10 shall become effective on January 1,
2008 (the “Section 10 Effective Date”).  Grants of Restricted Stock
Awards to Nonemployee Directors pursuant to this Section 10 will be automatic
and will be made in accordance with the provisions of this Section
10.

     

    (b) Duration.  This
Section 10 shall continue in effect for the remainder of the calendar year
commencing on the Section 10 Effective Date and for each subsequent calendar
year commencing during the term (as provided in Section 1.3) of the
Plan.  Subject to compliance with applicable law as provided in
Section 12, all Nonemployee Director Restricted Stock Awards granted prior to
termination of the Plan shall continue to be governed by the terms of the Plan
and the Award Agreement evidencing such Nonemployee Director Restricted Stock
Award.

     

    10.2 Initial Restricted Stock
Award.  Each person who first becomes a Nonemployee Director on
or after the Section 10 Effective Date automatically will be granted, on the
date he or she is first appointed or elected to the Board, 1,000 shares of
Restricted Stock multiplied by a fraction the numerator of which is the number
of months (including partial months) that the Nonemployee Director serves as a
Director during the period beginning on July 1 preceding the date the
Nonemployee Director first becomes a Nonemployee Director and ending on the next
June 30, and the denominator of which is 12.  Notwithstanding the
foregoing, if the person who first becomes a Nonemployee Director becomes the
“presiding director” of the Board, then the Nonemployee Director will granted
1,150 shares of Restricted Stock multiplied by the fraction described in the
foregoing sentence.

     

    10.3 Subsequent Restricted Stock
Award.  Each Nonemployee Director, who is not the “presiding
director” of the Board, automatically will be granted 1,000 shares of Restricted
Stock on each July 1.  The “presiding director” of the Board
automatically will be granted 1, 500 shares of Restricted on each July
1.

     

    10.4 Terms of Nonemployee Director
Restricted Stock Awards.  Except as set forth below, the terms
of each Nonemployee Director Restricted Stock granted pursuant to this Section
10 will be as set forth in Section 7.

     

    (a) Vesting and
Restrictions on Transfer.  Shares issued pursuant to any
Nonemployee Director Restricted Stock Award shall vest in full at the end of the
Director’s term in which the Award is granted as set forth in the Award
Agreement evidencing such Award.  During any Restriction Period in
which shares acquired pursuant to a Restricted Stock Award remain subject to
Vesting Conditions, such shares may not be sold, exchanged, transferred,
pledged, assigned or otherwise alienated or hypothecated, other than pursuant to
an Ownership Change Event, as defined in Section 14.1.  Upon request
by the Company, each Nonemployee Director shall execute any agreement evidencing
such transfer restrictions prior to the receipt of shares of Stock hereunder and
shall promptly present to the Company any and all certificates representing
shares of Stock acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.  All
rights with respect to Restricted Stock granted to a Nonemployee Director
hereunder shall be exercisable during his or her lifetime only by such
Nonemployee Director.

     

    (b) Voting Rights;
Dividends and Distributions.  Except as provided in this
Section, during the Restriction Period applicable to shares subject to a
Restricted Stock Award, the Nonemployee Director shall have all of the rights of
a stockholder of the Company holding shares of Stock, including the right to
vote such shares and to receive all dividends and other distributions paid with
respect to such shares.  However, in the event of a dividend or
distribution paid in shares of Stock or any other adjustment made upon a change
in the capital structure of the Company as described in Section 5.3, then any
and all new, substituted or additional securities or other property (other than
normal cash dividends) to which the Nonemployee Director is entitled by reason
of the Nonemployee Director’s Restricted Stock Award shall be immediately
subject to the same Vesting Conditions as the shares subject to the Nonemployee
Director Restricted Stock Award with respect to which such dividends or
distributions were paid or adjustments were made.

     

    (c) Effect of
Termination of Service.  The effect of a Nonemployee Director’s
termination of Service on his or her Restricted Stock Award shall be as
follows:

     

    (i) Retirement, Death or
Disability.  If the Nonemployee Director’s Service is
terminated by reason of the Retirement, death or Disability of the Nonemployee
Director’s during the Restriction Period, the restrictions applicable to the
shares of Restricted Stock pursuant to Section 10.4(a) shall terminate
automatically with respect to all such shares and such shares shall be 100%
vested.

     

    (ii) Other Termination of
Service.  If the Nonemployee Director’s Service terminates
during the Restriction Period for any reason except Retirement, death or
Disability, any shares of Restricted Stock still subject to restrictions
pursuant to Section 10.4(a) at the date of such termination shall be forfeited
and automatically reacquired by the Company; provided, however, that, in the
event of an involuntary termination of the Nonemployee Director’s Service, the
Board, in its sole discretion, may waive the automatic forfeiture of any or all
such shares and/or add such new restrictions to such shares of Restricted Stock
as it deems appropriate.

    
      
        
        

      

      
        12

        
        

      

      
        
        

      

    

     

    
      	
              SECTION
      11.

            	
              CHANGE
      IN CONTROL

            

    

     

    11.1 Effect of Change in
Control.  In the event of a Change in Control of the Company as
defined in Section 11.3 below, the surviving, continuing, successor, or
purchasing corporation or parent corporation thereof, as the case may be (the
“Acquiring
Corporation”), shall either assume all outstanding Awards or substitute
new Awards having an equivalent value for such outstanding Awards.  In
the event the Acquiring Corporation elects not to assume or substitute for such
outstanding Awards, and provided that the Participant’s Service has not
terminated prior to the effective date of the Change in Control (unless, the
Participant’s Service terminated within three (3) months prior to the effective
date of the Change in Control or, with respect to Performance Shares or
Performance Units, the Participant’s Service terminated by reason of the death,
Disability or Retirement of the Participant), all unexercisable, unvested or
unpaid portions of such outstanding Awards shall become, in accordance with this
Section 11.1 and Section 11.2 below,  immediately exercisable and
vested in full immediately prior to the effective date of the Change in Control
and immediately payable, as applicable, within ten (10) days following the
effective date of the Change in Control.  For purposes of the
preceding sentence, the value of Performance Shares and Performance Units shall
be determined and paid based upon the greater of (i) the extent to which the
applicable Performance Goals have been attained during the Performance Period up
to the effective date of the Change in Control or (ii) the pre-established 100%
of target level with respect to each Performance Target comprising the
applicable Performance Goals.

     

    Any
Options which are neither assumed or substituted for by the Acquiring
Corporation nor exercised as of the date of the Change in Control shall
terminate as of the effective date of the Change in Control.

     

    11.2 Acceleration of Vesting upon a Change
in Control.  Notwithstanding the provisions of Section 11.1
above, and provided that the Participant’s Service has not terminated prior to
the effective date of the Change in Control (unless, the Participant’s Service
terminated within three (3) months prior to the effective date of the Change in
Control or, with respect to Performance Shares or Performance Units, the
Participant’s Service terminated by reason of the death, Disability or
Retirement of the Participant), the exercisability, vesting and payment of any
outstanding Award shall be accelerated effective
as of the effective date of a Change in Control, and any outstanding Option, to
the extent unexercised and exercisable on the date of a Participant’s
termination of Continuous Service following the Change in Control, shall remain
exercisable by the Participant (or the Participant’s guardian or legal
representative) for at least six (6) months (or such longer period of time as
specified in the Award Agreement) after the date of the Participant’s
termination of Continuous Service, but in any event no later than the Option
Expiration Date.

     

    11.3 Definition.  A
“Change in Control” means the effective date of any one of the following events
but only to the extent that such change in control transaction is a change in
the ownership or effective control the Company or a change in the ownership of a
substantial portion of the assets of the Company as defined in the regulations
promulgated under Section 409A of the Code:

     

    (a)           an
acquisition, consolidation, or merger of the Company with or into any other
corporation or corporations, unless the stockholders 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;
or

     

    (b)           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 stockholders of the Company; or

     

    (c)           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 any single person or
affiliated persons leading to a change of a majority of the members of the
Board.

     

    The Board
shall have final authority to determine, in accordance with Section 409A of the
Code, whether multiple transactions are related and the exact date on which a
Change in Control has been deemed to have occurred under subsections (a), (b),
and (c) above.

     

     

    
      	
              SECTION
      12.

            	
              REQUIREMENTS
      OF LAW

            

    

     

    12.1 Compliance with Securities
Law.  The granting of Awards and the issuance of shares of
Stock pursuant to any Award shall be subject to compliance with all applicable
laws, rules, and regulations, and to such approvals by any governmental
agencies, securities exchanges or market systems as may be
required.  In addition, no Option may be exercised unless (a) a
registration statement under the Securities Act shall at the time of exercise of
the Option be in effect with respect to the shares issuable upon exercise of the
Option or (b) in the opinion of legal counsel to the Company, the shares
issuable upon exercise of the Option may be issued in accordance with the terms
of an applicable exemption from the registration requirements of the Securities
Act.  The inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the Company’s legal counsel
to be necessary to the lawful issuance and sale of any shares hereunder shall
relieve the Company of any liability in respect of the failure to issue or sell
such shares as to which such requisite authority shall not have been
obtained.  As a condition to the issuance of any Stock, the Company
may require the Participant to satisfy any qualifications that may be necessary
or appropriate, to evidence compliance with any applicable law or regulation and
to make any representation or warranty with respect thereto as may be requested
by the Company.

    
      
        
        

      

      
        13

        
        

      

      
        
        

      

    

     

    12.2 Governing Law.  The
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of California.

    
       

       

    

    
      	
              SECTION
      13.

            	
              TAX
      WITHHOLDING

            

    

     

    13.1 Tax Withholding In
General.  The Company shall have the power to withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
the Federal, state, local and foreign tax withholding obligations, if any, of
any Participating Company with respect to any Award.  The Company
shall have no obligation to deliver shares of Stock or make any payment of cash
under the Plan until such tax withholding obligations have been
satisfied.

     

    13.2 Withholding of
Shares.  The Company shall have the right, but not the
obligation, to deduct from the shares of Stock issuable to a Participant upon
the exercise or settlement of an Award, or to accept from the Participant the
tender of a number of whole shares of Stock having a Fair Market Value, as
determined by the Company, equal to all or any part of the tax withholding
obligations of the Participating Company Group.  The Fair Market Value
of any shares of Stock withheld or tendered to satisfy any such tax withholding
obligations shall not exceed the amount determined by the applicable minimum
statutory withholding rates.

     

     

    
      	
              SECTION
      14.

            	
              AMENDMENT
      AND TERMINATION OF PLAN

            

    

     

    14.1 Amendment and Termination of
Plan.  The Committee at any time may terminate, and from time
to time, may amend, the Plan; provided, however, that no such amendment may be
made without approval of the stockholders of the Company to the extent that the
Committee deems such stockholder approval to be necessary or advisable for
compliance with applicable tax and securities laws or other regulatory
requirements, including the requirements of any stock exchange or market system
on which the Stock is then listed.

     

    14.2 Effect of Amendment or
Termination.  No termination or amendment of the Plan shall
affect any then outstanding Award unless expressly provided by the
Committee.  In any event, no termination or amendment of the Plan
shall in any manner adversely affect any Award theretofore granted under the
Plan, without the consent of the Participant, unless such termination or
amendment is necessary to comply with any applicable law, regulation or
rule.

     

     

    
      	
              SECTION
      15.

            	
              MISCELLANEOUS
      PROVISIONS

            

    

     

    15.1 Beneficiary
Designation.  Each Participant may name, from time to time, any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of such Participant’s
death before he or she receives any or all of such benefit.  Each
designation will revoke all prior designations by the same Participant, shall be
in a form prescribed by the Company, and will be effective only when filed by
the Participant in writing with the Company during the Participant’s
lifetime.  In the absence of any such designation, benefits remaining
unpaid at the Participant’s death shall be paid to his or her spouse, or if
none, the Participant’s children in equal shares, or if none, the Participant’s
estate.

     

    15.2 Rights as an Employee or
Director.  No individual, even though eligible pursuant to
Section 3, shall have a right to be selected as a Participant, or, having been
so selected, to be selected again as a Participant.  Nothing in the
Plan or any Award granted under the Plan shall confer on any Participant a right
to remain an Employee or Director, or interfere with or limit in any way the
right of a Participating Company to terminate the Participant’s Service at any
time.

     

    15.3 Rights as a
Stockholder.  A Participant shall have no rights as a
stockholder with respect to any shares covered by an Award until the date of the
issuance of a certificate for such shares (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company).  No adjustment shall be made for dividends, distributions or
other rights for which the record date is prior to the date such certificate is
issued, except as provided in Section 5.3 or another provision of the
Plan.

     

    15.4 Provision of
Information.  Each Participant shall be given access to
information concerning the Company equivalent to that information generally made
available to the Company’s common stockholders.

    
      
        
        

      

      
        14

        
        

      

      
        
        

      

    

     

    15.5 Unfunded
Obligation.  Any amounts payable to Participants pursuant to
the Plan shall be unfunded obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security Act of
1974.  No Participating Company shall 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 Committee or any Participating Company and a
Participant, or otherwise create any vested or beneficial interest in any
Participant or the Participant’s creditors in any assets of any Participating
Company.  The Participants shall have no claim against any
Participating Company for any changes in the value of any assets which may be
invested or reinvested by the Company with respect to the Plan.

    
       

    

    15.6 Indemnification.  In
addition to such other rights of indemnification as they may have as members of
the Committee or officers or employees of the Participating Company Group,
members of the Committee and any officers or employees of the Participating
Company Group to whom authority to act for the Committee or the Company is
delegated shall be indemnified by the Company against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any right
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties; provided, however,
that within sixty (60) days after the institution of such action, suit or
proceeding, such person shall offer to the Company, in writing, the opportunity
at its own expense to handle and defend the same.

     

    IN
WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the
foregoing sets forth the Granite Construction Incorporated Amended and Restated
1999 Equity Incentive Plan as duly adopted by the Board on May 19,
2008.

     

    GRANITE
CONSTRUCTION INCORPORATED

     

    

    

    

     /s/ William G.
Dorey                                               
    
                                                                           

    By:           William
G. Dorey

    Title:         President
& CEO

     

    

     

    

     /s/ Michael
Futch                                                         
                                                                           

    By:           Michael
Futch

    Title:         Vice
President, General Counsel & Secretary

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