Document:

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Exhibit 10.28

                   AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into effective as of March 24, 2000 (the "Effective Date") by and
between Dennis J. Tietz ("Tietz's) and The Cronos Group, a limited liability
company organized and existing under the laws of Luxembourg (the "Company")
(collectively, the "Parties").

                                R E C I T A L S

WHEREAS, the Parties entered into an employment agreement (the "Prior
Agreement") effective as of December 11, 1998;

WHEREAS, the Parties entered into a severance agreement ("Severance Agreement")
effective as of December 11, 1998;

WHEREAS, the Parties desire to amend and restate the Prior Agreement to reflect
certain changes in the terms and conditions of Tietz's employment with the
Company, as more fully set forth in this Agreement;

WHEREAS, the Parties also desire to terminate the Severance Agreement;

WHEREAS, effective as of the date hereof, the Parties hereby agree that the
terms of this Agreement shall supercede, in its entirety, the terms of the Prior
Agreement and that the Severance Agreement shall be terminated; and

WHEREAS, the Parties further agree that this Agreement shall govern, in all
respects, the terms of the employment of Tietz by the Company.

NOW, THEREFORE, the Parties agree as follows:

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1. POSITION

During the term of this Agreement ("Term"), Tietz shall be employed by the
Company as its Chief Executive Officer and shall be nominated to the Company's
Board of Directors (the "Board") and nominated to serve as Chairman of the
Board. If requested by the Board, Tietz shall also serve, without additional
compensation, as the President and director of one or more subsidiaries of the
Company, including, without limitation, Cronos Capital Corporation, a California
corporation ("CCC" and collectively, the "Subsidiaries").

2. TERM

(a) The Term shall commence on the Effective Date and shall continue until
December 31, 2000. Thereafter, the Term shall continue for an additional year
ending on December 31, 2001. Any further extensions shall only occur upon the
written agreement of the Parties hereto.

(b) Tietz shall work exclusively for the Company (which, for the purposes of
this provision, includes the Subsidiaries) during the Term.

3. ANNUAL SALARY

Tietz's annual salary for services rendered under this Agreement shall be Three
Hundred Thousand Dollars ($300,000) (the "Initial Base Salary"), paid in
accordance with the Company's standard payroll practices. Commencing January 1,
2001, Tietz's annual salary may be increased, in the discretion of the Board,
but shall not be reduced. In all events, Tietz's annual salary for the year
2001, and for each year thereafter during the Term shall be increased, at a
minimum, in accordance with the ratio that the consumer price index compiled and
published by the United States Department of Labor's Bureau of Labor Statistics
for the San Francisco/Oakland Metropolitan area ("CPI") for the year just ended
bears to said figure for the calendar year preceding the year just ended. Such
increased CPI shall be applied to the Initial Base Salary, as previously
increased by the CPI, and not necessarily to the prior year's annual salary.

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4. BONUS

(a) For each calendar year that ends during the Term of this Agreement, the
Company shall pay a cash bonus to Tietz which, with respect to the 1999 calendar
year, shall be in an amount equal to up to 50% of Tietz's annual salary and
shall be calculated on the basis of the performance goals established by the
Compensation Committee of the Board at its meeting of June 3, 1999, and, with
respect to any subsequent calendar year (including, but not limited to, the 2000
calendar year), on the basis of comparable performance goals or such other
criteria determined by the Board, in its discretion with respect to such
calendar year.

(b) In the event that during the Term, any "Change in Control" (as defined in
Exhibit A hereto) of the Company occurs, Tietz shall receive a single sum cash
bonus (the "Transaction Bonus") in a dollar amount which shall be determined and
paid to Tietz in accordance with the terms and provisions of Exhibit B also
attached hereto. Notwithstanding any contrary provision in this Agreement,
payment of the Transaction Bonus shall be subject to any reduction required by
Section 13 hereof.

5.   ALLOCATION OF COMPENSATION AMONG THE COMPANY AND SUBSIDIARIES

For accounting and tax reporting purposes, the annual salary, bonus, and other
compensation and benefits (collectively, "Compensation") payable to Tietz shall
be allocated among the Company and the Subsidiaries based upon the services
rendered by Tietz to the Company and the Subsidiaries. Tietz shall, within
ninety (90) days of the date of this Agreement, in consultation with the
Company's accounting staff and outside auditors, and subject to the approval of
the Audit Committee of the Board, develop an allocation method and procedures
for the purpose of allocating Tietz's Compensation among the Company and the
Subsidiaries. The procedures selected shall be designed to fairly reflect an
allocation of Tietz's Compensation among the Company and the Subsidiaries based
upon the services rendered by Tietz to the Company and the Subsidiaries, in
accordance with sound accounting practice.

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6. GROUP/EXECUTIVE BENEFITS

(a) Except as otherwise specifically provided herein, Tietz and his family shall
participate, on terms no less favorable than were provided to the immediately
preceding Chief Executive Officer of Company, in any group and/or executive
life, hospitalization or disability insurance plan, health program, pension,
profit sharing, 401(k) and similar benefit plans (qualified, non-qualified and
supplemental) that the Company sponsors for its officers or employees, and in
other fringe benefits, including any automobile allowance or arrangement, club
memberships and dues, and similar programs (collective referred to as the
"Benefits"). All waiting periods for such plans shall be waived, except with
respect to any pension plan where waiver of the applicable waiting period is not
permitted. It is understood that participating on the "same terms" as the
immediately preceding Chief Executive Officer of the Company means the same
rules and/or policies shall apply, recognizing that the result upon applying
them can be affected by different credited years of service.

(b) Without limiting the generality of the foregoing provisions of this Section
6, the Company shall provide the following specific benefits to Tietz:

     (i) Automobile. For the Company's convenience, and as a condition to
Tietz's employment by the Company, Tietz shall, to the extent reasonably
possible, use a luxury automobile to be provided and maintained by the Company.
The Company shall also provide, at the Company's expense, adequate personal
injury and property damage insurance covering such automobile.

     (iii) Vacation. Tietz shall be entitled to twenty-five (25) business days
of vacation during each calendar year during the term of this Agreement and any
extensions thereof, prorated for partial years. Tietz may carry over to the
subsequent year up to five (5) business days of vacation each year that he does
not use.

     (iii) Life Insurance. For the term of this Agreement and any extensions
thereof, the Company shall, at its expense, procure and keep in effect life
insurance on the life of Tietz, payable to such beneficiaries as he may from
time to time designate, in such amounts as called for by the Company's

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current policy with respect to the provision of life insurance to senior
executives of the Company.

7.  EQUITY BASED INCENTIVE COMPENSATION

(a) The Company currently has in place an incentive stock option plan pursuant
to the provisions of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") (hereinafter, the "Option Plan"). The Company agrees that
Tietz, as the Chief Executive Officer of the Company, shall participate in the
Option Plan, at the time or times and consistent with the terms and vesting
rules generally applicable to other senior executives of the Company under the
Option Plan.

(b) If there is a generally applicable award of options or restricted shares to
senior executives of the Company other than an award of options under the Option
Plan, Tietz shall participate in such award(s) on terms consistent with the
Company's then-current practices with respect to awards made to other senior
executives. The Compensation Committee of the Board, in its sole discretion,
shall determine whether and to what extent stock options shall be granted to
Tietz under the Option Plan.

(c) In accordance with the terms of the Prior Agreement, the Company granted to
Tietz an option (the "Option") to acquire 300,000 shares (the "Option Shares")
of the Company's common stock, $2.00 par value, at an exercise price of $4.375
per share, the closing price of the Company" s common stock, as quoted on
NASDAQ, as of the close of business on December 11, 1998, the date of grant. The
terms of the Option are set forth in a separate Non-Qualified Stock Option
Agreement entered into between the Company and Tietz.

(d) In the event of an "Equity Change in Control" of the Company, as that term
is defined in Exhibit C hereto, then all of Tietz's awards of stock options,
restricted shares or similar equity-based interests which have not already
vested shall immediately vest in full.

(e)  CCC is an indirect wholly-owned subsidiary of the Company. CCC serves as
     the general partner or managing general partner of eleven (11) California
     limited partnerships organized to own and manage marine cargo containers.
     Since 1992, Tietz has served as President of CCC. Tietz shall

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continue to serve as President of CCC during the Term. Under the relevant
partnership agreements of the container partnerships, CCC, as general partner,
is entitled to various forms of compensation. The Company agrees to allocate and
distribute to Tietz, as additional incentive compensation, for the term of the
container partnerships paying such compensation, three percent (3%) of the
container partnerships" fees and distributions payable and distributable to CCC.
The incentive compensation payable to Tietz under the provisions of this
subsection (e) shall be payable to him by CCC quarterly and shall be paid to
Tietz regardless of the termination of this Agreement by either Party prior to
the expiration of the term of container partnerships" agreements with CCC.

8. EVENTS TRIGGERING SEVERANCE BENEFITS

Upon the termination of Tietz's employment for any of the reasons described in
subsections (a) - (c) below, he will be entitled to receive the severance
benefits described in Section 9 hereof:

(a) The Company terminates Tietz's employment without "Cause."

(b) Tietz terminates his employment with the Company "For Good Reason," which
means he terminates it within six (6) months of any event that constitutes "Good
Reason," as defined in subsection (d) below (the phrase "Without Good Reason"
means any termination by Tietz other than within six (6) months of an event
constituting Good Reason).

(c) Tietz resigns, with or without Good Reason within the thirty (30) day period
commencing one (1) year following an "Equity Change in Control" of the Company,
as that term is defined in Exhibit C hereto.

(d) Definitions:

     (i) "Cause" refers to Tietz's willful dishonesty toward, fraud upon, or
deliberate injury or attempted injury to, the Company, or by reason of Tietz's
willful material breach of this Agreement which has resulted in a material
injury to the Company; provided, however, that Cause shall not be deemed to
exist as a result of any act or omission believed by Tietz, in good faith, to
have been in the interest of the Company.

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     (ii) "Good Reason" for Tietz to resign shall exist if any of the following
events occur without his consent: (A) the Company fails to pay or provide
required compensation, after the omission has been called to the Company's
attention and it has been given a reasonable opportunity to cure the situation;
or (B) the Company materially reduces Tietz's titles, position, duties and/or
authority; or (C) the Company fails to nominate Tietz to serve on the Board or
to serve as Chairman of the Board; or (D) the Company materially breaches the
terms of this Agreement, provided, however, Tietz has called the breach to the
Company's attention and allowed the Company a reasonable opportunity to cure it.

     (iii) "Notice of Termination" shall mean a written notice which (A)
indicates the type of termination under this Agreement (e.g., for Cause) and
cites the applicable provision of this Agreement, (B) briefly describes the
facts and circumstances claimed to provide a basis for the stated type of
termination, if applicable, and (C) specifies the date of termination from
active service, provided, however, if Tietz is eligible for the Non-Solicitation
Payment payable pursuant to Section 10 hereof, the Company shall provide Tietz
with thirty (30) days advance notice of his date of termination in order to
enable him to make a timely election to receive the Non-Solicitation Payment
under Section 10 hereof.

(e) Termination because of Tietz's death or disability will not require payment
of the severance benefits described in Section 9, nor will termination for Cause
or Tietz' termination of employment Without Good Reason.

     (i) For purposes of this Agreement, Tietz will be deemed to be disabled
from performing his duties upon the earlier of: (A) the end of a six (6)
consecutive month period during which, for any reason, he has been unable to
substantially perform his usual and customary duties as Chief Executive Officer;
or (B) the date when it becomes apparent that, for any reason, he will be unable
to substantially perform his usual and customary duties as Chief Executive
Officer for a period of at least six (6) consecutive months, provided, however,
that in the case of a physical or mental injury or disease, his disability must
be determined in writing by a reputable physician or psychologist, selected
jointly by the Board and Tietz (or his personal representative). The Company
shall promptly give Tietz written notice of any

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determination that Tietz is disabled from working and of any decision by the
Board to terminate his employment by reason thereof. In the event of disability,
until the date of termination from active service, the base salary payable to
Tietz under Section 3 hereof shall be reduced dollar-for-dollar by the amount of
disability benefits paid to Tietz in accordance with any disability plan, policy
or program of the Company.

9. SEVERANCE BENEFITS

If Tietz qualifies for severance benefits under the provisions of Section 8
hereof, then the following terms and conditions shall apply:

(a) The Company shall pay Tietz all "Accrued Obligations" in a lump sum in cash
within thirty (30) days following his last day of active service; provided,
however, that any portion of the Accrued Obligations which consists of bonus,
deferred compensation, or incentive compensation shall be determined and paid in
accordance with the terms of the relevant plan or provision. "Accrued
Obligations" shall mean, as of the last day of active service, the sum of: (i)
his base salary under Section 3 hereof through the date of termination from
active service, to the extent not already paid; (ii) the amount of any bonus,
incentive compensation, deferred compensation and other cash compensation
accrued by Tietz as of his last day of active service, to the extent not already
paid; and (iii) any vacation pay, expense reimbursements and other cash
entitlements accrued by Tietz as of his last day of active service, to the
extent not already paid. For purposes of this Section, amounts shall be deemed
to accrue ratably over the period during which they are earned, but no
discretionary compensation shall be deemed earned or accrued until it is
specifically approved by the Board in accordance with the applicable plan,
program or policy.

(b) Within thirty (30) days after Tietz's last day of active service, the
Company shall pay him a lump sum equal to the amount that results when the
fraction described in subsection (i) below is multiplied times the sum described
in subsection (ii) below:

     (i) A fraction, the numerator of which is the lesser of (A) the number of
days remaining from Tietz's last day of paid active service until

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the last day of the term of this Agreement or (B) 365, and the denominator of
which is 365;

     (ii) The sum of his: (A) then-current annual salary and (B) then-current
annual performance bonus target or, if not yet established, his most recent
annual bonus payment.

However, the payment to Tietz under this paragraph (b) shall be conditioned upon
his compliance with the Company's policy (as in effect on the Effective Date or
on his last day of active service, whichever is more favorable to Tietz)
regarding all salaried employees executing a waiver and release prior to
receiving severance compensation.

(c) Within thirty (30) days after Tietz's last day of active service, the
Company shall pay him a lump sum that represents a pro-rated annual bonus for
the year of termination. This amount shall be calculated by taking his target
bonus (which, in the case of the target bonus for the 1999 calendar year shall
be in an amount equal to up to 50% of Tietz's annual salary and shall be
calculated on the basis of the objective criteria approved by the Compensation
Committee of the Board at its meeting of June 3, 1999 (but excluding for
purposes of this Section, the Committee's subjective determination with respect
to Tietz's overall performance for the year)) or, if such target bonus has not
been established (e.g. the bonus for the 2000 calendar year), his bonus for the
prior year, for the year of termination and multiplying it times a fraction (i)
whose numerator is the number of days elapsed in the current calendar year from
January 1 of that year through his final day of active service, and (ii) whose
denominator is 365 (e.g., if his last day of active service was February 5, then
this fraction would be .10, calculated as follows: 36 days elapsed in year
divided by 365 days).

(d) All options and restricted stock (including both shares and units) that were
granted before the date of termination but have not yet vested shall immediately
vest upon Tietz's final day of active service. All such options, and also
options that previously vested but have not yet been exercised, shall remain
exercisable in accordance with the Option Plan's terms for retirees.

The Company may at any time discharge Tietz from active service without advance
notice, by providing a Notice of Termination. Nothing in this

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Agreement shall be construed as requiring the Company to allow Tietz to continue
actively performing the duties of Chief Executive Officer. Regardless of the
reason for such termination or whether it constitutes a breach by the Company of
this Agreement, Tietz's exclusive remedy shall be payment of the severance
benefits described in subsections 9(a) - 9(d) hereof; he shall not be entitled
to reinstatement, nor to any other damages for wrongful termination; nor, after
his termination from active service, shall he be entitled to any other salary,
benefits or other compensation under this Agreement. Notwithstanding anything to
the contrary in the preceding sentences, Tietz shall be entitled to receive the
incentive compensation called for by the provisions of Section 7(e) of this
Agreement for the term of the container partnerships" paying such compensation,
and Tietz shall be entitled to the benefits of the Indemnification Agreement
previously entered into by the Company with Tietz.

10. NON-SOLICITATION PAYMENT

In the event that Tietz's employment with the Company terminates under
circumstances that would entitle him to the payment of severance under Section
9(b) hereof, then Tietz shall be eligible to receive, at his option, an
additional single lump sum payment in a dollar amount equal to 100% of the
annual salary and bonus payable to him under Section 9(b) for a 12-month period
in exchange for his agreement to comply with the non-solicitation and
confidentiality requirements contained in Section 12 hereof (the
"Non-Solicitation Payment"). In order to receive the Non-Solicitation Payment
Tietz must, on or before his last day of service with the Company, notify the
Company in writing of his election to receive the Non-Solicitation Payment and,
in connection therewith, Tietz must consent in writing to comply with the
requirements of Section 12 for a twenty-four (24) month period. Within thirty
(30) days after Tietz's last day of service with the Company, the Company shall
pay Tietz the Non-Solicitation Payment; provided, however, that if Tietz
violates the provisions of Section 12 hereof at any time during the twenty-four
(24) month period, Tietz shall promptly repay to the Company the
Non-Solicitation Payment.

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11.  OBLIGATIONS OF THE COMPANY UPON TERMINATION BY DEATH, DISABILITY,
     DISCHARGE FOR CAUSE, OR RESIGNATION WITHOUT GOOD REASON

In the event this Agreement terminates due to the death or disability of Tietz,
or due to a termination for Cause or resignation or Tietz's retirement Without
Good Reason, the Company shall pay to Tietz all Accrued Obligations in a lump
sum in cash within thirty (30) days after his last day of active service;
provided, however, that any portion of the Accrued Obligations which consists of
bonus, deferred compensation, or incentive compensation shall be determined and
paid in accordance with the terms of the relevant plan or provision. Nothing in
this Section shall limit or otherwise adversely affect any rights Tietz may have
under applicable law, under any other agreement with the Company including,
without limitation, the Indemnification Agreement, or under any compensation or
benefit plan or policy of the Company.

12. NON-SOLICITATION AND CONFIDENTIALITY

(a) If Tietz's employment with the Company is terminated for any reason that
entitles him to receive severance benefits pursuant to Section 9 of this
Agreement, and he elects to receive the Non-Solicitation Payment, then for a
period of twenty-four (24) months immediately following his last day of active
service, Tietz shall comply with the requirements of this Section 12.

     (i) Non-Solicitation of Business Contacts. Tietz shall not directly or
indirectly, solicit or interfere with any relationship with any customer,
supplier, investor, limited partner or deal referral source of the Company, CCC,
or any other affiliate.

     (ii) Non-Solicitation of Employees. Tietz shall not directly or indirectly
solicit or encourage any Existing Company Employee to leave the Company or to
accept any position with any other company that currently engages in business
with the Company. "Existing Company Employee" shall mean someone who: (a) became
employed by the Company before Tietz's active service terminates, and (b) is
still employed by the Company as of the date when the facilitating act or
solicitation takes place, and (c) holds a manager, director, or officer level
position at the Company (or an equivalent position based on job duties).

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(b) Confidentiality. Tietz shall not use or disclose to anyone any Confidential
Information regarding the Company and its affiliates. "Confidential Information"
shall include all non-public information Tietz acquires by virtue of his
positions with the Company which might be of material value to a competitor or
which might cause any economic loss (directly or via loss of an opportunity) or
substantial embarrassment to the Company or its customers, lessees, or suppliers
if disclosed. Examples of such Confidential Information include, without
limitation, non-public information about the Company's strategic or marketing
plans; its lessees, customers, and suppliers; its business operations and
structure; its pricing policies, or its non-public financial data.

(c) Remedies. In the event of a breach or threatened breach of any term of this
Section 12, the Company shall be entitled to injunctive relief and/or damages.
The Parties agree that breach of this Section 12 would cause irreparable injury
to the Company for which there would be no adequate remedy at law, due among
other reasons to the inherent difficulty of determining the precise causation
for loss of customers or measuring the exact impact of losing key employees or
having Confidential Information disclosed.

(d) Recitals. Tietz acknowledges that by virtue of the positions he will hold
with the Company, he will acquire Confidential Information, including, without
limitation, knowledge of operational plans, strategic long-range plans, and
leasing and marketing plans. Tietz also acknowledges that by virtue of the
positions he will hold with the Company, he will learn which Existing Company
Employees are critical to the Company's success and will develop relationships
he otherwise would not have had with such employees and with customers,
suppliers, investors, limited partners and deal referral sources.

13. GOLDEN PARACHUTE EXCISE TAX

(a) In the event any payment that is either received by Tietz or paid by the
Company on his behalf or any property or any other benefit provided to him under
this Agreement or under any other plan, arrangement or agreement with the
Company or any other person whose payments or benefits are treated as contingent
on a change of ownership or control of the Company (or in the ownership of a
substantial portion of the assets of the Company) or any person affiliated with
the Company or such person (but only if such payment or other

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benefit is in connection with Tietz's employment by the Company) (collectively,
the "Company Payments"), will be subject to the tax (the "Excise Tax") imposed
by Section 4999 of the Code (and any similar tax that may hereafter be imposed
by any taxing authority), the amounts of any Company Payments shall be
automatically reduced to an amount one dollar less than an amount that would
subject Tietz to the Excise Tax. The dollar amount of the reduction, if any, to
be made with respect to any Company Payments shall be determined by the
Company's Accountants (as such term is defined in Section 13(b) below) on or
before the date such Company Payments are due and payable to Tietz.

(b) For purposes of determining whether any of the Company Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (x) the Company
Payments shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "parachute payments" in excess of the "base
amount" (as defined under Code Section 280G(b)(3) of the Code) shall be treated
as subject to the Excise Tax, unless and except to the extent that, in the
opinion of the Company's independent certified public accountants, Deloitte &
Touche LLP, San Francisco (the "Accountants") such Company Payments (in whole or
in part) either do not constitute "parachute payments," represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the "base amount" or are otherwise not
subject to the Excise Tax, and (y) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Accountants in accordance
with the principles of Section 280G of the Code. In the event that the
Accountants are serving as accountant or auditor for the individual, entity or
group effecting the Change in Control, Tietz may appoint another nationally
recognized accounting firm to make the determinations hereunder (which
accounting firm shall then be referred to as the "Accountants" hereunder). All
determinations hereunder shall be made by the Accountants which shall provide
detailed supporting calculations both to the Company and Tietz at such time as
it is requested by the Company or Tietz. If the Accountants determine that
payments under this Agreement must be reduced pursuant to this paragraph, they
shall furnish Tietz with a written opinion to such effect. The determination of
the Accountants shall be binding upon the Company and Tietz.

(c) The Company agrees that it shall be responsible for all charges of the
Accountant.

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14. NO DUTY TO MITIGATE

With respect to the severance benefits provided under Section 9 and 10 of this
Agreement, Tietz shall not have any duty to mitigate his income loss after a
termination by finding alternative employment nor shall amounts he earns from
other employment be offset against those benefits.

15. TERMINATION BY EXECUTIVE

Tietz shall have no personal liability for damages to the Company for
voluntarily terminating his employment at any time, with or Without Good Reason,
so long as he gives at least thirty (30) days prior written notice.

16. ARBITRATION

Should any dispute or controversy arising from or related to this Agreement
arise between the Parties that the Parties are incapable of resolving themselves
through good faith negotiation, then such dispute or controversy shall be
submitted for resolution by J.A.M.S./ENDISPUTE ("JAMS") in San Francisco,
California, or at such other location as is agreed upon by the Parties. Any
dispute shall first be submitted to JAMS for mediation pursuant to the mediation
services provided by JAMS. Should the dispute between the Parties not be
successfully mediated by JAMS within ninety (90) days of its submission (subject
to any extension agreed to by the Parties) then and in such event the dispute
shall be submitted for binding arbitration by JAMS pursuant to the rules and
practices of JAMS. Unless agreed to by the Parties, the representative of JAMS
who attempts to mediate any dispute between the Parties shall not be the
representative of JAMS who arbitrates the dispute. Judgment upon any award by
the arbitrator(s) may be entered in any court having jurisdiction thereof. It is
agreed that the prevailing party in any such arbitration or other action arising
from or relating to this Agreement shall be entitled to reimbursement of its or
his reasonable costs and expenses, including attorneys" fees. Each Party
consents to the exercise over it or him of personal jurisdiction by the
arbitrator(s) selected by JAMS to resolve any dispute hereunder.

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17. FEES OF NEGOTIATING THIS AGREEMENT

The Company will pay all legal, accounting and other professional fees and
related expenses reasonably incurred by Tietz in connection with the negotiation
and preparation of this Agreement.

18. INDEMNIFICATION

To the fullest extent permitted by law and the Company's bylaws (and/or
resolutions or policies adopted by the Board), the Company shall indemnify Tietz
(including the advancement of expenses) for any judgments, fines, amounts paid
in settlement and reasonable expenses, including attorneys" fees, incurred by
Tietz in connection with the defense of any lawsuit or other claim to which he
is made a party by reason of being an officer, director or employee of the
Company or any of its subsidiaries. The Company and Tietz have entered into an
Indemnification Agreement for the purpose of implementing the indemnification
commitment of this Section 18.

19. BINDING EFFECT

This Agreement shall be binding upon and inure to the benefit of the heirs and
representatives of Tietz and the successors and assigns of the Company. The
Company shall require any successor (whether direct or indirect, by purchase,
merger, reorganization, consolidation, acquisition of property or stock,
liquidation or otherwise) to all or a substantial portion of its assets to
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
had taken place; provided, however, that Tietz shall have the same obligations
to the successor as he would have had to the Company. Regardless of whether such
an agreement is executed, this Agreement shall be binding on any successor of
the Company in accordance with the operation of law, and such successor shall be
deemed "the Company" for all purposes under this Agreement.

20. NOTICES

Any notice, demand or communication required or permitted to be given by any
provision of this Agreement shall be deemed properly given if given in writing
or by electronic mail and either delivered through a

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commercially recognized overnight delivery service or, if sent by electronic
mail or telecopier, to the party or to an officer of the party to whom the same
is directed, addressed as follows:

(a) If to Cronos, to:         The Cronos Group
                              444 Market Street, 15th Floor
                              San Francisco, California 94111
                              Attn:  Charles Tharp
                              Chairman of the Compensation Committee
                              of the Board of Directors
                              Fax:  (415) 677-9196

(b) If to Tietz, to:          Dennis J. Tietz
                              Cronos Capital Corp.
                              444 Market Street, 15th Floor
                              San Francisco, California  94111
                              Fax: (415) 677-9196

Any party identified above may change the address to which notices are to be
given hereunder by giving notice to the other party in the manner herein
provided.

21. AMENDMENT OF AGREEMENT

This Agreement may not be amended except by written agreement signed by both
Parties. Only the Board has the authority to authorize such an amendment on
behalf of the Company.

22. SEVERABILITY

Each term of this Agreement is deemed severable, in whole or in part, and if any
provision of this Agreement or its application in any circumstance is found to
be unlawful or invalid, the remaining terms and provisions shall remain in full
force and effect.

                                      E-84
<PAGE>   17

23. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York without reference to conflict of law principles.

24. EXECUTION IN COUNTERPARTS

This Agreement may be executed by the Parties hereto in counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
constitute one and the same instrument, and all signatures need not appear on
any one counterpart.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
day and year first above written.

                                  THE CRONOS GROUP

                                  By: /s/ C Tharp
                                      ----------------------------------------
                                      Charles Tharp
                                      Chairman of the Compensation Committee
                                      of the Board of Directors

                                      /s/ D J Tietz
                                      Dennis J. Tietz

                                      E-85
<PAGE>   18
                                    EXHIBIT A

                         DEFINITION OF CHANGE IN CONTROL

For purposes of Section 4(b) of the Agreement, the term "Change in Control"
shall be defined to mean the occurrence of any of the following events:

      (i) any "person" as such term is used in Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934 ("Act") (other than the Company, any
      trustee or other fiduciary holding securities under any employee benefit
      plan of the Company, or any company owned, directly or indirectly, by the
      stockholders of the Company in substantially the same proportions as their
      ownership of Common Stock of the Company), is or becomes the "beneficial
      owner" (as defined in Rule 13d-3 under the Act), directly or indirectly,
      of securities of the Company representing fifty percent (50%) or more of
      the combined voting power of the Company's then outstanding securities;

      (ii) the closing of an agreement and plan of merger or consolidation of
      the Company with any other corporation is approved, other than a merger or
      consolidation which would result in the voting securities of the Company
      outstanding immediately prior thereto continuing to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity) more than fifty percent (50%) of the combined voting
      power of the voting securities of the Company or such surviving entity
      outstanding immediately after such merger or consolidation; provided,
      however, that a merger or consolidation effected to implement a
      recapitalization of the Company (or similar transaction) in which no
      person acquires more than twenty-five percent (25%) of the combined voting
      power of the Company's then outstanding securities shall not constitute a
      Change in Control of the Company for purposes of this Exhibit A and the
      Agreement; or

      (iii) the closing of an agreement for the sale or disposition by the
      Company of all or substantially all of the Company's assets other than the
      sale of all or substantially all of the assets of the Company to person or
      persons who beneficially own, directly or indirectly, at least fifty
      percent (50%) or more of the combined voting power of the outstanding
      voting securities of the Company at the time of the sale.

                                      E-86
<PAGE>   19

                                    EXHIBIT B

Transaction Bonus

1. (a) If a Change in Control of the Company, as defined in Exhibit A occurs,
Tietz shall receive a Transaction Bonus calculated in accordance with the
provisions of this Exhibit B.

(b) The Company shall pay Tietz the full dollar amount of the Transaction Bonus
calculated hereunder no later than thirty (30) days after the date of such
Change in Control, as defined in Exhibit A, has occurred; provided, however,
payment of the Transaction Bonus calculated under this Exhibit B shall be
subject to the reduction, if any, required under Section 13 of the Agreement.

2. The Transaction Bonus shall be calculated as follows:

(a) On the closing date of the Change in Control transaction (the "Transaction
Date"), the dollar amount of the negotiated purchase price per share(2) of the
Company's common stock, net of all transaction costs and expenses, (the
"Purchase Price") shall be multiplied by the total number of the Company's
outstanding shares of common stock, determined as of the Transaction Date;

(b) The dollar amount determined in Section 2(a) above shall be multiplied by a
percentage which shall be calculated pursuant to the following formula: [X -
Y]/10 x .25, where "X" equals the Purchase Price and "Y" equals $5.40;

(c) The dollar amount determined in Section 2(b) shall be multiplied by 60% to
arrive at the lump sum cash dollar amount of the Transaction Bonus payable to
Tietz.

_________________

(2) Based on current outstanding shares, which price shall be adjusted for stock
splits, stock dividends or other recapitalization or redemption, all as
determined in the sole discretion of the Board.

                                      E-87
<PAGE>   20
                                    EXHIBIT C

                     DEFINITION OF EQUITY CHANGE IN CONTROL

(a) For purposes of Section 7(d) and 8(c) under the Agreement, "Equity Change in
Control" shall mean any one of the following events:

     (i) Schedule 13D or 13G filing. A Schedule 13D or 13G is filed pursuant to
the Exchange Act indicating that any person or group (as such terms are defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") has become the holder of more than twenty percent (20%) of the
outstanding Voting Shares. For purposes of calculating the percentage of Voting
Shares, such person or group shall be deemed the owner of any Voting Shares
which such person or group may acquire upon conversion of securities or upon the
exercise of options, warrants or rights.

     (ii) Certain Changes in Directors. As a result of or in connection with any
cash tender offer, merger, or other business combination, sale of assets or
contested election, or combination of the foregoing, the persons who were
directors of the Company just prior to such event shall cease within one year to
constitute a majority of the Board.

     (iii) Going Private.  The Company's stockholders approve a definitive
agreement providing for a transaction in which the Company will cease to be an
independent publicly-owned corporation.

     (iv) Certain Corporate Transactions. The stockholders of the Company
approve a definitive agreement (i) to merge or consolidate the Company with or
into another corporation in which the holders of Voting Shares immediately
before such merger or reorganization will not, immediately following such merger
or reorganization, hold as a group on a fully-diluted basis both the ability to
elect at least a majority of the directors of the surviving corporation and at
least a majority in value of the surviving corporation's outstanding equity
securities, or (ii) to sell or otherwise dispose of all or substantially all of
the assets of the Company.

     (v) Tender or Exchange Offer. An Offer is made by a person or group (as
such terms are defined in Section 13(d)(3) of the Exchange Act) and such Offer
has resulted in such person or group holding an aggregate of twenty percent
(20%) or more of the outstanding Voting Shares. For purposes of this sub-section
(v), Voting Shares held by such person or group shall be calculated in
accordance with the last sentence of Section (a)(i) hereof.

                                      E-88<PAGE>   1
                                                                    EXHIBIT 10.2

                              GRANITE CONSTRUCTION

                         PROFIT SHARING AND 401(k) PLAN

             As Amended and Restated Effective as of January 1, 1999

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                    Page
<S>                                                                          <C>
1.       Nature of the Plan                                                  1
2.       Definitions                                                         2
3.       Eligibility and Participation                                       8
4.       Contributions                                                      11
5.       Investment of Trust Assets                                         19
6.       Allocations to Participants' Accounts                              21
7.       Allocation Limitation                                              24
8.       Frozen Gibbons Accounts                                            25
9.       Disclosure to Participants                                         28
10.      Vesting and Forfeitures                                            29
11.      Years of Vesting Service and Break in Service                      30
12.      When Capital Accumulation Will Be Distributed                      32
13.      Hardship Withdrawals                                               34
14.      How Capital Accumulation Will Be Distributed                       37
15.      No Assignment of Benefits                                          39
16.      Administration                                                     39
17.      Claims Procedure                                                   43
18.      Limitation on Participants' Rights                                 44
19.      Future of the Plan                                                 45
20.      "Top-Heavy" Contingency Provisions                                 46
21.      Governing Law                                                      48
22.      Execution                                                          48
</TABLE>

<PAGE>   3

                              GRANITE CONSTRUCTION

                         PROFIT SHARING AND 401(k) PLAN

             As Amended and Restated Effective As of January 1, 1999

Section 1. Nature of the Plan.

         The purpose of this Plan is to enable participating Employees to save
funds on a tax-favored basis and to provide Participants with an opportunity to
accumulate capital for their future economic and retirement security.

         The Plan, which was originally adopted effective as of January 1, 1995,
as an amendment and restatement of the Granite Construction Company Profit
Sharing Plan Trust Agreement (originally effective January 1, 1976), is hereby
amended and restated effective as of January 1, 1999. The Plan is a profit
sharing plan under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), that contains a "cash or deferred arrangement" under
Section 401(k) of the Code. In order to satisfy applicable requirements of the
Code, as amended by the Small Business Job Protection Act of 1996, the second
sentence in the first paragraph of Section 4(b)(5) and the third sentence in the
first paragraph of Section 4(c)(3) are amended effective as of January 1, 1997.

         All Trust Assets held under the Plan will be administered, distributed,
forfeited and otherwise governed by the provisions of this Plan and the related
Trust Agreement. The Plan is administered by an Administrative Committee for the
exclusive benefit of Participants (and their Beneficiaries).

<PAGE>   4

Section 2.  Definitions.

         In this Plan, whenever the context so indicates, the singular or plural
number and the masculine, feminine or neuter gender shall be deemed to include
the other, the terms "he," "him" and "his" shall refer to a Participant, and the
capitalized terms shall have the following meanings:

<TABLE>
<S>                                     <C>
         Account                        One of several accounts maintained to
                                        record the interest of a Participant.
                                        See Section 6.

         Additional
         401(k) Contributions           Employer Contributions made pursuant to
                                        Participant elections under Section
                                        4(b)(2).

         Affiliate                      Any corporation which is a member of a
                                        controlled group of corporations (within
                                        the meaning of Section 414(b) of the
                                        Code) of which the Company is also a
                                        member or any trade or business (whether
                                        or not incorporated) which is under
                                        common control with the Company (within
                                        the meaning of Section 414(c) of the
                                        Code).

         Allocation                     Date December 31st of each year (the
                                        last day of each Plan Year).

         Beneficiary                    The person (or persons) entitled to
                                        receive any benefit under the Plan in
                                        the event of a Participant's death. See
                                        Section 14(b).

         Board of Directors             The Board of Directors of the Company.

         Break in Service               A Plan Year in which an Employee is not
                                        credited with more than 500 Hours of
                                        Service as a result of his termination
                                        of Service. See Section 11(b).

         Capital Accumulation           A Participant's vested, nonforfeitable
                                        interest in his Accounts under the Plan.
                                        Each Participant's Capital Accumulation
                                        shall be determined in accordance
</TABLE>

                                      -2-
<PAGE>   5

<TABLE>
<S>                                     <C>
                                        with the provisions of Section 10 and
                                        distributed as provided in Sections 12,
                                        13 and 14.

         Code                           The Internal Revenue Code of 1986, as
                                        amended.

         Committee                      The Administrative Committee appointed
                                        by the Board of Directors to administer
                                        the Plan. See Section 16.

         Company                        Granite Construction Incorporated, a
                                        Delaware corporation.

         Compensation                   The Statutory Compensation paid to an
                                        Employee by his Employer, but excluding
                                        (1) reimbursements or other expense
                                        allowances (including travel expense
                                        allowances), (2) fringe benefits (cash
                                        and noncash), (3) moving expenses, (4)
                                        welfare benefits, (5) any amount in
                                        excess of $160,000 (as adjusted
                                        periodically after 1998 for increases in
                                        the cost of living pursuant to Section
                                        401(a)(17) of the Code), and (6) any
                                        amount paid to an Employee pursuant to
                                        the terms of a collective bargaining
                                        agreement.

         Disability                     Any mental or physical incapacity of an
                                        Employee that, in the opinion of a
                                        licensed physician selected by the
                                        Company, renders the Employee totally
                                        and permanently incapable of performing
                                        his assigned duties with an Employer and
                                        results in his termination of Service.

         Employee                       Any individual who is treated by an
                                        Employer as a common law employee. A
                                        leased Employee, as described in Section
                                        414(n) of the Code, is not an Employee
                                        for purposes of this Plan.

         Employer                       The Company and each Affiliate which is
                                        designated as an Employer by the Board
                                        of Directors and which adopts the Plan
                                        for the benefits of its Employees.
</TABLE>

                                      -3-
<PAGE>   6

<TABLE>
<S>                                     <C>
         Employer Contributions         Payments made to the Trust by an
                                        Employer (other than Rollover
                                        Contributions) as described in Sections
                                        4(a), (b) and (c).

         ERISA                          The Employee Retirement Income Security
                                        Act of 1974, as amended.

         ESOP                           The Granite Construction Employee Stock
                                        Ownership Plan, an employee stock
                                        ownership plan under Section 4975(e)(7)
                                        of the Code.

         ESOP Diversification
         Account                        The Account which reflects a
                                        Participant's interest attributable to
                                        amounts transferred from the ESOP
                                        pursuant to the diversification election
                                        procedures of the ESOP.

         401(k) Account                 The Account which reflects a
                                        Participant's interest under the Plan
                                        attributable to 401(k) Contributions.
                                        See Section 6.

         401(k) Contributions           Employer Contributions made pursuant to
                                        Participant elections under Section
                                        4(b). Any reference made to 401(k)
                                        Contributions in the Plan shall
                                        generally include a Participant's
                                        Additional 401(k) Contributions, except
                                        for purposes of Sections 3(b) and 4(c)
                                        with respect to Matching Contributions.

         Forfeiture                     The portion of a Participant's Accounts
                                        which does not become a part of his
                                        Capital Accumulation and which is
                                        forfeited under Section 10(b).

         Frozen Elective Deferral
         Account                        The Account which reflects a
                                        Participant's interest in his "elective
                                        deferral account" under the Gibbons Plan
                                        that was transferred to the Plan on May
                                        1, 1998. See Section 8(a).

         Frozen General
         Account                        The Account which reflects a
                                        Participant's interest in his "rollover
                                        account," "employer matching
                                        contribution account" and "employer
                                        profit-sharing
</TABLE>

                                      -4-
<PAGE>   7

<TABLE>
<S>                                     <C>
                                        contribution account" under the Gibbons
                                        Plan that was transferred to this Plan
                                        on May 1, 1998. See Section 8(a).

         Gibbons                        Employee A Participant who became an
                                        Employee as a result of the Company's
                                        acquisition of G. G. & R., Inc.
                                        (formerly known as the Gibbons Company)
                                        and its affiliates on May 8, 1995.

         Gibbons Plan                   The Gibbons Company Profit Sharing and
                                        Retirement Plan, a qualified defined
                                        contribution that was terminated,
                                        effective as of March 31, 1998,
                                        (excluding the portion of the plan that
                                        was a "cash or deferred arrangement"
                                        under Section 401(k) of the Code).
                                        Amounts attributable to the portion of
                                        the plan that was a "cash or deferred
                                        arrangement" were transferred from the
                                        Gibbons Plan to this Plan on the behalf
                                        of Gibbons Employees on May 1, 1998.

         Highly Compensated
         Employee                       An Employee who (1) was a "5% owner" at
                                        any time during the Plan Year or
                                        preceding Plan Year, or (2) received
                                        Statutory Compensation in excess of
                                        $80,000 in the preceding Plan Year and
                                        was in the top-paid 20% group of
                                        Employees for such preceding Plan Year.
                                        The $80,000 amount shall be adjusted
                                        after 1998 for increases in the cost of
                                        living pursuant to Section 414(q)(1) of
                                        the Code.

         Hour of Service                Each hour of Service for which an
                                        Employee is credited under the Plan, as
                                        described in Section 3(d).

         Matching Account               The Account which reflects each
                                        Participant's interest attributable to
                                        Matching Contributions. See Section 6.

         Matching Contributions         Employer Contributions made under the
                                        Plan in amounts related to the 401(k)
                                        Contributions on behalf of each
                                        Participant. See Section 4(c).
</TABLE>

                                      -5-
<PAGE>   8

<TABLE>
<S>                                     <C>
         Participant                    Any Employee or former Employee who has
                                        met the applicable eligibility
                                        requirements of Section 3 and who has
                                        not yet received a complete distribution
                                        of his Capital Accumulation.

         Plan                           The Granite Construction Profit Sharing
                                        and 401(k) Plan, which includes this
                                        Plan and the Trust Agreement.

         Plan Year                      The 12-month period ending on each
                                        Allocation Date (and coinciding with
                                        each calendar year, which is the taxable
                                        year of the Company).

         Profit Sharing
         Account                        The Account which reflects a
                                        Participant's interest under the Plan
                                        attributable to Profit Sharing
                                        Contributions. See Section 6.

         Profit Sharing
         Contributions                  Employer Contributions made pursuant to
                                        Section 4(a).

         Retirement                     Termination of Service on or after
                                        attaining age 55 or, if later, the
                                        completion of ten Years of Vesting
                                        Service (but not later than the date he
                                        attains age 65 or, if later, the fifth
                                        anniversary of the date he became a
                                        Participant).

         Rollover Account               The Account which reflects a
                                        Participant's interest under the Plan
                                        attributable to Rollover Contributions.
                                        See Section 6.

         Rollover Contributions         Payments made to the Trust by a
                                        Participant under Section 4(e).

         Service                        Employment with the Company and or any
                                        Affiliate. For any corporation or other
                                        business entity which is designated as
                                        an Employer whose Employees are eligible
                                        to participate in the Plan and for the
                                        employees of any other business
                                        substantially all the assets of which
                                        are acquired by an Employer, the Board
                                        of Directors may grant the Employees of
                                        such entity credit for their years of
</TABLE>

                                      -6-
<PAGE>   9

<TABLE>
<S>                                     <C>
                                        service with such entity (prior to the
                                        date that such entity became an
                                        Affiliate) for purposes of eligibility
                                        and vesting under the Plan. Such grant
                                        shall be evidenced by action of the
                                        Board of Directors and attached to and
                                        made a part of this Plan.

         Statutory Compensation         The total remuneration paid to an
                                        Employee by an Employer during the Plan
                                        Year for personal services rendered,
                                        plus the amount of his 401(k)
                                        Contributions and any amounts that are
                                        contributed by an Employer on his behalf
                                        that are not included in gross income
                                        under Section 125 of the Code, but
                                        excluding employer contributions to a
                                        plan of deferred compensation, amounts
                                        realized in connection with stock
                                        options and amounts which receive
                                        special tax benefits.

         Stock                          Shares of common stock issued by the
                                        Company.

         Stock Fund                     The investment fund held by the Trust
                                        consisting of shares of Stock.

         Trust                          The Granite Construction Profit Sharing
                                        and 401(k) Plan Trust, created by the
                                        Trust Agreement entered into between the
                                        Company and the Trustee.

         Trust Agreement                The Agreement between the Company and
                                        the Trustee establishing the Trust and
                                        specifying the duties of the Trustee.

         Trust Assets                   The Stock (and other assets) held in the
                                        Trust for the benefit of Participants.
                                        See Section 5.

         Trustee                        The Trustee (and any successor Trustee)
                                        appointed by the Board of Directors to
                                        hold the Trust Assets.

         Year of Vesting Service        Each Plan Year in which an Employee is
                                        credited with at least 1000 Hours of
                                        Service. See Section 11(a).
</TABLE>

                                      -7-
<PAGE>   10

Section 3.  Eligibility and Participation.

         (a) Each Employee who was a Participant on December 31, 1998, shall
continue as a Participant. Each other Employee shall become a Participant as of
the Allocation Date of the Plan Year in which his Service began if he is
credited with at least 1000 Hours of Service during that Plan Year and is still
an Employee on the Allocation Date; provided, however, that an Employee who
incurs a Disability during that Plan Year while an Employee shall become a
Participant on the date of Disability and an Employee who dies during that Plan
Year while an Employee shall become a Participant on the day prior to his date
of death. Each other Employee who does not become a Participant pursuant to the
preceding sentence shall become a Participant as of the June 30th or December
31st coinciding with or next following the date on which he is credited with at
least 1000 Hours of Service over a period that does not exceed 12 consecutive
months, provided that he is still an Employee on such June 30th or December
31st. For this purpose, the eligibility computation period for determining the
1,000 Hours of Service requirement in the preceding sentence shall initially be
the period of 12 consecutive months beginning on the Employee's initial date of
Service and thereafter shall be the period of 12 consecutive months beginning on
the anniversary date of the Employee's initial date of Service.

         Employees whose terms of employment are covered by a collective
bargaining agreement shall not be eligible to participate in the Plan unless the
collective bargaining agreement specifically provides for such Employees to
participate in the Plan. Employees who are nonresident aliens who receive no
earned income from the Company or an Affiliate that constitutes income from
sources within the United States shall not be eligible to participate in the
Plan. An Employee who ceases to be ineligible to participate in the Plan shall
become a

                                      -8-
<PAGE>   11

Participant as of the later of the date he ceases to be ineligible or the date
described in the preceding paragraph.

         (b) A Participant shall be entitled to share in the allocation of
Matching Contributions for each Plan Year in which he elects to make 401(k)
Contributions; provided, however, that a Participant shall not be entitled to
share in the allocation of Matching Contributions with respect to any Additional
401(k) Contributions that are made to the Trust on his behalf. A Participant is
entitled to share in the allocation of Profit Sharing Contributions and
Forfeitures for each Plan Year in which he is credited with at least 1000 Hours
of Service and in which he is an Employee on the Allocation Date. A Participant
shall also entitled to share in the allocation of Profit Sharing Contributions
and Forfeitures for the Plan Year of his Retirement, Disability or death.

         (c) A former Participant who is reemployed by an Employer shall become
a Participant as of the date of his reemployment. A former Employee who is
reemployed by an Employer and who previously satisfied the service requirement
described in Section 3(a) shall become a Participant as of the later of the date
of his reemployment or the date described in Section 3(a). Notwithstanding any
provision of the Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with Section 414(u) of the Code.

         (d) Hours of Service - For purposes of determining the Hours of Service
to be credited to an Employee under the Plan, the following rules shall be
applied:

                  (1)      Hours of Service shall include each hour of Service
                           for which an Employee is paid (or entitled to
                           payment) for the performance of duties;

                                      -9-
<PAGE>   12

                            each hour of Service for which an Employee is paid
                           (or entitled to payment) for a period during which no
                           duties are performed (irrespective of whether Service
                           has terminated) due to vacation, holiday, illness,
                           incapacity (including Disability), layoff, jury duty,
                           military duty or paid leave of absence; and each
                           additional hour of Service for which back pay is
                           either awarded or agreed to (irrespective of
                           mitigation of damages); provided, however, that not
                           more than 501 Hours of Service shall be credited for
                           a single continuous period during which an Employee
                           does not perform any duties (whether or not such
                           period occurs in a single Plan Year or 12 month
                           period, with respect to an Employee's initial
                           eligibility computation period).

                  (2)      The crediting of Hours of Service shall be determined
                           in accordance with the rules set forth in paragraphs
                           (b) and (c) of Section 2530.200b-2 of the regulations
                           prescribed by the Department of Labor, which rules
                           shall be consistently applied with respect to all
                           Employees within the same job classification.

                  (3)      Hours of Service shall not be credited to an Employee
                           for a period during which no duties are performed if
                           payment is made or due under a plan maintained solely
                           for the purpose of complying with applicable worker's
                           compensation, unemployment compensation or disability
                           insurance laws, and Hours of Service shall not be
                           credited on account of any payment made or due an
                           Employee solely in reimbursement of medical or
                           medically-related expenses.

                  (4)      Hours of Service that are credited for the
                           performance of duties shall be determined from
                           records maintained by the Employer; provided,
                           however, that, in the case of an Employee whose
                           Compensation is not determined on the basis of
                           certain amounts for each hour worked and whose hours
                           are not required to be counted and recorded by any
                           Federal law (such as the Fair Labor Standards Act),
                           such Employee's Hours of Service need not be
                           determined from employment records, and such Employee
                           shall be credited with ten Hours of Service for each
                           day in which he would be credited with any Hours of
                           Service. Hours of Service that are credited for
                           periods during which no duties are performed or for
                           back pay shall be credited on the basis of 40 Hours
                           of Service for each week or eight Hours of Service
                           for each day.

                                      -10-
<PAGE>   13

Section 4.  Contributions.

         (a) Profit Sharing Contributions - Profit Sharing Contributions may be
paid to the Trustee for each Plan Year in such amounts (or under such formula)
as may be determined by the Board of Directors. Profit Sharing Contributions
shall be paid to the Trustee not later than the due date (including extensions)
for filing the Company's Federal income tax return for that Plan Year.

         (b) 401(k) Contributions -

                  (1) Each Participant may elect as of the first business day of
each month (or as soon as administratively feasible) to have a whole percentage
(up to 10% or such other percentage as may be determined by the Board of
Directors) of his Compensation per pay period withheld by his Employer and
contributed to the Trust as 401(k) Contributions in lieu of receiving such
amount as Compensation. A Participant's 401(k) Contributions may not exceed
$10,000 (as adjusted periodically after 1998 for increases in the cost of living
pursuant to Section 402(g)(5) of the Code) for any Plan Year.

                  (2) Additional 401(k) Contributions. Under rules established
by the Committee, an eligible Participant may elect to have an additional
portion of his Compensation withheld by his Employer and contributed to the
Trust as Additional 401(k) Contributions equal to the full amount of the
quarterly cash dividends that are paid to him under Section 13(a) of the ESOP.
An Additional 401(k) Contribution may be made for a Participant under the
preceding sentence with respect to a calendar quarter only if he is an Employee
on the last day of such calendar quarter and if he is not a participant in a
non-qualified deferred compensation plan maintained by an Employer for such
calendar quarter. An eligible Participant who is not a

                                      -11-
<PAGE>   14

participant in a non-qualified deferred compensation plan maintained by an
Employer may also elect to have any portion of his Compensation contributed to
the Plan as Additional 401(k) Contributions under the terms of the Employer's
"cafeteria plan" under Section 125 of the Code. A Participant who is an Employee
and is not a participant in a non-qualified deferred compensation plan
maintained by an Employer may also elect to have up to 90% of his cash bonus (in
10% increments) under the Granite Construction Profit Sharing Cash Bonus Plan
contributed to the Plan as Additional 401(k) Contributions, less such amounts as
may be required to be withheld to satisfy tax withholding obligations.

                  (3) A Participant may change the amount of 401(k)
Contributions to be withheld or cease to have any 401(k) Contributions withheld
as of the first business day of each month or as soon as administratively
feasible. A Participant who elects to cease to have any 401(k) Contributions
withheld may not make a new election to have 401(k) Contributions withheld until
the beginning of the following Plan Year. Each such election (and any changes
thereof) shall be made on the payroll deduction authorization form supplied by
the Participant's Employer and in accordance with administrative rules and
procedures established by the Committee. 401(k) Contributions shall be paid by a
Participant's Employer to the Trustee as soon as practicable but in no event
later than the 15th business day of the month following the month in which such
amounts are withheld from the Participant's Compensation.

                  (4) 401(k) Contributions made under this Section 4(b) shall be
treated as automatically satisfying the nondiscrimination requirements of
Section 401(k)(3)(A)(ii) of the Code for any Plan Year in which Matching
Contributions are made at the rates described in Section 4(c)(1), in accordance
with Section 401(k)(12)(B)(iii) of the Code. For this purpose, the

                                      -12-
<PAGE>   15

Committee shall provide each eligible Employee with a written notice informing
such Employee of the amount he will be entitled to receive as a Matching
Contribution under Section 4(c)(l) for the subsequent Plan Year (if he elects to
make 401(k) Contributions to the Plan during such subsequent Plan Year),
including a description of the Employee's rights and obligations under the Plan,
as described in Internal Revenue Service Notice 98-52. For Employees who have
satisfied the requirements of Section 3(a) prior to the beginning of a Plan Year
(other than those Employees who terminate Service as a result of Disability or
death), such notice shall be provided to such Employees at least 30 days (and no
more than 90 days) prior to the first day of each Plan Year for which the Board
has determined to make Matching Contributions at rates described in Section
4(c)(1). For Employees (other than those Employees who terminate Service as a
result of Disability or death) who satisfy the requirements of Section 3(a) and
(c) during a Plan Year in which the Board has determined to make Matching
Contributions at rates described in Section 4(c)(1), the written notice shall be
provided no more than 90 days prior to the date that such Employees will become
eligible under Section 3(a) (and no later than the date that such Employees
become eligible).

                  (5) 401(k) Contributions for Highly Compensated Employees
shall be limited for any Plan Year in which no Matching Contributions are made
to the Plan to the extent necessary to satisfy one of the deferral percentage
tests described in Section 401(k)(3) of the Code and Section 1.401(k)-1(b) of
the regulations thereunder. Such deferral percentage requirements shall be
satisfied based upon the "current Plan Year testing method," as described in
Internal Revenue Service Notice 98-1.

                                      -13-
<PAGE>   16

         The Committee may take any of the following corrective actions to
satisfy the deferral percentage tests:

                           (i) Prospectively limit the amount of 401(k)
         Contributions for some or all Highly Compensated Employees for such
         Plan Year, provided, however, that the Committee shall first limit the
         amount of Additional 401(k) Contributions for some or all Highly
         Compensated Employees for such Plan Year before limiting the amount of
         such Highly Compensated Employees' 401(k) Contributions; or

                           (ii) Distribute all or a portion of the 401(k)
         Contributions made on behalf of a Highly Compensated Employee (together
         with any income attributable thereto) to him which are determined to be
         "excess contributions" within the meaning of Section 1.401(k)-1(g)(7)
         of the regulations. Such "excess contributions" are determined by
         reducing 401(k) Contributions made on behalf of Highly Compensated
         Employees in order of the actual deferral percentages beginning with
         the highest of such percentages. The actual deferral percentage of the
         Highly Compensated Employee with the highest such percentage shall be
         reduced until it equals that of the Highly Compensated Employee with
         the next highest percentage. This process shall be repeated until one
         of the tests described in Section 40l(k)(3) of the Code and Section
         1.40l(k)-l(b) is passed. The amount of excess contributions to be
         distributed to Highly Compensated Employees under this Section
         4(b)(5)(ii) shall be deemed attributable first to those Highly
         Compensated Employees who have the greatest dollar amount of 401(k)
         Contributions. Such excess contributions shall be reduced by any excess
         deferrals previously distributed under Section 4(b)(6) for the calendar
         year ending with the Plan Year. The amount of

                                      -14-
<PAGE>   17

         excess contributions to be distributed to an affected Highly
         Compensated Employee shall be taken first from the affected Highly
         Compensated Employee's Additional 401(k) Contributions, if any.

To the extent practicable, the Committee shall take such corrective action by
March 15th of the following Plan Year; but in no event shall such action be
taken later than the Allocation Date of the following Plan Year.

                  (6) If during a Plan Year a Participant participates in more
than one qualified cash or deferred arrangement described in Section 401(k) of
the Code and the Participant notifies the Committee no later than the March 1st
following any calendar year that all or a specified portion of the 401(k)
Contributions made on the Participant's behalf for that calendar year should be
paid to the Participant (together with any income attributable thereto) because
such 401(k) Contributions constitute "excess deferrals," as described in Section
402(g)(2)(A) of the Code, distribution of such amounts to the Participant shall
occur no later than the April 15th following the calendar year in which the
"excess deferral" occurred.

                  (7) Any determination and distribution of income attributable
to 401(k) Contributions under Sections 4(b)(5)(ii) and (6) shall be made in
accordance with Section 1.401(k)-1(f) of the regulations under the Code.

         (c)      Matching Contributions -

                  (1) Matching Contributions shall be paid by an Employer to the
Trust together with the payment of the 401(k) Contributions to which the
Matching Contributions relate. With respect to each Participant, the rate of
Matching Contribution shall be equal to (1) 2% for 1% of Compensation deferred
as 401(k) Contributions, (2) 2.5% for 2% of Compensation deferred as 401(k)
Contributions, (3) 3% for 3% of Compensation deferred as

                                      -15-
<PAGE>   18

401(k) Contributions, (4) 3.5% for 4% of Compensation deferred as 401(k)
Contributions, or (5) 4% for 5% of Compensation deferred as 401(k)
Contributions. No Matching Contribution shall be made with respect to any
Additional 401(k) Contributions or for amounts contributed as 401(k)
Contributions by a Participant during any Plan Year in an amount that exceeds 5%
of such Participant's Compensation.

                  (2) Matching Contributions made under Section 4(c)(1) shall be
treated as automatically satisfying the nondiscrimination requirements of
Section 401(m)(2) of the Code in accordance with Section 40l(k)(12)(B)(iii) of
the Code. For this purpose, the Committee shall provide each Employee who has
satisfied the requirements of Section 3(a) with a written notice in the manner
described in Section 4(b)(4).

                  (3) Matching Contributions shall be subject to the
nondiscrimination testing requirements described in this Section 4(c)(3) if the
rate of Matching Contributions is changed for any Plan Year to be a rate that
does not satisfy Section 40l(m)(11) of the Code. For this purpose, Matching
Contributions for Highly Compensated Employees shall be limited to the extent
necessary to satisfy one of the contribution percentage requirements described
in Section 401(m)(2) of the Code and Section 1.40l(m)-1(b) of the regulations
thereunder. Such contribution percentage requirements shall be satisfied based
upon the "current Plan Year testing method," as described in Internal Revenue
Service Notice 98-1.

         The Committee may take any of the following corrective actions to
satisfy one of the contribution percentage tests:

                                      -16-
<PAGE>   19

                           (i) Prospectively limit the amount of Matching
         Contributions for some or all Highly Compensated Employees for such
         Plan Year; or

                           (ii) Forfeit all or a portion of the Matching
         Contributions made on behalf of a Highly Compensated Employee
         attributable to 401(k) Contributions that are distributed under Section
         4(b)(5)(ii) above.

                           (iii) Distribute all or a portion of the Matching
         Contributions made on behalf of a Highly Compensated Employee (together
         with any income attributable thereto) to him which are determined to be
         "excess aggregate contributions" within the meaning of Section
         1.401(m)-1(f)(8) of the regulations. Such "excess aggregate
         contributions" are determined by reducing Matching Contributions made
         on behalf of Highly Compensated Employees in order of the actual
         contribution percentages beginning with the highest of such
         percentages. The actual contribution percentage of the Highly
         Compensated Employee with the highest such percentage shall be reduced
         until it equals that of the Highly Compensated Employee with the next
         highest percentage. This process shall be repeated until one of the
         tests described in Section 401(m)(2) of the Code and Section
         l.401(m)-l(b) of the regulations is passed. The amount of excess
         aggregate contributions to be distributed to Highly Compensated
         Employees under this Section 4(c)(3)(iii) shall be deemed attributable
         first to those Highly Compensated Employees who have the greatest
         dollar amount of Matching Contributions.

                                      -17-
<PAGE>   20

To the extent practicable, the Committee shall take such corrective action by
March 15th of the following Plan Year; but in no event shall such action be
taken later than the Allocation Date of the following Plan Year.

         (d) Additional Provisions - Employer Contributions shall not be made
for any Plan Year in amounts which can be allocated to no Participant's Accounts
by reason of the allocation limitation described in Section 7 or in amounts
which are not deductible under Section 404(a) of the Code. Any Employer
Contributions which are not deductible under Section 404(a) of the Code may be
returned to the Employer by the Trustee (upon the direction of the Company)
within one year after the deduction is disallowed or after it is determined that
the deduction is not available. In the event that Employer Contributions are
paid to the Trust by reason of a mistake of fact, such Employer Contributions
may be returned to the Employer by the Trustee (upon the direction of the
Company) within one year after the payment to the Trust. The Employer shall pay
any amounts attributable to 401(k) Contributions which are not deductible under
Section 404(a) of the Code to the affected Participants as Compensation. In the
event that 401(k) Contributions are paid to the Trust by reason of a mistake of
fact, such 401(k) Contributions shall be returned to the Employer by the Trustee
(upon the direction of the Company) within one year after the payment to the
Trust. The Employer shall pay any amounts attributable to 401(k) Contributions
which are paid to the Trust by reason of a mistake of fact to the affected
Participants as Compensation.

         (e) Rollover Contributions - Subject to such terms and conditions as
may be established from time to time by the Committee, an Employee who is in the
class of Employees that is eligible to participate in the Plan in accordance
with Section 3(a) may make a Rollover

                                      -18-
<PAGE>   21

Contribution to the Trust by delivering such contribution in cash to the
Trustee, together with a written certification, satisfactory to the Committee,
that the contribution qualifies as a Rollover Contribution under Section
402(c)(4) of the Code. Such Employee's Rollover Contributions shall be allocated
to his Rollover Account.

         (f) Participant Contributions - Except as provided in Sections 4(b) and
4(e), no Participant shall be required or permitted to make contributions to the
Trust.

Section 5. Investment of Trust Assets.

         (a) Each Participant shall direct the investment of his Accounts among
such investment funds as the Committee shall from time to time cause to be made
available, including the Stock Fund.

         The Stock Fund shall be made available only if the offering of such
fund complies with the registration and/or qualification requirements of
applicable Federal or state securities laws. The Stock Fund shall be invested in
shares of Stock purchased by the Trustee from time to time in accordance with
the provisions of the Trust Agreement. All dividends (whether cash or stock)
with respect to the Stock in the Stock Fund shall be reinvested in the fund.

         (b) Investment elections by Participants shall be made in such
increments and at such times as the Committee shall permit, in accordance with
administrative rules and procedures established from time to time by the
Committee, and shall be subject to such reasonable guidelines and limitations as
the Committee shall deem to be appropriate for the efficient administration of
the Plan. Each Participant shall bear the sole responsibility for the investment
of such Accounts, and the Committee shall not have any responsibility or
liability for any losses

                                      -19-
<PAGE>   22

that may occur in connection with such investment. No Participant who is subject
to the provisions of Section 16 of the Securities Exchange Act of 1934 may
invest in the Stock Fund. In addition, no portion of a Participant's ESOP
Diversification Account may be invested in the Stock Fund.

         (c) Each Participant (or Beneficiary) shall be entitled to direct the
Trustee as to the manner in which shares of Stock then allocated to his Accounts
will be voted. Each Participant (or Beneficiary) who is entitled to direct the
Trustee as to the manner in which shares of Stock will be voted shall be
provided with the proxy statement and other materials provided to Company
shareholders in connection with each shareholder meeting, together with a form
or forms upon which the Participant (or Beneficiary) shall have the right to
give confidential voting instructions to the Trustee. A Participant (or
Beneficiary) who does not give instructions to the Trustee shall be treated as
having authorized the Committee to direct the Trustee as to the voting of his
shares of Stock.

         In the event that there should be a tender or exchange offer for Stock,
each Participant (or Beneficiary) will be entitled to direct the Trustee as to
the manner in which to respond to such offer with respect to shares of Stock
then allocated to his Accounts. Each Participant (or Beneficiary) who is
entitled to direct the Trustee as to the manner in which the Trustee will
respond to any such offer shall be provided with the tender offer materials and
the Participant (or Beneficiary) shall have the right to provide confidential
instructions to the Trustee as to the manner in which to respond to such offer
with respect to the shares of Stock then allocated to his Accounts. A
Participant (or Beneficiary) who does not give instructions to the Trustee shall
be treated as having directed the Trustee not to tender.

                                      -20-
<PAGE>   23

         Each Participant (or Beneficiary) shall be a named fiduciary of the
Plan for the purpose of providing directions as to the voting or tendering of
the shares of Stock allocated to his Accounts.

Section 6. Allocations to Participants' Accounts.

         Profit Sharing Account - A Profit Sharing Account shall be maintained
to reflect the interest of each Participant who is eligible to receive Profit
Sharing Contributions or who had a prior profit sharing account under the Plan.
The Profit Sharing Account maintained for a Participant shall be credited
annually with his share of any Profit Sharing Contributions and Forfeitures. The
Profit Sharing Account shall be credited throughout each Plan Year with its
share of the net income (or loss) of the Trust. Subaccounts of a Participant's
Profit Sharing Account may be maintained to reflect the portion of the Profit
Sharing Account that is invested in each investment fund.

         401(k) Account - A 401(k) Account shall be maintained to reflect the
interest of each Participant under the Plan who makes 401(k) Contributions. The
401(k) Account maintained for a Participant shall be credited throughout each
Plan Year with his 401(k) Contributions and with its share of the net income (or
loss) of the Trust. Subaccounts of a Participant's 401(k) Account may be
maintained to reflect Additional 401(k) Contributions and the portion of the
401(k) Account that is invested in each investment fund.

         Matching Account - A Matching Account shall be maintained to reflect
the interest of each Participant who is eligible to receive Matching
Contributions. The Matching Account maintained for a Participant shall be
credited throughout each Plan Year with his share of any

                                      -21-
<PAGE>   24

Matching Contributions. The Matching Account maintained for a Participant shall
be credited throughout each Plan Year with its share of the net income (or loss)
of the Trust. Subaccounts of a Participant's Matching Account may be maintained
to reflect the portion of the Matching Account that is invested in each
investment fund.

         Rollover Account - A Rollover Account shall be maintained to reflect
the interest of each Employee who makes Rollover Contributions. The Rollover
Account maintained for an Employee shall be credited throughout each Plan Year
with the Employee's Rollover Contributions and with its share of the net income
(or loss) of the Trust. Subaccounts of a Participant's Rollover Account may be
maintained to reflect the portion of the Rollover Account that is invested in
each investment fund.

         ESOP Diversification Account - An ESOP Diversification Account shall be
maintained to reflect the interest of each Participant who elects have a portion
of his "stock account" under the ESOP transferred to the Plan in order to
satisfy the diversification election requirements of Section 401(a)(28)(B) of
the Code. The ESOP Diversification Account maintained for a Participant shall be
credited annually with any amounts that are so transferred on behalf of a
Participant. The ESOP Diversification Account shall be credited throughout each
Plan Year with its share of the net income (or loss) of the Trust. Subaccounts
of a Participant's ESOP Diversification Account may be maintained to reflect the
portion of the ESOP Diversification Account that is invested in each investment
fund. No portion of a Participant's ESOP Diversification Account may be invested
in the Stock Fund.

                                      -22-
<PAGE>   25

         The allocations to Participants' Accounts for each Plan Year shall be
made as follows:

         (a) Profit Sharing Contributions and Forfeitures - Profit Sharing
Contributions under Section 4(a) and Forfeitures under Section 10(b) for each
Plan Year shall be allocated as of the Allocation Date among the Profit Sharing
Accounts of Participants so entitled under Section 3(b) in the ratio that the
Compensation of each such Participant bears to the total Compensation of all
such Participants, subject to the allocation limitations described in Section 7.

         (b) 401(k) Contributions - 401(k) Contributions under Section 4(b) for
each Plan Year shall be allocated to the 401(k) Accounts of the Participants on
whose behalf they were made, subject to the allocation limitations described in
Section 7.

         (c) Matching Contributions - Matching Contributions under Section 4(c)
for each Plan Year shall be allocated to the Matching Accounts of the
Participants on whose behalf they were made, subject to the allocation
limitations described in Section 7.

         (d) Rollover Contributions and ESOP Diversification Transfers -
Rollover Contributions and transfers from the ESOP (pursuant to the ESOP's
diversification election provisions) for each Plan Year shall be allocated to
the Rollover Accounts and ESOP Diversification Accounts, respectively, of those
Employees or Participants who made them.

         (e) Net Income (or Loss) of the Trust - The net income (or loss) of the
Trust for each Plan Year attributable to Participants' Accounts shall be
determined separately on a daily basis for each investment fund and allocated
among such Accounts in proportion to the respective balances of such Accounts
invested in such funds.

                                      -23-
<PAGE>   26

         (f) Accounting for Allocations - The Committee shall establish
accounting procedures for the purpose of making the allocations to Participants'
Accounts provided for in this Section 6. From time to time, the Committee may
modify the accounting procedures for the purposes of achieving equitable and
nondiscriminatory allocations among the Accounts of Participants in accordance
with the general concepts of the Plan, the provisions of this Section 6 and the
requirements of the Code and ERISA.

Section 7.  Allocation Limitation.

         The Annual Additions for each Plan Year with respect to any Participant
may not exceed the lesser of:

                  (1)      25% of the Participant's Statutory Compensation; or

                  (2)      $30,000, as may be adjusted for increases in the cost
                           of living pursuant to Section 415(d)(1)(C) of the
                           Code.

For this purpose, "Annual Additions" shall be the total of the Employer
Contributions and Forfeitures (including any income attributable to Forfeitures)
allocated to the Accounts of a Participant for the Plan Year, plus the
allocations of employer contributions and forfeitures made on his behalf under
the ESOP. Annual Additions shall include 401(k) Contributions distributed to a
Participant pursuant to Sections 4(b)(5)(ii) or 4(b)(6), but shall exclude any
amounts paid to a Participant pursuant to the next paragraph of this Section 7.

         If the aggregate amount that would be allocated to the accounts of a
Participant under this Plan and the ESOP in the absence of this limitation would
exceed the amount set forth in this

                                      -24-
<PAGE>   27

limitation, then, to the extent necessary, the Participant's Annual Additions
for the Plan Year shall be reduced and reallocated to the Accounts of
Participants not affected by this limitation for the Plan Year in the following
order: (1) any Profit Sharing Contributions made on the Participant's behalf for
the Plan Year shall be reduced, (2) any Additional 401(k) Contributions made on
the Participant's behalf for the Plan Year shall be returned to the Participant
as Compensation (together with any income attributable thereto), (3) any 401(k)
Contributions made on the Participant's behalf for the Plan Year shall be
returned to the Participant as Compensation (together with any income
attributable thereto), (4) any Matching Contributions made on the Participant's
behalf for the Plan Year shall be reduced and (5) any employer contributions
under the ESOP made on the Participant's behalf for the Plan Year shall be
reduced.

         If, after such reductions, there are any Forfeitures which can be
allocated to no Participant's Accounts by reason of this limitation, such
Forfeitures shall be credited to a "Forfeiture Suspense Account" and allocated
as Forfeitures under Section 6(a) for the next succeeding Plan Year (prior to
the allocation of Employer Contributions for such succeeding Plan Year).

Section 8.  Frozen Gibbons Accounts.

         (a) Allocations to Gibbons Employee's Frozen Gibbons Accounts.

         Frozen Elective Deferral Account - A Frozen Elective Deferral Account
shall be maintained to reflect the interest of each Gibbons Employee in his
"elective deferral account" under the Gibbons Plan that was transferred to this
Plan on May 1, 1998. The Frozen Elective

                                      -25-
<PAGE>   28

Deferral Account maintained for a Participant shall be credited throughout each
Plan Year with its share of the net income (or loss) of the Trust. Subaccounts
of a Participant's Frozen Elective Deferral Account may be maintained to reflect
the portion of the Frozen Elective Deferral Account that is invested in each
investment fund.

         Frozen General Account - A Frozen General Account shall be maintained
to reflect the interest of each Gibbons Employee in his "rollover account,"
"employer profit-sharing contribution account" and "employer matching
contribution account" that was transferred to the Plan on May 1, 1998. The
Frozen General Account maintained for a Gibbons Employee shall be credited
throughout each Plan Year with its share of the net income (or loss) of the
Trust. Subaccounts of a Gibbons Employee's Frozen General Account may be
maintained to reflect the portion of the Frozen General Account that is invested
in each investment fund.

         (b) Distributions From Frozen Accounts. All distributions from a
Gibbons Employee's Frozen Elective Deferral Account and Frozen General Account
(collectively referred to as "Frozen Accounts") shall be subject to the
provisions of Section 12, except as otherwise provided in this Section 8(b). For
purposes of Section 12(c), distribution to a Gibbons Employee from his Frozen
Accounts shall commence no later than the date provided in the first sentence in
Section 12(c), unless a Gibbons Employee elects to maintain his Frozen Accounts
in the Plan until they are required to be distributed under the second and third
sentences of Section 12(c). For this purpose, failure to submit a claim for a
distribution shall be deemed such an election. A Gibbons Employee may elect to
receive his Frozen Accounts in one or a combination of the following forms:

                                      -26-
<PAGE>   29

                           (i)      A single lump sum cash payment.

                           (ii)     Substantially equal monthly, quarterly or
                                    annual cash installments over a period not
                                    exceeding the life expectancy of the Gibbons
                                    Employee and the Gibbons Employee's spouse.
                                    The minimum installment amount, regardless
                                    of the periodic method chosen, must be at
                                    least $100.00.

If a Gibbons Employee fails to elect to a form of payment, payment shall be made
as a single lump sum cash payment.

         (c) In-Service Distributions -

                  (1) Frozen Elective Deferral Account. Each Gibbons Employee
may request a withdrawal of all or a portion of his Frozen Elective Deferral
Account at any time after he attains age 59 1/2 in accordance with such rules as
may be prescribed by the Committee. A Gibbons Employee is entitled to make only
one such withdrawal from his Frozen Elective Deferral Account in any Plan Year.
Such withdrawals shall be distributed in the manner described in Section 8(b).

                  (2) Frozen General Account. Each Gibbons Employee may request
a withdrawal of all or a portion of his Frozen General Account at any time in
accordance with such rules as may be prescribed by the Committee. A Gibbons
Employee is entitled to make only one such withdrawal from his Frozen General
Account in any Plan Year. Such withdrawals shall be distributed in the manner
described in Section 8(b).

                                      -27-
<PAGE>   30

Section 9. Disclosure to Participants.

         (a) Summary Plan Description - Each Participant shall be furnished with
a summary plan description of the Plan required by Sections 102(a)(l) and
104(b)(1) of ERISA. Such summary plan description shall be updated from time to
time as required under ERISA and Department of Labor regulations thereunder.

         (b) Summary Annual Report - Within two months after the due date for
filing the annual return/report (Form 5500) for the Plan with the Internal
Revenue Service, each Participant shall be furnished with the summary annual
report of the Plan required by Section 104(b)(3) of ERISA, in the form
prescribed in regulations of the U.S. Department of Labor.

         (c) Quarterly Statement - Each Participant shall be furnished with a
statement reflecting the following information:

                  (1)      The balances (if any) in the Participant's Accounts
                           as of the beginning of the period.

                  (2)      The amount of each type of Employer Contributions,
                           Rollover Contributions and ESOP Diversification
                           transfers allocated to each of the Participant's
                           Accounts for the period.

                  (3)      The adjustments to the Participant's Accounts to
                           reflect the Participant's share of the net income (or
                           loss) of the Trust for that period.

                  (4)      The new balances in the Participant's Accounts as of
                           the end of the period.

                  (5)      His number of Years of Vesting Service and his vested
                           percentage in his Account balances (under Sections 10
                           and 11).

                                      -28-
<PAGE>   31

         (d) Additional Disclosure - The Company shall make available for
examination by any Participant copies of the Plan, the Trust Agreement and the
latest annual report of the Plan filed (on Form 5500) with the Internal Revenue
Service. Upon written request of any Participant, the Company shall furnish
copies of such documents and may make a reasonable charge to cover the cost of
furnishing such copies, as provided in regulations of the U. S. Department of
Labor.

Section 10. Vesting and Forfeitures.

         (a) Vesting -

                  (1) A Participant's interest in his 401(k) Account, Rollover
Account, Frozen Elective Deferral Account, Frozen General Account and ESOP
Diversification Account shall be 100% vested and nonforfeitable at all times.
Any Participant who is credited with an Hour of Service after December 31, 1998,
shall become 100% vested in his Matching Account.

                  (2) A Participant's interest in his Profit Sharing Account
shall become 100% vested and nonforfeitable if he (A) is eligible for Retirement
(whether or not he actually terminates Service), (B) terminates Service by
reason of Disability, (C) dies while employed by the Company or an Affiliate or
(D) completes five Years of Vesting Service.

         (b) Forfeitures - Any portion of the final balances in a Participant's
Profit Sharing Account which is not vested (and does not become part of his
Capital Accumulation) shall become a Forfeiture as of the Allocation Date of the
Plan Year in which he incurs a five-consecutive-year Break in Service (or in
which he dies, if earlier). All Forfeitures will be reallocated to the Profit
Sharing Account of remaining Participants, as provided in Section 6, as

                                      -29-
<PAGE>   32

of the Allocation Date of the Plan Year in which a five-consecutive-year Break
in Service occurs (or in which the Participant dies, if earlier).

Section 11. Years of Vesting Service and Break in Service.

         (a) Years of Vesting Service - An Employee's Years of Vesting Service
shall be the number of Plan Years in which he is credited with at least 1000
Hours of Service. Years of Vesting Service shall include such Service with the
Company or any Affiliate.

         (b) Break in Service - A one-year Break in Service shall occur in a
Plan Year in which an Employee is not credited with more than 500 Hours of
Service as a result of his termination of Service. A five-consecutive-year Break
in Service shall be five consecutive one-year Breaks in Service.

         For purposes of determining whether a Break in Service has occurred, if
an Employee begins a maternity/paternity absence described in Section
41l(a)(6)(E)(i) of the Code or a leave covered under the Family and Medical
Leave Act of 1993, the computation of his Hours of Service shall include the
Hours of Service that would have been credited if he had not been so absent (or
eight Hours of Service for each normal work day of such absence if the actual
Hours of Service cannot be determined). For purposes of this Section 11(b), a
"maternity/paternity absence" means an Employee's absence (A) by reason of (i)
the pregnancy of the Employee, (ii) birth of a child of the Employee or (iii)
placement of a child with the Employee in connection with the adoption of such
child by such Employee, or (B) for purposes of caring for a child described in
clause (A) for a period beginning immediately following such birth or placement.
An Employee shall be credited for such Hours of Service (up to a maximum of 501
Hours of

                                      -30-
<PAGE>   33

Service) in the Plan Year in which such absence begins (if such
crediting will prevent him from incurring a Break in Service in such Plan Year)
or in the next following Plan Year.

         In addition, if an Employee is eligible for and is granted leave
pursuant to the Company's family care leave plan, a Break in Service shall not
occur if the Employee returns to Service with an Employer, without any
intervening employment with another employer, immediately following the
expiration of such leave and remains employed for a period of 90 days
thereafter. The Employee shall be credited with the Hours of Service that would
have been credited if he had not been so absent (or eight Hours of Service for
each normal work day of such absence if the actual Hours of Service cannot be
determined) up to a maximum of 501 Hours of Service for each Plan Year during
the period of such absence (if such crediting will prevent him from incurring a
Break in Service for any such Plan Year).

         (c) Reemployment - If a former Employee is reemployed after a one-year
Break in Service, the following special rules shall apply in determining his
Years of Vesting Service:

                  (1)      New Accounts may be established to reflect his
                           interest in the Plan attributable to Service after
                           the Break in Service.

                  (2)      If he is reemployed after the occurrence of a
                           five-consecutive-year Break in Service, Years of
                           Vesting Service after the Break in Service will not
                           increase his vested interest in his Accounts
                           attributable to Service prior to the Break in
                           Service.

                  (3)      After he completes one Year of Vesting Service
                           following reemployment, his Years of Vesting Service
                           will include his Years of Vesting Service accumulated
                           prior to the Break in Service.

                                      -31-
<PAGE>   34

Section 12. When Capital Accumulation Will Be Distributed.

         (a) Except as otherwise provided in Sections 8(b), 8(c), 12(c) and 13,
a Participant's Capital Accumulation shall be distributed following his
termination of Service. If the value of a Participant's Capital Accumulation at
the time distribution would otherwise commence under this Section 12 exceeds
$5,000, no portion of his Capital Accumulation may be distributed to him before
he attains age 65 without his written consent.

         (b) Timing of Distributions -

                  (1) If the value of a Participant's Capital Accumulation is
$5,000 or less, his Capital Accumulation shall be distributed as soon as
practicable after the date his Service terminates, upon the completion and
processing of the applicable distribution forms. A Participant whose Service has
terminated but who does not have any nonforfeitable interest in his Accounts
shall be deemed to have received a distribution of zero dollars ($0).

                  (2) If the value of a Participant's Capital Accumulation
exceeds $5,000 and the Participant terminates Service (whether or not on account
of Retirement or Disability), the Participant may elect to receive a
distribution of his Capital Accumulation as soon as practicable after the date
his Service terminates, upon the completion and processing of the applicable
distribution forms.

                  (3) In the event of the Participant's death, his Capital
Accumulation shall be distributed to his Beneficiary as soon as practicable
following his death, upon the completion and processing of the applicable
distribution forms.

                  (4) For purposes of determining the amount of any
distribution, the value of the Participant's Accounts shall be determined at the
time his distribution forms are processed.

                                      -32-
<PAGE>   35

         (c) Distribution of a Participant's Capital Accumulation shall commence
not later than 60 days after the Allocation Date coinciding with or next
following the latest of (1) the date of his 65th birthday, (2) the 10th
anniversary of the date he became a Participant or (3) the date he terminates
Service. The distribution of the Capital Accumulation of any Participant who
attains age 70 1/2 in a calendar year and either has (1) terminated Service or
(2) is a "5% owner" (as defined in Section 4l6(i)(l)(B)(i) of the Code) must
occur not later than April 1st of the next calendar year and must be made in
accordance with the regulations under Section 401(a)(9) of the Code, including
Section 1.401(a)(9)-2. Distributions shall be offered to any other Participant
who attains age 70 1/2 before January 1, 1999, to the extent required under
Sections 401(a)(9) and 411(d)(6) of the Code and the regulations issued
thereunder. If the amount of a Participant's Capital Accumulation cannot be
determined (by the Committee) by the date on which a distribution is to occur,
or if the Participant cannot be located, distribution of his Capital
Accumulation shall occur within 60 days after the date on which his Capital
Accumulation can be determined or after the date on which the Committee locates
the Participant.

         (d) If a Participant's Capital Accumulation is retained in the Trust
after his Service ends, his Accounts shall continue to be treated as described
in Section 6 and he shall continue to be able to direct the investment of his
Accounts (other than the nonvested portion of his Profit Sharing Account) in
accordance with Section 5. However, except as otherwise provided in Section
3(b), his Profit Sharing Account shall not be credited with any additional
Employer Contributions and Forfeitures. If a Participant's Service terminates
and he does not have any vested and nonforfeitable interest in his Profit
Sharing Account, the Participant shall continue to direct the Trustee as to the
investment of such Account until the date such Participant becomes

                                      -33-
<PAGE>   36

eligible to receive a Plan distribution in accordance with Sections 12(b)(1) or
(2). After such date, the Committee shall direct the Trustee as to the
investment of such Account.

         (e) Notwithstanding any other provision of this Plan, all or a portion
of a Participant's Capital Accumulation may be distributed at any time to the
Participant's former spouse or other alternate payee, even prior to the
Participant's "earliest retirement age" (as defined in Section 414(p) of the
Code), if such distribution is made pursuant to and in accordance with the terms
of a "qualified domestic relations order" ("QDRO"), (including QDROs which were
received prior to January 1, 1999). Such distribution will occur in a single
lump sum in cash as soon as practicable following the date that the Committee
determines that the order constitutes a QDRO. If the value of a Participant's
Capital Accumulation exceeds $5,000 (at the time a distribution to the
Participant's former spouse or other alternate payee would otherwise be
available under this Section 12(e)), no portion of such Capital Accumulation may
be distributed to his former spouse or other alternate payee, without the
written consent of such former spouse or other alternate payee.

Section 13. Hardship Withdrawals.

         (a) A Participant who is an Employee shall be entitled to request a
hardship withdrawal of a portion of his Capital Accumulation attributable to his
Profit Sharing Account, 401(k) Account, Matching Account, Rollover Account and
ESOP Diversification Account (less the amount of any income attributable to his
401(k) Contributions and Matching Account), with the value available for
withdrawal determined at the time his hardship request is processed. Any
withdrawal attributable to the Participant's 401(k) Contributions and Matching
Contributions

                                      -34-
<PAGE>   37

(less the amount of any income attributable to his 401(k) Contributions and
Matching Account) shall be available only if necessary in light of immediate and
heavy financial needs of the Participant, as determined by the Committee in
accordance with nondiscriminatory standards and pursuant to Section
1.401(k)-1(d)(2) of the regulations under the Code. A hardship withdrawal shall
be available only to be used for the following:

                  (1)      costs related directly to the purchase of a principal
                           residence for the Participant (excluding mortgage
                           payments);

                  (2)      reimbursement of tuition and related educational
                           fees, including room and board and the costs of
                           textbooks, for post-secondary education of the
                           Participant, his spouse, his children or his
                           dependents (as defined in Section 152 of the Code);
                           provided that, a withdrawal of a Participant's 401(k)
                           Contributions and Matching Contributions shall not be
                           permitted for the costs of textbooks and shall be
                           limited to tuition, fees, and room and board for the
                           12 month-period following the withdrawal; or

                  (3)      payments necessary to prevent the eviction of the
                           Participant from his principal residence or
                           foreclosure on the mortgage on that residence.

         (b) A withdrawal of less than $1,000 shall not be permitted, and no
more than two withdrawals shall be permitted in each Plan Year. The
determination of the amount of funds needed by the Participant may include any
amounts necessary to pay any Federal, state or local income taxes or penalties
reasonably anticipated to result from the withdrawal. The maximum aggregate
amount that may be withdrawn under this Section 13 shall be the lesser of 40% of
(1) the Participant's vested Profit Sharing Account, Matching Account, ESOP
Diversification Account and Rollover Account plus the Participant's 401(k)
Contributions, determined at the time the hardship request is processed, or (2)
$200,000 (reduced by any amount withdrawn as a

                                      -35-
<PAGE>   38

 hardship withdrawal from the ESOP), and the Committee may establish such rules
as it deems appropriate in order to compute the amount that may be withdrawn by
a Participant.

         (c) Prior to allowing a withdrawal of the Participant's 401(k)
Contributions and Matching Contributions (less the amount of any income
attributable to his 401(k) Contributions and Matching Account), the Committee
shall make the following findings:

                  (1)      The distribution requested by the Participant is not
                           in excess of the amount of the immediate and heavy
                           financial need of the Participant.

                  (2)      The Participant has obtained all distributions
                           (including hardship distributions under the ESOP and
                           from the Participant's other Accounts under the Plan)
                           and all nontaxable loans under all qualified plans of
                           the Company.

                  (3)      The Participant has agreed that no 401(k)
                           Contributions will be made on his behalf under
                           Section 4(b) (or under any other qualified or
                           nonqualified plan of deferred compensation maintained
                           by an Employer) during the 12-month period commencing
                           upon his receipt of a hardship withdrawal.

                  (4)      401(k) Contributions to be made on behalf of the
                           Participant for the Plan Year immediately following
                           the Plan Year of the hardship withdrawal shall not
                           exceed the applicable limit under Section 402(g) of
                           the Code for such succeeding Plan Year, less the
                           amount of the Participant's 401(k) Contributions for
                           the Plan Year of the hardship withdrawal.

         (d) A hardship withdrawal shall be disbursed first from the
Participant's Profit Sharing Account, Matching Account, Rollover Account and
ESOP Diversification Account and then from the Participant's 401(k) Account. The
amount withdrawn shall be taken prorata from the investment funds in which the
Account is invested at the time of the withdrawal.

                                      -36-
<PAGE>   39

Section 14. How Capital Accumulation Will Be Distributed.

         (a) All distributions shall be made in a single lump sum in cash,
except as provided in Section 8(b).

         (b) Distribution of a Participant's Capital Accumulation will be made
to the Participant if he is living, and if not, to his Beneficiary. In the event
of a Participant's death, the Participant's Beneficiary shall be the
Participant's surviving spouse, or if none, his estate. A Participant (with the
written consent of his spouse, if any, acknowledging the effect of the consent
and witnessed by a notary public or Plan representative) may designate a
different Beneficiary (and contingent Beneficiaries) from time to time by filing
a written designation with the Committee. A deceased Participant's entire
Capital Accumulation shall be distributed to his Beneficiary on or before the
December 31st of the calendar year that includes the fifth anniversary of his
death, except to the extent that distribution has previously commenced in
accordance with Section 8(b), as applicable.

         (c) The Company shall furnish the recipient of a distribution with the
tax consequences explanation required by Section 402(f) of the Code and shall
comply with the withholding requirements of Section 3405 of the Code and of any
applicable state law with respect to distributions from the Trust. If the
Committee so elects for a Plan Year, distributions to Participants may commence
less than 30 days after the notice required under Section 1.411(a)-11(c) of the
regulations under the Code is given; provided, however, that no such
distribution to a Participant shall be made unless (1) the Participant is
informed that he has the right for a period of at least 30 days after receiving
the notice to consider whether or not to

                                      -37-
<PAGE>   40

consent to a distribution (or a particular distribution option), and (2) the
Participant affirmatively elects to receive a distribution after receiving the
notice.

         (d) If a distribution of a Participant's Capital Accumulation is not
the minimum amount required to be distributed pursuant to the second and third
sentences of Section 12(c), the Committee shall notify the Participant (or any
spouse or former spouse who is his alternate payee under a "qualified domestic
relations order" (as defined in Section 414(p) of the Code)) of his right to
elect to have the "eligible rollover distribution" paid directly to an "eligible
retirement plan" (within the meaning of Section 401(a)(31) of the Code) that is
an individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, a
qualified trust described in Section 401(a) of the Code or a qualified annuity
plan described in Section 403(a) of the Code that accepts "eligible rollover
distributions." If such an "eligible rollover distribution" is to be made to the
Participant's surviving spouse, the Committee shall notify the surviving spouse
of his right to elect to have the distribution paid directly to an "eligible
retirement plan" that is either an individual retirement account described in
Section 408(a) of the Code or an individual retirement annuity described in
Section 408(b) of the Code. Any election under this Section 14(d) shall be made
and effected in accordance with such rules and procedures as may be established
from time to time by the Committee in order to comply with Section 401(a)(31) of
the Code.

                                      -38-
<PAGE>   41

Section 15. No Assignment of Benefits.

         A Participant's interest in the Plan may not be anticipated, assigned
(either at law or in equity), alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process, except in accordance with a
"qualified domestic relations order" (as defined in Section 414(p) of the Code).

Section 16. Administration.

         (a) Administrative Committee - The Plan will be administered by an
Administrative Committee composed of not fewer than three individuals appointed
by the Board of Directors to serve at its pleasure and without compensation. The
members of the Committee shall be the named fiduciaries with authority to
control and manage the operation and administration of the Plan. Members of the
Committee need not be Employees or Participants. Any Committee member may resign
by giving notice, in writing, to the Board of Directors.

         (b) Committee Action - Committee action will be by vote of a majority
of the members at a meeting or in writing by all the members without a meeting.
A Committee member who is a Participant shall not vote on any question relating
specifically to himself.

         The Committee shall choose from its members a Chairman and a Secretary.
The Chairman or the Secretary of the Committee shall be authorized to execute
any certificate or other written direction on behalf of the Committee. The
Secretary shall keep a record of the Committee's proceedings and of all dates,
records and documents pertaining to the administration of the Plan.

                                      -39-
<PAGE>   42

         (c) Powers and Duties of the Committee - The Committee shall have all
powers necessary to enable it to administer the Plan and the Trust Agreement in
accordance with their provisions, including without limitation the following:

                  (1)      resolving all questions relating to the eligibility
                           of Employees to become
                           Participants;

                  (2)      determining the appropriate allocations to
                           Participants' Accounts pursuant to Section 6;

                  (3)      determining the amount of benefits payable to a
                           Participant (or Beneficiary), and the time and manner
                           in which such benefits are to be paid;

                  (4)      selecting the investment funds to be offered to
                           Participants for investment of their Accounts;

                  (5)      authorizing and directing all disbursements of Trust
                           Assets by the Trustee;

                  (6)      establishing procedures in accordance with Section
                           414(p) of the Code to determine the qualified status
                           of domestic relations orders and to administer
                           distributions under such qualified orders;

                  (7)      engaging any administrative, legal, accounting,
                           clerical or other services that it may deem
                           appropriate;

                  (8)      construing and interpreting the Plan and the Trust
                           Agreement and adopting rules for administration of
                           the Plan that are consistent with the terms of the
                           Plan documents and of ERISA and the Code;

                  (9)      compiling and maintaining all records it determines
                           to be necessary, appropriate or convenient in
                           connection with the administration of the Plan;

                  (10)     reviewing the performance of the Trustee with respect
                           to the Trustee's administrative duties,
                           responsibilities and obligations under the Plan and
                           Trust Agreement; and

                                      -40-
<PAGE>   43

                  (11)     executing agreements and other documents on behalf of
                           the Plan and Trust.

         The Committee shall perform its duties under the Plan and the Trust
Agreement solely in the interests of the Participants (and their Beneficiaries).
Any discretion granted to the Committee under any of the provisions of the Plan
or the Trust Agreement shall be exercised only in accordance with rules and
policies established by the Committee which shall be applicable on a
nondiscriminatory basis. The Committee shall have the full and exclusive
discretion to interpret and administer the Plan. All actions, interpretations
and decisions of the Committee are conclusive and binding on all persons, and
shall be given the maximum possible deference allowed by law.

         (d) Expenses - All reasonable expenses of administering the Plan and
Trust may be charged to and paid out of the Trust Assets. A Participant's
Accounts may be charged with any expenses that are incurred by the Participant
in connection with any investment transaction with respect to the Participant's
Accounts.

         The Company may, however, pay all or any portion of such expenses of
the Plan and Trust directly, and payment of expenses by the Company shall not be
deemed to be Employer Contributions.

         (e) Information to be Submitted to the Committee - To enable the
Committee to perform its functions, the Company shall supply full and timely
information to the Committee on all matters as the Committee may require, and
shall maintain such other records as the Committee may determine are necessary
or appropriate in order to determine the benefits due or which may become due to
Participants (or Beneficiaries) under the Plan.

                                      -41-
<PAGE>   44

         (f) Delegation of Fiduciary Responsibility - The Committee from time to
time may allocate to one or more of its members and/or may delegate to any other
persons or organizations any of its rights, powers, duties and responsibilities
with respect to the operation and administration of the Plan that are permitted
to be so delegated under ERISA. Any such allocation or delegation shall be made
in writing, shall be reviewed periodically by the Committee and shall be
terminable upon such notice as the Committee in its discretion deems reasonable
and proper under the circumstances.

         (g) Bonding, Insurance and Indemnity - To the extent required under
Section 412 of ERISA, the Company shall secure fidelity bonding for the
fiduciaries of the Plan.

         The Company (in its discretion) or the Trustee (as directed by the
Committee) may obtain a policy or policies of insurance for the Committee (and
other fiduciaries of the Plan) to cover liability or loss occurring by reason of
the act or omission of a fiduciary. If such insurance is purchased with Trust
Assets, the policy must permit recourse by the insurer against the fiduciary in
the case of a breach of a fiduciary obligation by such fiduciary. The Company
hereby agrees, to the maximum extent permitted by law, to indemnify and hold
harmless the Committee and each of its designees under Section 16(f), who is an
officer, director or employee of any Employer, against any and all claims, loss,
damages, liability, expenses, including legal fees, costs, judgments, fines,
settlements and other amounts actually and reasonably incurred, including in
connection with any proceeding, arising by reason of the fact that such person
is or was acting in such capacity.

         (h) Notices, Statements and Reports - The Company shall be the "Plan
Administrator" (as defined in Section 3(16)(A) of ERISA and Section 414(g) of
the Code) for

                                      -42-
<PAGE>   45

purposes of the reporting and disclosure requirements of ERISA and
the Code. The Committee shall assist the Company, as requested, in complying
with such reporting and disclosure requirements. The Company shall be the
designated agent of the Plan for the service of legal process.

Section 17. Claims Procedure.

         A Participant (or Beneficiary) who does not receive a distribution of
benefits to which he believes he is entitled may present a claim to the
Committee. The claim for benefits must be in writing and addressed to the
Committee or to the Company. If the claim for benefits is denied, the Committee
shall notify the Participant (or Beneficiary) in writing within 90 days after
the Committee initially received the benefit claim. If there are special
circumstances which require an extension of time for processing the claim for
benefits, the Committee's decision shall be rendered not later than 180 days
after receipt of a claim. Any notice of a denial of benefits shall advise the
Participant (or Beneficiary) of the basis for the denial, any additional
material or information necessary for the Participant (or Beneficiary) to
perfect his claim and the steps which the Participant (or Beneficiary) must take
to have his claim for benefits reviewed.

         Each Participant (or Beneficiary) whose claim for benefits has been
denied may file a written request for a review of his claim by the Committee.
The request for review must be filed by the Participant (or Beneficiary) within
60 days after he receives the written notice denying his claim. The decision of
the Committee will be made within 60 days after receipt of a request for review
and shall be communicated in writing to the claimant. Such written notice shall
set forth the basis for the Committee's decision. If there are special
circumstances (such as the need to

                                      -43-
<PAGE>   46

hold a hearing) which require an extension of time for completing the review,
the Committee's decision shall be rendered not later than 120 days after receipt
of a request for review. All decisions and interpretations of the Committee
under this Section 17 shall be conclusive and binding upon all persons with an
interest in the Plan and shall be given the greatest deference permitted by law.

Section 18. Limitation on Participants' Rights.

         A Participant's Capital Accumulation will be based solely upon his
vested interest in his Accounts and will be paid only from the Trust Assets. An
Employer, the Committee or the Trustee shall not have any duty or liability to
furnish the Trust with any funds, securities or other assets, except as
expressly provided in the Plan.

         The adoption and maintenance of the Plan shall not be deemed to
constitute a contract of employment or otherwise between an Employer and any
Employee, or to be a consideration for, or an inducement or condition of, any
employment. Nothing contained in this Plan shall be deemed to give an Employee
the right to be retained in the Service of an Employer or to interfere with the
right of an Employer to discharge, with or without cause, any Employee at any
time.

                                      -44-
<PAGE>   47

Section 19. Future of the Plan.

         The Company reserves the right to amend or terminate the Plan (in whole
or in part) and the Trust Agreement at any time, by action of the Board of
Directors. Neither amendment nor termination of the Plan shall retroactively
reduce the vested rights of Participants or permit any part of the Trust Assets
to be diverted to or used for any purpose other than for the exclusive benefit
of the Participants (and their Beneficiaries).

         The Company specifically reserves the right to amend the Plan and the
Trust Agreement retroactively in order to satisfy any applicable requirements of
the Code and ERISA.

         If the Plan is terminated (or partially terminated), participation of
Participants affected by the termination will end. If Employer Contributions are
not replaced by contributions to a comparable plan which satisfies the
requirements of Section 401(a) of the Code, the Accounts of only those
Participants who are Employees on the effective date of termination will become
nonforfeitable as of that date. A complete discontinuance of Employer
Contributions shall be deemed to be a termination of the Plan for this purpose.
The Capital Accumulation of those Participants whose Service terminated prior to
the effective date of Plan termination shall continue to be determined pursuant
to Section 10; and, to the extent that such Participants are not vested, the
nonvested balances in their Accounts will become Forfeitures to be reallocated
as of the effective date of Plan termination (even if they have not incurred a
five-consecutive-year Break in Service).

         After termination of the Plan, the Trust will be maintained until the
Capital Accumulations of all Participants have been distributed. Capital
Accumulations shall be distributed as soon as practicable following termination
of the Plan.

                                      -45-
<PAGE>   48

         In the event of the merger or consolidation of this Plan with another
plan, or the transfer of Trust assets (or liabilities) to another plan, the
Account balances of each Participant immediately after such merger,
consolidation or transfer must be at least as great as immediately before such
merger, consolidation or transfer (as if the Plan had then terminated).

Section 20. "Top-Heavy" Contingency Provisions.

         (a) The provisions of this Section 20 are included in the Plan pursuant
to Section 40l(a)(10)(B)(ii) of the Code and shall become applicable only if the
Plan becomes a "top-heavy plan" under Section 416(g) of the Code for any Plan
Year.

         (b) The determination as to whether the Plan becomes "top-heavy" for
any Plan Year shall be made as of the Allocation Date of the immediately
preceding Plan Year by considering the Plan together with the ESOP and any other
tax-qualified plan maintained by an Employer in which a "key employee"
participates. The Plan and the ESOP (and any other plan required to be
aggregated with the Plan) shall be "top-heavy" only if the total of the account
balances under the Plan and the ESOP and such other plan for "key employees" as
of the determination date exceeds 60% of the total of the account balances for
all Participants. For such purpose, account balances shall be computed and
adjusted pursuant to Section 4l6(g) of the Code. "Key employees" shall be
certain Participants (who are officers or shareholders of the Company) and
Beneficiaries described in Section 416(i)(1) or (5) of the Code.

         (c) For any Plan Year in which the Plan is "top-heavy," each
Participant who is an Employee on the Allocation Date (and who is not a "key
employee") shall receive a minimum allocation of Employer Contributions and
Forfeitures which is equal to the lesser of:

                                      -46-
<PAGE>   49

                  (1)      3% of his Statutory Compensation; or

                  (2)      the same percentage of his Statutory Compensation as
                           the allocation to the "key employee" for whom the
                           percentage is the highest for that Plan Year. 401(k)
                           Contributions made by key employees during a Plan
                           Year shall be included in determining the "key
                           employee" with the highest percentage for such Plan
                           Year.

For this purpose, Statutory Compensation of each Employee shall not take into
account any amount in excess of $160,000 (as adjusted periodically after 1998
for increases in the cost of living).

         (d) As of the first day of any Plan Year in which the Plan has become
"top-heavy," the vesting provision in Section 10(a)(2) shall be amended (with
respect to any Employee who is credited with at least one Hour of Service after
the Plan has become "top-heavy") to provide for vesting upon completion of at
least three Years of Vesting Service.

         If the Plan ceases to be "top-heavy," the Capital Accumulation of a
Participant who, at that time, has less than three years of Service shall
thereafter be determined under the vesting provision in Section 10(a)(2),
instead of under this Section 20(d), except that his nonforfeitable percentage
shall not be reduced below the nonforfeitable percentage that he had at the time
the Plan ceased to be "top-heavy." If the Plan ceases to be "top-heavy," the
Capital Accumulation of a Participant who, at that time, has three or more years
of Service shall continue to be determined under this Section 20(d).

                                      -47-
<PAGE>   50

Section 21. Governing Law.

         The provisions of this Plan and the Trust Agreement shall be construed,
administered and enforced in accordance with the laws of the State of
California, to the extent such laws are not superseded by ERISA.

Section 22. Execution.

         To record the amendment and restatement of the Plan, the Company has
caused this document to be executed on this _____ day of_____________, 199____.

                                            GRANITE CONSTRUCTION
                                            INCORPORATED

                                            By
                                              ----------------------------------
                                            Its
                                                --------------------------------

                                            By
                                              ----------------------------------
                                            Its
                                                --------------------------------

                                      -48-

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