Document:

exh10_1.htm

    EXHIBIT
10.1

     

    AMENDMENT
NO. 3

     

    TO

     

    RIGHTS
AGREEMENT

     

    THIS
AMENDMENT NO. 3 (this "Amendment")
to the Rights Agreement, dated as of March 12, 2000, as amended on
September 5, 2007 and December 21, 2007 (the "Rights
Agreement"), by and between CPI Corp., a Delaware corporation (the "Company"),
and Computershare Trust Company, N.A., a federally chartered trust company, as
successor rights agent to Harris Trust and Savings Bank (the "Rights Agent"),
is made and entered into as of March 12, 2010.

     

    WHEREAS,
the Board of Directors of the Company has deemed it advisable and in the best
interests of the Company and its stockholders to extend the Final Expiration
Date of the Rights Agreement for three years; and

     

    WHEREAS,
the Board of Directors of the Company has authorized the amendment and
restatement of certain provisions of the Rights Agreement as described
below;

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:

     

    1. Amendment
of Definition of Beneficial Owner.  Section 1(c) of the Rights
Agreement is hereby amended to replace the period of the end of Section 1(c)(iv)
and add “; or” followed by a new subsection (v) to be and read in its entirety
as follows:

     

    “(v)           That
are the subject of a derivative transaction entered into by such Person (or any
Affiliate or Associate of such Person), which gives such Person (or such
Affiliate or Associate of such Person) the economic equivalent of ownership of
an amount of such securities due to the fact that the value of the derivative is
explicitly determined by reference to the price or value of such securities,
without regard to whether (a) such derivative conveys any voting rights in such
securities to such Person (or such Affiliate or Associate of such Person), (b)
the derivative is required to be, or capable of being, settled through delivery
of such securities, or (c) such Person (or such Affiliate or Associate of such
Person) may have entered into other transactions that hedge the economic effect
of such derivative.

     

    Notwithstanding
anything in this definition of Beneficial Ownership to the contrary, the phrase
“then outstanding,” when used with reference to a Person’s Beneficial Ownership
of securities of the Company, shall mean the number of such securities then
issued and outstanding together with the number of such securities not then
actually issued and outstanding that such Person would be deemed to Beneficially
Own hereunder.  In determining the number of Common Shares deemed
Beneficially Owned by virtue of subparagraph (iv) of this paragraph (c), the
subject Person shall be deemed to Beneficially Own (without duplication) the
number of Common Shares that are synthetically owned pursuant to such derivative
securities.”

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    2. Deletion
of Definition of Exempt Person and Related Terms.  Sections
1(o) “Exempt Person”, 1(p) “Excess Shares”, 1(q) “Knightspoint Group” and 1(r)
“Pro Rata Shares” of the Rights Agreement are hereby deleted in their
entirety.

     

    3. Amendment of Section
2.  Section 2 of the Rights Agreement is hereby amended to
delete the following language “and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date also be the holders
of the Common Shares)”.

     

    4. Termination
Date.  Section 7(a)(i) of the Rights Agreement is hereby
amended to define the Final Termination Date to be March 13, 2013.

     

    5. Amendment
of Section 21.  Section 21 of the Rights Agreement is hereby
amended:

     

    (a)  to
insert the following language “in the event that the Rights Agent or one of its
Affiliates is not also the transfer agent 

      for the Company”  immediately
before the word “to” and after the word “and” in the first sentence
thereof;

     

    (b) to delete
the following language “, and to the holders of the Rights Certificates by
first-class mail” in the first sentence thereof; and

     

    (c) to
replace “100,000,000”  with “$50,000,000” and insert “individually or
combined with an Affiliate” immediately thereafter.

     

    6. Amendment of Section
26.  Section 26 of the Rights Agreement is hereby amended to
insert “overnight delivery service or” immediately before the word “first-class”
and after the word “by” in the first two sentences thereof.

     

    7. Elimination
of Exhibit D.  The Rights Agreement is hereby amended to delete
Exhibit D in its entirety.

     

    8. No
Further Amendments.  Except as expressly amended pursuant to
Sections 1 through 7 hereof, the remaining provisions of the Rights Agreement
shall remain in full force and effect in accordance with their
terms.

     

    9. Counterparts;
Facsimile Signatures.  This Amendment may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.  This Amendment may be executed by
electronic or facsimile signature, and an electronic or facsimile signature
shall constitute an original for all purposes.

     

    10. Miscellaneous.  Capitalized
terms used but not defined herein shall have the respective meanings assigned to
them in the Rights Agreement.

     

    [Signature
page follows.]

     

    - 2
-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Company and the Rights Agent have caused this Amendment to
the Rights Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.

     

     

                               
 The "Company":

     

                                                                                                              

    
      
        	 	CPI CORP.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/Renato
      Cataldo	 
	 	 	Name:
      Renato Cataldo	 
	 	 	Title:
      Chief Executive Officer/President	 
	 	 	 	 

      

    

     

     

    
                                 
  The "Rights Agent":

       

                                                                                                                

      
        
          	 	COMPUTERSHARE TRUST COMPANY,
      N.A.	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/Dennis
      V. Moccia	 
	 	 	Name:
      Dennis V. Moccia	 
	 	 	Title:
      Manager, Contract Administrationex_10-12.htm

    Exhibit
10.12

     

    Employment
Agreement

     

    of

     

    Kip
L. Wadsworth

     

    This Employment
Agreement is entered into by Kip L. Wadsworth (referred to
herein as "you") and
Ralph L. Wadsworth Construction
Company, LLC a Utah limited liability company into which Ralph L.
Wadsworth Construction Company, Inc. converted immediately prior to the date
hereof (the "Company")
and is effective on this 3rd day
of December, 2009 (the "Effective
Date.")  This Employment Agreement is being entered into in
connection with the closing of the purchase by Sterling Construction Company,
Inc. ("SCC") of an 80%
membership interest in the Company (the "Acquisition") pursuant to a
purchase agreement of even date herewith (the "Purchase
Agreement.")  It provides for your employment by the Company on
the following terms and conditions:

     

    
      	
              1.  

            	
              Term. This Employment
      Agreement will remain in effect unless terminated earlier as provided
      below until 5:00 p.m. Mountain Time on December 31,
  2012.

            

    

     

    
      	
              2.  

            	
              Annualized Salary. The Company will
      pay you an annualized salary of $244,000, which will be paid to you in
      installments at the same time and for the same period as other employees
      of the Company are paid.

            

    

     

    
      	
              3.  

            	
              Bonus. You will receive a
      bonus as follows:

            

    

     

    
      	
              1.1  

            	
              A
      cash bonus in an amount equal to 80% of your Annualized Salary in each
      year in which the Company achieves 75% of its mutually agreed upon
      forecasted EBITDA (as that term is defined in Appendix A of the Purchase
      Agreement.)

            

    

     

    
      	
              (a)  

            	
              The
      cash bonus payable pursuant to Section 3.1,
      above, shall be increased by an amount in cash equal to 10% of your
      Annualized Salary in each year in which the Company achieves 100% of its
      mutually agreed upon forecasted
EBITDA.

            

    

     

    
      	
              1.2  

            	
              A
      restricted stock bonus equal to 10% of your Annualized Salary in each year
      in which the Company achieves 100% of its mutually agreed upon forecasted
      EBITDA.

            

    

     

    
      	
              1.3  

            	
              A
      cash bonus to be divided among you and the other Sellers (as that term is
      defined in the Purchase Agreement) pursuant to each of their percentage
      ownership of the Company immediately prior to the Acquisition in an amount
      equal to —

            

    

     

    
      	
              (a)  

            	
              8%
      of the amount by which Company's EBITDA in a given year exceeds the
      Company's mutually agreed upon forecasted EBITDA for such year by up to
      $5 million; plus

            

    

     

    
      	
              (b)  

            	
              5%
      of the amount by which Company's EBITDA in a given year exceeds the
      Company's mutually agreed upon forecasted EBITDA for such year by more
      than $5 million.

            

    

     

    
      	
              1.4  

            	
              Although
      a description of the bonus in Section 3.3, above, is included in the
      employment agreement of each of the Sellers, only one such bonus shall be
      paid in the aggregate, to be divided by the Sellers in the manner
      indicated.

            

    

     

    
      	
              4.  

            	
              Title, Responsibilities &
      Reporting.

            

    

     

    
      	
              1.5  

            	
              You
      will be elected President of the Company and will carry out the customary
      duties and responsibilities of that position and will perform services of
      an executive nature that are generally consistent with the services that
      you performed for the Company prior to the
  Acquisition.

            

    

     

    
      	
              1.6  

            	
              In
      carrying out your responsibilities, you will report to the President of
      SCC.

            

    

     

    
      	
              1.7  

            	
              While
      you are an employee of the Company, you shall have the right to control
      the hiring and retention of RLW employees other than its executive
      management employees.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
              5.  

            	
              Benefits.  The
      Company will provide to you substantially the same benefits that you were
      entitled to immediately prior to the Acquisition, except that with respect
      to vacation, you will be eligible to take so many days vacation per year
      as you believe is appropriate in light of the needs of the Company's
      business.  The Company will also provide you with a car
      allowance of $1,100 per month.

            

    

     

    
      	
              6.  

            	
              Business
      Expenses.  The Company will reimburse to you in
      accordance with its expense reimbursement policy the reasonable business
      expenses that you incur in the performance of your
      responsibilities.

            

    

     

    
      	
              7.  

            	
              Confidential
      Information.  You understand and agree that while you are
      an employee of the Company and/or one of the Company's affiliates and for
      a period of 4 years after your employment terminates for any reason
      —

            

    

     

    
      	
              1.8  

            	
              You
      are required to hold the confidential and proprietary information of the
      Company and its affiliates (the "Confidential
      Information") in confidence and not to disclose it to anyone
      outside of the Company and its affiliates except in the good faith
      performance of your job
responsibilities;

            

    

     

    
      	
              1.9  

            	
              You
      may only use Confidential Information for the benefit of the Company and
      its affiliates and not for the benefit of any other company or
      person.

            

    

     

    
      	
              1.10  

            	
              For
      purposes of this Employment Agreement, Confidential Information does not
      include, and the obligations herein do not apply to, information that is
      now or subsequently becomes generally available to the public other than
      through a breach by you of this Section 7, and,
      after your employment terminates for any reason, the obligations herein
      will also not apply to information that you rightfully obtain from a third
      party that is not an affiliate of the Company and that has the right,
      without obligation to the Company, to transfer or disclose such
      information to you.

            

    

     

    
      	
              1.11  

            	
              Notwithstanding
      any provision in this Employment Agreement to the contrary, you may
      disclose Confidential Information (a) if required to do so by any request
      or order of any government authority, provided that you first notify the
      Company of such requirement; (b) if otherwise required to do so by law; or
      (c) if necessary to establish your rights under this Employment
      Agreement.

            

    

     

    
      	
              8.  

            	
              Termination of
      Employment.

            

    

     

    
      	
              1.12  

            	
              Termination Because of your
      Death.  If you should die during the term of this
      Employment Agreement, the Company will pay to your estate in a single lump
      sum within 74 days of the date of your
  death —

            

    

     

    
      	
              (a)  

            	
              Your
      accrued but unpaid salary through the date of your
  death;

            

    

     

    
      	
              (b)  

            	
              Any
      unpaid bonus for the calendar year immediately preceding the year in which
      your death occurs; and

            

    

     

    
      	
              (c)  

            	
              A
      portion of any bonus for the year in which your death occurs to which you
      are entitled, such portion to be based on (a) the number of days that have
      elapsed between the first day of the calendar year in which your death
      occurs and the date of your death; and (b) the extent to which, if at all,
      any personal goals on which your bonus is based have been achieved in that
      year.

            

    

     

    
      	
              1.13  

            	
              Termination Because of your
      Disability.  If you become Permanently Disabled during
      the term of this Employment Agreement, the Company may terminate your
      employment effective upon giving you written notice of
      termination.  You will be deemed to be Permanently Disabled if
      for physical or mental reasons you are unable to perform your duties and
      responsibilities under this Employment Agreement for 60 consecutive days,
      or for a total of 90 days during any twelve-month period, and such
      physical or mental reasons are confirmed in writing by a licensed
      physician reasonably acceptable to the Company.  In that event,
      the Company will pay you or your personal representative, as the case may
      be, in a single lump sum within 74 days of the date of
      termination —

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)  

            	
              Your
      accrued but unpaid salary through the date of the termination of your
      employment;

            

    

     

    
      	
              (b)  

            	
              Any
      unpaid bonus for the calendar year immediately preceding the year in which
      you become permanently disabled;
and

            

    

     

    
      	
              (c)  

            	
              A
      portion of any bonus for the year in which you are determined to be
      Permanently Disabled, such portion to be based on (a) the number of days
      elapsed between the first day of the calendar year in which you become
      permanently disabled and the date your employment terminates; and (b) the
      extent to which, if at all, any personal goals on which your bonus is
      based have been achieved in that
year.

            

    

     

    
      	
              1.14  

            	
              Termination For
      Cause.  The Company may terminate your employment for
      "Cause" (as defined below) effective upon giving you written notice of
      termination.  In that event, the Company will pay you your
      accrued but unpaid salary through the date of the termination of your
      employment in a single lump sum within 74 days of the date of
      termination.  The Company will not pay you any bonus for the
      year in which your employment is terminated that you might otherwise have
      earned had your employment not been terminated for
  Cause.

            

    

     

    
      	
              1.15  

            	
              Definition
      of Cause.  "Cause" means any one or more of the following
      —

            

    

     

    
      	
              (a)  

            	
              Your
      gross neglect of your duties, gross negligence in the performance of your
      duties, or your refusal to perform your
duties.

            

    

     

    
      	
              (b)  

            	
              Your
      unsatisfactory performance of your duties that is not cured within 30
      working days after you receive written notice identifying the reasons why
      your performance is considered unsatisfactory and what you can do to cure
      the unsatisfactory performance.

            

    

     

    
      	
              (c)  

            	
              Any
      act of theft or other dishonesty by you, including, but not limited to any
      intentional misapplication of the Company's or its affiliates' funds or
      other property.

            

    

     

    
      	
              (d)  

            	
              Your
      conviction of any criminal activity not described above, or your
      participation in an activity involving moral turpitude that is or could
      reasonably be expected to be injurious to the business or reputation of
      the Company.

            

    

     

    
      	
              (e)  

            	
              Your
      immoderate use of alcohol and/or the use of non-prescribed narcotics that
      adversely and materially affects the performance of your duties and
      responsibilities.

            

    

     

    
      	
              1.16  

            	
              Termination Without
      Cause.  Your employment shall be deemed to have been
      terminated by the Company Without Cause unless termination is (a) by
      reason of your death or your becoming Permanently Disabled; (b) for Cause;
      or (c) because of your Voluntary Resignation.  The Company may
      terminate your employment without Cause effective upon giving you written
      notice of termination.  In that event, the Company will pay you
      in a single lump sum within 74 days of the date of termination
      —

            

    

     

    
      	
              (a)  

            	
              The
      greater of your accrued but unpaid salary through the date of the
      termination of your employment or any unpaid salary as if it had been
      earned through 5:00 p.m. Mountain Time on the third anniversary of the
      Effective Date;

            

    

     

    
      	
              (b)  

            	
              Any
      unpaid bonus for the calendar year immediately preceding the year in which
      you are terminated;

            

    

     

    
      	
              (c)  

            	
              Any
      bonus to which you are entitled for the year in which you are terminated
      regardless of the number of days elapsed between the first day of the
      calendar year and the date your employment terminates.  The
      bonus will be the amount you would have earned had your employment not
      been terminated.

            

    

     

    
      	
              (d)  

            	
              During
      the twelve-month period following the termination of your employment, the
      Company will continue to cover you under the medical and dental plans
      sponsored by the Company for its employees with the same coverage you had
      immediately prior to the termination of your employment, provided that you
      remit to the Company on a timely basis an amount equal to the applicable
      monthly COBRA premium (less the COBRA administrative surcharge) for such
      continued coverage; and the Company will reimburse you for any medical
      premium expenses incurred by you hereunder within 30 days after the date
      of your payment thereof.  To the extent that any medical or
      dental expense or in-kind benefits provided for under this Section 8.5 are
      taxable to you in a given year, any such expense will be reimbursed to you
      by the Company within 30 days of such expense being incurred by you, and
      any expenses reimbursed or in-kind benefits provided hereunder will not
      affect the expenses eligible for reimbursement or in-kind benefits
      provided in any other year.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (e)  

            	
              The
      Company will permit you to purchase any insurance maintained by the
      Company for its own benefit on your life at its then cash surrender
      value.

            

    

     

    
      	
              1.17  

            	
              Voluntary
      Resignation by You.

            

    

     

    
      	
              (a)  

            	
              You
      may resign your employment (a "Voluntary Resignation")
      by giving the Company and SCC 180 days' prior written notice of your
      resignation.  In that event, the Company will not pay you any
      bonus that had not already been paid to you before the date of your notice
      of resignation.

            

    

     

    
      	
              (b)  

            	
              Notwithstanding
      the foregoing, the Company may deem your notice of resignation as a
      resignation by you effective upon the giving of the notice of your
      employment and any and all directorships and offices then held by you in
      the Company and its affiliates, in which case the Company shall pay you
      your base salary then in effect for the one-hundred-eighty-day period in a
      single lump sum within 74 days of the date of your notice of
      resignation.

            

    

     

    
      	
              1.18  

            	
              Termination
      by You for Good Reason.

            

    

     

    
      	
              (a)  

            	
              You
      may terminate your employment for Good Reason if (a) the Company commits a
      Breach (as defined below) of this Employment Agreement; (b) you give the
      Company detailed written notice of the Breach within 30 days after the
      occurrence of the Breach; and (c) the Company fails to cure the Breach
      within 30 days after the receipt of the notice, or if the nature of the
      Breach is such that it cannot practicably be cured in 30 days, if the
      Company fails to diligently and in good faith commence a cure of the
      Breach within the thirty-day period and completes the same within 60 days
      after the occurrence of the Breach.

            

    

     

    
      	
              (b)  

            	
              In
      the event that you terminate your employment for Good Reason, the
      termination shall be deemed for purposes of this Employment Agreement to
      be a termination by the Company Without Cause.  As a result, you
      will be entitled to the payments and other benefits described in Section 8.5,
      above.  You will also be entitled to sell your membership
      interest in the Company to SCC according to the terms and conditions set
      forth in the Operating Agreement of the
Company.

            

    

     

    
      	
              (c)  

            	
              A
      "Breach" means a
      material breach by the Company of any one or more of the material terms or
      conditions of this Employment Agreement, and will include but not be
      limited to the Company taking any one or more of the following
      actions:

            

    

     

    
      	
              (i)  

            	
              Moving
      your place of employment (except for travel on Company or SCC business) to
      a location outside the Salt Lake City, Utah
  area.

            

    

     

    
      	
              (ii)  

            	
              Materially
      diminishing your duties and/or
responsibilities.

            

    

     

    
      	
              (iii)  

            	
              Materially
      diminishing the kind or level of the benefits you are entitled to under
      this Employment Agreement.

            

    

     

    
      	
              (iv)  

            	
              Failure
      to timely pay the 20% annual distributions of net income and/or Put/Call
      payments as set forth in the Operating Agreement of the Company, if such
      failure is not cured within 30 days following written notice of such
      failure.

            

    

     

    
      	
              9.  

            	
              Non-Competition/Non-Solicitation.

            

    

     

    
      	
              1.19  

            	
              During
      the period specified, below, you shall not directly or
      indirectly —

            

    

     

    
      	
              (a)  

            	
              Render
      services or advice (whether for compensation or without compensation) to
      any person, entity or organization with respect to any business (whether
      in existence or under development) that is engaged in the heavy
      construction business or in any other business in which the Company or SCC
      engages (the "Business") while you
      are an employee of the Company or one of its affiliates (the "Non-Compete
      Obligation"); or

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              Solicit
      or induce or entice any employees of the Company or of any of its
      affiliates to terminate their employment with, or otherwise cease their
      relationships with, the Company or any of its
      affiliates.  Notwithstanding the foregoing, after your
      employment terminates for any reason, the placement of general
      advertisements which may be targeted to a particular geographic or
      technical area, but which are not targeted directly or indirectly towards
      the Company's, its affiliates' employees will not be deemed to be a
      violation of this Section (b)
      so long as you do not guide or direct the attention of any employee
      or consultant of SCC, the Company or their affiliates to any such general
      advertisement.

            

    

     

    
      	
              9.1  

            	
              Exceptions and
      Limitations.

            

    

     

    
      	
              (a)  

            	
              The
      ownership of less than five percent (5%) of the outstanding stock of any
      publicly-traded corporation shall not by itself deem the owner thereof to
      be engaged in such corporation's
business.

            

    

     

    
      	
              (b)  

            	
              The
      Non-Compete Obligation shall not be construed to prevent the Seller from
      engaging in the commercial and/or residential real estate development
      business or in aesthetic enhancement construction and provided, further,
      that nothing in this Agreement shall prevent the Seller from performing
      civil construction in connection with his own commercial and real estate
      development.

            

    

     

    
      	
              (c)  

            	
              The
      Non-Compete Obligation shall not be construed to prevent the Seller from
      providing bonding and other financial support for Cal Wadsworth
      Construction or its affiliates, provided, however, that
      in the states of Utah and Idaho, the Seller shall not provide bonding for
      any Cal Wadsworth Construction civil construction project that competes
      with RLW unless RLW chooses not to bid on such
  project.

            

    

     

    
      	
              1.20  

            	
              The
      non-competition obligations specified above (a) shall be applicable while
      you are an employee of the Company or of any of its affiliates and for a
      period of one year after all such employment terminates for any reason,
      but in any event for a period of 4 years after the Effective Date; and (b)
      shall apply in any state in which the Business was carried on while you
      were an employee of the Company or of any of its
    affiliates.

            

    

     

    
      	
              1.21  

            	
              The
      restrictions set forth above are considered by you and the Company to be
      reasonable for the purposes of protecting the
      Business.  However, if any of the restrictions is found by any
      court of competent jurisdiction to be unenforceable because it extends for
      too long a period of time, over too great a range of activities, or in too
      broad a geographic area, it shall be interpreted to extend only over the
      maximum period of time, range of activities and/or geographic area as to
      which it may be enforceable.

            

    

     

    
      	
              10.  

            	
              Indemnification.  You
      will be indemnified by the Company and/or SCC with respect to claims made
      against you as a director, officer and/or employee of the Company and of
      any affiliate of the Company to the fullest extent permitted by the
      Company’s charter and operating agreement; by SCC's charter and bylaws and
      by the laws of the states of Utah and Delaware,
      respectively.  SCC shall maintain insurance coverage for the
      foregoing indemnification obligation in the same amount as SCC's directors
      maintain for themselves, but in any event at least $5 million of
      coverage.

            

    

     

    
      	
              11.  

            	
              Other
      Terms

            

    

     

    
      	
              1.22  

            	
              Affiliates.  The
      affiliates of the Company are SCC and any entities controlled by the
      Company or by SCC.

            

    

     

    
      	
              1.23  

            	
              Construction.  The
      words "will" and "shall" mean "is obligated to." and the word "may" means
      "is permitted to".  The section headings contained in this
      Employment Agreement are inserted for convenience only and shall not
      affect in any way the meaning or interpretation of this Employment
      Agreement.

            

    

     

    
      	
              1.24  

            	
              Amendments.  No
      amendment of any provision of this Employment Agreement shall be valid
      unless it shall be in writing and signed by you and the
      Company.

            

    

     

    
      	
              1.25  

            	
              Authorship.  You
      and the Company agree that we have participated jointly in the negotiation
      and drafting of this Employment Agreement.  In the event an
      ambiguity or question of intent or interpretation arises, this Employment
      Agreement shall be construed as if drafted jointly by the parties and no
      presumption or burden of proof shall arise favoring or disfavoring you or
      the Company by virtue of the authorship of any of the provisions of this
      Employment Agreement.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              1.26  

            	
              Governing
      Law.  This Employment Agreement shall be governed by, and
      construed in accordance with, the domestic laws of the State of Utah
      without giving effect to any choice or conflict of law provision or rule
      (whether of the State of Utah or any other jurisdiction) that would cause
      the application of the laws of any jurisdiction other than the State of
      Utah.

            

    

     

    
      	
              12.  

            	
              Compliance with Section 409A of
      the Code.

            

    

     

    
      	
              1.27  

            	
              To
      the extent that any payment to you under this Employment Agreement is
      deemed to be deferred compensation subject to the requirements of Section
      409A of the Internal Revenue Code of 1986 (the "Code") this Employment
      Agreement will be operated in compliance with the applicable requirements
      of Section 409A of the Code ("Section 409A") and its
      corresponding regulations and related guidance with respect to the payment
      in question.  Notwithstanding anything in this Employment
      Agreement to the contrary, any payment under this Employment Agreement
      that is subject to the requirements of Section 409A may only be made in a
      manner and upon an event permitted by Section 409A.  To the
      extent that any provision of this Employment Agreement would cause a
      conflict with the requirements of Section 409A, or would cause the
      administration of this Employment Agreement to fail to satisfy the
      requirements of Section 409A, such provision shall be deemed null and void
      to the extent permitted by applicable law, and the Company may modify this
      Employment Agreement in such a manner as to comply with such requirements
      without your consent.

            

    

     

    
      	
              1.28  

            	
              If
      you are a key employee (as defined in Section 416(i) of the Code (without
      regard to paragraph 5 thereof)) except to the extent permitted under
      Section 409A, no benefit or payment that is subject to Section 409A (after
      taking into account all applicable exceptions to Section 409A, including
      but not limited to the exceptions for short-term deferrals and for
      separation pay only upon an involuntary separation from service) will be
      made under this Employment Agreement on account of your separation from
      service (as defined in Section 409A) with the Company until the later of
      —

            

    

     

    
      	
              (a)  

            	
              The
      date prescribed for payment in this Employment Agreement;
    and

            

    

     

    
      	
              (b)  

            	
              The
      first day of the seventh calendar month that begins after the date of your
      separation from service (or, if earlier, the date of your
      death.)

            

    

     

    
      	
              1.29  

            	
              All
      payments that were delayed by reason of the application of the date
      prescribed by Section
      12.2(b), above (the "Section 12.2(b) Date")
      will be aggregated and paid to you on the Section 12.2(b) Date in a lump
      sum together with interest computed from the date each such payment would
      have first been paid to you absent the application of the Section 12.2(b)
      Date until paid at the rate of the prime rate of SCC's lending bank plus
      three percentage points.  After the Section 12.2(b) Date, the
      Company will pay any other amounts provided for herein to the extent and
      in the manner provided in this Employment
  Agreement.

            

    

     

    
      	
              13.  

            	
              Notices:  All
      notices required or permitted under this Employment Agreement shall be in
      writing and shall be deemed given by a party when hand delivered to the
      other party against a receipt therefor or when deposited with a delivery
      service that provides next-business-day delivery and proof of delivery, in
      either case addressed to the other party as
  follows:

            

    

     

    
      	
              If to the Company
      at:

              Sterling
      Construction Company, Inc.

              20810
      Fernbush Lane

              Houston,
      Texas 77073

              Attention:  Board
      of Directors

            	
              With
      a copy to:

              Roger
      M. Barzun

              60
      Hubbard Street

              Concord, Mass.
    01742

            
	
              If to you, at your most
      recent home address as shown in the Company's employment records, or to
      such other persons or addresses as may be designated in writing by the
      party to receive the notice.

            	
              With
      a copy to:

              R.
      Gary Winger, Esq.

              Kirton
      & McConkie

              1800
      Eagle Gate Tower

              60
      East South Temple

              Salt
      Lake City, Utah 84111

            

    

    
      	
              14.  

            	
              Execution and
      Delivery.  This Employment Agreement and any amendment of
      this Employment Agreement may be executed in any number of counterparts,
      each of which counterparts shall be enforceable against the party
      executing such counterpart, and all of which together shall constitute but
      one and the same instrument.  This Employment Agreement when
      signed by a party may be delivered by telecopier or other facsimile
      transmission or via e-mail in portable document format as if such party
      had executed and delivered an original manually signed
      counterpart.

            

    

     

    [The
following page is the signature page of this Employment Agreement]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      You and
the Company have signed this Employment Agreement as of the Effective Date
intending to be legally bound by its terms and conditions.

       

      
        	
                Ralph
      L. Wadsworth Construction Company, LLC

                By
      Sterling Construction Company, Inc.

                its sole Manager

                 

                 

                 

                By:          /s/ Joseph P. Harper,
      Sr.                                                                

                Name: Joseph P. Harper,
      Sr.

                Title President

              	
                 

                 

                 

                 

                 

                 

                /s/ Kip L.
      Wadsworth                                                                

                Kip
      L. Wadsworth

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