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EXHIBIT 10.9
GRANITE CONSTRUCTION INCORPORATED
KEY MANAGEMENT DEFERRED INCENTIVE COMPENSATION PLAN
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GRANITE CONSTRUCTION INCORPORATED
KEY MANAGEMENT DEFERRED INCENTIVE COMPENSATION PLAN
1. Introduction. The Company hereby amends and restates the Plan,
effective as of January 1, 1998. The purpose of the Plan is to provide deferred
compensation to a select group of executive employees of the Company in
recognition of their contributions to the Company and its subsidiaries. This
document constitutes the written instrument under which the Plan is maintained.
2. Definitions.
(a) "Account" means as to any Participant the separate account
established and maintained by the Company in order to reflect his or her
interest in the Plan. Each Participant's Account will reflect the allocations
and earnings credited (or debited) thereto in accordance with Section 5.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee of the Company's
Board of Directors.
(d) "Company" means Granite Construction Incorporated, a Delaware
corporation, and any other affiliated entity that is designated from time to
time by the board of directors of Granite Construction Incorporated. As to a
particular Participant, "Company" refers to the corporate entity which is his or
her employer. For purposes of Sections 2(c) and 10, "Company" refers only to
Granite Construction Incorporated.
(e) "Compensation" means the annual cash incentive compensation
payable to a Participant.
(f) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
(g) "Participant" means each employee of the Company who is
designated as such from time to time by the Committee.
(h) "Plan" means the Granite Construction Incorporated Key
Management Deferred Incentive Compensation Plan, as set forth in this instrument
and as hereafter amended.
(i) "Plan Year" means the calendar year.
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3. Eligibility To Participate. The Committee will, from time to
time, designate Company employees to be Participants. Each Participant selected
by the Committee must belong to a select group of management and highly
compensated employees of the Company.
4. Vesting. Each Participant will always be 100% vested in his or
her Account; provided, however, that if a Participant is terminated "for cause"
(as such term is defined in the Company's Ethics Policy Statement), the
Participant will forfeit all amounts other than his or her own Compensation
deferrals.
5. Additions To Accounts.
(a) Participant Compensation Deferrals. Each Participant may
annually elect to defer the receipt of up to and including 100% of his or her
Compensation.
(b) Hypothetical Investment Experience. For each Plan Year, the
balance of each Participant's Account will be credited quarterly with
hypothetical earnings equal to one-quarter of the sum of the 30-day average of
the Lehman Brothers long term bond index (as published in the Wall Street
Journal) determined as of the December 1 of the prior Plan Year, plus 100 basis
points, or as determined by the Committee.
6. Deferral Elections. Each Participant must complete a deferral form
for each Plan Year with respect to which he or she wishes to defer the receipt
of Compensation. To be effective, each such deferral form must satisfy the
following rules:
(a) Content And Form Requirements. The deferral form must be
signed and dated by the Participant, and must specify the payment date and
method for distribution of the Participant's Account. Each annual deferral must
be for a minimum amount of at least $1,000, and must be for a period of at least
five years. A Participant may extend (but not reduce) the length of his or her
deferral period for one-year periods, so long as such extensions are made at
least 12 months prior to an otherwise scheduled distribution date. A
Participant's election to defer Compensation will be irrevocable and cannot be
modified or amended by the Participant.
(b) Timing Of Deferral Forms. In general, a Participant's
deferral form must be received by the Committee before the beginning of the Plan
Year in which the Compensation is payable. However, in the case of Compensation
payable with respect to the initial Plan Year, the deferral form must be
received by the Committee both (i) within 30 days of the later of the date that
the Company adopts the Plan or the date on which the employee is notified of his
or her eligibility to participate, and (ii) before the date on which the
Compensation subject to the deferral election would otherwise be paid.
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7. Distribution Of Accounts.
(a) Form Of Distributions. Subject to Sections 7(b), 7(d), 7(g)
and 10, each Participant will receive a distribution of the balance of his or
her Account in the form specified in the Participant's election form, which may
be a lump sum cash payment, or annual installments of substantially equal
amounts payable over a period of years certain not to exceed ten years.
(b) Rules For Installment Distributions. If, at any time after
installment distributions have begun, the amount of any installment would be
less than $1,000, the remainder of the Participant's Account will be distributed
in a lump sum. The Committee may, in its sole discretion, accelerate the
installment distribution of any Account for any reason. Participant Accounts
will continue to be credited with hypothetical earnings under Section 5(b) while
they are in pay status.
(c) Timing Of Distributions. Subject to Sections 7(d), 7(f) and
10, the distribution of the balance of a Participant's Account will be made or
begin as soon as practicable following the earliest of the following events:
- Occurrence of the date set forth in the Participant's
deferral form;
- The Participant's disability, as determined under the
Company's Long Term Disability Plan;
- The Participant's "retirement" under the Company's
tax-qualified retirement plans; or
- The Participant's death.
(d) Special Rule for "For Cause" Terminations. If a Participant
is terminated "for cause" (as such term is defined in the Company's Ethics
Policy Statement), and the Participant forfeits all amounts other than his or
her own Compensation deferrals, then notwithstanding Sections 6, 7(a) or 7(c),
distribution of the vested portion of such Participant's Account will be made as
a lump sum cash payment as soon as practicable following his or her termination
of Company employment.
(e) Timing Of Distribution To A Beneficiary. If a Participant
dies before receiving the distribution of his or her Account, the distribution
of such Account to his or her beneficiary will made as previously elected by the
Participant.
(f) Beneficiary Designation. Each Participant must designate a
beneficiary to receive a distribution of his or her Account if the Participant
dies before it is distributed to him or her. A beneficiary designation form must
be signed, dated and delivered to the
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Committee to become effective. In the absence of a valid or effective
beneficiary designation, the Participant's surviving spouse will be his or her
beneficiary or, if there is no surviving spouse, the Participant's estate will
be his or her beneficiary.
(g) Hardship Distributions. In the event of an unforeseeable
emergency, a Participant may apply to the Committee for a distribution of part
or all of his or her Account prior to the date that it would otherwise be
distributed under this Section 7. If the Committee approves such an application,
it will make such distribution as a lump sum cash payment.
8. Withholding. The Company will withhold from any Plan distribution
all required federal, state, local and other taxes and any other payroll
deductions required. Each Participant agrees as a condition of participation in
the Plan to have withheld annually from his or her salary such amounts as are
necessary to satisfy his or her FICA withholding requirements.
9. Administration. The Plan is administered and interpreted by the
Committee. The Committee has delegated to the Company's Vice President and
Director of Human Resources its delegable responsibilities under the Plan. The
Committee (and its delegatee) have the full and exclusive discretion to
interpret and administer the Plan. All actions, interpretations and decisions of
the Committee (and its delegatee) are conclusive and binding on all persons, and
will be given the maximum possible deference allowed by law. The Company agrees
to indemnify and hold harmless the members of the Committee and any employee to
whom the Committee delegates any responsibility under the Plan.
10. Amendment Or Termination. The Company reserves the right, in its
sole and unlimited discretion, to amend or terminate the Plan at any time,
without prior notice to any Participant or beneficiary. Upon Plan termination,
the Account of each Participant will be distributed as a lump sum cash payment
as soon as practicable, without regard to Section 7 or the Participant's
deferral election.
11. Claims Procedure. Any person who believes that he or she is
entitled to any payment under the Plan may submit a claim in writing to the
Committee. If the claim is denied (either in full or in part), the claimant will
be provided a written notice explaining the specific reasons for the denial and
referring to the provisions of the Plan on which the denial is based. The notice
will describe any additional information needed to support the claim. The denial
notice will be provided within 90 days after the claim is received. If special
circumstances require an extension of time (up to 90 days), written notice of
the extension will be given within the initial 90-day period.
12. Appeal Procedure. If a claimant's claim is denied, the claimant
(or his or her authorized representative) may apply in writing to the Committee
for a review of the decision denying the claim. The claimant (or representative)
then has the right to review pertinent documents and to submit issues and
comments in writing. The Committee will provide written notice of its decision
on review within 60 days after it receives a review request. If additional
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time (up to 60 days) is needed to review the request, the claimant will be given
written notice of the reason for the delay.
13. Source Of Payments.
(a) No Plan Assets. All payments under the Plan will be paid in
cash from the general funds of the Company, no separate fund will be established
under the Plan, and the Plan will have no assets. Any right of any person to
receive any payment under the Plan is no greater than the right of any other
unsecured creditor of the Company. The Plan constitutes a mere promise by the
Company to pay benefit payments in the future and is unfunded for purposes of
both Title I of ERISA and the Code.
(b) Rabbi Trust. The Company will (i) establish a trust, (ii)
fund such trust in the event that it determines that a "change in control" (as
defined in the trust agreement) is imminent, and (iii) arrange to have such
trust assume its obligations to pay benefits under the Plan. Any trust created
by the Company to assist it in meeting its obligations under the Plan will
conform to the terms of the model trust as described in Revenue Ruling 92-64.
14. Inalienability. A Participant's rights to benefits under the
Plan are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Participant or the Participant's beneficiary.
15. Applicable Law. The provisions of the Plan will be construed,
administered and enforced in accordance with ERISA and, to the extent
applicable, the laws of the State of California.
16. Severability. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability will not affect any other
provision of the Plan, and the Plan will be construed and enforced as if such
provision had not been included.
17. No Employment Rights. Neither the adoption or maintenance of the
Plan will be deemed to constitute a contract of employment between the Company
and any employee, or to be a consideration for, or an inducement or condition
of, any employment. Nothing contained in this Plan will be deemed to give an
employee the right to be retained in the service of the Company or to interfere
with the right of the Company to discharge, with or without cause, any employee
at any time.
18. Status Of Plan As ERISA "Top Hat" Plan. The Plan is intended to
be an unfunded plan maintained primarily for the purpose of providing deferred
compensation for a select group of management and highly compensated employees
and will be administered and construed to effectuate this intent. Accordingly,
the Plan is subject to Title I of ERISA, but is exempt from Parts 2, 3 and 4 of
such Title.
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Execution
IN WITNESS WHEREOF, Granite Construction Incorporated, by its
duly authorized officers, has executed the Plan on the date(s) indicated below.
GRANITE CONSTRUCTION INCORPORATED
By: /s/ DAVID H. WATTS
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David H. Watts, President and CEO
Dated: 9/17/98
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By: /s/ MICHAEL FUTCH
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Michael Futch, Secretary
Dated: 9/17/98
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