Exhibit 10.1
 
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PROGRAM DESCRIPTION
 
2015 Short-Term Incentive Compensation Program
 
2015 Long-Term Incentive Compensation Program
 
 
Introduction
 
 
You have been selected to participate in the Company's 2015 Short-Term Incentive
Compensation Program and its 2015 Long-Term Incentive Compensation
Program.  These two programs give you the opportunity to earn additional cash
compensation depending on the achievement of financial and personal goals in
calendar year 2015, as well as to earn stock-based compensation that is
dependent on the achievement of goals at the end of a three-year period
beginning January 1, 2015.
 
The purpose of these programs is to advance the interests of the Company's
stockholders by enhancing the Company's ability to attract, retain and motivate
persons who make (or who are expected to make) important contributions to the
Company.  Participants do not have any special right to continued employment by
the Company because of their participation in the programs.
 
The cash incentive compensation program is referred to as the Short-Term
Incentive Compensation Program, or STIP, and the stock-based incentive
compensation program is referred to as the Long-Term Incentive Compensation
Program, or LTIP.  In this Program Description, the Company's common stock will
be referred to simply as common stock.
 
Both the Short-Term Incentive Compensation Program and the Long-Term Incentive
Compensation Program were adopted by the Compensation Committee of the Board of
Directors of the Company to be effective on January 1, 2015.  The LTIP has been
adopted under the Company's Stock Incentive Plan, which, among other things,
provides for stock-based awards.
 
Sterling sets high goals — goals that are designed to encourage key employees to
exert an extra effort to raise the Company's performance to the next level.  The
STIP and the LTIP are designed to provide you with that incentive, both in the
near term and over the course of several years.
 
These programs reflect the pay-for-performance philosophy of the Company by
linking your opportunity to earn additional compensation to the achievement of
Company, operating unit, and individual performance goals.
 
References in this Program Description to being an employee of the Company or
employment with the Company mean an employee of or with the Company or one of
its operating divisions.
______________
 
 
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Part I:  The Short-Term Incentive Compensation Program
 
STIP Target Amount.
 
Each participant in the STIP is assigned an STIP Target Amount, which is
expressed as a percentage of his or her base salary.  Participants do not
necessarily have the same STIP Target Amounts.  Your 2015 STIP Target Amount is
set forth in Appendix A to this Program Description.
 
The STIP Target Amount is the amount that you can earn if 100% of the 2015
financial goal and your personal goals are met.  The actual payout, if any, may
be less than or more than your STIP Target Amount depending on the Company's
actual financial results, your operating unit's actual financial results (if you
are employed by one of the Company's operating units) and your individual
performance during the year measured against personal goals that are set at the
beginning of the year.
 
STIP Performance Goals.
 
There are three types of STIP goals for participants with operating
responsibilities, and two types of goals for participants who do not have
operating responsibilities.
 

 
·
A Company financial goal, which is based on achieving a target level of earnings
per share in 2015, which is referred to as the EPS Goal.

 

 
·
An operating unit financial goal, which is based on your operating unit
achieving a target level of earnings before interest and taxes in 2015, which is
referred to as the EBIT Goal.

 

 
·
Personal goals, which are established at the beginning of the year and consist
of tasks to be accomplished in 2015 that are considered to require an extra or
particular effort on your part.

 
Your STIP Target Amount is allocated among the goals, as follows:
 
Participant
Company
EPS Goal
STIP Target %
Operating Unit
EBIT Goal
STIP Target %
Personal Goals
STIP Target %
Operating Unit Participants
25%
50%
25%
Non-Operating Unit Participants
50%
N/A
50%

 
Calculation of Payouts.
 
At the end of 2015, the level of the achievement of the EPS Goal and the EBIT
Goal will be determined from the Company's audited financial statements.
 
The level of the achievement of your personal goals will be determined by the
manager to whom you report directly, and for some participants, by a committee
of the Board of Directors.
 
Once the levels of achievement have been determined, the payout for each goal
will be determined.
 

 
·
Payout for Financial Goals.  The payout, if any, for financial goals is
determined from the following formula in which STA refers to your STIP Target
Amount:

 
STA times the percent of STA allocated to the financial goal, times the percent
of the financial goal that was achieved in 2015.  However, there is a minimum
and a maximum achievement level:
 
If the achievement level of a financial goal is below 80%, no payout will be
made for that goal.
 
If the achievement level of a financial goal is more than 100%, the payout
cannot exceed 120% of the STA allocated to that goal.
 
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·
Payout for Personal Goals.  The payout for the completion of personal goals is
determined by the percentage of your goals that you complete satisfactorily in
2015.  Just as for financial goals, the formula for payout on personal goals is
—

 
STA times the percent of STA allocated to personal goals, times the percentage
of personal goals satisfactorily completed.  However, any positive level of
achievement will result in some payout, but there cannot be more than a 100%
payout for satisfactorily completing all of your personal goals.
 
Termination of Employment During Calendar Year 2015.  In the event that you
cease to be an employee of the Company during 2015, your participation in the
STIP will be treated as follows:
 
Reason for Termination
 
Effect on your Participation in the STIP
For Cause (as defined in your LTIP award agreement)
 
No payment under the STIP will be made to you.
Your Resignation
 
No payment under the STIP will be made to you.
Without Cause, Permanent Disability, Death or Retirement (as defined by the
Compensation Committee)
 
The incentive compensation that you would have earned, if any, had your
employment not terminated, based on the level of achievement of the financial
goal or goals at the end of 2015, and assuming that you had completed all of
your personal goals satisfactorily, will be multiplied by a fraction, the
numerator of which is the number of days in 2015 that you were an employee of
the Company, and the denominator of which is 365.  The resulting incentive
compensation, if any, will be paid to you at the end of the Program Cycle.

Part II:  The Long-Term Incentive Compensation Program
 
LTIP Target Amount.  Each participant in the LTIP is assigned an LTIP Target
Amount, which, just like the STIP Target Amount, is a percentage of the
participant's base salary.  Your LTIP Target Amount is set forth in Appendix
A.  Participants do not necessarily have the same LTIP Target Amounts, and your
LTIP Target Amount is not necessarily the same as your STIP Target Amount.
 
Awards.  Awards under the LTIP are for a three-year period, referred to as the
Program Cycle, that starts on January 1, 2015 and ends at 5:30 p.m. Central Time
on December 31, 2017.  The award will consist of one or both of the following:
 

 
·
Time-Based Shares. Time-Based Shares are shares of common stock that are subject
to restrictions on their sale or other transfer, and that are released from
those restrictions (that is, they vest) at the end of the Program Cycle so long
as the participant is an employee of the Company at the end of the Program
Cycle.

 

 
·
RSU's.  RSU stands for restricted stock unit.  An RSU is an unfunded and
unsecured, non-transferable promise by the Company to issue (subject to the
terms and conditions of the award agreement) one share of common stock.  RSU's
will be converted into shares of common stock (that is, they will vest) at the
end of the Program Cycle based on the extent to which, if at all, a goal based
on the Company's stock price — the TSR Goal — is met.  For RSU's to vest, you
must also be an employee of the Company at the end of the Program Cycle, except
as otherwise described below.

 
Some participants will be awarded only Time-Based Shares.  A participant's LTIP
Target Amount is converted into an award of Time-Based Shares or RSU's, or a
combination of both, by dividing the LTIP Target Amount by the simple average of
the closing prices of the common stock during December 2014.  Any RSU's that are
awarded to a participant are referred to as his or her Target RSU's.  All awards
under the LTIP are contingent on the participant signing the Company's form of
LTIP Award Agreement.
 
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The number of Time-Based Shares and RSU's, if any, that you have been awarded is
also set forth in Appendix A.
 
Vesting.  No un-vested Time-Based Shares and no un-vested Target RSU's may be
transferred by a participant during the Program Cycle.
 

 
·
Time-Based Shares.  Your Time-Based Shares will vest if you are still an
employee of the Company at the end of the Program Cycle.  If they vest, the
Time-Based Shares become no longer subject to the LTIP's transfer restrictions.

 

 
·
Target RSU's.  At the end of the Program Cycle, Target RSU's will be eligible
for vesting based on the level of achievement of the TSR Goal, which is
described below.  Vested RSU's are converted into shares of common stock that
are no longer subject to the LTIP's transfer restrictions.

 

 
·
Continuing Restrictions.  Vested Time-Based Shares and shares of common stock
issued for vested RSU's remain subject to all restrictions imposed on them by
federal and state securities laws, rules and regulations, and by the Company's
policies and rules relating to common stock.

 

 
·
Forfeitures.  Time-Based Shares that fail to vest are automatically forfeited,
returned to the Company, and retired.  Target RSU's that fail to vest are
automatically forfeited, canceled, and cease to be subject to vesting.  No
compensation is paid to a participant for any of his or her Time-Based Shares or
Target RSU's that are forfeited.

 
The TSR Goal.  The vesting level of Target RSU's is based on the total
shareholder return, or TSR, of the Company over the course of the Program Cycle
compared to the TSR of a list of publicly-traded companies, a Peer Group.  The
Compensation Committee believes that the companies in the Peer Group are
sufficiently similar to the Company in size and/or other characteristics as to
make a comparison with them appropriate.  In this way, the TSR Goal is a measure
of the Company's performance within the context of other companies that are
subject to the same industry and economic trends and factors as the Company.
 

 
·
TSR.  TSR is the percentage change in a company's stock price (plus dividends
paid) over a period of time.  For the LTIP, TSR is the change in the Company's
stock price over the course of the Program Cycle.  Although dividends are
included in the calculation of a company's TSR, the Company has not paid any
dividends in the past, and does not anticipate doing so in the future.  It is
likely that some of the companies in the Peer Group will pay dividends during
the Program Cycle.  A list of the companies in the Peer Group is set forth in
Appendix B-1 to this Program Description.

 

 
·
For purposes of computing the Company's TSR, the beginning stock price will be
the simple average of its closing stock prices during the month of December
2014, and the ending stock price will be the average in December 2017.

 

 
·
TSR Goal Achievement.  Achievement of the TSR Goal is based on the percentile
ranking of the Company's TSR against the TSR's of the Peer Group.  The following
table shows possible levels of the Company's TSR ranking, and the corresponding
percentage of Target RSU's that would vest at that level.  As can be seen in the
table, it is possible for more RSU's to vest than a participant's Target RSU's,
and at the other extreme, it is possible for none of a participant's Target
RSU's to vest.  The Company's TSR ranking that falls between the percentages in
the table will be determined by linear interpolation.

 
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The Company's TSR
Percentile Rank
Percentage of Target
RSU's that Vest
80% or higher
150%
50%
100%
25%
25%
Below 25%
0%

 
By way of illustration only, an example of how the Company's ranking might
appear at the end of the Program Cycle is attached as Appendix B-2 to this
Program Description.
 
Termination of Employment.  In the event that a participant's employment with
the Company terminates before the end of the Program Cycle, his or her
Time-Based Shares and RSU's, if any, will be treated as follows:
 
Reason for Termination
 
Effect on Time-Based Shares and RSU's
For Cause (as defined in the award agreement)
 
All Time-Based Shares and RSU's, if any, will be forfeited.
Resignation by the Participant
 
All Time-Based Shares and RSU's, if any, will be forfeited.
Without Cause, Permanent Disability or Death (as defined in the award agreement)
 
All Time-Based Shares and RSU's will vest.
Retirement (as defined by the Compensation Committee)
 
The number of Time-Based Shares and any Target RSU's that would have vested had
your employment not terminated, based on the Company's TSR ranking at the end of
the Program Cycle, will be multiplied by a fraction, the numerator of which is
the number of whole calendar months in the Program Cycle that you were an
employee of the Company, and the denominator of which is 36.  The resulting
number of Time-Based Shares and RSU's, if any, will vest at the end of the
Program Cycle.

Part III:  Terms Affecting Both Programs
 
Administration of the Programs.  The two programs are administered by the
Compensation Committee of the Board of Directors.  Among other things, the
Committee determines those employees who are eligible to participate in the
programs; the participants' STIP and LTIP Target Amounts; the allocations
between Time-Based Shares and RSU's; and the goals and other performance
measures.  At the end of the Program Cycle, the Committee determines whether and
to what extent the financial goals, and in some cases the personal goals and
other performance measures, have been met.
 
The Committee will correct any defects, supply any omissions, and reconcile any
inconsistencies in the programs or in any award made under the programs in the
manner and to the extent it believes necessary or advisable to implement the
programs.  The decisions by the Committee on matters that are not expressly
determined by award agreements will be made in the Committee's good faith
discretion.  In the event of a conflict between the terms of this Program
Description and a participant's award agreement, the terms of the award
agreement will govern.  In the event of a conflict between this Program
Description and the Stock Incentive Plan, the terms of the Stock Incentive Plan
will govern.
 
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Taxes & Tax Consequences.  STIP Payouts.
 

 
·
Any payout under the STIP will be made in the first quarter of 2016, but no
later than March 15, 2016.

 

 
·
Payouts under the STIP are treated as 2016 supplemental income for federal
income tax withholding purposes.  The Company is currently required to withhold
25% of the payout amount plus Social Security and Medicare taxes on the payout.

 

 
·
Payouts may also be subject to state income tax withholding, and to any
garnishment, levy or other wage withholding order affecting the participant.

 

 
·
Payouts are not eligible for deferral into a participant's Company 401(k)
account.

 
Taxes & Tax Consequences.  LTIP Vesting.
 

 
·
Generally, a participant will not recognize taxable income at the time
Time-Based Shares and RSU's are received, but will recognize taxable income when
they vest — that is, when the LTIP restrictions on Time-Based Shares expire, and
when Target RSU's are converted into shares of unrestricted common stock.  The
taxable income recognized by a participant is equal to the fair market value of
the vested shares on the vesting date, which is the last day of the Program
Cycle.  The Company is currently required to withhold from the participant 25%
of the taxable income recognized as well as Social Security and Medicare taxes.

 

 
·
The Compensation Committee permits participants to satisfy the Company's LTIP
withholding requirements (but not the STIP withholding requirements) by
transferring to the Company shares of common stock that have vested under the
LTIP (or any shares of common stock owned by the participant that he or she has
held for at least six months) and that have a market value on the last trading
day of the Program Cycle equal to the taxes that the Company is required to
withhold.

 

 
·
More information about the tax consequences of participating in the LTIP is
contained in the Plan Description of the Stock Incentive Plan.

 
The Company's Claw-Back Policy.  The Company's Claw-Back Policy applies to all
payments made under the STIP, and all RSU's, Time-Based Shares and shares of
common stock issued under the LTIP.  A copy of the Claw-Back Policy is attached
as Appendix C to this Program Description.  Please read it.  It affects any
incentive compensation (cash or stock) that was paid to you if the Company
subsequently, for whatever reason, restates the financial statements on which
all or a portion of that incentive compensation was based.
 
Change of Control.  A "Change of Control" of the Company is defined in the
Company's Stock Incentive Plan, and generally refers to an acquisition of the
Company or a large portion of the Company through acquisition of shares of
common stock, acquisition of assets of the Company, a merger or the like.  If
there is a Change of Control before the end of the Program Cycle, your STIP
Target Amount will become payable in full and all Target RSU's and Time-Based
Shares will vest.
 
Governing Law.  The provisions of the STIP and the LTIP are governed by, and
interpreted in accordance with, the laws of the State of Delaware, without
regard to any of its conflicts of law provisions.
 
Compliance with Section 409A of the Code.  The Company intends that the STIP and
the LTIP and each award agreement either (a) complies with Section 409A of the
Internal Revenue Code of 1986, as amended, and the guidance thereunder; or (b)
is excepted from the provisions of Section 409A.  As a result, the Company has
the right to amend the programs or any award agreement, or both, in order to
cause them to be in compliance with Section 409A or to qualify for being
excepted from the provisions of Section 409A, and to take any other actions
under the programs and any award agreement to achieve that compliance or
exception.
______________
 
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[Form of] Appendix A
 
Your Key Numbers for Both Programs

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The Short-Term Incentive Compensation Program
 
Financial Goals:
The 2015 Company EPS Goal:
Your 2015 Operating Unit EBIT Goal:

 
Your STIP Target Amount:
Your 2015
Base Salary
Your STIP Target
Amount
Percent — Dollars
Your STIP Target
Amount
EPS Goal
Allocation
Percent — Dollars
Your STIP Target
Amount
EBIT Goal
Allocation
Percent — Dollars
Your STIP Target
Amount
Personal Goals
Allocation
Percent — Dollars
         

 
Your personal goals will be set forth on the form developed for that purpose by
the Human Resources Department.
 
A change in your base salary during 2015 will not affect your STIP Target
Amount.

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The Long-Term Incentive Compensation Program
 
TSR Ranking Goal:
 
Your LTIP Target Amount
 
Your 2015 Base Salary:
Your LTIP Target Amount — Percent:
Your LTIP Target Amount — Dollars:
The average common stock closing price per share in December 2014:

Time-Based Shares
 
Restricted Stock Units
Percent
Dollars
Shares
 
Percent
Dollars
RSU's
             

 
A change in your base salary during 2015 will not affect your LTIP Target
Amount.
______________

 
 

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[Form of] Appendix B-1
The Peer Group*
Sorted by Revenues

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Name
2014
Revenues
Average Closing
Price in
December 2014
Market
Capitalization at
December 31, 2014
Net Income
Sterling Construction Company, Inc.
       
MasTec, Inc.
       
Tutor Perini Corporation
       
Granite Construction Incorporated
       
Willbros Group Inc.
       
Primoris Services Corporation
       
Dycom Industries Inc.
       
Layne Christensen Company
       
Great Lakes Dredge & Dock Corporation
       
U.S. Concrete, Inc.
       
Integrated Electrical Services, Inc.
       
Orion Marine Group, Inc.
       
Argan, Inc.
       

 
*
Any company that ceases to be publicly traded during the Program Cycle will be
deleted from the Peer Group.

 
 

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[Form of] Appendix B-2
A Hypothetical TSR Ranking List

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This is an example of how the TSR ranking list might look at the end of the
Program Cycle.  The actual numbers will be different.
 
Company Name By Descending Stock Price
Average Stock Price
December 2014
Average Stock Price
December 2017
Change in
Stock Price
TSR
Percent
Rank
Sterling Construction Company, Inc.
         
MasTec, Inc.
         
Tutor Perini Corporation
         
Granite Construction Incorporated
         
Willbros Group Inc.
         
Primoris Services Corporation
         
Dycom Industries Inc.
         
Layne Christensen Company
         
Great Lakes Dredge & Dock Corporation
         
U.S. Concrete, Inc.
         
Integrated Electrical Services, Inc.
         
Orion Marine Group, Inc.
         
Argan, Inc.
         

 
 

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Appendix C
 
Sterling Construction Company, Inc.
 
Claw-Back Policy
 
1.
It is the policy of the Company that the amount of any bonus or other incentive
compensation (together, "Incentive Compensation") that has already been paid to
an employee of the Company (either in cash or in common stock of the Company, or
both) that was based on financial statements that are subsequently restated
shall, if necessary, be adjusted either by repayment by the employee to the
Company or by making an additional payment to the employee so that the employee
will have received no more and no less than the amount that he or she would have
received had the financial statements been restated before the amount of the
Incentive Compensation was determined.

 
2.
If as a result of the restatement, the Incentive Compensation is shown to have
been —

 

 
(a)
Overpaid, the recipient shall return the amount of the overpayment within sixty
days of a written demand therefor by the Company.

 

 
(b)
Underpaid, the Corporation shall pay the amount of the underpayment within
thirty days of the completion of the restatement.

 
3.
In the event that any repayment by an employee under this policy involves the
re-conveyance to the Company of shares of common stock that have been sold by
the employee, the proceeds realized from the sale shall be repaid to the
Corporation.  If the shares shall have been otherwise transferred, or shall have
been pledged or encumbered, the employee shall convey to the Company either —

 

 
(a)
The market value of such shares at the date of such transfer, pledge or
encumbrance or at the date the demand for repayment is made, whichever is
higher; or

 

 
(b)
Shares of common stock of the Company having such market value.

 
4.
Any payment and/or conveyance of shares to the Company under this policy shall
be made whether or not the employee required to make the payment or conveyance
was culpable with respect to the error, event, act or omission that caused the
restatement to be made, but nothing in this policy shall be construed to prevent
the Company from pursuing other remedies against the employee if the Company
determines that he or she was in fact culpable in any respect.

 
________________
 
Adopted by the Board of Directors on January 18, 2011