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EXHIBIT 10.11
 
Sterling Construction Company, Inc.
 
Elizabeth D. Brumley Employment Agreement
 

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This Employment Agreement (this "Agreement") is made to be effective as of
February 1, 2011 (the "Effective Date") by and between Elizabeth D. Brumley
(hereinafter referred to as "Ms. Brumley") and Sterling Construction Company,
Inc. (hereinafter referred to as the "Company.")
 
Background
 
Ms. Brumley has recently joined the Company and accordingly, Ms. Brumley and the
Company wish to enter into this Agreement on the terms and conditions set forth
herein.
 
Therefore, for and in consideration of the foregoing recitals, the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as
follows:
 
1.  
Term.  Ms. Brumley's employment under this Agreement shall commence on the
Effective Date and shall expire on the earliest to occur of —

 
1.1.  
A termination of her employment pursuant to Section 8 (Termination by the
Company);

 
1.2.  
A termination of her employment pursuant to Section 9 (Termination by
Ms. Brumley) below; or

 
1.3.  
5:00 p.m. Central Time on December 31, 2013.

 
2.  
Title, Reporting Relationship, Responsibilities & Place of
Employment. Ms. Brumley's title, position, reporting relationship, duties and
responsibilities, and place of employment so long as she is an employee of the
Company under this Agreement are all set forth on Exhibit A.  Ms. Brumley shall
devote her full working time to diligently carrying out those duties and
responsibilities to the best of her abilities.

 
3.  
Compensation & Benefits.  So long as she is an employee of the Company under
this Agreement —

 
3.1.  
Salary.  Ms. Brumley shall be paid the salary set forth in Exhibit A.

 
3.2.  
Incentive Compensation.  Ms. Brumley shall be eligible to earn the annual
incentive compensation in the amounts and pursuant to the terms and conditions
set forth in Exhibit B.

 
3.3.  
Benefits.  Ms. Brumley shall be entitled to the same health, life insurance,
disability and other like benefits as are made available to the Company's senior
managers generally, and on the same terms and conditions, and she shall be
entitled to the paid vacation time set forth on Exhibit A.

 
4.  
Business Expense Reimbursement.  Ms. Brumley shall be reimbursed in accordance
with the Company's business expense reimbursement policy from time to time in
effect for all reasonable business expenses incurred by her in the performance
of her duties and responsibilities.

 
5.  
Indemnification.

 
5.1.  
Ms. Brumley shall be indemnified by the Company with respect to claims made
against her as a director, officer and/or employee of the Company and of any
affiliate of the Company (as defined in Section 16.3.3, below) to the fullest
extent permitted by the Company's charter and by-laws, and by the laws of the
State of Delaware.

 
5.2.  
So long as the directors of the Company are themselves covered by a directors
and officers liability insurance policy, the Company will ensure that
Ms. Brumley in her capacity as an officer of the Company is similarly covered at
no cost to her.

 
6.  
Confidential Information.

 
6.1.  
During her employment by the Company and thereafter, Ms. Brumley shall not
disclose to any person or entity Confidential Information (as defined below)
except in the proper performance of her duties and responsibilities under this
Agreement, or except as may be expressly authorized by the Board of Directors of
the Company.

 
6.2.  
For purposes of this Agreement, "Confidential Information" is defined as any
information of the Company or its affiliates that derives independent economic
value from not being generally known or readily ascertainable by proper means,
and includes, but is not limited to trade secrets, customer names and lists,
vendor names and lists, employee names, titles and lists, business plans,
marketing plans, non-public financial data, product specifications as well as
designs, inventions, discoveries, processes, drawings, documents, records,
software, and also includes any information of a third party that is held by the
Company and/or its affiliates under an obligation of confidentiality.

 
 
 

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7.  
Non-Compete Obligations.  For purposes of this Section 7 only, the term "the
Company" shall include the Company's affiliates.  Ms. Brumley's obligations with
respect to competing with the Company and soliciting the Company's employees and
customers (together the "Non-Compete Obligations") shall be as follows:

 
7.1.  
Ms. Brumley shall not render services or advice, whether for compensation or
without compensation, and whether as an employee, officer, director, principal,
consultant or otherwise, to any person or organization with respect to any
product or service that is competitive with a product or service of the Company
with which during her employment by the Company Ms. Brumley was actively
engaged, or of which she had detailed knowledge; or with any planned business in
which she had an active part in the planning or of which she had detailed
knowledge.

 
7.2.  
Ms. Brumley shall not either directly or indirectly as agent or otherwise in any
manner solicit, influence or encourage any customer of the Company to take away
or to divert or direct its business to himself or to any person or entity by or
with which she is employed, associated, affiliated or otherwise related (other
than the Company.)

 
7.3.  
Ms. Brumley shall not recruit or otherwise solicit or induce any employee of the
Company to terminate her or her employment, or otherwise cease her or her
relationship with the Company.

 
7.4.  
The Non-Compete Obligations shall continue so long as Ms. Brumley is an employee
of the Company.  After Ms. Brumley's employment terminates for any reason, the
Non-Compete Obligations —

 
7.4.1.  
Shall continue for a period of twelve months or for the period, if any, with
respect to which the Company is obligated to pay Ms. Brumley her salary (whether
or not payment is in a lump sum) whichever period is longer; and

 
7.4.2.  
Shall apply in Texas and in any other state in which the Company received more
than 10% of its annual revenues in the calendar year immediately preceding the
calendar year in which Ms. Brumley's employment terminated.

 
8.  
Termination by the Company.  Prior to the expiration of this Agreement, the
Company may terminate Ms. Brumley's employment only pursuant to the following
terms and on the following conditions:

 
8.1.  
Termination Without Cause.  The Company may terminate Ms. Brumley's employment
Without Cause (as defined below) by giving her ninety days' prior written notice
thereof, in which event —

 
8.1.1.  
The Company shall to pay her in a lump sum her salary at the rate then in effect
for the period from the effective date of termination through December 31, 2013
or for a period of twelve full calendar months, whichever amount is greater (the
"Severance Amount;") and

 
8.1.2.  
Subject to the terms and conditions set forth in Exhibit B, the Company shall
pay Ms. Brumley the Annual Incentive Compensation (as set forth in Section 4 of
Exhibit B) that she would have earned had she remained an employee of the
Company through the end of the calendar year in which her employment terminated
and on the assumption that she satisfactorily completed all of her personal
goals for such year.  In addition, notwithstanding any of the provisions of
Exhibit B to the contrary, any of such Annual Incentive Compensation that would
otherwise be payable in shares of common stock of the Company shall be paid in
cash.

 
8.1.3.  
For the period with respect to which the Company is required to pay the
Severance Amount, the Company shall continue to cover Ms. Brumley under the
medical and dental plans sponsored by the Company for its employees with the
same coverage she had immediately prior to the termination of her employment,
provided that Ms. Brumley remits 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 shall reimburse
Ms. Brumley for any medical premium expenses incurred by her hereunder within
thirty days after the date of her payment thereof.  To the extent that any
medical or dental expense or in-kind benefits provided for under this
Section 8.1.3 are taxable to Ms. Brumley in a given year, any such expense shall
be reimbursed to Ms. Brumley by the Company within thirty days of such expense
being incurred by her, and any expenses reimbursed or in-kind benefits provided
hereunder shall not affect the expenses eligible for reimbursement or in-kind
benefits provided in any other year.

 
8.1.4.  
The Company shall permit Ms. Brumley to purchase any insurance maintained by the
Company for its own benefit on her life at its then cash surrender value.

 
Except for the severance benefits relating to a change of control of the Company
that are set forth in a separate agreement with Ms. Brumley of even date
herewith, the foregoing severance benefits are the only benefits and payments to
which Ms. Brumley is entitled that arise out of the termination of her
employment Without Cause.
 
8.1.5.  
Definition of Without Cause.  Ms. Brumley's employment shall be deemed to have
been terminated by the Company Without Cause unless termination is for one of
the following reasons:

 
(a)  
Termination by reason of her becoming Permanently Disabled pursuant to
Section 8.2, below;

 
(b)  
Termination by reason of her death pursuant to Section 8.3, below;

 
(c)  
Termination for Cause pursuant to Section 8.4, below; or

 
(d)  
Termination by Ms. Brumley pursuant to Section 9.1 (Voluntary Resignation),
below.

 
 
 

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8.2.  
Termination for Permanent Disability.  The Company may terminate Ms. Brumley's
employment if she shall become Permanently Disabled (as defined below) in which
event —

 
8.2.1.  
The Company shall pay her her salary then in effect through the date of
termination to the extent not already paid; and

 
8.2.2.  
Subject to the terms and conditions set forth in Exhibit B, the Company shall
pay her a pro-rated amount of the Annual Incentive Compensation (as set forth in
Section 4 of Exhibit B) that she would have earned had she remained an employee
of the Company through the end of the calendar year in which her employment
terminated and on the assumption that she satisfactorily completed all of her
personal goals for such year, such pro-ration to be based on the number of days
during such year that she was an employee of the Company.  In addition,
notwithstanding any of the provisions of Exhibit B to the contrary, any of such
Annual Incentive Compensation that would otherwise be payable in shares of
common stock of the Company shall be paid in cash.

 
8.2.3.  
Ms. Brumley shall be considered to have become Permanently Disabled if during
any consecutive twelve-month period, because of ill health, or physical or
mental disability, she shall have been continuously unable to perform her duties
under this Agreement, in whole or in substantial part, for one hundred eighty
consecutive days.  The phrase "substantial part" means the inability of
Ms. Brumley to perform and devote at least eight hours per work day to the
performance of her duties and responsibilities.

 
8.3.  
Upon the Death of Ms. Brumley.  In the event of Ms. Brumley's death during the
term of this Agreement, her employment shall thereupon terminate and —

 
8.3.1.  
The Company shall pay her estate her salary then in effect through the date of
her death to the extent not already paid; and

 
8.3.2.  
Subject to the terms and conditions set forth in Exhibit B, the Company shall
pay her estate a pro-rated amount of the Annual Incentive Compensation (as set
forth in Section 4 of Exhibit B) that she would have earned had she remained an
employee of the Company through the end of the calendar year in which she died
and on the assumption that she satisfactorily completed all of her personal
goals for such year, such pro-ration to be based on the number of days during
such year that she was an employee of the Company.  In addition, notwithstanding
any of the provisions of Exhibit B to the contrary, any of such Annual Incentive
Compensation that would otherwise be payable in common stock of the Company
shall be paid in cash.

 
8.4.  
Termination for Cause.  The Company may terminate Ms. Brumley's employment for
Cause (as defined below) by giving her written notice of termination.  In the
event of the termination of Ms. Brumley's employment for Cause, the Company
shall pay her any of her accrued but unpaid salary through the date of
termination and any other amounts required to be paid by applicable law through
that date.  For the avoidance of doubt, no incentive compensation of any kind
shall be payable to her that had not already been paid to her on the date her
employment is terminated for Cause.

 
8.4.1.  
Definition of Cause.  For purposes of this Section 8.4.1, "Cause" for
termination of Ms. Brumley's employment shall mean any one or more of the
following:

 
(a)  
Ms. Brumley’s gross neglect of her duties, gross negligence in the performance
of her duties, or her refusal to perform her duties.

 
(b)  
Ms. Brumley’s unsatisfactory performance of her duties that is not cured within
thirty working days after written notice is given to her specifically
identifying each reason why Ms. Brumley’s performance is unsatisfactory and what
she can do to cure such unsatisfactory performance.

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

 
(d)  
Ms. Brumley’s conviction of any criminal activity (other than a traffic
violation or a Class C misdemeanor) not described in the immediately preceding
Subsection (c), or participation in any activity involving moral turpitude that
is or could reasonably be expected to be injurious to the business or reputation
of the Company.

 
(e)  
Ms. Brumley’s immoderate use of alcohol and/or the use of non-prescribed
narcotics that adversely and materially affects the performance of her duties.

 
(f)  
Ms. Brumley's material breach of Section 11, below.

 
 
 

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9.  
Termination by Ms. Brumley.

 
9.1.  
Voluntary Resignation.  Ms. Brumley may resign her employment with the Company
on ninety days' prior written notice to the Company (the "90-Day Notice
Period.")  Upon receipt of a notice of resignation, the Company (a) may
accelerate the effective date of Ms. Brumley's resignation to any date within
the 90-Day Notice Period; and/or (b) may deem her notice of resignation a
resignation by her of (x) any one or more of the offices then held by her in the
Company; and (y) any one or more of the directorships and offices then held by
her in the Company's affiliates, in each case to be effective on any date or
dates within the 90-Day Notice Period.

 
9.1.1.  
In the event Ms. Brumley resigns her employment, she will be paid her accrued
but unpaid salary through the effective date of her resignation.

 
9.1.2.  
In the event Ms. Brumley's resignation becomes effective before the end of a
calendar year, no incentive compensation of any kind shall be paid to her with
respect to such year or any subsequent year.

 
9.1.3.  
In the event that Ms. Brumley's resignation becomes effective at or after the
end of the calendar year in which she gave notice of her resignation, she shall
be entitled to any earned Annual Incentive Compensation for such calendar year
without regard to her having given a notice of resignation.

 
9.1.4.  
No incentive compensation of any kind shall be payable to Ms. Brumley with
respect to the calendar year or years following the calendar year in which she
gives notice of her resignation.

 
9.2.  
Constructive Termination.  Ms. Brumley may terminate her employment if (a) the
Company commits a Breach (as defined below) of this Agreement; and (b)
Ms. Brumley gives the Company detailed written notice of the Breach within
thirty days after the occurrence thereof; and (c) the Company fails to cure the
Breach within thirty days after the receipt of such notice or, if the nature of
the Breach is such that it cannot practicably be cured in thirty days, if the
Company shall fail to diligently and in good faith commence a cure of the Breach
within such thirty-day period.

 
9.2.1.  
In the event of the termination by Ms. Brumley of her employment by reason of a
Breach by the Company, the termination shall be deemed for purposes of this
Agreement to be a termination by the Company Without Cause, and the Company
shall be required to perform all of its obligations described in Section 8.1.1
through Section 8.1.4, above.

 
9.2.2.  
For purposes of this Section 9.2, "Breach" shall mean a material breach by the
Company of any one or more of the material terms or conditions of this
Agreement.  For the avoidance of doubt, it shall not be a Breach of this
Agreement if all or substantially all of the Company's assets or outstanding
shares of capital stock are acquired by a third party and after such
acquisition, Ms. Brumley retains substantially the same duties, responsibilities
and compensation that she had prior to such event, notwithstanding that the
Company's common stock is no longer publicly traded or that the Company becomes
a subsidiary or division of another entity.

 
10.  
Change of Control.  In the event of a change of control of the Company,
Ms. Brumley will be entitled, under certain circumstances, to additional
severance compensation according to the terms and conditions of that certain
Change of Control Agreement of even date herewith between the Company and
Ms. Brumley.

 
11.  
Company Policies.  In addition to the terms and conditions contained in this
Agreement, Ms. Brumley shall abide by all of the Company's policies from time to
time in effect, including the policies on business conduct and ethics, and its
policies on hedging, and on retaining shares of the common stock of the Company.

 
12.  
Notices.  All notices required or permitted under this 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 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, Massachusetts 01742
 
If to Ms. Brumley, at her most recent home address as shown in the Company's
employment records.
 
And a copy to:
Sterling Construction Company, Inc.
20810 Fernbush Lane
Houston, Texas 77073
Attention:  Secretary

 
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
 
 
 

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13.  
Severability.  If any provision or part of a provision of this Agreement is
finally declared to be invalid by any tribunal of competent jurisdiction, such
part shall be deemed automatically adjusted, if possible, to conform to the
requirements for validity, but, if such adjustment is not possible, it shall be
deemed deleted from this Agreement as though it had never been included
herein.  In either case, the balance of any such provision and of this Agreement
shall remain in full force and effect.  Notwithstanding the foregoing, however,
no provision shall be deleted if it is clearly apparent under the circumstances
that either or both of the parties would not have entered into this Agreement
without such provision.

 
14.  
Survival.  Notwithstanding the expiration or earlier termination of this
Agreement or of Ms. Brumley's employment for any reason, the following shall
survive such expiration or termination:

 
14.1.  
Section 6 (Confidential Information;)

 
14.2.  
Section 7 (Non-Compete Obligations;)

 
14.3.  
Any right or obligation that accrued prior to such expiration or termination;
and

 
14.4.  
Any other obligation of a party that by its terms is to be performed or is to
have continued effect after expiration or termination.

 
15.  
Proration.  Any amount payable to Ms. Brumley hereunder for a period shorter
than the period for which it is provided herein shall be pro-rated on a daily
basis using a 365-day year.

 
16.  
Miscellaneous.

 
16.1.  
Withholdings.  All compensation of any kind payable under this Agreement shall
be subject to all legally-required withholdings and deductions as determined in
good faith by the Company.

 
16.2.  
Entire Agreement.  This Agreement together with the exhibits referred to herein
and the Change of Control Agreement contains the entire understanding of the
parties on the subject matter hereof; shall not be amended, except by written
agreement of the parties signed by each of them; shall be binding upon, and
inure to the benefit of, the parties and their personal representatives,
successors and permitted assigns; and shall not be assignable by either party
without the prior written consent of the other party, except that the Company
may assign this Agreement to any entity acquiring substantially all of the
stock, business or assets of the Company, provided that the acquiror assumes in
writing all of the Company's obligations hereunder.

 
16.3.  
Construction.

 
16.3.1.  
Each party has read and understood this Agreement and each party has had an
opportunity to review this Agreement with counsel.  Accordingly, each provision
of this Agreement shall be interpreted and enforced without the aid of any
canon, custom or rule of law requiring or suggesting construction against the
party drafting or causing the drafting of such provision.

 
16.3.2.  
The words "herein," "hereof," "hereunder," "hereby," "herewith" and words of
similar import when used in this Agreement shall be construed to refer to this
Agreement as a whole.

 
16.3.3.  
An "affiliate" of the Company is any entity controlling, controlled by, or under
common control with, the Company.

 
16.3.4.  
The words "include" "includes" "including" and words of similar import shall
mean considered as part of a larger group and not limited to any one or more
enumerated items.

 
16.4.  
Prior Dealings etc.  No representation, affirmation of fact, course of prior
dealings, promise or condition in connection herewith or usage of the trade that
is not expressly incorporated herein shall be binding on the parties.

 
16.5.  
Waiver.  The failure to insist upon strict compliance with any term, covenant or
condition contained herein shall not be deemed a waiver of such term, nor shall
any waiver or relinquishment of any right at any one or more times be deemed a
waiver or relinquishment of such right at any other time or times.  No term or
condition hereof shall be waived unless in writing by the party to be bound by
such waiver;

 
16.6.  
Captions.  The captions of the paragraphs herein are for convenience only and
shall not be used to construe or interpret this Agreement.

 
16.7.  
Counterparts & Execution.  This Agreement may be executed in multiple
counterparts, each of which may be considered an original, but all of which
together shall constitute but one and the same instrument.  This Agreement when
signed by a party may be delivered by facsimile transmission with the same force
and effect as if the same were an executed and delivered original,
manually-signed counterpart.

 
16.8.  
No Guarantee of Tax Consequences.  Ms. Brumley shall be solely responsible for
and liable for any taxes (including but not limited to any interest or
penalties) as a result of any payments made to her under this Agreement, and the
Company makes no commitment or guarantee that any particular federal, state or
local tax treatment will apply or be available hereunder.

 
 
 

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17.  
Governing Law.  This Agreement shall be governed by, and construed in accordance
with, the domestic laws of Texas without giving effect to any choice of law or
conflict of law provision or rule (whether of Texas or of any other
jurisdiction) that would cause the application hereto of the laws of any
jurisdiction other than Texas.

 
18.  
Compliance with Section 409A of the Code.

 
18.1.  
To the extent that any payment to Ms. Brumley under this Agreement is deemed to
be deferred compensation subject to the requirements of Section 409A of the
Internal Revenue Code of 1986 (the "Code") this Agreement shall 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 Agreement
to the contrary, any payment under this 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 Agreement
would cause a conflict with the requirements of Section 409A, or would cause the
administration of this 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 Agreement in such a
manner as to comply with such requirements without Ms. Brumley's consent.

 
18.2.  
If Ms. Brumley is 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) shall be made under this Agreement
on account of Ms. Brumley's separation from service (as defined in Section 409A)
with the Company until the later of —

 
18.2.1.  
The date prescribed for payment in this Agreement; and

 
18.2.2.  
The first day of the seventh calendar month that begins after the date of
Ms. Brumley's separation from service (or, if earlier, the date of her death.)

 
18.3.  
All payments that were delayed by reason of the application of the date
prescribed by Section 18.2.2, above (the "Section 18.2.2 Date") shall be
aggregated and paid to Ms. Brumley on the Section 18.2.2 Date in a lump sum
together with interest computed from the date each such payment would have first
been paid to her absent the application of the Section 18.2.2 Date until paid
using the Non-LIBOR rate of interest the Company would have paid had it borrowed
the amount of the payment under its revolving line of credit.  After the Section
18.2.2 Date, the Company shall pay any other amounts provided for herein to the
extent and in the manner provided in this Agreement.

 
18.4.  
To the extent that any payment to Ms. Brumley under this Agreement is payable on
account of the termination of her employment with the result that the income tax
under Section 409A of the Code would apply or be imposed on such payment, but
where such tax would not apply or be imposed if the meaning of the term
"termination" included and met the requirements of a "separation from service"
within the meaning of Treas. Reg. §1.409A 1(h), then the term "termination"
herein shall mean, but only with respect to the income so affected, an event,
circumstance or condition that constitutes both a "termination" as defined in
the preceding sentence and a "separation from service" within the meaning of
Treas. Reg. §1.409A-1(h).

 
In Witness Whereof, the parties hereto have executed this Agreement as of the
Effective Date.
 
Sterling Construction Company, Inc.
By: ____________________________________
Richard O. Schaum
Chairman of the Compensation Committee
_____________________________________
Elizabeth D. Brumley

 
 

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Exhibit A
 
31. Title:
 
32. Ms. Brumley shall be elected to the position of Chief Accounting Officer of
the Company.
 
33. Reporting Relationship:
 
34. In carrying out her duties and responsibilities, Ms. Brumley shall report to
the Chief Financial Officer of the Company.
 
35. Duties & Responsibilities:
 
36. Ms. Brumley shall carry out the customary duties and responsibilities of the
chief accounting officer of a publicly-traded corporation and such other
appropriate duties as Chief Financial Officer shall assign to her.
 
37. Place of Employment:
 
38. Ms. Brumley's place of employment shall be in Houston, Texas except for
required travel on the Company's business.
 
39. Salary:
 
40. Ms. Brumley's annual salary shall be $315,000, which shall be paid to her
commencing as of the date hereof in installments at the same time and in the
same manner as other senior executives of the Company are paid their salaries.
 
41. Vacation:
 
42. Ms. Brumley shall be entitled to five weeks of paid vacation per year.

 
 

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Exhibit B
 
Incentive Compensation
 
1.  
Annual Incentive Compensation.  Each calendar year during which this Agreement
is in effect, Ms. Brumley shall be eligible to earn incentive compensation based
on the Company's Defined Earnings (as defined below) and the achievement of
personal goals for the year.

 
2.  
Executive Incentive Compensation Pool.

 
(a)  
For each year that this Agreement is in effect, there is hereby established an
Executive Incentive Compensation Pool (the "EICP").  The EICP is equal to four
percent of the Company's income before income taxes and earnings attributable to
noncontrolling interests as set forth in the Company's audited consolidated
statements of operations for a given year after adding back thereto any accrual
of incentive compensation for executives who share in the EICP ("Defined
Earnings.")

 
(b)  
On the date hereof, six executives share 94% of the EICP.  In the event that one
or more executives are added to the number sharing the EICP and the sum of the
percentages of the added executives exceeds the unallocated six percent of the
EICP; or in the event that one or more executives are removed from sharing in
the EICP, an equitable adjustment shall be made in the size of the EICP so that
no executive then sharing in the EICP is disadvantaged or benefited by such
change in the number sharing in the EICP.

 
3.  
Discretionary Executive Incentive Compensation Pool.  For each year that this
Agreement is in effect, there is hereby established a Discretionary Executive
Incentive Compensation Pool (the "DEICP").  The DEICP is equal to one percent of
Defined Earnings.

 
4.  
Annual Incentive Compensation Amount.  During the term of this Agreement,
although Ms. Brumley is not one of the executives who participate in the EICP,
she shall be eligible to earn the same dollar amount of Annual Incentive
Compensation as the executive vice presidents of the Company who do share in the
EICP are eligible to earn and on the same terms, as set forth below.

 
5.  
Payment of Annual Incentive Compensation.  For a given calendar year during
which this Agreement is in effect —

 
(a)  
No Annual Incentive Compensation will be paid if Defined Earnings for such year
is zero or less.

 
(b)  
No Annual Incentive Compensation will be paid if the Company's three-year
average return on equity (AROE) at the end of such year is less than five
percent.

 
(i)  
AROE for a given year is the Company's net income as shown on the Company's
audited financial statements for such year, divided by the average stockholders'
equity for the year.

 
(ii)  
The average stockholders' equity for a given year is the sum of the opening
stockholders' equity and the closing stockholders' equity for such year divided
by two.

 
(iii)  
The three-year AROE at the end of a given year is the sum of the AROE for such
year and the AROE for each of the immediately preceding two completed fiscal
years divided by three.

 
(c)  
Thirty percent of any Annual Incentive Compensation payable hereunder will be
paid to Ms. Brumley in cash.

 
(d)  
Up to twenty percent of any Annual Incentive Compensation payable hereunder will
be paid to Ms. Brumley in cash based on the extent to which she achieves her
personal goals that were established for such year.  Ms. Brumley's personal
goals shall be established in consultation with, shall be subject to final
approval by, and the extent of their achievement each year shall be determined
by, Chief Financial Officer.  In addition, Ms. Brumley's personal goals and the
determination of the extent to which they have been achieved in a given year
shall be subject to review and approval by the Compensation Committee of the
Board of Directors of the Company (the "Committee.")

 
(e)  
Fifty percent of any Annual Incentive Compensation payable hereunder will be
paid to Ms. Brumley in the form of shares of common stock of the Company subject
to restrictions (the "Restricted Shares.")  The number of Restricted Shares to
be issued will be determined by using the average of the daily closing prices of
the Company's common stock in the month of December of the year for which the
Annual Compensation is being paid.  All of the Restricted Shares shall be
subject to the terms and conditions of the form of Restricted Stock Agreement
attached to this Exhibit B as Appendix I.  It shall be a condition of each
issuance of Restricted Shares that Ms. Brumley execute a copy of that agreement
and the form of stock assignment attached to it.

 
(f)  
Payment of any Annual Incentive Compensation shall be made after January 1 and
before March 15 of the calendar year immediately following the year for which
the Annual Incentive Compensation is to be paid.

 
6.  
Allocation of the DEICP.  The DEICP, if any, for a given year shall be allocated
among the executive officers of the Company based on senior management's
recommendations, but subject to the Committee's approval.

 
 
 

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7.  
Financial Restatements.  Ms. Brumley expressly understands and agrees that if
the financial statements of the Company or of any affiliate of the Company are
restated, the amount of Annual Incentive Compensation that was paid to her that
was based on such financial statements shall be recalculated.

 
(a)  
Overpayments.  If as a result of the restatement, all or a portion of any
payment of Annual Incentive Compensation (whether in cash or Restricted Shares)
already made to her would not have been made had the financial statements been
restated prior to the determination as to whether such payment had been earned
by Ms. Brumley, then —

 
(i)  
As to Annual Incentive Compensation that was paid in cash, all or such portion
thereof, as the case may be, shall be reimbursed to the Company within sixty
days of a written demand therefor by the Company.

 
(ii)  
As to Annual Incentive Compensation that was paid in Restricted Shares, all or a
portion thereof, as the case may be, shall be re-conveyed to the Company upon
written demand therefor by the Company.

 
(A)  
In the event that any of the Restricted Shares required to be re-conveyed shall
then have been sold, Ms. Brumley shall pay to the Company the amount of the
proceeds realized from the sale.

 
(B)  
In the event that any of the Restricted Shares required to be re-conveyed shall
then have been otherwise transferred, or shall have been pledged or encumbered,
Ms. Brumley shall either (1) pay the Company the market value of such Restricted
Shares at the date of such transfer, pledge or encumbrance or the date of the
demand, whichever is higher; or (2) transfer to the Company shares of common
stock of the Company having such market value.

 
(iii)  
The reimbursement provided for in this Exhibit B shall be made whether or not
Ms. Brumley was culpable with respect to the error, event, act or omission that
caused the restatement to be made, but nothing in this Agreement shall be
construed to prevent the Company from pursuing other remedies against
Ms. Brumley if the Company determines that she was in fact culpable in any
respect.

 
(b)  
Underpayments.  If as a result of the restatement a greater amount of Annual
Incentive Compensation would have been paid to Ms. Brumley had the financial
statements been restated prior to the determination of her Annual Incentive
Compensation for a given year, then the Company shall promptly pay to her the
amount of such underpayment in the same form as such amount would have
originally been paid to her.

 
 

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Appendix I to Exhibit B
 
[Form of] Restricted Stock Agreement
 
This Restricted Stock Agreement is made effective as of January 1, ____ (the
"Effective Date") and is entered into between Elizabeth D. Brumley
("Ms. Brumley") and Sterling Construction Company, Inc. (the "Company") pursuant
to Ms. Brumley's employment agreement with the Company dated as of February 1,
2011 (the "Employment Agreement") and the Company’s 2001 Stock Incentive Plan
(the "Plan.")  The Plan is hereby incorporated into this Restricted Stock
Agreement by reference except that if there is a conflict between the terms of
the Plan and the terms of this Agreement, the terms of this Agreement shall take
precedence.  By signing this Restricted Stock Agreement, Ms. Brumley
acknowledges that she has received a copy of the Plan and a summary description
of the Plan.
 
In consideration of the foregoing recitals and definitions and the issuance to
Ms. Brumley of __________ shares of common stock of the Company (the "Restricted
Shares") Ms. Brumley agrees with the Company as follows:
 
1.  
The Restrictions.

 
(a)  
From the Effective Date until the occurrence of one of the events set forth in
Subsection (b), below, Ms. Brumley may not sell, assign, transfer, pledge or
otherwise dispose of or encumber any of the Restricted Shares or any of her
rights or interests in the Restricted Shares except by her will or according to
the laws of descent and distribution (the "Restrictions.")

 
(b)  
Expiration of the Restrictions.  Unless the Restricted Shares have earlier been
forfeited as provided herein, the Restrictions will expire on the earlier to
occur of the following events:

 
(i)  
At 5:00 p.m. Central Time on the day immediately preceding the third anniversary
of the Effective Date.

 
(ii)  
The termination of Ms. Brumley's employment Without Cause as that term is
defined in the Employment Agreement.

 
2.  
Forfeiture of the Restricted Shares.  The Restricted Shares will be deemed
forfeited by Ms. Brumley without any act by the Company or by Ms. Brumley, and
without the payment of any compensation to Ms. Brumley if any of the following
events occurs while the Restricted Shares are still subject to the Restrictions:

 
(a)  
Ms. Brumley voluntarily resigns her employment; or

 
(b)  
Ms. Brumley's employment is terminated for Cause as that term is defined in the
Employment Agreement.

 
3.  
Rights as a Stockholder.  Subject to the Restrictions and the other limitations
and conditions set forth in this Restricted Stock Agreement, as owner of the
Restricted Shares, Ms. Brumley will have all of the rights of a stockholder of
the Company, including the right to vote the Restricted Shares and to receive
any dividends paid on the Restricted Shares.

 
4.  
Other Terms and Conditions.

 
(a)  
Stock Dividends etc.  Any additional shares of common stock of the Company that
are issued on account of the Restricted Shares as a result of stock dividends,
stock splits or recapitalizations (whether by way of mergers, consolidations,
combinations or exchanges of shares or the like) will be subject to the terms
and conditions of this Restricted Stock Agreement and are deemed included in the
definition of the term "Restricted Shares."

 
(b)  
Stock Certificate.  A certificate representing the Restricted Shares will be
registered in Ms. Brumley's name.  If the Restrictions expire, the Company will
deliver the certificate for the Restricted Shares to Ms. Brumley.  If the
Restricted Shares are forfeited before the Restrictions expire, the certificate
will be canceled.

 
(c)  
Securities and Other Laws.  The Company may require as a pre-condition to the
delivery of the Restricted Shares to Ms. Brumley that the Restricted Shares
shall have been duly listed, upon official notice of issuance, upon any national
securities exchange or automated quotation system on which the Company's common
stock may then be listed or quoted; and that either (i) a registration statement
under the Securities Act of 1933 (the "Act") relating to the Restricted Shares
is in effect; or (ii) in the opinion of counsel to the Company, the issuance of
the Restricted Shares is exempt from registration under the Act, in which event
Ms. Brumley shall have made such undertakings and agreements with the Company as
the Company may reasonably require; and that such other steps, if any, as
counsel to the Company considers necessary to comply with any law applicable to
the Restricted Shares shall have been taken by Ms. Brumley, by the Company, or
both.  The certificate representing the Restricted Shares may contain such
legends as counsel for the Company considers necessary to comply with applicable
laws.

 
(d)  
Withholdings.  All legally-required withholdings and deductions arising out of
this Agreement, including, but not limited to the lapse of the Restrictions,
will be made as determined in good faith by the Company.

 
(e)  
Decisions by the Committee.  Any dispute or disagreement that arises under, or
as a result of, or pursuant to, this Restricted Stock Agreement shall be
resolved by the Compensation Committee of the Board of Directors of the Company
(the "Committee") in its sole and absolute discretion, and any such resolution
or any other determination by the Committee and any interpretation by the
Committee of the terms and conditions of this Restricted Stock Agreement shall
be final, binding, and conclusive on all persons affected thereby.

 
 
In Witness Whereof, the parties have signed this Restricted Stock Agreement to
be effective as of the Effective Date.
 
Sterling Construction Company, Inc.
 
 
By: ____________________________________
Name:
Title:
 
 
 
______________________________________
Elizabeth D. Brumley

 
 

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STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
 
COMMON STOCK
 
For Value Received, the undersigned, Elizabeth D. Brumley, does hereby sell,
assign and transfer unto Sterling Construction Company, Inc. (the "Company")
___________ shares of the common stock of the Company standing in her name on
the books of the Company, represented by Certificate No.______________ and does
hereby irrevocably constitute and appoint any officer of the Company as the
proxy and attorney-in-fact of the undersigned to transfer the said stock on the
books of the Company with full power of substitution in the premises.

Dated:   ________________________

______________________________________________
Elizabeth D. Brumley

Witness:

__________________________________________________________________________
[Signature]                                                                           [Print
name]
 
 

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