ex10_1.htm


    
      
        

      

    

    


    
      	 	
              Sterling
                Construction Company, Inc.

            	
              Exhibit
                10.1  

            
	 	
              Patrick
                T. Manning Employment Agreement

            	 


    

     
      
        

      

    

    THIS
      EMPLOYMENT AGREEMENT (this "Agreement") is made to be
      effective as of  July 19, 2007 (the "Effective Date") by and
      between Patrick T. Manning (hereinafter referred to as "Mr. Manning") and Sterling
      Construction Company, Inc. (hereinafter referred to as the "Company.")

     

    Background

     

    Mr.
      Manning has been an employee of the Company under an employment agreement that
      expired at the close of business on July 18, 2007 (the "Prior
      Agreement.")  Mr. Manning and the Company wish to enter into
      another employment agreement on the terms and conditions set forth
      herein.

     

    THEREFORE,
      for and in consideration of 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
&
Transition.
                

            


    

     

    
      	
            	
              1.1.

            	
              Mr.
                Manning's employment under this Agreement shall commence on the Effective
                Date and shall expire on the earlier to occur of (a) a termination
                of his
                employment pursuant to Section
                8
                (Termination by the Company) or Section
                9
                (Termination by Mr. Manning) below; or (b) 5:00 p.m. Central Time
                on
                December 31, 2010. 

            


    

     

    
      	
            	
              1.2.

            	
              Because
                this Agreement will be in effect for only a part of calendar year
                2007,
                Mr. Manning's salary shall be pro rated as provided in Exhibit
                A,
                below. 

            


    

     

    
      	
            	
              1.3.

            	
              For
                calendar year 2007, the provisions of the Prior Agreement relating
                to
                vacation shall be superseded in their entirety by the provisions
                relating
                to vacation in this Agreement. 

            


    

     

    
      	
              2.

            	
              Title,
                Reporting Relationship,
                Responsibilities & Place of Employment.
                

            


    

     

    
      	
            	
              2.1.

            	
              So
                long as Mr. Manning is an employee of the Company under this Agreement
—
                

            


    

     

    
      	
               

            	
              2.1.1.

            	
              He
                shall be elected to the position or positions set forth on Exhibit
                A;
                

            


    

     

    
      	
               

            	
              2a.1.2.

            	
              He
                shall have the reporting relationship set forth on Exhibit
                A;
                

            


    

     

    
      	
               

            	
              2.1.3.

            	
              He
                shall devote his full working time to diligently carrying out the
                duties
                and responsibilities set forth in Exhibit
                A to
                the best of  abilities; and


            


    

     

    
      	
               

            	
              2.1.4.

            	
              His
                place of employment shall be based in Houston, Texas except for required
                travel on the Company's business. 

            


    

     

    
      	
              3.

            	
              Compensation.
                

            


    

     

    
      	
            	
              3.1.

            	
              Cash
                Compensation.  Subject to the transition provisions for
                calendar year 2007 set forth in Exhibit
                A,
                below, so long as Mr. Manning is an employee of the Company under
                this
                Agreement, he shall be paid the Base Payroll Salary and shall be
                eligible
                to earn the Base Deferred Salary and the Incentive Bonus set forth
                in
                Exhibit
                A
                in accordance with the terms thereof.


            


    

     

    
      	
               

            	
              3.1.1.

            	
              Base
                Deferred Salary and Incentive Bonus if and to the extent either is
                earned
                in a given year shall be paid after January 1 and before March 15
                of the
                calendar year immediately following such year.


            


    

     

    
      	
               

            	
              3.1.2.

            	
              All
                cash compensation shall be subject to legally-required and any voluntary
                withholdings and deductions. 

            


    

     

    
      	
            	
              3.2.

            	
              Benefits.  Mr.
                Manning 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.  He
                shall also be entitled to paid vacation time as set forth on Exhibit
                A.
                

            


    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      Patrick
        T. Manning Employment Agreement — continued

       

    

    
      	
              4.

            	
              Business
                Expense
                Reimbursement.  Mr. Manning 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
                him in the performance of his duties.


            


    

     

    
      	
              5.

            	
              Indemnification.
                

            


    

     

    
      	
            	
              5.1.

            	
              Mr.
                Manning shall be indemnified by the Company with respect to claims
                made
                against him 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, by-laws and the laws of the State of Delaware.
                

            


    

     

    
      	
            	
              5.2.

            	
              The
                Company shall ensure that Mr. Manning is covered by a standard form
                directors and officers liability insurance policy obtained and maintained
                at no cost to Mr. Manning. 

            


    

     

    
      	
              6.

            	
              Confidential
                Information. 

            


    

     

    
      	
            	
              6.1.

            	
              During
                his employment by the Company and thereafter, Mr. Manning shall not
                disclose to any person or entity Confidential Information (as defined
                below) except in the proper performance of his 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, business plans, marketing plans, non-public financial
                data,
                product specifications and designs, inventions, discoveries, processes,
                drawings, documents, records, software, or any information of a third
                party that is held by the Company or its affiliates under an obligation
                of
                confidentiality. 

            


    

     

    
      	
              7.

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

            


    

     

    
      	
            	
              7.1.

            	
              Mr.
                Manning shall not render services or advice, whether for compensation
                or
                without compensation and whether as an employee, officer, director,
                principal 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 in which he was actively engaged during his employment by
                the
                Company or of which he has detailed knowledge; or with any planned
                business in which he had an active part in the planning or of which
                he has
                detailed knowledge. 

            


    

     

    
      	
            	
              7.2.

            	
              Mr.
                Manning 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 he is employed, associated, affiliated
                or
                otherwise related (other than the Company.)


            


    

     

    
      	
            	
              7.3.

            	
              Mr.
                Manning shall not recruit or otherwise solicit or induce any employee
                of
                the Company to terminate his or her employment with or otherwise
                cease his
                or her relationship with the Company.


            


    

     

    
      	
            	
              7.4.

            	
              The
                Non-Compete Obligations apply to the state of Texas and any other
                state in
                which the Company and its affiliates taken as a whole receives more
                than
                10% of its annual revenues. 

            


    

     

    
      	
            	
              7.5.

            	
              Mr.
                Manning's obligations under this Section
                7 shall
                continue (a) so long as he is an employee of the Company; and (b)
                after
                his employment terminates (whether by reason of the expiration of
                this
                Agreement or pursuant to Section
                8
                (Termination by the Company) or Section
                9
                (Termination by Mr. Manning)) below, or otherwise) for a period of
                twelve
                months; or for the period, if any, during which he is entitled to
                be paid
                his Base Payroll Salary, whichever period is longer.
                

            


    

     

    
      
        
          
          

        

        
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      Patrick
        T. Manning Employment Agreement — continued

       

    

    
      	
              8.

            	
              Termination
                bythe
                Company.  Prior to the expiration of this Agreement, the
                Company may terminate Mr. Manning's employment only pursuant to the
                following terms and on the following conditions:
                

            


    

     

    
      	
            	
              8.1.

            	
              Without
                Cause.  The Company may terminate Mr. Manning's
                employment Without Cause (as defined below) by giving him ninety
                days'
                prior written notice thereof, in which event —


            


    

     

    
      
        	
              	
                8.1.1.

              	
                The
                  Company shall continue to pay him his Base Payroll Salary then
                  in effect
                  through December 31, 2010 or for twelve full calendar months, whichever
                  period is longer (the "Severance Period;")
                  

              


      

    

     

    
      
        	
              	
                8.1.2.

              	
                During
                  the Severance Period, the Company shall continue to cover Mr. Manning
                  under the medical and dental plans sponsored by the Company for
                  its
                  employees with the same coverage he had immediately prior to the
                  termination of his employment, provided that Mr. Manning 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 Mr. Manning for any medical
                  premium expenses incurred by him hereunder within thirty days after
                  the
                  date of his payment thereof. To the extent that any medical or
                  dental
                  expense or in-kind benefits provided for under this Section
                  8.1.2
                  are taxable to Mr. Manning in a given year, any such expense shall
                  be
                  reimbursed to Mr. Manning by the Company within thirty days of
                  such
                  expense being incurred by him, 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.
                  

              


      

    

     

    
      
        	
              	
                8.1.3.

              	
                The
                  Company shall pay Mr. Manning in the manner and at the time set
                  forth in
                  Exhibit
                  A, a portion of any Base Deferred Salary and of any Incentive
                  Bonus
                  that he would have earned had he remained an employee of the Company
                  through the end of the calendar year in which his employment terminated,
                  such portion to be based on the number of days during such year
                  that he
                  was an employee of the Company; and


              


      

    

     

    
      
        	
              	
                8.1.4.

              	
                The
                  Company shall permit him to purchase any insurance maintained by
                  the
                  Company for its own benefit on his life at its then cash surrender
                  value.
                  

              


      

    

     

    The
      foregoing severance benefits are the only benefits and payments to which Mr.
      Manning is entitled that arise out of the termination of his employment under
      this Section
      8.1.

     

    
      	
            	
              8.2.

            	
              Definition
                of Without
                Cause.  Mr. Manning's employment shall be deemed to have
                been terminated by the Company Without Cause unless termination is
                for one
                of the reasons set forth in Section
                8.5,
                below, by reason of his death or pursuant to Section
                9.1,
                below. 

            


    

     

    
      	
            	
              8.3.

            	
              Termination
                for Permanent
                Disability.  The Company may terminate Mr. Manning's
                employment if he shall become permanently disabled.  Mr. Manning
                shall be considered to have become permanently disabled if during
                any
                consecutive twelve-month period, because of ill health, or physical
                or
                mental disability, he shall have been continuously unable to perform
                his
                duties under this Agreement, in whole or in substantial part, for
                one
                hundred eighty consecutive days.  The phrase "substantial part"
                means the inability of Mr. Manning to perform and devote at least
                eight
                hours per work day to the performance of his duties and responsibilities.
                

            


    

     

    
      	
            	
              8.4.

            	
              Upon
                the Death of Mr.
                Manning.  In the event of Mr. Manning's death during the
                term of this Agreement, his employment shall thereupon terminate
                and the
                Company shall pay his estate — 

            


    

     

    
      
        
          	
                	
                  8.4.1.

                	
                  His
                    Base Payroll Salary then in effect through the date of his death
                    to the
                    extent not already paid; and


                


        

      

    

     

    
      
        
          
          

        

        
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      Patrick
        T. Manning Employment Agreement — continued

       

    

    
      
        	
              	
                8.4.2.

              	
                In
                  the manner and at the time provided in Exhibit
                  A, a
                  portion of any Base Deferred Salary and any Incentive Bonus that
                  he would
                  have earned had he remained an employee through the end of the
                  calendar
                  year in which his death occurred, such portion to be based on the
                  number
                  of days during such year that he was an employee.
                  

              


      

    

     

    
      
        	
              	
                8.5.

              	
                Termination
                  for
                  Cause.  The Company may terminate Mr. Manning's
                  employment for Cause (as defined below) by giving him written notice
                  of
                  termination.  In the event of the termination of Mr. Manning's
                  employment for Cause, the Company shall pay him any accrued but
                  unpaid
                  Base Payroll Salary through the date of termination and any other
                  legally-required payments through that date.  For the avoidance
                  of doubt, no Base Deferred Salary and no Incentive Bonus shall
                  be payable
                  to him for the year in which his employment is terminated for
                  Cause. 

              


      

       

    

    
      	
               

            	
              8.5.1.

            	
              Definition
                of
                Cause.  For
                purposes of Section
                8.5,
                "Cause" for
                termination of Mr. Manning's employment shall mean any one or more
                of the
                following: 

            


    

     

    
      
        	
              	
                (a)

              	
                Mr.
                  Manning’s gross neglect of his duties, gross negligence in the performance
                  of his duties, or his refusal to perform his duties.
                  

              


      

    

     

    
      	
               

            	
              (b)

            	
              Mr.
                Manning’s unsatisfactory performance of his duties that is not cured
                within thirty working days after written notice is given to him
                specifically identifying each reason why Mr. Manning’s performance is
                unsatisfactory and what he can do to cure such unsatisfactory performance.
                

            


    

     

    
      
        	
              	
                (c)

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


              


      

    

     

    
      	
               

            	
              (d)

            	
              Mr.
                Manning’s conviction of any criminal activity not described in Subsection
                (c),
                above, or 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)

              	
                Mr.
                  Manning’s immoderate use of alcohol and/or the use of non-prescribed
                  narcotics that adversely and materially affects the performance
                  of his
                  duties. 

              


      

    

     

    
      	
              9.

            	
              Termination
                by Mr.
                Manning. 

            


    

     

    
      	
            	
              9.1.

            	
              Voluntary
                Resignation.  Mr. Manning may resign his 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 — 

            


    

     

    
      	
               

            	
              9.1.1.

            	
              May
                accelerate the effective date of Mr. Manning's resignation to any
                date
                within the 90-Day Notice Period; and/or


            


    

     

    
      	
               

            	
              9.1.2.

            	
              May
                deem his notice of resignation a resignation by him of (i) any one
                or more
                of the offices then held by him in the Company; and (ii) any one
                or more
                of the directorships and offices then held by him in the Company's
                affiliates, in each case to be effective on any date or dates within
                the
                90-Day Notice Period. 

            


    

     

    
      	
            	
              9.2.

            	
              In
                the event Mr. Manning's resignation becomes effective before the
                end of a
                calendar year, a portion of any Base Deferred Salary that he would
                have
                earned had he remained an employee through the end of such calendar
                year
                shall be paid to him in the manner and at the time set forth in Exhibit
                A, such
                portion to be based on the number of days during such year that he
                was an
                employee, but no Incentive Bonus shall be payable to him for such
                year.
                

            


    

     

    
      	
            	
              9.3.

            	
              In
                the event that Mr. Manning's resignation becomes effective at or
                after the
                end of the calendar year in which he gave notice of his resignation,
                he
                shall be entitled to Base Deferred Salary and Incentive Bonus for
                the year
                in which he gave notice of his resignation to the same extent as
                if he had
                not given notice of his resignation.


            


    

     

    
      
        
          
          

        

        
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      Patrick
        T. Manning Employment Agreement — continued

       

    

    
      	
            	
              9.4.

            	
              No
                Incentive Bonus shall be payable to Mr. Manning with respect to the
                calendar year following the calendar year in which he gives notice
                of his
                resignation. 

            


    

     

    
      	
            	
              9.5.

            	
              Constructive
                Termination.  Mr. Manning may terminate his employment if
                (a) the Company commits a Breach (as defined below) of this Agreement;
                (b)
                Mr. Manning gives the Company detailed written notice of the Breach
                within
                thirty days after the occurrence thereof; and (c) the Company shall
                fail
                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.
                

            


    

     

    
      	
            	
              9.6.

            	
              In
                the event of the termination by Mr. Manning of his 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, above. 

            


    

     

    
      	
            	
              9.7.

            	
              For
                purposes of Section
                9.5,
                above, "Breach"
                shall mean a material breach by the Company of any one or more of
                the
                material terms or conditions of this Agreement.


            


    

     

    
      	
            	
              10.

            	
              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 to the other party as follows:


            


    

     

    
      	
              If
                to the Company
                at:

            	
              With
                a copy to:

            
	
              Sterling
                Construction Company, Inc.

            	
              Roger
                M. Barzun

            
	
              20810
                Fernbush Lane

            	
              60
                Hubbard Street

            
	
              Houston,
                Texas 77073

            	
              Concord,
                Massachusetts 01742

            
	
              Attention:  Board
                of Directors

            	 
	
              If
                to Mr. Manning, at
                his 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 such notice.

     

    
      	
            	
              11.

            	
              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. 

            


    

     

    
      	
            	
              12.

            	
              Survival.  Notwithstanding
                the expiration or earlier termination of this Agreement or of Mr.
                Manning's employment for any reason, the terms and conditions of
Section
                6
                (Confidential Information) and Section
                7
                (Non-Compete Obligations) above, and any other obligation of a party
                that
                by its terms is to be performed or is to have continued effect after
                such
                termination shall survive such expiration or termination.
                

            


    

     

    
      	
            	
              13.

            	
              Proration.  Any
                amount payable to Mr. Manning 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. 

            


    

     

    
      
        
          
          

        

        
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      Patrick
        T. Manning Employment Agreement — continued

       

    

    
      
        
          	
                  14.

                	
                  Miscellaneous.
                    

                


        

      

    

     

    
      	
            	
              14.1.

            	
              Entire
                Agreement.  This Agreement together with Exhibit
                A
                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 successors, personal representatives 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 all of the stock, business
                or assets of the Company, provided that the acquiror assumes all
                of the
                Company 's obligations hereunder. 

            


    

     

    
      	
            	
              14.2.

            	
              Construction.
                

            


    

     

    
      	
               

            	
              14.2.1.

            	
              Each
                party has read and understood this Agreement and each party has had
                an
                opportunity to review this agreement with its or his 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. 

            


    

     

    
      	
               

            	
              14.2.2.

            	
              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. 

            


    

     

    
      	
               

            	
              14.2.3.

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


            


    

     

    
      	
            	
              14.3.

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

            


    

     

    
      	
            	
              14.4.

            	
              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;
                

            


    

     

    
      	
            	
              14.5.

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

            


    

     

    
      	
            	
              14.6.

            	
              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 telecopier or other facsimile transmission with the
                same
                force and effect as if the same were an executed and delivered original
                manually-signed counterpart. 

            


    

     

    
      	
            	
              15.

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

            


    

     

    
      	
              16.

            	
              Compliance
                with Section 409A of
                the Code. 

            


    

     

    
      	
            	
              16.1.

            	
              To
                the extent that any payment to Mr. Manning 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 Mr. Manning's consent.


            


    

     

    
      
        
          
          

        

        
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      Patrick
        T. Manning Employment Agreement — continued

       

    

    
      	
            	
              16.2.

            	
              If
                Mr. Manning 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 Mr. Manning's separation
                from
                service (as defined in Section 409A) with the Company until the later
                of —
                

            


    

     

    
      	
               

            	
              16.2.1.

            	
              The
                date prescribed for payment in this Agreement; and
                

            


    

     

    
      	
               

            	
              16.2.2.

            	
              The
                first day of the seventh calendar month that begins after the date
                of Mr.
                Manning's separation from service (or, if earlier, the date of his
                death.)
                

            


    

     

    
      	
            	
              16.3.

            	
              All
                payments that were delayed by reason of the application of the date
                prescribed by Section
                16.2.2,
                above (the "Section
                16.2.2 Date") shall be aggregated and paid to Mr. Manning on the
                Section 16.2.2 Date in a lump sum together with interest computed
                from the
                date each such payment would have first been paid to him absent the
                application of the Section 16.2.2 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
                16.2.2 Date, the Company shall pay any other amounts provided for
                herein
                to the extent and in the manner provided in this Agreement.
                

            


    

     

    In
      Witness Whereof, the parties hereto have executed this Agreement as of the
      day
      and year first above written.

     

    
      
        	
                Sterling
                  Construction Company, Inc.

              	 	 
	 	 	 	 
	 	 	 	 
	
                By:

              	 	 	 
	 	
                Robert
                  W. Frickel

              	 	
                Patrick
                  T. Manning

              
	 	
                Chairman
                  of the Compensation Committee

              	 	 


      



    
      
        
          
          

        

        
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      Patrick
        T. Manning Employment Agreement — continued

      Exhibit
        A

    

     

    
      	
              For
                purposes of this Exhibit
                A,
                "SCC" means the Company.

              
              

            
	
              Title

            	
              Mr.
                Manning shall be elected annually Chief Executive Officer of the
                Company.

            
	
              Duties
                and Responsibilities

            	
              Mr.
                Manning shall carry out the customary duties and responsibilities
                of a
                chief executive officer of a publicly-traded company.

            
	
              Reporting
                Relationship

            	
              In
                carrying out those duties and responsibilities, Mr. Manning shall
                report
                to SCC's Board of Directors.

            
	
              Base
                Payroll Salary

              
              

            	
              Mr.
                Manning's annualized Base Payroll Salary shall be $365,000, which
                shall be
                paid to him commencing as of July 19, 2007 in bi-weekly installments
                at
                the same time and in the same manner as other senior managers of
                the
                Company are paid their Base Payroll Salaries.

            
	
              Base
                Deferred Salary

              
              

            	
              Mr.
                Manning's annualized Base Deferred Salary shall be $162,500 and shall
                be
                paid to him if in a given calendar year SCC achieves seventy-five
                percent
                of the EBITDA budgeted for such year provided that the budget was
                approved
                by the Board of Directors of SCC.

               

              However,
                if 75% of budgeted EBITDA is achieved in 2007 —

               

              For
                the period January 1 through and including July 18, 2007, Mr. Manning
                shall be paid an amount equal to 54.25% of his "bonus" under the
                Prior
                Agreement; and

               

              For
                the period from and including the Effective Date through and including
                December 31, 2007, Mr. Manning shall be paid an amount equal to 45.75%
                of
                his Base Deferred Salary set forth above.  

            
	
              Incentive
                Bonus

              
              

            	
              Each
                calendar year including calendar year 2007, Mr. Manning shall be
                eligible
                to earn an Incentive Bonus of up to $162,500.

               

              Of
                that amount —

               

              ·     
                Sixty percent shall be paid to Mr. Manning if SCC achieves
                the
                fully-diluted earnings per share budgeted for such year provided
                that the
                budget was approved by the Board of Directors of SCC ("Budgeted EPS");
                and

               

              ·     
                Forty percent will be based upon the extent to which, if at all,
                Mr.
                Manning has achieved the personal goals and objectives established
                for him
                for such year , provided
                however, that for calendar year 2007, the forty percent portion of
                the Incentive bonus shall be awarded, if at all, in the sole discretion
                of
                the Compensation Committee.

               

              The
                foregoing is in lieu of any "Additional Bonus" that might otherwise
                be
                payable under the Prior Agreement.

              In
                determining whether Budgeted EPS has been achieved in a given year,
                any
                shares of common stock of SCC issued during such year otherwise than
                out
                of a reserve therefor that had been established at or before the
                approval
                of the budget shall be ignored.

               

              Mr.
                Manning's personal goals and objectives for a given year shall be
                established in consultation with, shall be subject to final approval
                by,
                and the extent of their achievement shall be determined by SCC's
                Board of
                Directors and SCC's Compensation
                Committee.

            


    

     

    
      
        
          
          

        

        
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      Patrick
        T. Manning Employment Agreement — continued

    

     

    
      	
              EBITDA

              
              

            	
              For
                purposes of this Agreement, EBITDA means the net income of SCC on
                a
                consolidated basis determined in accordance with generally accepted
                accounting principles for a given calendar year —

              Plus          
                Interest expense for the period;

              Plus          
                Depreciation and amortization expense for the period;

              Plus          
                Federal and state income tax expense incurred for the period;

              Plus          
                Extraordinary Items (to the extent negative) if any, for the
                period;

              Minus   Extraordinary
                Items
                (to the extent positive) if any;

              Minus      
                Interest income for the period;

              Minus     
                Any fees paid to non-employee directors; and

               

              in
                calculating EBITDA for a given year, appropriate and equitable adjustment
                shall be made for any material changes in the Company’s business that
                occur during such year, such as an acquisition of a business or the
                sale
                of a part of the business.

            
	
              Vacation

            	
              Mr.
                Manning shall be eligible to take so many days vacation per year
                as he
                believes is appropriate in light of the needs of the
                business.

            


    

     

     

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