ex10_4.htm


    
      

    

    
      	
              NOTICE
                OF GRANT OF STOCK OPTION &

            	
              STERLING
                CONSTRUCTION COMPANY, INC.

            	
              EXHIBIT
                10.4

            
	STOCK
              OPTION AGREEMENT	
              TAXPAYER
                ID #:25-1655321

            	
            
	 	
              2751
                CENTERVILLE ROAD - SUITE 3131

            	
            
	 	
              WILMINGTON,
                DELAWARE 19803

            	       
              


    

     

    
      	
               

            	
              Optionee:

            	
              James
                H.
                Allen

            


    

    


    
      	
               

            	
              Grant
                Date:

            	
              August
                7,
                2007 (Option
                No. 521/Option
                Type: ISO)
                

            


    

    


    
      	
               

            	
              Option
                Shares:

            	
              13,707

            


    

     

    
      	
               

            	
              Option
                Price Per
                Share:

            	
              $18.990

            


    

     

    
      	
               

            	
              Option
                Expiration
                Date:

            	
              August
                7,
                2012

            


    

     

    
      	
               

            	
              Option
                Plan:

            	
              2001
                Stock Incentive
                Plan

            


    

    
      
        

      



    Effective
      on the Grant Date set forth above, Sterling Construction Company, Inc. (the
      "Company") has granted
      to you a stock option that to the extent permissible under applicable tax laws
      and regulations is intended to be an Incentive Stock Option as
      defined in Section 422 of the Internal Revenue Code of 1986, as amended, and
      any
      regulations thereunder (the "Code") to purchase the
      number
      of Option Shares of the Company's common stock (par value $0.01 per share)
      set
      forth above at the Option Price Per Share set forth above, on the condition
      that
      you enter into this Option Agreement with the Company.

    


    The
      Option Shares become exercisable (vest) in installments from and after the
      vesting dates set forth below:

    


    
      	
              Number
                of  Option
                Shares

            	
              
              

              Vesting
                Date

            
	
              4,569

            	
              August
                7, 2008

            
	
              4,569

            	
              August
                7, 2009

            
	
              4,569

            	
              August
                7, 2010

            


    

    


    You
      may
      purchase any one or more of the Option Shares that become exercisable on a
      given
      date from that date through and including the Option Expiration Date set forth
      above, unless this Option is sooner terminated or ceases to be exercisable
      as
      provided in this Agreement or in the Option Plan.

    
      
        

      

    

    By
      signing this Option Agreement, you and the Company agree that this Option is
      governed by the terms and conditions set forth on this page and on the following
      Pages 2 and 3 of this Option Agreement as well as by the terms and conditions
      of
      the Option Plan, a copy of which has been furnished to you.  An
      additional copy of the Option Plan will be furnished to you on request to the
      Company's Treasurer.

    

     

    
      	
              Sterling
                Construction Company,
                Inc.

            	 	
              Optionee

            
	 	 	 	 
	 	 	 	 
	
              By:

            	 	 	 
	 	
              Patrick
                T. Manning

            	 	
              James
                H. Allen

            
	 	
              Chairman
                & Chief Executive Officer

            	 	 


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ADDITIONAL
      STOCK OPTION AGREEMENT TERMS

    


    
      	
              1.

            	
              Exercises.  For
                an exercise to be effective, the Company must receive from you:
                

            


    

    


    
      	
            	
              (a)

            	
              A
                written notice signed by you stating the Option Grant Date and the
                number
                of Option Shares you wish to purchase; and


            


    

    


    
      	
            	
              (b)

            	
              Payment
                for the Option Shares either (i) by personal, cashier's or certified
                check; or (ii) by the surrender of shares of the Company's Common
                Stock
                that you have held for at least six months and that have a fair market
                value (as defined in the Plan) on the date of exercise equal to the
                purchase price of the Option Shares being purchased, or a combination
                of
                both, all according to the rules and regulations relating to the
                Plan.
                

            


    

    


    
      	
              2.

            	
              Issuance
                of Option
                Shares. 

            


    

    


    
      	
            	
              (a)

            	
              You
                will have no rights as a shareholder of the Company with respect
                to any
                Option Shares purchased under this Option until a certificate representing
                such shares has been issued and delivered to you.
                

            


    

    


    
      	
            	
              (b)

            	
              The
                Company will not be obligated to deliver a certificate for any Option
                Shares unless — 

            


    

    


    
      	
               

            	
              (i)

            	
              Provision
                acceptable to the Company has been made for the payment of any federal,
                state and local taxes that are due or that are required to be withheld
                by
                the Company because of the purchase of the Option Shares; and
                

            


    

    


    
      	
               

            	
              (ii)

            	
              There
                has been compliance with all federal and state laws and regulations,
                in
                particular, the Securities Act of 1933 and the Securities Exchange
                Act of
                1934 and the regulations promulgated under those acts, that the Company
                deems applicable, and all other legal matters in connection with
                the
                issuance and delivery of the Option Shares have been approved by
                the
                Company's counsel. 

            


    

    


    
      	
              3.

            	
              Non-Transferability.  During
                your lifetime, this Option may only be exercised by you or in the
                case of
                your disability, by your legal representative.  In addition,
                this Option may not be assigned, transferred, pledged or otherwise
                encumbered, either voluntarily or by operation of law, except (a)
                by your
                will or according to the laws of descent and distribution; or (b)
                to
                immediate family members (as defined in the Option Plan) to the extent
                permitted by applicable laws. 

            


    

    


    
      	
              4.

            	
              Termination
                of
                Employment.  For purposes of this Section
                4, the
                word “Company” includes the Company’s subsidiaries, and the "Termination Date" means
                the date that you cease to have an employment relationship with the
                Company. 

            


    

    


    
      	
            	
              (a)

            	
              If
                your employment terminates by reason of (i) your permanent disability
                as
                defined in any employment agreement between you and the Company,
                or if
                none is then in effect, as defined in Section 22(e)(3) of the Code;)
                or
                (ii) your death; or if you should die within three months after the
                Termination Date (unless termination was for Cause, as defined below),
                then this Option may nevertheless be exercised by you, by your legal
                representative, by your estate, or by your beneficiaries, as the
                case may
                be, but only to the extent it was exercisable on the Termination
                Date and
                only on or before the earlier to occur of (x) the first anniversary
                of the
                Termination Date and (y) the Option Expiration Date.
                

            


    

    


    
      	
            	
              (b)

            	
              If
                your employment is terminated pursuant to a "cause" or "good reason"
                provision of any employment agreement between you and the Company
                and/or
                any of its subsidiaries, or absent such an agreement, for Cause (as
                defined below,) then this Option will terminate effective upon the
                Termination Date. 

            


    

    


    
      	
               

            	
              (c)

            	
              If
                your employment terminates for any reason other than those set forth
                in
                Sections
                4(a) or 4(b),
                above,
                then this Option may nevertheless be exercised by you, but only to
                the
                extent it was exercisable on the Termination Date and only on or
                before
                the earlier to occur of (i) the expiration of ninety days after the
                Termination Date and (ii) the Option Expiration Date.
                

            


    

     

    
      
        
        

      

      
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              (d)

            	
              "Cause"
                shall mean
                willful misconduct by you or willful failure by you to perform your
                responsibilities to the Company (including but not limited to a breach
                of
                any material provision of any agreement between you and the Company)
                as
                determined by the Company acting in good faith, which determination
                shall
                be conclusive.  Your employment shall be considered to have been
                terminated for Cause if the Company determines within thirty days
                after
                the Termination Date that discharge for Cause was warranted.
                

            


    

    


    
      	
              5.

            	
              Not
                an Employment
                Agreement.  Nothing in this Option Agreement shall in any
                way affect your right to resign from the Company's employ or the
                Company's
                right to terminate your employment.


            


    

    


    
      	
              6.

            	
              Adjustments.  As
                more fully described in the Plan, the number and kind of shares issuable
                under this Option and the Option Price Per Share will be adjusted
                to
                account for any reorganization, merger, recapitalization, or the
                like that
                affects the Company's shares. 

            


    

    


    
      	
              7.

            	
              Acceleration
                of
                Vesting.  This Option shall become immediately
                exercisable as to all then unvested shares thirty days prior to the
                effective date of a Change In Control of the Company as that term
                is
                defined in the Option Plan. 

            


    

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