Document:

Exhibit 10.1

 

Execution Version

  

FIFTH AMENDMENT TO CREDIT
AGREEMENT

 

 

This Fifth Amendment
to Credit Agreement (this “Amendment”) is entered into effective as of the 13th day of February,
2017, by and among Gran Tierra Energy International Holdings Ltd., an exempted company incorporated with limited liability under
the laws of the Cayman Islands (“Borrower”), Gran Tierra Energy Inc., a corporation duly formed and existing
under the laws of the State of Delaware (f/k/a Gran Tierra Energy Inc., a corporation duly formed and existing under the laws of
the State of Nevada, “Parent”), The Bank of Nova Scotia, as administrative agent ( “Administrative
Agent”) and Lenders party hereto.

 

W I T N E S S E T H:

 

WHEREAS, Borrower, Parent,
Administrative Agent, and Lenders are parties to that certain Credit Agreement dated as of September 18, 2015 (as amended, supplemented
or otherwise modified prior to the date hereof, the “Credit Agreement”) (unless otherwise defined herein, all
terms used herein with their initial letter capitalized shall have the meaning given such terms in the Credit Agreement as amended
by this Amendment);

 

WHEREAS, pursuant to
the Credit Agreement, Lenders have made certain Loans to Borrower and provided certain other credit accommodations to Borrower;

 

WHEREAS, Borrower has
requested that Administrative Agent and Lenders enter into this Amendment to amend the Credit Agreement to, among other things,
permit the sale of certain Property located in Peru and Brazil owned by certain Subsidiaries and the sale of the Equity Interests
of such Subsidiaries owning such Property;

 

WHEREAS, Administrative
Agent, Borrower and Lenders have agreed to enter into this Amendment to amend the Credit Agreement as more particularly set forth
herein;

 

NOW THEREFORE, for and
in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged and confessed, Borrower, Administrative Agent and Lenders hereto hereby agree
as follows:

 

Section
1.Amendments. In reliance on the representations,
warranties, covenants and agreements contained in this Amendment, and subject to the satisfaction of the conditions precedent set
forth in Section 2 hereof, the Credit Agreement shall be amended, effective as of the Fifth Amendment Effective Date,
as follows:

 

1.1       Amended
and Restated Definition. Section 1.02 of the Credit Agreement is hereby amended to amend and restate the definition
of “NCIB Buyback” in its entirety with:

 

     

     

    

 

“NCIB
Buyback” means the normal course issuer bid made on February 8, 2017 through the facilities of the Toronto Stock Exchange
and the New York Stock Exchange by the Parent whereby the Parent has the ability to repurchase (each such repurchase by the Parent
in connection with any NCIB Buyback, a “Repurchase”) for cancellation of up to approximately 5% of the Parent’s
aggregate shares of common Equity Interests that are issued and outstanding on January 27, 2017, until February 12, 2018 (such
date, the “Bid End Date”).

 

1.2       Amendment
to Section 9.04(a)(v)(B) of the Credit Agreement. Section 9.04(a)(v)(B) of the Credit Agreement is hereby amended to
read as follows:

 

(B) the aggregate
amount of consideration paid by the Parent in respect of all Repurchases for the NCIB Buyback shall not exceed $35,000,000 in the
aggregate for the NCIB Buyback;

 

1.3       Amendment
to Section 9.11 of the Credit Agreement. Section 9.11 of the Credit Agreement is hereby amended by (a) deleting “and”
at the end of clause (i) thereof, (b) deleting “.” at the end of clause (j) thereof and restating it with “;
and” and (c) inserting new clause (k) after clause (j) therein to read as follows:

 

(k) the sale
or disposition of (i) any Property located in Brazil or Peru, (ii) any Equity Interests of any Subsidiary not constituting a Credit
Party which directly or indirectly owns solely Property located in Brazil or Peru and immaterial Property related thereto and (iii)
any loans made by the Parent or a Subsidiary to the entity described in clause (ii); provided that (A) after giving effect to such
sale or disposition, no Default, Event of Default or Borrowing Base Deficiency shall exist or would result therefrom, (B) such
sale or disposition does not include any Property (including any Swap Agreement) assigned value in the then-effective Borrowing
Base, and (C) the Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying as
to the foregoing clauses (A) and (B) within three Business Days after the date of any such sale or disposition.

 

Section
2.Conditions Precedent. This Amendment shall
be effective on the date that each of the following conditions precedent is satisfied or waived in accordance with Section 12.02
of the Credit Agreement (the “Fifth Amendment Effective Date”):

 

2.1       Counterparts.
Administrative Agent shall have received from Lenders constituting at least the Majority Lenders, Parent and Borrower, counterparts
(in such number as may be requested by Administrative Agent) of this Amendment signed on behalf of such Persons.

 

2.2       Expenses.
Borrower shall have paid to Administrative Agent any and all expenses payable to Administrative Agent (including counsel of Administrative
Agent) or Lenders pursuant to or in connection with this Amendment or as required by the Credit Agreement.

 

    2

     

    

 

2.3       No
Default/No Event of Default/No Borrowing Base Deficiency. No Default or Event of Default shall have occurred and be continuing
and no Borrowing Base Deficiency shall exist.

 

Section
3.Reaffirmation of Loan Documents by Parent.
Parent hereby ratifies, confirms, and acknowledges that its obligations under the Credit Agreement and each other Loan Document
are in full force and effect and that Parent continues to unconditionally and irrevocably, jointly and severally, guarantee the
full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, of all of the Secured
Obligations, as such Secured Obligations may have been amended by this Amendment pursuant to the Guaranty Agreement. Parent hereby
acknowledges that its execution and delivery of this Amendment does not indicate or establish an approval or consent requirement
by Parent in connection with the execution and delivery of amendments to the Credit Agreement or any of the other Loan Documents.

 

Section
4.Representations and Warranties of Parent and Borrower.
To induce Lenders and Administrative Agent to enter into this Amendment, Parent and Borrower each hereby represents and warrants
to Lenders and Administrative Agent as follows: 

 

4.1       Reaffirm
Existing Representations and Warranties. Each representation and warranty of Parent or Borrower, as applicable, contained
in the Credit Agreement and the other Loan Documents is true and correct in all material respects (except to the extent any such
representation or warranty is qualified by materiality or Material Adverse Effect, in which case it shall be true and correct in
all respects) on the date hereof after giving effect to the amendments set forth herein, except to the extent any such representations
and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be
true and correct in all material respects (except to the extent any such representation or warranty is qualified by materiality
or Material Adverse Effect, in which case it shall be true and correct in all respects) as of such specified earlier date.

 

4.2       Due
Authorization; No Conflict. The execution, delivery and performance by Parent and Borrower of this Amendment are within
Parent’s or Borrower’s, as applicable, corporate powers and have been duly authorized by all necessary corporate and,
if required, stockholder or shareholder action (including, without limitation, any action required to be taken by any class of
directors of Parent or Borrower or any other Person, whether interested or disinterested, in order to ensure the due authorization
of this Amendment). The execution, delivery and performance by Parent and Borrower of this Amendment (a) do not require any consent
or approval of, registration or filing with, or any other action by, any Governmental Authority or any other third Person (including
shareholders or any class of directors, whether interested or disinterested, of Parent, Borrower or any other Person), nor is any
such consent, approval, registration, filing or other action necessary for the validity or enforceability of this Amendment, except
such as have been obtained or made and are in full force and effect other than those third party approvals or consents which, if
not made or obtained, would not cause a Default hereunder, could not reasonably be expected to have a Material Adverse Effect or
do not have an adverse effect on the enforceability of this Amendment, (b) will not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of any Credit Party or any order of any Governmental Authority, (c) will
not violate or result in a default under any Material Document or any indenture, agreement or other instrument binding upon Borrower
or any other Credit Party or its Properties, or give rise to a right thereunder to require any payment to be made by any Credit
Party, and (d) will not result in the creation or imposition of any Lien on any Property of Borrower or any other Credit Party
(other than the Liens created by the Loan Documents).

 

    3

     

    

 

4.3       Validity
and Enforceability. This Amendment constitutes a legal, valid and binding obligation of Parent and Borrower, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

 

4.4       Acknowledgment
of No Defenses. Parent and Borrower each acknowledges that it has no defense to (a) Borrower’s obligation to pay the
Obligations when due, or (b) the validity, enforceability or binding effect against Borrower or any other Credit Party of the Credit
Agreement or any of the other Loan Documents (to the extent a party thereto) or any Liens intended to be created thereby.

 

Section
5.Miscellaneous.

 

5.1       Reaffirmation
of Loan Documents. Any and all of the terms and provisions of the Credit Agreement and the Loan Documents shall, except
as amended and modified hereby, remain in full force and effect. This Amendment shall not limit or impair any Liens securing the
Obligations, each of which are hereby ratified, affirmed and extended to secure the Obligations as it may be increased pursuant
hereto. This Amendment constitutes a Loan Document.

 

5.2       Parties
in Interest. All of the terms and provisions of this Amendment shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns.

 

5.3       Counterparts.
This Amendment may be executed in counterparts, including, without limitation, by electronic signature, and all parties need not
execute the same counterpart; however, no party shall be bound by this Amendment until Borrower, Parent and Lenders constituting
at least the Majority Lenders have executed a counterpart. Facsimiles or other electronic transmissions (e.g. pdfs) of such executed
counterparts shall be effective as originals.

 

5.4       Complete
Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

 

5.5       Headings.
The headings, captions and arrangements used in this Amendment are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of this Amendment, nor affect the meaning thereof.

 

5.6       Governing
Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be duly executed by their respective authorized officers on the date and year
first above written.

 

[Signature Pages Follow]

 

    4

     

    

  

	BORROWER:	gran
tierra energy international holdings ltd. 
	 
	 	 	 	 
	 	By:  	/s/ 	Adrian Coral	 
	 	Name: 	Adrian Coral	 
	 	Title: Director	 
	 	 	 	 
	 	 	 	 
	PARENT:	GRAN TIERRA ENERGY INC.	 
	 	 	 	 
	 	 	 	 
	 	By:  	/s/ 	 Ryan Ellson	 
	 	Name: 	Ryan Ellson	 
	 	Title: Chief Financial Officer	 

 

    
Signature Page – Fifth Amendment

     

    

  

	ADMINISTRATIVE AGENT:	THE BANK OF NOVA SCOTIA,	 
	 	 	 	 
	 	By:  	 /s/ 	Clement
Yu	 
	 	Name: 	Clement
Yu	 
	 	Title: Director
	 
	 	 	 	 
	 	 	 	 
	 	By:	 /s/ 	Ryan Moonilal	 
	 	Name:	Ryan Moonilal	 
	 	Title: Analyst	 

 

    
Signature Page – Fifth Amendment

     

    

 

	LENDERS: 
	THE BANK OF NOVA SCOTIA, as a Lender	 
	 	 	 	 
	 	By:  	 /s/ 	James Sotiriou	 
	 	Name: 	James Sotiriou	 
	 	Title: Director, International
Banking	 
	 	 	 	 
	 	 	 	 
	 	By:	 /s/ 	Enrique Lopez	 
	 	Name:	Enrique Lopez	 
	 	Title: Vice-President, International Banking	 

 

    
Signature Page – Fifth Amendment

     

    

 

		SOCIÉTÉ GÉNÉRALE,

 as a Lender	 
	 	 	 	 
	 	By:  	 /s/ 	Max Sonnonstine	 
	 	Name: 	Max Sonnonstine	 
	 	Title:
Director
	 

 

    
Signature Page – Fifth Amendment

     

    

 

		HSBC Bank
                                         Canada,

                                         as a Lender 

	 
	 	 	 	 
	 	By:  	 /s/ 	Jason Lang	 
	 	Name: 	Jason Lang	 
	 	Title: Director	 
	 	 	 	 
	 	 	 	 
	 	By:	 /s/ 	Adam Lamb	 
	 	Name:	Adam Lamb	 
	 	Title: Vice-President	 

 

    
Signature Page – Fifth Amendment

     

    

 

		Export Development
                                         Canada,

                                                as a Lender

	 
	 	 	 	 
	 	By:  	 /s/ 	Richard Leong	 
	 	Name: 	Richard Leong	 
	 	Title: Asset Manager	 
	 	 	 	 
	 	 	 	 
	 	By:	 /s/ 	Allan T. Quiz	 
	 	Name:	Allan T. Quiz	 
	 	Title: Senior Asset Manager	 

 

    
Signature Page – Fifth Amendment

     

    

 

		Natixis, New York
Branch,

                                                as a Lender

	 
	 	 	 	 
	 	By:  	 /s/ 	Gabriella Davies	 
	 	Name: 	Gabriella Davies	 
	 	Title: Director	 
	 	 	 	 
	 	 	 	 
	 	By:	 /s/ 	Morvan Mallegol	 
	 	Name:	Morvan Mallegol	 
	 	Title: Director	 

 

    
Signature Page – Fifth Amendment

     

    

 

		Royal Bank of Canada,

                                                as a Lender

	 
	 	 	 	 
	 	By:    	 /s/ 	 Bryn Davies	 
	 	Name: 	 Bryn Davies	 
	 	Title: Authorized Signatory	 

 

    
Signature Page – Fifth AmendmentExhibit
10.1

 

 

 

 

2017
EXECUTIVE INCENTIVE COMPENSATION PROGRAM

 

Program
Description

 

Introduction

 

You have been selected to participate in the Company's 2017
Executive Incentive Compensation Program (the "EICP"). The EICP was adopted by the Compensation Committee of the Board
of Directors of the Company to be effective as of January 1, 2017. The program gives you the opportunity to earn additional cash
and share-based compensation depending on the achievement of financial and individual performance goals in calendar year 2017.

 

The purpose of this program is to advance the interests of the
Company's shareholders by enhancing the Company's ability to attract, retain and motivate persons who make (or who are expected
to make) important contributions to the Company. Participants do not have any special right to continued employment by the Company
because of their participation in this program.

 

Sterling sets high goals — goals that are designed to
encourage key employees like you to exert an extra effort to raise the Company's performance. The EICP is designed to provide you
with that incentive, both in the near term and over the course of several years.

 

The EICP reflects the pay-for-performance philosophy of the
Company by linking your opportunity to earn additional compensation to the achievement of Company goals, operating unit goals,
and individual performance goals.

 

References in this Program Description to being an employee
of the Company or employment with the Company mean an employee of or with the Company or one of its operating units.

 

______________

 

 

 

    
	2017 Executive Incentive Compensation Program — [Name of participant]
	Page 1 of 6

 

     

    

Part
I

 

Elements
of the 2017 Executive Incentive Compensation Program

 

EICP Target Amount.

 

Each participant in the EICP is assigned an EICP
Target Amount, which is expressed as a percentage of his or her base salary. Participants do not necessarily have the same
EICP Target Amount. Your EICP Target Amount for 2017 is set forth in Appendix A to this Program Description.

 

Your EICP Target Amount is the amount that you can
earn if 100% of the 2017 financial goal or goals and your individual performance goals are met. The actual payout, if any, may
be less than or more than your EICP Target Amount depending on the Company's actual financial results, your operating unit's actual
financial results (if you are employed by one of the Company's operating units) and your individual performance during the year
measured against the individual performance goals that are set for you at the beginning of the year.

 

EICP Awards.

 

Awards under the EICP are payable half in cash and
half in shares of the Company's common stock. The number of shares is determined using the simple average of the closing prices
of the common stock during December 2017. The shares are subject to a three-year restriction on their sale or other transfer. The
shares are released from those restrictions (that is, the shares vest) in approximately equal annual installments

 

One-third on January 1, 2019

 

One-third on January 1, 2020

 

One-third on January 1, 2021

 

Shares of restricted stock that fail to vest (for
instance if you resign from the Company or are terminated for cause) are automatically forfeited and returned to the Company without
the payment of any compensation to you.

 

EICP Performance Goals.

 

There are three types of EICP goals for participants
with operating responsibilities, and two types of goals for participants who do not have operating responsibilities, as follows:

 

		1.	A Company financial goal, which is based on the Company achieving a target level of earnings per share in 2017, which is referred
to as the EPS Goal.

 

		2.	An operating unit financial goal, which is based on your operating unit achieving a target level of earnings before interest
and taxes in 2017, which is referred to as the EBIT Goal.

 

		3.	Individual performance goals, which are established at the beginning of the year and consist of value–added tasks or
projects to be accomplished by you in 2017 that are considered to require an extra or particular effort on your part.

 

Your EICP Target Amount is allocated among the goals,
as follows:

 

	Participant	
        Company

        EPS Goal
	
        Operating Unit

        EBIT Goal
	Individual 

Performance 

Goals
	Operating Unit Participants	25%	50%	25%
	Non-Operating Unit Participants	75%	N/A	25%

    
	2017 Executive Incentive Compensation Program — [Name of participant]
	Page 2 of 6

 

     

    

Calculation of Payouts.

 

In early 2018, the level of the achievement of the
2017 EPS Goal and the 2017 EBIT Goal of each operating unit will be determined from the Company's financial statements.

 

The level of the achievement of your individual performance
goals will be determined by the manager to whom you report directly, and for some participants, also by a committee of the Board
of Directors.

 

Once the levels of achievement have been determined,
the payout for each goal will be determined.

 

		1.	Payout for Financial Goals. The payout, if any, for the achievement of financial goals is determined from the following
formula:

 

Your Target Amount times the percent of your
Target Amount allocated to the financial goal, times the percent of the financial goal that was achieved in 2017. However,
there is a minimum and a maximum achievement level:

 

		—	If the achievement level of a financial goal is below 80%, no payout will be made for that goal.

 

		—	If the achievement level of a financial goal is more than 100%, the payout cannot exceed 120% of your Target Amount allocated
to that goal.

 

		2.	Payout for Individual Performance Goals. The payout for the completion of individual performance goals is determined
by the percentage of your goals that you complete satisfactorily in 2017. Just as for financial goals, the formula for payout on
individual performance goals is —

 

Your Target Amount times the percent of your
Target Amount allocated to individual performance goals (25% for all participants), times the percentage of individual performance
goals you satisfactorily completed. Any positive level of achievement will result in some payout, but there cannot be more than
a 100% payout for satisfactorily completing all of your individual performance goals.

 

Termination of Employment During Calendar Year 2017.
In the event that you cease to be an employee of the Company during 2017, your participation in the EICP will be treated as follows:

 

	Reason for Termination	 	Effect on your Participation in the EICP
	For Cause 	 	No payment under the EICP will be made to you if the termination of your employment was for one or more of the following reasons:

	 	 	 	 
	 	 	a)	You were grossly negligent in the performance of your duties and/or your responsibilities;
or you refused to perform your duties and/or responsibilities.
	 	 	 	 
	 	 	b)	You committed an act of theft or other dishonesty, including, but not limited to an intentional
misapplication of the Company's or of any of its subsidiaries' funds or other property.
	 	 	 	 
	 	 	c)	You were convicted of any other criminal activity (other than a traffic violation or minor
misdemeanor).
	 	 	 	 
	 	 	d)	You participated in any activity involving moral turpitude that is, or could reasonably
be expected to be injurious to the business or reputation of the Company.
	 	 	 	 

 

 

    
	2017 Executive Incentive Compensation Program — [Name of participant]
	Page 3 of 6

 

     

    

	 	 	e)	You used alcohol immoderately and /or used non-prescribed narcotics that had the effect
of adversely and materially affecting the performance of your duties.
	 	 	 	 
	 	 	f)	You committed a material breach of a Company policy.
	 	 	 	 
	Your Resignation	 	No payment under the EICP will be made to you.  
	Without Cause, Permanent Disability, Death or Retirement (as defined by the Compensation Committee )	 	The incentive compensation that you would have earned, if any, had your employment not terminated, based on (a) the level of achievement of the financial goal or goals applicable to you at the end of 2017; and (b) on the assumption that you completed all of your individual performance goals satisfactorily, will be multiplied by —

 

A fraction, the numerator of which is the number of days in 2017 that you were an employee of the Company, and the denominator of which is 365.

 

The resulting incentive compensation, if any, will be paid to you or your personal representative, as the case may be, when other participants are paid, except that any incentive compensation payable in shares of restricted stock will be paid in cash.

 

 

Part
II:

 

Other
Terms of the 2017 Executive Incentive Compensation Program

 

Administration of the Program. The EICP is administered
by the Compensation Committee of Sterling's Board of Directors. Among other things, the Committee determines those employees who
are eligible to participate in the program, the participants' Target Amounts, and the goals and other performance measures. In
early 2018, the Committee will determine whether and to what extent the financial goals, and for certain participants the individual
performance goals, and other performance measures, have been met, and will authorize any payouts that have been earned.

 

The Committee will correct any defects, supply any omissions,
and reconcile any inconsistencies in the program or in any award made under the program in the manner and to the extent it believes
necessary or advisable to implement the program, including any adjustment to reflect the effect of any extraordinary financial
events occurring during the year.

 

 

Taxes & Tax Consequences.

 

		1.	Any payout under the EICP will be made in the first quarter of 2018, but no later than March 15, 2018.

 

		2.	Payouts to you under the EICP are treated as 2017 supplemental income for federal income tax withholding purposes. The Company
is currently required to withhold 25% of any cash payout amount plus Social Security and Medicare taxes.

 

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

 

		4.	Payouts are not eligible for deferral into your Company 401(k) account.

 

		5.	No taxes are withheld on the award of restricted shares. However, when the shares vest, the Company is required to withhold
taxes. You will be advised at the time of vesting of the opportunity to satisfy the tax withholding using some of the shares that
are vesting.

 

    
	2017 Executive Incentive Compensation Program — [Name of participant]
	Page 4 of 6

 

     

    

The Company's Claw-Back Policy. The Company's Claw-Back
Policy applies to any payments made under the EICP. A copy of the Claw-Back Policy is attached as Appendix B to this Program
Description. Please read it. It affects any incentive compensation (cash or shares) that was paid to you if the Company subsequently,
for whatever reason, restates the financial statements on which all or a portion of that incentive compensation was based.

 

Change of Control. A "Change of Control" of
the Company is defined in the Company's Stock Incentive Plan, and generally refers to the acquisition of the Company or a large
portion of the Company through the acquisition of shares of the Company's common stock, the acquisition of assets of the Company,
a merger or the like. If there is a Change of Control while shares of restricted stock issued to you under the EICP is still outstanding,
they will vest in full.

 

Governing Law. The provisions of the EICP are governed
by, and interpreted in accordance with, the laws of the State of Delaware, without regard to any of its conflicts of law provisions.

 

Compliance with Section 409A of the Code. The Company
intends that the EICP either (a) complies with Section 409A of the Internal Revenue Code of 1986, as amended, and the guidance
thereunder; or (b) is excepted from the provisions of Section 409A. As a result, the Company has the right to amend the EICP in
order to cause it to be in compliance with Section 409A or to qualify for being excepted from the provisions of Section 409A, and
to take any other actions to achieve that compliance or exception.

______________

 

[Insert Name] — Appendix
A

Your Key Numbers for the 2017 Executive
Incentive Compensation Program

	Financial Goals:	The 2017 Company EPS Goal:	$TBD per share
	 	
        Your 2017 Operating Unit EBIT Goal:
	
        $[refer to your unit's approved budget]

 

	Your 2017 Base Salary(1) ($)	
        Your EICP Target Amount

        Percent — Dollars
	
        Your EICP Target Amount

        EPS Goal Allocation

        Percent — Dollars
	
        Your EICP Target Amount

        EBIT Goal Allocation

        Percent — Dollars
	
        Your EICP Target Amount

        Individual Performance Goals(2)

        Allocation

        Percent — Dollars

	 	 	 	 	 

 

		(1)	Your Target Amount Percent will be applied to the base salary amount reported in your IRS Form W-2 for calendar year 2017.

 

		(2)	Your individual performance goals will be set forth on the form developed for that purpose by the Human Resources Department.

________________

 

 

 

    
	2017 Executive Incentive Compensation Program — [Name of participant]
	Page 5 of 6

 

     

    

Appendix B

Sterling Construction Company, Inc. Claw-Back
Policy

 

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

 

		(b)	If as a result of the restatement, the Incentive Compensation is shown to have been —

 

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

 

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

 

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

 

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

 

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

 

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

 

Adopted by the Board of Directors on
January 18, 2011

 

 

	2017 Executive Incentive Compensation Program- [Name of participant]	Page 6 of 6

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