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Sterling Construction Company, Inc.
1800 Hughes Landing Boulevard
The Woodlands, Texas 77380
Telephone: (281) 214-0800
Audit Corporate Governance Audit Compensation Director Chairman Audit Corporate Governance Paul J. (1)(2) Roger M. (1)(4) Kevan M. (5) Peter E. (6) Thomas R. (7) Committee Assignment(1)* Maarten D. Hemsley (nominee) Audit Corporate Governance Charles R. Patton (nominee) Richard O. Schaum (nominee) Audit Compensation* Milton L. Scott (nominee) Chairman of the Board Audit* Corporate Governance Paul J. Varello (nominee) Director, Chief Executive Officer Marian M. Davenport (continuing director) Compensation Corporate Governance* Chairman and Chief Executive Officer are management of risks associated with our board leadership structure, including committee appointments, size of board and nomination of board members, and corporate governance matters. The The Fees Earned or ($) Stock Awards ($) Total ($) Aggregate Stock at December 31, 2015 (#) Grant Date Fair Value of Stock Awards ($) Name and Address of Beneficial Owner Total Beneficial Ownership Percent of Class FMR LLC (1) 245 Summer Street, Boston, Massachusetts 02210 SEC. Based solely upon U.S. Concrete, Inc. Change in Control” on page 33. 2017 Summary Compensation Table Name and Principal Position Salary ($) Bonus ($) Stock Awards (1) ($) Non-Equity Incentive Plan Compensation ($) All Other Compen- (2) ($) Total ($) Paul J. Varello (3) Chief Executive Officer Since February 1, 2015 Ronald A. Ballschmiede (4) Executive Vice President & Since November 9, 2015 Roger M. Barzun (5) Senior Vice President & 2013 2014 2015 220,000 220,000 250,000 — — — — — — — — — — — — 220,000 220,000 250,000 Kevan M. Blair (6) Senior Vice President & Peter E. MacKenna President & Chief Executive January 1 – 31, 2015 2013 2014 2015 600,000 600,000 46,154 — — — 994,000 81,000 — 216,000 189,000 — 156,506 399,952 1,793,500 1,966,506 1,269,952 1,839,654 Thomas R. Wright Executive Vice President & January I – July 3, 2015 2013 2014 2015 84,808 350,000 200,962 100,000 — — 92,600 105,000 187,501 56,384 105,000 — 43,502 22,740 449,618 377,294 582,740 838,801 Estimated Possible Payouts Under Non-Equity Incentive Plan Awards ($) All Other Stock Awards: Number of Shares of Stock or Units Grant Date Fair Value of Stock and Option Awards Salary ($) Thomas R. Wright STIP Thomas R. Wright LTIP Number of (#) Aggregate on Vesting (1) ($) determined that each of Messrs. Hemsley and Scott qualifies as an “audit committee financial expert,” as such term is defined by the rules of the SEC. We operate under a written charter approved by us and adopted by the board of directors. Our primary function is to assist the board of directors in fulfilling the board’s oversight responsibilities relating to (1) the effectiveness of the company’s internal control over financial reporting, (2) the integrity of the company’s financial statements, (3) the company’s compliance with legal and regulatory requirements, (4) the qualifications and independence of the company’s independent registered public accounting firm, (5) the performance of the company’s independent registered public accounting firm and (6) the review and approval or ratification of any transaction that would require disclosure under Item 404(a) of Regulation S-K of the Exchange Act. Number of Shares of Stock or Units That Have Not Vested (1) (#) Market Value on December 31, 2015 of Shares of Stock or Units That Have Not Vested (2) ($) Number of (#) Market or Payout Value of Unearned Shares, Units or Other Rights That ($) Number of Securities (a) Weighted-average exercise price of warrants and rights (b) Number of securities remaining column (a) (c) December 2010 ($) December 2011 ($) December 2012 ($) December 2013 ($) December 2014 ($) December 2015 ($) All Other Fees (non-audit fees): on the internet. The notice also provides instructions on how to submit your proxy and voting instructions via the internet. If you 
the 2016 Annual MeetingNotice is hereby given that the 2016 Annual Meeting of Stockholders of Sterling Construction Company, Inc.a Delaware corporation, will be held as follows:local timeDate:May 6, 2016Place:Place: — Time:8:30 a.m. local timePurposes:1.To elect five Board nominees, each to serve for a term of one year and until their successors are duly elected and qualified.2.To ratify the selection of Grant Thornton LLP as the Company's independent registered public accounting firm for 2016.3.An advisory vote to approve named executive officer compensation.4.To transact any other business that properly comes before the meeting.Record Date:Date: Only the stockholders of record atas of the close of business on March 8, 201613, 2018 are entitled to notice of the meeting and to attend or vote at the meeting, or at any adjournment of it.annual meeting.By Order of the Board of DirectorsMarch 24, 2016Proxy Voting:Roger M. Barzun,SecretaryImportant notice regardingavailabilityBoard of proxy materials for theDirectors.
2016 Annual Meeting of StockholdersMarch 20, 2018The
ANNUAL MEETING OF STOCKHOLDERSthe form of proxy and the Annual Reportcompany’s 2017 annual report to Stockholders for the year ended December 31, 2015stockholders are available at the Company's Internet website, www.STRLco.com, on the "Investor Relations" page under the headingsProxy Statements andAnnual Reports.As indicated above, we are again using the "Notice and Access" methoddelivery of proxy materials to save costs and to avoid wasting paper. Most stockholders will receive the Notice Regarding the Availability of Proxy Materials, which provides the Internet website address of our transfer agent where stockholders can both access electronic copies of the proxy materials and vote. This website also has instructions for voting by telephone and for requesting paper copies of the proxy materials and a proxy card.Contentssummary of how you can vote your shares Page Proxy Summary Via the Internet:You may vote via the Internet by following the instructions in the Availability Notice or on your proxy card (if you receive one).By Telephone:Visit www.voteproxy.com to obtain the toll-free number to call.By Mail:If you request a paper copy of the proxy materials, you may vote by completing, signing, and dating the proxy card, and mailing it to the Company in the envelope that is provided to you.In person:You may attend the2018 Annual Meeting of Stockholders and cast your vote on each item as it is presented. Agenda and Voting Recommendations STERLING CONSTRUCTION COMPANY, INC.Proxy Statement for the 2016 Annual Meeting of StockholdersTable of ContentsSUMMARY OF THE PROXY STATEMENTIMatters to be Voted on at the Meeting Director HighlightsISummary of 2017 Performance Highlights Executive Compensation Highlights II2015 Compensation Corporate Governance HighlightsIISummary of Corporate GovernanceIIIGENERAL INFORMATION Board Governance Guidelines; Ethics and Business Conduct Policy1The Record Date1Methods of Voting1Voting in Person1Voting by Proxy2Revocation of a Proxy2Quorum, Vote Required & Method of Counting3The Solicitation of Proxies & Expenses3The 2015 Annual Report3ELECTION OF DIRECTORS (Proposal 1)4Term of Office & Declassification of Directors4The Nominees & Continuing Director; Independence4Background & Skills of the Nominees & Continuing Director5RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Proposal 2)9APPROVAL OF THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION FOR 2015 (an advisory vote) (Proposal 3)9THE BOARD OF DIRECTORS10Communicating with the Board10Board Governance10Independence10 Composition and Leadership Structure 10Declassification of Directors Board and Committee Meeting Attendance11Election of Directors by Majority Vote Board Committees11Directors' Attendance at Meetings in 201511Stock Ownership Guidelines & Policies11Claw-Back Policy12Board Evaluations12The Board's Risk Oversight12Selecting Director Nominees13Board Operations14Committees of the Board14The Audit Committee14The Audit Committee Report15The Compensation Committee15- i - Corporate Governance and Nominating Committee Special Committee Board and Committee Independence; Financial Experts Compensation Committee Procedures Compensation Committee Interlocks and Insider Participation 16The Compensation Committee Report Board Evaluation Process16The Corporate Governance & Nominating Committee Board’s Role in Oversight of Risk Management16 Director and Executive Officer Stock Ownership Guidelines Consideration of Director Nominees Communications with the Board Director Compensation 17STOCK OWNERSHIP INFORMATION Cash Compensation19Security Equity-Based Compensation 2017 Director Compensation Proposal No. 1: Election of Directors Information about Nominees Stock Ownership of Directors, Director Nominees and Executive Officers Stock Ownership of Certain Beneficial Owners and Management19Section 16(a) Beneficial Ownership Reporting Compliance EXECUTIVE COMPENSATIONExecutive Officer CompensationThe Executive Officers21Compensation Discussion and Analysis 22The objectives of the Company's compensation programs Compensation Committee Report22The elements of the named executive officers' compensation Executive Compensation Tables22How the amounts and compensation formulas were determined23The results of the most recent stockholder advisory vote24New incentive compensation arrangements for 201624Additional information on executive compensation25Compensation Policies & Practices — Risk Management26Employment Agreements of the Named Executive Officers27Potential Payments upon Termination or Change-in-Control29Compensation & Stock Tables.31 2017 Summary Compensation Table for 201531Grants of Plan-Based Awards in 2015201733Option Exercises and Stock Vested for 201535Outstanding Equity Awards at December 31, 2015201735Equity Compensation Plan Information 2017 Stock Vested36PERFORMANCE GRAPH Potential Payments upon Termination or Change in Control37TRANSACTIONS WITH RELATED PERSONS Pay Ratio38INFORMATION ABOUT AUDIT FEES & AUDIT SERVICESProposal No. 2: Advisory Vote on the Compensation of Our Named Executive Officers39Audit FeesCommittee Report39Audit-Related Fees39Tax Fees40All Other Fees (Non-Audit Fees)40Procedures for Approval of Services40SUBMISSION OF STOCKHOLDER PROPOSALS40- ii -SUMMARY OF THE PROXY STATEMENTA summary of some of the information contained in this Proxy Statement for the 2016 Annual Meeting of Stockholders is set forth on the following four pages. Each summary does not contain all the information that a stockholder should consider before voting. The entire Proxy Statement should be read before doing so. The Company's 2015 Annual Report is its Annual Report on Form 10-K for the year ended December 31, 2015, which has been filed with the Securities and Exchange Commission.Matters to be Voted on at the Meeting Appointment of Independent Registered Public Accounting Firm; Financial Statement
ReviewIndependent Registered Public Accounting Firm Fees and Related Disclosures for Accounting Services Proposal #1: The election of five Directors for one-year terms. The table below contains a summary of some of the information about the nominees for director. More detailed information can be found below under the heading Election of Directors (Proposal 1) at Page 4. Pre-Approval Policies and Procedures Nominees Current
PositionAge Occupation Board Committee Director
SinceMaarten D. Hemsley Director 66 Founder, Chairman and President
of New England Center for Arts
& Technology, Inc.1998 Charles R. Patton Director 56 President & Chief Operating
Officer of Appalachian Power CompanyCompensation 2013 Richard O. Schaum Director 69 General Manager, 3rd Horizon
Associates LLC2010 Milton L. Scott 59 Chairman and Chief Executive
Officer of the Tagos Group, LLC2005 Paul J. Varello Director 72 Chief Executive Officer of the Company N/A 2014 Proposal #2:No. 3: Ratification of the selectionAppointment of Grant Thornton LLP as the Company's independent registered public accounting firm for 2016. Grant Thornton was also the Company's firm of auditors for 2015. More information about Grant Thornton and their fees can be found below under the headingInformation About Audit Fees & Audit Services on Page 39.Our Independent Registered Public Accounting FirmProposal No. 4: Adoption of the 2018 Stock Incentive Plan Certain Transactions Proposal #3:Advisory approval of the compensation of the Company's named executive officers. More informationQuestions and Answers about the compensation of executives can be found in the following summaryProxy Materials, Annual Meeting and below under the headingExecutive Compensation on Page 21.Voting2019 Stockholder Proposals Proxy Statement Summary Page I Summary of Executive Compensation Annex A: 2018 Stock Incentive Plan This summary is qualified by the information below under the headingExecutive Compensation, which begins on Page 21. Named Executive Officers. The Company's named executive officers are those officers who are named in theSummary Compensation Table for 2015 under the headingExecutive Compensation. As noted below, two named executive officers left the Company in 2015. Except for Mr. Blair, the salaries of the named executive officers in 2015 were based on their employment agreements, or in the case of Mr. Ballschmiede, on an outline of employment terms. Mr. Blair has no employment agreement. After serving on an interim basis as Chief Financial Officer, as indicated below, he resumed his position as Senior Vice President, Corporate Finance.The Company's named executive officers for 2015 were as follows:A-1 NameTitle/PositionDate of ExecutiveOfficer StatusPaul J. VarelloChief Executive OfficerSince February 1, 2015Ronald A. BallschmiedeExecutive Vice President & Chief Financial Officer, Chief Accounting OfficerSince November 9, 2015Roger M. BarzunSenior Vice President & General Counsel, SecretarySince 2006Kevan M. BlairSenior Vice President & Chief Financial OfficerFrom July 3 toNovember 9, 2015Peter E. MacKennaFormer President & Chief Executive OfficerFrom September 2012through January 2015Thomas R. WrightFormer Executive Vice President & Chief Financial OfficerFrom September 2013to July 3, 20152015 Compensation. The table below shows the salaries, incentive compensation, bonuses and stock awards for 2015 of the named executive officers.
VarelloRonald A.
Ballschmiede
(1)(3)
Barzun
Blair
MacKenna
Wright2015 Annual Salary ($) $1.00 $400,000 $250,000 $250,000 $600,000 $375,000 2015 Cash Incentive Compensation/Bonus — — — $75,000 720,000 — 2015 Stock Awards (#) 600,000 100,000 — 3,971 — 136,259 2015 Stock Awards ($)(8) $1,932,000 $467,000 — $24,422 — $629,385(9) (1)Messrs. Varello, Ballschmiede and Barzun did not participate in any incentive compensation plan for 2015.(2)Mr. Varello's restricted stock award (vesting over three years) was in lieu of salary, and was approved by stockholders.(3)Mr. Ballschmiede served as a consultant to the Company's Audit Committee for several weeks prior to being hired as Chief Financial Officer, for which work he was paid $97,809. His restricted stock award (vesting over two years) was made to him in connection with his joining the Company.(4)Mr. Barzun is paid a $100,000 annual retainer for the performance of routine matters, which, after the end of the year is subject to increase by an amount that the Compensation Committee believes reflects appropriate compensation for the non-routine matters on which he worked during the year.(5)Mr. Blair participated in the Company's 2015 Long-Term Incentive Compensation Program under which he was awarded 3,971 shares of restricted stock that vest at the end of three years. Because he was unable to participate in the Company's 2015 Short-Term Incentive Compensation Program, he was awarded a $50,000 bonus for 2015. In addition, in connection with his assuming the role of Chief Financial Officer on an interim basis during 2015, he was awarded a $25,000 bonus.Proxy Statement Summary Page II (6)In connection with his leaving the Company's employ, Mr. MacKenna was paid his 2015 incentive compensation in full and in cash as if all 2015 goals had been met.(7)Mr. Wright participated in both the Company's 2015 Short-Term and Long-Term Incentive Compensation Programs. Under the Long-Term Incentive Compensation Program, he was awarded 29,871 shares of restricted stock vesting at the end of three years. In connection with his leaving the Company's employ, those shares were vested (as were the other shares of restricted stock he then held) and he was awarded 106,478 shares of unrestricted common stock.(8)These values are based on the closing price of the common stock on the date of the award, except as to Mr. Blair's 3,971 shares and 29,781 of Mr. Wright's shares that were awarded under the 2015 Long-Term Incentive Compensation Program pursuant to which the value was based on the average closing prices of the common stock in December 2014.At the 2015 Annual Meeting of Stockholders, the say-on-pay vote was as follows:Number of SharesEntitled to VoteVoted ForVoted AgainstAbstained13,173,92112,579,278 (95%)288,943 (2.2%)305,700 (2.3%)For more information about the named executive officers' restricted stock in 2015, see the tables below starting at Page 33.Summary of Corporate GovernanceThe Board has adopted a set of governance guidelines that it reviews periodically to ensure that they reflect the Board's and the Company's needs, as well as current trends in corporate governance.The following is a description of some of the main elements of the Company's corporate governance matters. A more detailed discussion can be found below under the headingThe Board of Directors in the section entitledBoard Governance beginning on Page 10:·Independence:o Of the Company's six directors, five are independent directors. The only non-independent director is the Company's Chief Executive Officer.o The roles of Chairman and Chief Executive Officer are separate, and the Board's Chairman is an independent director.o All members of the Board's standing committees are independent directors.o No director has entered into any related-party transaction with the Company.·At the 2015 Annual Meeting of Stockholders, the Board started the process of declassifying directors so that by the 2017 Annual Meeting, all nominees will be elected for one-year terms. See the section entitledTerm of Office & Declassification of Directorsunder the heading Election of Directorson Page 4.·Directors (in uncontested elections) are elected by a majority vote, with a director resignation procedure for incumbent directors who are nominated for re-election.·Meeting Attendance:o In 2015, all directors attended, in the aggregate, more than 90% of the meetings of the Board and of the committees on which they served.o All directors attended the 2015 Annual Meeting of Stockholders in person.Proxy Statement Summary Page III ·Executive sessions of independent directors are held at all four regularly-scheduled Board meetings and at other times as the need arises.·Two of the three members of the Audit Committee are financial experts.·Stock Ownership Guidelines & Policies:oDirectors and executive officers are prohibited from hedging shares of the Company's common stock.oExecutive officers are required to retain shares of the Company's common stock equal to a multiple of their base salaries.oDirectors are expected to hold shares of the Company's common stock with an acquisition value equal to five times their annual retainer.oThe Company's claw-back policy is applicable to incentive compensation paid irrespective of culpability, and applies to both cash and equity compensation.·The financial goals of incentive compensation programs are subject to caps and minimum achievement levels.·The Company currently has no change-in-control severance provisions in effect with any officer of the Company; however, their restricted stock vests in the event of a change in control.��Board Performance Evaluation:oBoth the Board and its committees perform a self-evaluation annually.oFor individual director evaluations, the Chair of the Corporate Governance & Nominating Committee confers with each director annually to solicit comments about nominations for election and re-election to the Board, and to permit each director to express any concerns about the functioning of the Board, its committees and its members. Any concerns about the Corporate Governance & Nominating Committee or its Chair are directed to the Chairman of the Board.·At each of the Board's regularly-scheduled meetings, directors receive an assessment and/or an update on the Company's primary risk categories.·The Company conducts annual advisory votes on executive compensation.·The Company has no stockholders rights plan (poison pill).Persons interested in communicating with the Board about their concerns, questions or other matters may do so as follows:By U.S. Mail to:Board of Directors℅ The SecretarySterling Construction Company, Inc.1800 Hughes Landing Blvd. — Suite 250The Woodlands, TX 77380orBy E-mail to:Reports@Lighthouse-Services.comProxy Statement Summary Page IV STERLING CONSTRUCTION COMPANY, INC.ii
1800 Hughes Landing BoulevardTelephone: (281) 214-0800statementFOR THE 2016 ANNUAL MEETING OF STOCKHOLDERSGENERAL INFORMATIONIn this Proxy Statement, Sterling Construction Company, Inc. is sometimes referred to as the Company, and the Board of Directorsstatement. This summary does not contain all of the Companyinformation that you should consider, and you should read the entire proxy statement carefully before voting. For more information regarding our 2017 financial and operational performance, please review our 2017 annual report to stockholders (2017 annual report). The 2017 annual report, including financial statements, is sometimes referredfirst being made available to as the Board. The Company is makingstockholders together with this Proxy Statement, theproxy statement and form of proxy and the Company's 2015 Annual Report on Form 10-K available to stockholders starting onor about March 24, 2016 in connection with the solicitation of proxies by the Board for the 201620, 2018.Stockholders. The Annual Meeting will be held on Friday, May 6, 2016 at Stockholdersat the Company's headquarters office at 1800 Hughes Landing Boulevard — Suite 250, The Woodlands, Texas 77380.On Wednesday, May 2, 2018Place: 24, 2016, the Company mailed aNotice13, 2018 Internet Availability of Proxy Materials (the Availability Notice) to stockholders of record on March 8, 2016 (the Record Date) and posted the proxy materials on the Company's website:www.STRLco.comas well as on the website provided in the Availability Notice:http://www.astproxyportal.com/ast/04770The Company is sending the Availability Notice to all stockholders of record instead of mailing them a printed set of the proxy materials to save postage and paper. As stated in the Availability Notice, if you wish to obtain a printed set of the proxy materials, you can do so without charge by requesting a copy either by telephone, by e-mail, or through either of the websites listed above, all as described in the Availability Notice.On or about April 5, 2016, the Company plans to mail a second Availability Notice to stockholders that will be accompanied by a proxy card on which you can indicate how you wish your shares to be voted.The Record Date. The Company has established March 8, 2016 as the Record Date. The persons or entities whose names appear on the records of the Company on that date as holders of the Company's common stock are entitled to notice of the Annual Meeting and to vote at the Annual Meeting, or at any adjournment of the meeting. On the Record Date, there were 19,773,170 shares of the Company's common stock outstanding.Methods of Voting. As a holder of record of common stock of the Company on the Record Date, you may vote your shares either by coming to the Annual Meeting and voting in person, or by appointing someone to vote your shares for you by giving that person a proxy.Voting in Person. To vote your shares in person, come to the meeting at the date, time and address set forth above in the Notice of the 2016 Annual Meeting of Stockholders, and you will be given a ballot on which you can vote your shares on each of the proposals.However, if your shares are held for you in the name of your broker, bank or other nominee, evidence of your stock ownership on the record date March 8, 2016 (such as a current letter from your broker, bank or other nominee, or a photocopy of your brokerage or other account statement for March 2016) must be presented at the meeting in order for you to vote your shares in person. -1- Voting by Proxy. In this Proxy Statement, you are being asked to appoint each of Milton L. Scott, the Chairman of the Board of Directors; Ronald A. Ballschmiede, the Company's Chief Financial Officer; and Roger M. Barzun, the Company's General Counsel, as your proxy to vote your shares in the way you direct, both at the Annual Meeting and at any adjournment of the meeting. Stockholders have the option to vote by proxy in three ways, all of them described in the Availability Notice:·Via the Internet: You may vote via the Internet by following the instructions in the Availability Notice.·By Telephone: You may vote by telephone by calling toll-free 1-800-PROXIES (1-800-776-9437) in the United States, or 1-718-921-8500 from a foreign country using a touch-tone telephone, and by following the instructions given to you. You should have your proxy card with you when you make the call so that you can provide the numbers found on your proxy card when asked to do so.·By Mail: You may vote by mail by obtaining a printed copy of the proxy card in the manner described in the Availability Notice. You may then complete, sign, and date the proxy card and mail it to the Company in the envelope that will have been provided to you with the proxy card.If your shares are held in the name of a bank, a broker or by another nominee holder of record, please refer to the information provided to you by the nominee about your voting options.If you vote by proxy, your shares will be voted as you direct if —·Your proxy is properly completed;·Your proxy is received before the Annual Meeting; and·Your proxy is not revoked by you before the voting.If you do not specify on your proxy how you want your shares voted, they will be voted in the following ways:FORthe election of the five nominees for a term of one year (Proposal 1).FORthe ratification of the selection of Grant Thornton LLP as the Company's independent registered public accounting firm for 2016 (Proposal 2).FORthe approval of the compensation of the Company's named executive officers as set forth in this Proxy Statement (Proposal 3) (an advisory vote).The Board does not know of any other proposal that will be presented for consideration at the Annual Meeting.Revocation of a Proxy. You may revoke a proxy you have already given in any one of the following three ways:·By sending to the Secretary of the Company, at the Company's address set forth above, a written statement that you wish to revoke your proxy;·By submitting another proxy dated later than a previous proxy; or·By attending the Annual Meeting in person and notifying the chair of the meeting that you wish to vote in person. -2- Quorum, Vote Required & Method of CountingThe Quorum for the Meeting. A quorum must be present in order to hold the Annual Meeting. A quorum consists of the holders of a majority of the shares of outstanding common stock who are present in person or represented by proxy at the meeting and entitled to vote. Each share of common stock entitles the record holderis entitled toonfor each director position and one vote for each of the mattersother proposals to be voted on at the Annual Meeting. Shares held in "street" name, meaning held by a bank, broker or other nominee who indicate on their proxies that, because they have not received directions on how to vote the shares, they do not have the discretionary authority to vote the shares on a particular proposal, are known as broker non-votes.Vote Required & Method of Counting.Item Description Board Vote Recommendation Page 1 Election of seven director nominees FOR each nominee 2 Advisory vote to approve the compensation of our named executive officers FOR 3 Ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for 2018 FOR 4 Adoption of the 2018 stock incentive plan FOR Proposal 1.To be elected a director, a nominee must receive more votes for his or her election than against it. Because the election of a nominee does not require a minimum number of votes, abstentions and broker non-votes will have no effect on the voting for the election of directors.Director Highlights Proposal 2.Name Age Director Since Principal Occupation Independent Joseph A. Cutillo 52 2017 Chief Executive Officer of Sterling Construction Company, Inc. No None Marian M. Davenport 64 2014 Executive Director of Genesys Works – Houston Yes Maarten D. Hemsley 68 1998 Founder, Chairman and President of New England Center for Arts & Technology, Inc. Yes Raymond F. Messer 70 2017 Chairman Emeritus of Walter P Moore Yes Charles R. Patton 58 2013 Executive Vice President — External Affairs American Electric Power Company, Inc. Yes Richard O. Schaum 71 2010 General Manager, 3rd Horizon Associates LLC Yes Milton L. Scott** 61 2005 Chairman and Chief Executive Officer of the Tagos Group, LLC Yes The ratification of the selection of Grant Thornton LLP as the Company's independent registered public accounting firm for 2016 requires the affirmative vote of the holders of a majority of the shares of common stock who are present in person or represented by proxy at the Annual Meeting and who are entitled to vote on that proposal. Abstentions will have the effect of votes against the proposal, but broker non-votes will not be counted as they are not, by definition, entitled to vote.2017 Performance Highlights See also the information below under the headingRatification of the Selection of the Independent Registered Public Accounting Firm (Proposal 2) for the effect of your vote on this proposal.Executive Compensation Highlights Proposal 3.The advisory vote to approve the compensation of the named executive officers also requires the affirmative vote of the holders of a majority of the shares of common stock who are present in person or represented by proxy at the Annual Meeting and who are entitled to vote on that proposal. Abstentions will have the effect of votes against the proposal, but broker non-votes will not be counted as, by definition, they are not entitled to vote.The SolicitationProxies & Expensesperformance metrics. In additionCorporate Governance Highlights solicitationinterests of proxies by means of this Proxy Statement, directors, officers and employees of the Company and possibly a third-party solicitation agent may solicit proxies using personal interviews, telephone calls, facsimile transmissions and e-mails. The cost of any proxy solicitation agent would be borneour stockholders. Our commitment to good corporate governance is illustrated by the Company. The Company will request banks, brokerage housesfollowing practices: other custodians, nominees and fiduciaries to solicit votes from their customers who are beneficial owners, but not record holders, of common stock, and to forward or make available proxy solicitation materials to those beneficial owners. The Company will reimburse them for the reasonable out-of-pocket expenses they incur in doing so, and will pay the expenses of printing and mailing this Proxy Statement, the form of proxy, the Availability Notice, the Company's 2015 Annual Report on Form 10-K, and any other solicitation materials.The 2015 Annual Report. A copy of the Company's Annual Report on Form 10-K for the year ended December 31, 2015, which has been filed with the Securities and Exchange Commission (SEC) contains financial statements and other information of interest to stockholders. Stockholders may obtain a copy of the 2015 Annual Report in the same manner as they may obtain a copy of the other proxy solicitation materials. -3- ELECTION OF DIRECTORS (Proposal 1)Term of Office & Declassification of Directors. A director holds office until the expiration of his or her term and until a successor is elected and qualified unless the director dies, resigns or is removed from the Board, in which case, the Board has the authority to appoint a replacement director.Starting with the 2015 Annual Meeting of Stockholders, the Board began the process of phasing out the classification of its directors. Prior to the 2015 Annual Meeting of Stockholders, directors were divided into three classes with three-year terms each, and the election of the classes of directors were staggered so that at each Annual Meeting of Stockholders, the terms of only one class of directors expired. At the 2014 Annual Meeting of Stockholders, an amendment of the Company's Certificate of Incorporation was approved by stockholders with the result that —·At the 2015 Annual Meeting of Stockholders, when the three-year terms of the three Class II directors expired, their successors were elected to one-year terms.·At the 2016 Annual Meeting of Stockholders, when the terms of the two Class III directors expire, their successors and the successors to the three directors whose terms expired at the 2015 Annual Meeting of Stockholders will all be elected to one-year terms.·At the 2017 Annual Meeting of Stockholders, the term of the Company's only Class I director will expire. Her successor and the successors to the other directors whose terms expire at that meeting will be elected to one-year terms, and as a result, at that time, directors will no longer be classified.It is anticipated that at the 2017 Annual Meeting, stockholders will be asked to approve an amendment of the Company's Certificate of Incorporation in order bring it into compliance with Delaware's requirements regarding the removal of directors for companies that do not have classified directors.The Bylaws of the Company permit the Board to determine from time to time the number of directors serving on the Board. The Board has set the size of the Board at six directors.To be elected, a director must receive more votes for his or her election than against it.the board of directors recommends that stockholders votefor each director nomineeThe Nominees & Continuing Director; Independence.Each of the nominees listed below has stated a willingness to serve if elected. If any nominee is unable to serve, the proxy holders may vote for a substitute nominee. The Board has no reason to believe that any of the nominees will be unable to serve.A proxy cannot be voted by the proxy holders for more persons than the number of nominees named in this Proxy Statement. Information about the number of shares of common stock of the Company owned by the nominees and the continuing director can be found below under the headingStock Ownership Information.The table below shows information about the nominees for director and the continuing director. All of the directors satisfy the Nasdaq Stock Market's definition of an independent director except for Mr. Varello, who, as the Company's Chief Executive Officer and as an employee of the Company, is not considered independent. -4- Nominees Current Position Age Class Director Since Year Term Expires Director 66 N/A 1998 2017 Director Compensation 56 N/A 2013 2017 Director 69 N/A 2010 2017 Director 59 N/A 2005 2017 — 72 N/A 2014 2017 Director 62 I 2014 2017 (1)The full names of the committees are the Audit Committee, Compensation Committee, and Corporate Governance & Nominating Committee.*An asterisk indicates that the director is the Chair of the committee.Background & Skills of the Nominees & Continuing DirectorMaarten D. Hemsley (nominee)Founder, Chairman and President of New England Center for Arts & Technology, Inc. (NECAT),a career-directed educational non-profit serving resource-limited adults and youth in Boston, Massachusetts.Mr. Hemsley founded NECAT in 2010. Before that, he was the Company's President and Chief Operating Officer from 1988 until 2001, and its Chief Financial Officer from 1998 until 2007. From 2001 until March 2012, when he retired, Mr. Hemsley was a consultant to, or employee of, Harwood Capital LLP (Harwood) (formerly JO Hambro Capital Management Limited) an investment management company based in the United Kingdom. During that period, Mr. Hemsley served as a Fund Manager, Senior Fund Manager and Senior Advisor to several investment funds managed by Harwood.Other Directorships. From 2003 until February 2016, Mr. Hemsley was a director of Sevcon, Inc., a public company that manufactures electronic controls for electric vehicles and other equipment, and of a number of privately-held companies in the United Kingdom.Experience, Qualifications, Attributes & Skills. Mr. Hemsley has extensive financial experience and managerial skills gained over many years, including as chief financial officer of the Company for nine years and as its President for thirteen years; through his recent position managing investment funds; and his responsibilities during his career as chief financial officer of several medium-sized public and private companies in a variety of business sectors in the U.S. and Europe. His knowledge of the Company derived from more than twenty-five years' service, as well as his analytical skills honed as a fund manager in making investment decisions and overseeing the management of a wide range of portfolio companies, enable him to contribute to the Board's oversight of the Company's business, its financial risks, its executive compensation arrangements, the risks inherent in its acquisition program, and in post-acquisition integration issues. Mr. Hemsley is a Fellow of the Institute of Chartered Accountants in England and Wales. -5- Charles R. Patton (nominee)President & Chief Operating Officer of Appalachian Power Company,a company serving approximately one million customers in West Virginia, Virginia and Tennessee.Mr. Patton has served in the above capacity since June 2010 with responsibility for distribution operations and a wide range of customer and regulatory relationships. Appalachian Power Company is a unit of American Electric Power Company, Inc. (AEP), one of the largest publicly-traded utilities in the United States. From June 2008 to June 2010, Mr. Patton served as Senior Vice President of Regulatory Policy and subsequently Executive Vice President of AEP's Western Utilities where he was responsible for oversight of utilities in Texas, Louisiana, Arkansas and Oklahoma. Prior to that, from May 2004 to June 2008, Mr. Patton was President and Chief Operating Officer of AEP Texas, and held various other executive roles, with responsibility for external affairs in Texas and in the Southwestern region of AEP. Before joining AEP in December 1995, Mr. Patton spent nearly 11 years in the energy and telecommunications business with Houston Lighting & Power Company.Other Directorships. Mr. Patton serves as a director of the Richmond Federal Reserve Bank.Experience, Qualifications, Attributes & Skills.As evidenced by his biographical data, above, Mr. Patton has extensive experience in the utilities industry combined with high-level management experience, both of which benefit the Board in its deliberations by bringing a different perspective than any other director. Mr. Patton received a bachelor’s degree (cum laude) from Bowdoin College in Brunswick, Maine, and a master’s degree from the LBJ School of Public Policy at the University of Texas in Austin.Richard O. Schaum (nominee)General Manager, 3rd Horizon Associates LLC,a technology assessment and development company.Mr. Schaum has served in the above capacity since May 2003. From October 2003 until June 2005, he was also Vice President and General Manager of Vehicle Systems for WaveCrest Laboratories, Inc. and led its vehicle systems development group. Prior to that, for more than thirty years, he was with DaimlerChrysler Corporation, and its predecessor, Chrysler Corporation, most recently, from January 2000 until his retirement in March 2003, as Executive Vice President, Product Development.Experience, Qualifications, Attributes & Skills. Mr. Schaumhas extensive executive and management experience at all levels in a Fortune 100 company, and knowledge of, and interest in, corporate governance matters, gained on the boardand nominating committees.a Fortune 500 company. In addition, his technical background and his operating experience at all levels of management contribute to the breadth and depth of the Board's deliberations. Mr. Schaum is a fellow of the Society of Automotive Engineers and served as its President from 2007 to 2008. He earned a B.S. in Mechanical Engineering from Drexel University and an M.S. in Mechanical Engineering from the University of Michigan.Other Directorships. Mr. Schaum is currently a director of BorgWarner Inc., a publicly-traded company that manufactures and sells technologies for engines and drive trains, and Gentex Corporation, a publicly-traded company that manufactures and sells automotive electro-chromic dimming mirrors, windows, camera-based driver assist systems, and commercial fire protection products. -6- Milton L. Scott (nominee)Tagos Group, LLC (Tagos),a company that provides expertise in Supply Chain Advisory Services and Anti-Corrosion Technology. It also holds an investment in cement technology.Mr. Scott was elected Chairman ofboard overseen by the Board of Directors in March 2015, and he remains Chair of the Audit Committee. He has served as Chairman and Chief Executive Officer of Tagos since April 2007. From October 2012 to November 2013, Mr. Scott was also the Chairman and Chief Executive Officer of CorrLine International, LLC (CorrLine), a private company that manufactured CorrX, a surface decontamination product that treats and destroys the primary cause of premature coating failures. CorrLine was placed into involuntary Chapter 7 bankruptcy in August 2014, and in October 2014, Tagos purchased the assets of CorrLine and placed them in a subsidiary of Tagos, TGS Solutions, LLC, of which Mr. Scott is Chairman and Chief Executive Officer. Mr. Scott was previously associated with Complete Energy Holdings, LLC, a company of which he was Managing Director until January 2006, and which he co-founded in January 2004 to acquire, own and operate power generation assets in the United States. From March 2003 to January 2004, Mr. Scott was a Managing Director of The StoneCap Group, an entity formed to acquire, own and operate power generation assets. From October 1999 to November 2002, Mr. Scott served as Executive Vice President and Chief Administrative Officer at Dynegy Inc., a public company in the business of power distribution, marketing and trading of gas, power and other commodities, midstream services and electric distribution. From July 1977 to October 1999, Mr. Scott was a partner with the Houston office of Arthur Andersen LLP, a public accounting firm, where from 1996 to 1999, he served as partner in charge of the Southwest Region Technology and Communications practice.Other Directorships. Mr. Scott is Chairman and Chief Executive Officer of TGS Solutions, LLC, a private company that manufactures Corrx, a surface decontamination product that treats and destroys the primary cause of premature coating failures. He is also Chairman of Inea International, Ltd. (Inea), a private company that through its wholly-owned subsidiary, VHSC Cement, LLC, has developed a technology that enables the creation of a product that competes with Portland Cement. Tagos has an equity investment in Inea.Past Directorships. Mr. Scott was a director of W-H Energy Services, Inc., which at the time was a publicly-traded company in the oilfield services industryExperience, Qualifications, Attributes & Skills. Mr. Scotthas many years of experience as an audit partner at a large public accounting firm; leadership, managerial and corporate governance skills acquired during his tenure as a senior executive at a Fortune 500 company; and entrepreneurial skills developed through the founding of several companies in the energy service and technology sectors. He has also served as a chief executive officer of private companies and as a lead director at a public company. Mr. Scott's background and experience enable him to bring to the Board and its deliberations a broad range and combination of valuable insights as well as leadership skills, particularly in his role as Chairman of the Board and Chair of the Audit Committee.Paul J. Varello (nominee)Chief Executive Officer of the Company.Mr. Varello is the Founder and President of Commonwealth Projects, LLC, a project development company specializing in the development of a liquefied natural gas (LNG) facility in Cameron, Louisiana. He is the former Founder and Chairman of Commonwealth Engineering & Construction, LLC (CEC), an engineering and construction management company specializing in the design and construction of capital projects for the oil & gas, refining, LNG, power, and related energy industries, which he sold in January of 2014. -7- Prior to founding CEC in May 2003, Mr. Varello was Senior Partner of Varello & Associates, a company that provided technical assessments, economic evaluations, estimates and constructability reviews to project lenders, plant operators and engineering companies from September 2001 to May 2003. From May 1990 to September 2001, Mr. Varello was Chairman of the Board and Chief Executive Officer of American Ref-Fuel Company of Houston, Texas. The company was a joint venture of two publicly-traded companies formed to develop, own and operate plants that converted solid municipal waste into energy. For the eighteen years prior to 1990, Mr. Varello was with Fluor Corporation, a Fortune 500 company that provides engineering, procurement, construction, maintenance, and project management services to a wide range of global clients. Mr. Varello started with Fluor as a project construction manager and rose to the position of President of the Process Sector.Prior Directorships.From 2005 to 2012, Mr. Varello was a director of Sims Metal Management Limited (NYSE: SMS and ASX: SGM), a global recycler of metals and electronics, headquartered in Sydney, Australia. From 1992 to 1999, he served on the board of Ryland Group, Inc. (NYSE: RYL), a homebuilder and a mortgage-finance company located in the United States.Experience, Qualifications, Attributes & Skills.Mr. Varello's background encompasses a diversity of experience in engineering, construction, executive management and board service that enhances both the scope and breadth of the Board's expertise as a group, thereby contributing to the overall performance of the Board's responsibilities. He is a Registered Professional Engineer in California, Texas and Louisiana, and holds a Bachelor of Civil Engineering from Villanova University. He is also a graduate of Harvard Business School's Advanced Management Program.Marian M. Davenport (continuing director)Executive Director, Genesys Works — Houston,a nationally-recognized nonprofit organization that trains and employs economically disadvantaged high school students to work as professionals in major corporations during their senior year.Ms. Davenport has served in the above capacity since March 2013. From September 2004 to March 2013, Ms. Davenport was associated with Big Brothers Big Sisters, a non-profit organization that provides one-to-one mentoring for children. She held various positions in its affiliated organizations, including serving from September 2004 to June 2010 as President & Chief Executive Officer of Big Brothers Big Sisters of Greater Houston, and from June 2010 to March 2013 as Senior Vice President, Operations and Capacity Building of Big Brothers Big Sisters Lone Star. From April 1997 to December 2002, Ms. Davenport was employed by Dynegy Inc., a publicly-traded company in the business of power distribution, marketing and trading of gas, power and other commodities, midstream services and electric distribution. She joined Dynegy as General Counsel, Commercial Development and rose to the position of Senior Vice President, Legislative and Regulatory Affairs.Experience, Qualifications, Attributes & Skills.Ms. Davenport brings to the Board her background as a lawyer, with experience in corporate governance and securities compliance, having served as general counsela public company. In addition, she has extensive experience as an executive inbusiness conduct. energy industry as a result of managing the development of large natural gas-fired power plants and where she served as a change agent to improve performance of critical company functions, including human resources. Ms. Davenport's more recent career in the non-profit sector providing mentoring and workforce development opportunities for disadvantaged youth brings a new perspective and expertise to the Company, which is in an industry where finding competent candidates for employment at all levels is more and more competitive. In sum, Ms. Davenport's extensive background in both the for-profit and non-profit sectors brings cognitive diversity to the Board and the committees on which she serves.Ms. Davenport holds a Bachelor of Arts degree, Liberal Arts and Sciences, from The Colorado College, of Colorado Springs, Colorado, and a JD degree from the University of Denver, College of Law, in Denver, Colorado. Ms. Davenport is a member of the bar of Texas. -8- RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM(Proposal 2)Pursuant to its charter, the Audit Committee is responsible for the appointment of the Company's independent registered public accounting firm. The Audit Committee has selected Grant Thornton LLP to perform the audit of the Company's 2016 financial statements. Grant Thornton was also the Company's 2015 independent registered public accounting firm.The Audit Committee may select a different independent registered public accounting firm at any time during the year if it determines that to do so would be in the best interests of the Company and itsour stockholders. The Board is asking stockholders to ratify the selection of Grant Thornton as a matter of good corporate practice, although ratification is not required by law or by the Company's Bylaws, and the vote is not binding on the Audit Committee. There is information about Grant Thornton's fees below under the headingInformation About Audit Fees & Audit Services.The ratification of the selection of Grant Thornton requires the affirmative vote of the holders of a majority of shares of common stock present in person or represented by proxy at the meeting and who are entitled to vote on this proposal.the Board of Directors recommends that stockholders votefor the ratification of the selection of Grant Thornton LLPAPPROVAL OF THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION FOR 2015 (an advisory vote)(Proposal 3)Current SEC regulations require the Company to solicit an advisory stockholder vote on the approval of the compensation of the executive officers of the Company who are listed below in the section entitledThe Executive Officers under headingExecutive Compensation. The advisory vote, as described below, is commonly referred to as say-on-pay. The vote is not binding on the Company.At the 2011 Annual Meeting of Stockholders, the holders of 80% of the shares who were present in person or represented by proxy at the meeting voted in accordanceOur board governance guidelines, along with the Company's recommendation to hold a say-on-pay vote annually. The Company has done so in the past and intends to continue to do so in the future.At the 2015 Annual Meeting of Stockholders, the holders of common stock present in person or represented by proxy at the meeting and who were entitled to vote on the Company's 2014 executive compensation voted as follows:Number of SharesEntitled to VoteVoted ForVoted AgainstAbstained13,173,92112,579,278 (95%)288,943 (2.2%)305,700 (2.3%)In determining how to vote on the Company's 2015 executive compensation, stockholders should take into account all of the disclosures in this Proxy Statement that relate to the compensation of executives. That information includes a discussion and tables that are found below under the headingExecutive Compensation, as well as an explanation of why and how the types and levels of executive compensation were determined. -9- In the event that stockholders do not approve executive compensation, the Compensation Committee of the Board will review its decisions on compensation structure and levels, as well as the comparability of the executives' compensation to that of a peer group of companies, before deciding whether to make any changes in the compensation of one or more of the executives.The next advisory vote on say-on-pay after the 2016 Annual Meeting of Stockholders will be held at the 2017 Annual Meeting of Stockholders. In addition, a vote on whether the say-on-pay vote should be held every one, two or three years (the say-on-frequency vote) will also be held at the 2017 Annual Meeting of Stockholders.The affirmative vote of the holders of a majority of the shares of common stock who are present in person or represented by proxy at the Annual Meeting and who are entitled to vote on this proposal is required to approve executive compensation.The Board of Directors recommends that stockholders votefor the approval ofnamed executive officer compensation pursuant to the following resolution:Resolved, that the compensation paid to the Company's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth below under the headingExecutive Compensation, is hereby approved.THE BOARD OF DIRECTORSCommunicating with the Board. Stockholders and other interested parties may communicate with the whole Board, the Chairman of the Board, or with any independent director by sending the communication as follows:By U.S. Mail:℅ The SecretarySterling Construction Company, Inc.1800 Hughes Landing Blvd. — Suite 250The Woodlands, TX 77380 orBy E-mail to: Reports@Lighthouse-Services.comThe Secretary will give the communication to the directors when received unless it is frivolous. If the communication is voluminous, the Secretary will summarize it and furnish the summary to the Board.Board Governance.The Board has adopted a set of governance guidelines, some of which are referred to elsewhere in this Proxy Statement. The full set ofBoard Governance Guidelines can be found on the Company's website, www.STRLco.com, on the Investor Relations page under Corporate Governance.Independence. The Board is currently made up of six directors, five of whom are independent. All memberscharters of the standing committees of our board, provide the Board are independent directors as required byframework for the Board's Governance Guidelines. Mr. Varello, Chief Executive Officergovernance of the Company, iscompany and reflect the only directorboard’s commitment to monitor the effectiveness of policy and decision making at both the board and management levels. Our board governance guidelines and our code of business conduct are available at www.strlco.com under Investor Relations–Corporate Governance. Both are available in print to any stockholder who is not considered independent because he is an employeerequests a copy. Amendments to or waivers of our code of business conduct granted to any of our directors or executive officers will be published promptly on our website. Such information will remain on our website for at least 12 months.Company.Leadership Structure. Formanagement of our business and affairs. Our board of directors consists of seven members, six of whom have been determined by our board to be independent, specifically Ms. Davenport and Messrs. Hemsley, Messer, Patton, Schaum and Scott. Mr. Cutillo, our chief executive officer, is our only non-independent director. Our board of directors recognizes the short period between February 1importance of having a strong independent board leadership structure to ensure accountability and March 9, 2015, Mr. Varello, was the Company's Chairmanto provide effective oversight of the Board and acting Chief Executive Officer. As a result of his election as Chief Executive Officer on a more permanent basis and his execution of a three-year employment agreement with the Company, Mr. Varello resigned as Chairman of the Board. management.who is the Chairserves as our chairman of the Audit Committee, was elected Chairman in his place.board of directors with responsibilities that include: (1) presiding at meetings of the board and executive sessions of its independent directors; (2) presiding at the annual meeting of stockholders; (2) serving as a liaison between the independent directors and senior management; and (3) approving the agendas for board meetings. The Companyboard of directors believes that the separation of the roles of Chairmanchairman and Chief Executive Officer,chief executive officer, as required by our board governance guidelines, continues to be the appropriate leadership structure for the company at this time. The board believes this structure provides an effective balance between strong company leadership and appropriate safeguards and oversight by independent directors.Governance Guidelines, is appropriateand Committee Meeting Attendanceorder to enhance the independence75% or more of the Board. It separates the operational leadership roletotal number of the chief executive from the fiduciary leadership rolemeetings of the Board. Prior to electing an independent Chairman in 2014, from 2006 to 2014, the Company had a Lead Director, who was elected from among the independent directors. -10- Declassificationour board and meetings of Directors. As described above under the headingElection of Directors (Proposal 1), the Board is in the process of phasing out the classification of its directors. Formerly, directors were divided into three classes, with three-year, staggered terms so that at each Annual Meeting of Stockholders, the terms of one classcommittee on which such director served. Messrs. Cutillo and Messer did not join our board of directors expired. Atuntil April of 2017.2014 Annual Meeting, stockholders approved an amendment of the Company's Certificate of Incorporation to phase out the classes of directors so that by the 2017 Annual Meeting of Stockholders, all directors will be elected for one-year terms.Election of Directors by Majority Vote. In order to be elected a director, a nominee must receive more votes for his or her election than against it, which is generally referred to as a majority vote. Since a director is elected for a specified term and until his or her successor is elected and qualified, an incumbent director who is nominated for re-election, but fails to receive a majority vote, would remain a director because no successor had been elected. To cure this problem, each incumbent director, as a condition to being nominated for re-election, must, in advance of the Annual Meeting, submit a resignation that becomes effective if he or she does not receive the required vote, and if the Board accepts the resignation. Before the Board makes a determination on accepting or rejecting the resignation, the Corporate Governance & Nominating Committee considers the matter and makes a recommendation to the Board. Each of the nominees has furnished the Board with the required contingent resignation.Directors' Attendance at Meetings in 2015. During 2015, the Board held 17 meetings; the Audit Committee held 17 meetings; the Compensation Committee held seven meetings; and the Corporate Governance & Nominating Committee held three meetings. The meetings were held in person or by conference telephone call. During 2015, each incumbent director attended, in the aggregate, at least 90% of theannual meetings of the Board and of the committees on which he or she served. All directors attended last year’s Annual Meeting of Stockholders in person. The Company'sour stockholders. Our company policy is to schedule the Annual Meeting of Stockholders to coincide with a regular Board meeting of the board of directors on the same day as the annual meeting of stockholders so that directors can attend the Annual Meetingannual meeting without the Companycompany incurring the extra travel and related expenses of a separate meeting.Stock Ownership Guidelines & Policies.·Hedging of Company Stock.Directors, executive officers, officers of the Company's majority-owned subsidiaries, as well as any employee of the Company or its subsidiaries to whom the Company has awarded shares of common stock, are prohibited from hedging the value of their shares, however acquired.·Pledging Shares & Share Retention. This policy prohibits officers from selling or pledging their shares of the Company's stock if, after giving effect to the sale or pledge, the market value of the number of unpledged shares then held by the officer would be —For the Chief Executive Officer, less than two times his or her annualized base salary;For executive officers (including the named executive officers) less than two times his or her annualized base salary; andFor officers of majority-owned subsidiaries, less than one times his or her annualized base salary.The policy does not apply to stock purchased in the open market prior to January 1, 2011. -11- ·Directors. Under the Board Governance Guidelines, within five years of initial election to the Board, each non-employee director is expected to own shares of the Company's common stock equal in value to five times the annual cash retainer payable to directors. Market value is determined by the acquisition price or the closing market price at the time of acquisition, as the case may be. See the section below entitledDirector Compensation. All directors with five or more years of service on the Board have met this requirement. In the event of an increase in the annual retainer, the Corporate Governance &and Nominating Committee will review this guideline to determine if there is a need for a change to reflect the increase.Marian M. Davenport — X Chair Maarten D. Hemsley X — X Raymond F. Messer X X — Charles R. Patton — X — Richard O. Schaum X Chair — Milton L. Scott Chair — X Claw-Back Policy. The Company's Claw-Back Policy applies to all bonuses, incentive compensation and the like that has been paid to an employeeCompany (whetherboard, all of which are composed entirely of independent directors.cash, in equity, or both) that was based on financial statements that are subsequently restated. If necessary,fulfilling its oversight responsibilities related to (1) the compensation is adjusted 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 amounteffectiveness of the compensation was determined. The policy applies to all such compensation paid to an employee, whether or notcompany’s internal control over financial reporting; (2) the employee was culpable with respect tointegrity of the error, event, act or omission that causedcompany’s financial statements; (3) the restatement to be made.Board Evaluations. Directors conduct an annualqualifications and independence of the company’s independent registered public accounting firm; (4) the evaluation of the performance of the company’s independent registered public accounting firm; and (5) the review and approval or ratification of any transaction that would require disclosure under Item 404(a) of Regulation S-K of the Securities Exchange Act of 1934 (the Exchange Act). Please refer to the “Audit Committee Report” included in this proxy statement for more information. The audit committee held six meetings in 2017. committees. Questionnairesreview of director independence, our board and legal counsel considered all commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the company or management.sentlikely to expose the company to material risks.Board memberdirector completes an evaluation of the full board and each committee upon which the director serves, which is intended to provide each director with an opportunity to evaluate performance for the purpose of improving board and committee member.processes and effectiveness. The detailed questionnaire seeks quantitative ratings and subjective comments in key areas of board practices, and asks each director to evaluate how well the board or the committee, as applicable, operates and to make suggestions for improvements. Replies are anonymous and are collected and summarized by the Chairchair of the Corporate Governance & Nominating Committee.corporate governance and nominating committee. The summary is then discussed by the independent directors in an executive session held for such purpose. In addition, the purpose.chair of the corporate governance and nominating committee conducts one-on-one interviews with each director to solicit additional feedback on the overall operation of the board and its committees, as well as specific feedback on the effectiveness of individual directors. The board chair or the chair of the corporate governance and nominating committeeBoardboard or committee performance that are identified as needing improvement or change are considered by the Corporate Governance & Nominating Committee,corporate governance and nominating committee, which then makes a recommendation to the Boardboard on the matter.addition,its risk oversight role, our board of directors reviews, evaluates and discusses with appropriate members of management whether the Chairrisk management processes designed and implemented by management are adequate in identifying, assessing, managing and mitigating material risks facing the company. Throughout the year, the board of directors receives briefings and assessments of the Corporate Governance & Nominating Committee confers each year with each director individually to solicit comments about nominations for election and re-election to the Board, and to permit each director to express any concerns about the functioning of the Board, its committees and its members. Any comments a director may have about the Corporate Governance & Nominating Committee and its Chair are directed to the Chairman of the Board.The Board's Risk Oversight. Directors identify and exercise oversight of the Company's material risks acting as the whole Board as well as through its three standing committees. At each of the Board's regularly-scheduled meetings, directors receive a briefing and an assessment of the Company'scompany's risks as they relate to:·Safety·Crisis management·Construction joint ventures·Information technology·Compensation -12- Risk OversightBoard Committees.our board on risk management or any other matters. Our board of directors oversees the strategic direction of the company, and in doing so considers the potential rewards and risks of the company’s business opportunities and challenges, and monitors the development and management of risks that impact our strategic goals.Board sharesboard of directors assists the board in fulfilling its risk oversight responsibility as shown inwith respect to the table below:following:Audit Committee Compensation Committee Corporate Governance and Nominating Committee Board of DirectorsAudit CommitteeCompensationCommitteeCorporate Governance &Nominating CommitteeFinancial liquidityExecutive compensationBoard organizationCovenant complianceIncentive compensationBoard membershipAccountingBoard governanceInternal controlsLegal compliance Audit Committee. Inaudit committee assists our board in fulfilling its oversight responsibilities with respect to certain areas of risk. The audit committee is responsible for reviewing and discussing with management and our independent registered public accounting firm any guidelines and policies relating to risk assessment and risk management, and the measures management has taken to monitor, control and minimize the company’s major financial risk exposures. The audit committee also discusses with our independent registered public accounting firm the results of their processes to assess risk in the context of its audit engagement. The audit committee also assists our board in fulfilling its oversight responsibilities by monitoring the effectiveness of the company’s internal control over financial reporting and legal and regulatory compliance. Our independent registered public accounting firm meets regularly in executive session with the audit committee. The audit committee regularly reports on these matters to the full board. Finally, in furtherance of its risk oversight responsibility, the Audit Committeeaudit committee provides for the confidential, anonymous submission by employees and others of concerns regarding questionable accounting, auditing and any other matters. These submissions are collected by an independent organization specializing in those services, and are conveyed to the Chairchair of the Audit Committee,audit committee, our chief compliance officer, and our general counsel.Company's Chief Compliance Officer,company’s assessment of whether its compensation policies and practices are likely to expose the company to material risks, including the company’s compensation of executives and incentive compensation awarded to officers. Also, in consultation with management, the compensation committee is responsible for overseeing the company’s compliance with regulations governing executive compensation.Company's General Counsel.Compensation Committee. More information about the Compensation Committeecorporate governance and compensation risk can be found below in the section entitledCompensation Policies & Practices — Risk Management under the headingExecutive Compensation.The Corporate Governance & Nominating Committee. The Corporate Governance & Nominating Committeenominating committee addresses some of its risk oversight responsibilities throughby identifying and recommending for nomination well-qualified independent directors; throughdirectors, periodically reviewing of our board governance guidelines, and conducting annual board self-evaluations and individual director evaluations (through the periodic reviewchair of the Board Governance Guidelines;committee).by conducting annual Board self-evaluations,Executive Officer Stock Ownership Guidelinesthroughour executive officers. The board of directors believes that it is in the Chairbest interests of the Committee, individual director evaluations.Selecting Director Nominees.company and its stockholders that directors and executive officers have a meaningful proprietary stake in the company so that their interests are aligned with the interests of stockholders. The Board's Corporate Governance & Nominating Committee has the responsibility, among others, to identify and recommend for nominationstock ownership guidelines are administered by the Board (includingcorporate governance and nominating committee.majoritytrust for the director or executive or his or her immediate family, as well as shares subject to unvested restricted stock and restricted stock units are counted for purposes of independent directors) qualified candidates forthe stock ownership guidelines.as director.The Corporate Governance & Nominating Committee has voted to recommendcomply with the stock ownership guidelines. Mr. Messer, who was first elected to the Board the nomination for re-election of Messrs. Hemsley, Patton, Schaum, Scott and Varello, whose current terms expireboard at the Annual Meeting. If re-elected, they will serve2017 annual meeting, is required to reach his stock ownership target within five years from the date of election and, thus, is currently in compliance with the guidelines. Our executive officers have five years from the date of their respective appointments (or from January 17, 2018, the date upon which the guidelines were revised, whichever is later) to attain their required ownership levels. All of our executive officers have all been in their respective positions with the company for one-year terms.Information aboutless than three years, so each has until January 17, 2023 to reach his target ownership level and, thus, each of our executive officers is currently in compliance with the backgroundguidelines.qualifications of the nominees is set forth above in the section entitledBackground & Skills of the Nominees & Continuing Director under the headingElection of Directors (Proposal 1).The Corporate Governance & Nominating Committeenominating committee has not specified any minimum qualifications for serving on the Board,board, but seeks to achieve a Boardboard that is composed of individuals who have experience that is relevant to the needs of the Company,company, who have a high level of professional and personal ethics,integrity, who have the ability and willingness to work cooperatively with other members of our board and with senior management, and who contribute to the cognitive diversity of the Board,board taking into account many factors, including business experience, public sector experience, professional training, public and private offices held, geographical representation, race, gender and age, among other considerations. Experience in the construction industry and in one or more of engineering, transportation, finance and accounting, corporate governance, senior management, and public sector matters are considered particularly valuable. An independent director candidate is expected to be committed to enhancing stockholder value, and to have sufficient time to carry out the duties of a director,Boardboard and on one or more of its standing committees. -13- Corporate Governance & Nominating Committeecorporate governance and nominating committee will regularly assess whether the size of our board is appropriate, and whether any vacancies on our board are expected due to retirement or otherwise. In addition, the corporate governance and nominating committee periodically assesses the strengths, experience, qualifications, attributes and skills of the independent directors to determine if there is a gap in the skills or experienceare gaps that the Boardboard should seek to fill. GivenIn the Company's size,event that vacancies are anticipated, or otherwise arise, the Committee realizes that it is difficult to achieve a Board with broad diversity. Whenever it is determined that replacement directors or additional directors are needed, the Corporate Governance & Nominating Committeecorporate governance and nominating committee will perform a similar assessment.In identifyingconsider various potential candidates, who may come to the corporate governance and nominating committee’s attention through professional search firms, stockholders or other persons. Alternatively, the corporate governance and nominating committee may recommend a reduction in the size of the board. Each candidate brought to the attention of the corporate governance and nominating committee, regardless of who recommended such candidate, will be considered on the basis of the criteria set forth above.Board membership,nomination by our stockholders. Stockholders may propose candidates for consideration by the corporate governance and nominating committee by submitting the names and supporting information to: c/o Corporate Governance & Nominating Committee relies on suggestionsSecretary, Sterling Construction Company, Inc., 1800 Hughes Landing Blvd. — Suite 250, The Woodlands, Texas 77380.recommendations from directors, management and others,received by our corporate secretary at our principal executive offices no later than February 1, 2019. If the date of next year’s annual meeting is moved to a date more than 30 days before or 90 days after the anniversary of this year’s annual meeting, the nomination must be received no later than 90 days prior to the date of the 2019 annual meeting or 10 days following the public announcement of the date of the 2019 annual meeting. Any stockholder submitting a nomination under our bylaws must comply with the requirement provided in the bylaws including from timeproviding: (a) all information relating to time executive search and board advisory firms. The Committee has not established a special policy regarding the considerationnominee that is required to be disclosed in solicitations of director candidates recommended by stockholders. Before recommending a candidateproxies for election of directors pursuant to Regulation 14A under the Corporate Governance & Nominating Committee conducts an independent evaluationSecurities Exchange Act of the candidate and checks references. The evaluation of any candidate recommended by a stockholder would be conducted1934, as amended (including such nominee’s written consent to being named in the same manner as for any other candidate.If a stockholder wishes to recommend a personproxy statement as a candidate for nominationnominee and to serve as a director if elected); and (b) the name and address (as they appear on the company’s books) of the nominating stockholder should followand the procedure for communicatingclass and number of shares beneficially owned by such stockholder.is described abovecompensation in the section entitledCommunicatingform of equity-based compensation. The corporate governance and nominating committee reviews the form and amount of director compensation and, with the Board. Recommendationsadvice of candidatesthe chair of the compensation committee, makes recommendations to the full board. We use a combination of cash and equity-based incentive compensation to compensate our non-employee directors, as described below.nominationserving on our board (including the chairman of the board of directors), increased from $30,000;2017 Annual Meeting of Stockholders must be receivedaudit committee (including if performed by the date set forth below under the headingSubmission of Stockholder Proposals.Board Operations.Committeeschairman of the Board. The Board's three standing committees are the Audit Committee, the Compensation Committee and the Corporate Governance & Nominating Committee. The professional background and skillsboard of eachdirectors);members of these committees are described above incompensation committee (unless performed by the section entitledBackground & Skillschairman of the Nominees & Continuing Director, underboard of directors);headingElectioncorporate governance and nominating committee (unless performed by the chairman of Directors (Proposal 1).Eachthe board of these committees hasdirectors); andcharter thatfee of $1,500 for attending each board meeting in person, and a fee for attending any committee meeting (of which he or she is posteda member) in person:Company's website, www.STRLco.com under the Investor Relations page in the Corporate Governance section. The Board also establishes special-purpose, orad hoc, committees as the need arises.The Audit Committee. The current membersspecial committee of the Audit Committee are Milton L. Scott, Chair, Maarten D. Hemsley,board in 2017, Ms. Davenport and Richard O. Schaum. The Board has determined that each of Messrs. Hemsley, Patton, Schaum and Scott is an Audit Committee Financial Expert based on the definition of that term containedreceived additional fees in applicable regulations. The Audit Committee meets at least quarterly.The Audit Committee assists the Board in fulfilling its responsibility to oversee the Company's accounting and financial reporting processes, and the audits by the Company's independent registered public accounting firm, which is referred to in the Committee's charter as the independent auditors. In particular, the Audit Committee has the responsibility to —·Review financial reports and other financial information, internal accounting and financial controls, controls and procedures relating to public disclosure of information, and the audit of the Company's financial statements by the Company's independent auditors;·Appoint independent auditors, approve their compensation, supervise their work, oversee their independence, and evaluate their qualifications and performance;·Review with management and the independent auditors the audited and interim financial statements that are included in filings with the Securities and Exchange Commission; -14- ·Review the quality of the Company's accounting policies;·Review with management major financial risk exposures;·Review and discuss with management the Company's policies with respect to press releases on earnings and earnings guidance, including the use of pro forma information;·Review all proposed transactions between the Company and related parties in which the amount involved exceeds $100,000;·Provide for the confidential, anonymous submission by employees and others of concerns regarding questionable accounting or auditing matters; and·Oversee the Company's Ethics & Compliance Program by supporting the resource needs of the Company's Chief Compliance Officer, and by receiving periodic reports from the Chief Compliance Officer on the status of the compliance program and other matters.The Audit Committee Report. In fulfillment of its responsibilities, the Audit Committee has —·Reviewed, and met and discussed with management and with the Company's independent registered public accounting firm the Company's 2015 audited consolidated financial statements;·Discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 16, as amended,Communications with Audit Committees as adopted by the Public Company Accounting Oversight Board;·Received the written disclosures and the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence, and has discussed with the independent accountant the independent accountant's independence; and·Based and in reliance on the foregoing review and discussions, recommended to the Board, and the Board has approved the inclusion of the Company's audited consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 for filing with the SEC.Submitted by the members of the Audit Committee on March 24, 2016:Milton L. Scott,ChairMaarten D. HemsleyRichard O. SchaumThe Compensation Committee. The current members of the Compensation Committee are Richard O. Schaum, Chair, Marian M. Davenport, and Charles R. Patton. The Committee holds at least four regularly-scheduled meetings each year.The Compensation Committee has the responsibility to —·Determine the type, the amount, the manner and the time of payment, of salary, incentive compensation and any other compensation that is paid to officers of the Company and the principal executive officers of the Company's subsidiaries;·Set any goals, financial or individual, pursuant to which any incentive compensation may be earned by an officer, and to determine the level of achievement, if any, of those goals;·Determine the terms and conditions of officers' employment agreements and severance arrangements; -15- ·Determine which, if any, employees of the Company and its subsidiaries and affiliates are provided with change-in-control severance benefits, and the terms and conditions of those benefits;·Administer the Company's stock plans;·Review and make recommendations on the Company's benefit plans;·Evaluate risks that arise from the Company's compensation policies and practices;·Review and advise the Corporate Governance & Nominating Committee on the compensation of non-employee directors;·Establish the compensation of non-employee directors who serve onad hoc committees of the Board;·Appoint, retain, compensate and oversee the work of compensation consultants, independent legal counsel, and other compensation advisers, and to consider certain independence factors before selecting them; and·Review and discuss with management the Company's Compensation Discussion and Analysis, and based on that review and those discussions, to determine whether to recommend that it be included in the Company's Annual Report on Form 10-K.In exercising its authority and carrying out its responsibilities, the Compensation Committee meets to discuss the structure of executive compensation, proposed employment agreements, salaries, cash and equity incentive awards, and the achievement and the setting of financial and individual performance goals on which executive incentive compensation is based, using information circulated in advance of the meeting by the Chair of the Committee. The Compensation Committee may not delegate any of its responsibilities, but may share them with other independent directors. When the Committee discusses an executive officer's compensation, he or she may not be present. For a description of the compensation of executives of the Company, see the information below under the headingExecutive Compensation.Compensation Committee Interlocks and Insider Participation. During 2015, Marian M. Davenport, Maarten D. Hemsley, Charles R. Patton, and Richard O. Schaum served on the Compensation Committee. None of these Committee members was in 2015, or within the last eight years has been, an officer or employee of the Company.None of the Company's executive officers served as a director or member of the compensation committee, or of any other committee serving an equivalent function, of any other entity that has an executive officer who is serving, or during 2015 served as a director or member of the Compensation Committee of the Company.The Compensation Committee Report. The Compensation Committee of the Board of Directors has reviewed and discussed with management theCompensation Discussion and Analysis set forth below under the headingExecutive Compensation. Based on that review and those discussions, the Compensation Committee recommended to the Board of Directors that theCompensation Discussion and Analysis be included in the Company's proxy statement on Schedule 14A.Submitted by the members of the Compensation Committee on March 24, 2016:Richard O. Schaum,ChairMarian M. DavenportCharles R. Patton -16- The Corporate Governance & Nominating Committee. The current members of the Corporate Governance & Nominating Committee are Marian M. Davenport, Chair, Maarten D. Hemsley, and Milton L. Scott. The Committee typically holds three to four regularly-scheduled meetings a year. The Corporate Governance & Nominating Committee assists the Board in fulfilling its corporate governance responsibilities, and in particular has the responsibility to —·Develop and recommend to the Board appropriate corporate governance principles and rules;·Recommend appropriate policies and procedures to ensure the effective functioning of the Board;·Identify and recommend qualified director candidates for nomination by the Board and election by stockholders;·Recommend directors for membership on Board committees;·Develop and make recommendations to the Board regarding standards and processes for determining the independence of directors under applicable laws, rules and regulations;·Develop and oversee the operation of an orientation program for new directors and to determine whether and what form and level of continuing director education is appropriate;·Periodically review the Company's Code of Business Conduct and its Insider Trading Policy to ensure that they remain responsive both to legal requirements and to the nature and size of the business; and·With the advice of the Chair of the Compensation Committee, make recommendations to the Board for the compensation of non-employee directors, members and Chairs of the Company's standing committees, and the Chairman of the Board.Director Compensation.Standard Director Compensation Arrangements. The following table shows the standard compensation arrangements for non-employee directors in effect on the date of this Proxy Statement. Non-employee directors are also compensated for service onad hoc committees, the fees for which are determined by the Compensation Committee as the need arises. The Company does not pay any additional compensation for serving on the Board to directors who are also employees of the Company or its affiliates. All directors are reimbursed for their reasonable out-of-pocket expenses incurred in attending meetings of the Board and its committees. Following the table below is a second table that shows the amount of fees and other$1,500.actually paid to directors for 2015.Annual Fees — Each Non-Employee Director:·$30,000 Retainer (paid in monthly installments)·Immediately following the Annual Meeting of Stockholders, an award of shares of restricted common stock that has an accounting income charge under ASC Topic 718 of $50,000.(1)Annual Fees: —Board and Committee Chairs (paid in monthly installments)·Chairman of the Board of Directors(2)$100,000·Chair of the Audit Committee$25,000·Chair of the Compensation Committee$15,000·Chair of the Corporate Governance & Nominating Committee$10,000 -17- Meeting Fees(3)In-Person MeetingsPer Meeting·Board Meetings$1,500·CommitteeMeetingsAudit Committee MeetingsIn connection with a Board meetingNot in connection with a Board meeting$1,000$1,500Other Committee MeetingsIn connection with a Board meetingNot in connection with a Board meeting$500$750Telephonic Meetings (Board & Committee Meetings)·One hour or longer$750·Less than one hour$500(1)The restricted stock award is subject to the following basic terms:Restrictions: The shares may not be sold, assigned, transferred, pledged or otherwise disposedunder our stockholder-approved stock incentive plan consisting of until they vest. The retentionannual grants of the shares is subject the Board's Governance Guidelines.Vesting: The restrictionsrestricted stock. Each year on the restricted stock lapse on the trading day immediately preceding the following year's Annual Meeting of Stockholders, but earlier upon the deathannual meeting of the director; upon thestockholders, each non-employee director becoming permanently disabled; and upon a change in control of the Company as defined in the Company's Stock Incentive Plan under which the shares are issued.Forfeiture: Theis awarded shares of restricted stock are forfeitedwith an aggregate grant date value of $50,000. The restricted stock vests the day prior to the following year’s annual meeting of stockholders, with potential accelerated vesting in the event that the non-employee director dies or becomesthanreason.reason of his or her death, permanent disability or a changeour non-employee directors during 2017. The amount included in controlthe “Stock Awards” column reflects the aggregate grant date fair value of the Company.(2)The Chairman of the Board receives the annual cash retainer and the stock award made to each non-employee director. The Chairman's fee covers not only compensation for service as Chairman, but also for attendance at all Board and committee meetings and for service as chair of any committee of the Board other than the Audit Committee. In the event the Chairman is also the Chair of the Audit Committee, the Audit Committee Chair fee will also be paid. On March 9, 2015, Mr. Varello resigned as Chairman, executed a three-year employment agreement with the Company, and Milton L. Scott, Chair of the Audit Committee, was elected Chairman of the Board in his place. Mr. Scott remains Chair of the Audit Committee.(3)In-personBoard and committee meetings that continue from one day to the next are paid as a single meeting. Time spent by non-employee directors at the Company's investor conferences or attending continuing education programs are not separately compensated, but the expenses of attending are reimbursed.Director Compensation Paidrestricted stock, and does not necessarily reflect the income that will ultimately be realized by the director for 2015.Set forth below is a table showing the compensation paid for 2015 to each non-employee director who served for any period during 2015. The amounts are based on the standard director compensation arrangements described above. None of the Company's non-employee directors receivedthese stock awards. Mr. Cutillo did not receive any compensation for any otherhis service providedon our board of directors, and Mr. Varello did not begin receiving compensation for service on our board of directors until April 28, 2017, when he ceased serving as an officer of the company. The compensation paid to Messrs. Cutillo and Varello, including compensation received in Mr. Varello’s capacity as a director, during 2017 is reflected in the Company.In the"2017 Summary Compensation" table below, —Name of Director Fees Earned or Paid in Cash Total Marian M. Davenport $72,083 $49,994 $122,077 Maarten D. Hemsley $70,167 $49,994 $120,161 $43,833 $49,994 $93,827 Charles R. Patton $56,583 $49,994 $106,577 Richard O. Schaum $79,083 $49,994 $129,077 Milton L. Scott $168,333 $49,994 $218,327 ·Fees Earned or Paid in Cash include meeting fees, the directors' annual retainer fee, and annual fees for serving as the Chair of a committee or as Chairman of the Board.·Stock Awards show the dollar value of the annual award of restricted stock made following the Annual Meeting of Stockholders to each director. The award is denominated in dollars, not shares, so this number isAmounts reflect the aggregate grant date fair value computedof the restricted stock, which is valued on the date of grant at the closing sale price per share of our common stock in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718. The cost does not reflect any estimates made for financial statement reporting purposes718, disregarding the effect of future forfeitures relatedforfeitures. On April 28, 2017, each non-employee director was granted 5,257 shares of restricted stock, which had a grant date fair value of $9.51 per share. As of December 31, 2017, each non-employee director had 5,257 shares of restricted stock outstanding.Mr. Messer was first elected as a director at the 2017 annual meeting, and was appointed to service-based vesting conditions. The valuationthe audit and compensation committees on April 28, 2017.
EACH OF THE SEVEN DIRECTOR NOMINEES.Name of Director Age Director Since Joseph A. Cutillo 52 2017 
Chief Executive Officer of Sterling Construction Company, Inc. 64 2014 
Name of Director Age Director Since 68 1998 
Name of Director Age Director Since 70
Other Directorships. Mr. Messer serves on the board of Kennedy/Jenks Consultants, a private environmental and water resources engineering company, where he chairs the nominating and compensation committees. He also serves on the board of Braun Intertec, a private materials testing and geotechnical engineering firm, where he serves on the compensation/human resources and nominating committees. He serves on the boards of not-for-profits Texas Higher Education Foundation, Stages Theatre, Genesys Works. He has also served on the national executive committee of the American Council of Engineering Companies.
Experience, Qualifications, Attributes & Skills. In addition to his engineering degrees, Mr. Messer brings to the board over 40 years of practical experience in engineering design, project management and construction, all matters that relate directly to the Company's construction businesses. During his tenure as President and Chief Executive Officer of Walter P. Moore, he acquired leadership, managerial and corporate governance skills that contribute to the board’s industry-specific expertise and ability to fulfill its responsibilities. In addition, the variety of his private and not-for-profit board experience enables him to bring to the Company valuable strategic insights into board matters generally. Mr. Messer is a Licensed Professional Engineer in Texas, Florida and New York. He holds a Bachelor of Arts in Mathematics from Carroll College, Helena Montana and a Bachelor of Science in Civil Engineering and a Master of Science in Engineering Mechanics from Columbia University. 2017 
Name of Director Age Director Since 58 2013 
Name of Director Age Director Since 71 2010 
61 2005 
Chairman and Chief Executive Officer of the Tagos Group, LLC Name of Director Age Director Since awardsSouthwest Region Technology and Communications practice. Mr. Scott was elected chairman of the Company’s board of directors in March 2015.describedChairman and Chief Executive Officer of TGS Solutions, LLC, a private company that manufactures Corrx, a surface decontamination product that treats and destroys the primary cause of premature coating failures. He is also Chairman of Inea International, Ltd. (Inea), a private company that through its wholly-owned subsidiary, VHSC Cement, LLC, has developed a technology that enables the creation of a product that competes with Portland Cement. Tagos has an equity investment in Inea.Company's Annual Report on Form 10-K foroilfield services industry) from October 2000 until the year ended December 31, 2015company was sold in Note 14 of Notes to Consolidated Financial Statements. No amounts earned by a director have been capitalized on the balance sheet for 2015. -18- ·All dollar amounts are roundedAugust 2008.nearest dollar.Name
Paid in CashMarian M. Davenport 64,250 50,000 114,250 Maarten D. Hemsley 87,293 50,000 137,293 Charles R. Patton 49,000 50,000 99,000 Richard O. Schaum 81,250 50,000 131,250 Milton L. Scott (1) 157,887 50,000 217,887 (1)The fees paid to Mr. Scott for 2015 includeboard hismany years of experience as an audit partner at a special, one-time payment of $50,000 in recognition of the extra work required of him in 2015 in his dual capacity as Chairman of the Board and Chair of the Audit Committee, including the 34 meetings of the Board and Audit Committee in 2015,large public accounting firm as well as leadership, managerial and corporate governance skills acquired during his tenure as a senior executive at a Fortune 500 company, and entrepreneurial skills developed through the extensive work required outsidefounding of meetings.several companies in the energy service and technology sectors. He has also served as a chief executive officer of private companies and as the lead director at a public company. Mr. Scott's background and experience enable him to bring to the board and its deliberations a broad range and combination of valuable insights as well as leadership skills, particularly in his role as chairman of the board. Mr. Scott holds a Bachelor of Science in Accounting from Southern University.Outstanding Awards.The following table shows at December 31, 2015each non-employee directorour directors and executive officers to align their interests with the long-term interests of our stockholders. We encourage stock accumulation through the grant date fair value of each outstandingequity incentives to our directors and executive officers and through our stock award that has been expensed,ownership guidelines applicable to our directors and executive officers.aggregate numberamount of shares of stock awarded.The annual stock award to directors is denominated in dollars ($50,000) and was converted into shares ofour common stock usingbeneficially owned as of the $4.12 closing price per share on the awardrecord date, May 8, 2015, which resulted in an award toMarch 13, 2018, by each non-employeeof our director of 12,135 shares.At December 31, 2015, no non-employee directornominees, our named executive officers and our current directors and executive officers as a group. Unless otherwise indicated, all shares shown are held any stock options or any stock-based grant or award otherwith sole voting and investment power.Name of Beneficial Owner Number of Shares Not Subject to Unvested Awards Total Number of Shares Beneficially Owned Marian M. Davenport 30,186 5,257 35,443 * Maarten D. Hemsley 175,969 5,257 181,226 * Raymond F. Messer — 5,257 5,257 * Charles R. Patton 35,161 5,257 40,418 * Richard O. Schaum 46,881 5,257 52,138 * Milton L. Scott 40,050 5,257 45,307 * Joseph A. Cutillo 46,586 56,848 103,434 * Ronald A. Ballschmiede 68,287 10,614 78,901 * Con L. Wadsworth 31,869 — 31,869 * Richard E. Chandler, Jr. — 25,000 25,000 * 731,946 — 731,946 2.7% 18,000 — 18,000 * 474,989 124,004 598,993 2.2% those shown in the table below.Name Grant Date
Awards OutstandingMarian M. Davenport May 8, 2015 12,135 50,000 Maarten D. Hemsley May 8, 2015 12,135 50,000 Charles R. Patton May 8, 2015 12,135 50,000 Richard O. Schaum May 8, 2015 12,135 50,000 Milton L. Scott May 8, 2015 12,135 50,000 STOCK OWNERSHIP INFORMATIONFor more information regarding the restricted stock, see “Director Compensation—Equity-Based Compensation” and “Executive Officer Compensation—Compensation Discussion and Analysis—Components of Executive Compensation—Long-Term Incentive Awards.” Mr. Varello resigned as our chief executive officer on April 28, 2017, but continued to serve as a director until December 31, 2017. Mr. Barzun resigned on October 27, 2017. Security and Management. following table sets forth certain information atbelow shows persons known to us, as of March 14, 2016 about13, 2018, to be the beneficial ownershipowner of sharesmore than 5% of the Company's common stock, its only class of equity securities outstanding. The information given relates to the following categories of stockholders:·Each person or entity known to the Company to own beneficially more than 5% of theour outstanding shares of common stock.·Each nominee and continuing director. -19- ·Each executive officer named below in theSummary Compensation Table for 2015 under the headingExecutive Compensation.·All current directors and executive officers as a group.Based on information furnished by the beneficial owners, the Company believes that the owners listed have sole investment and sole voting power over the shares of common stock shown as beneficially owned by them, except as stated otherwise in the footnotes to the table.Rule 13d-3(d)stock.Name and Address of Beneficial Owner Number of Shares Beneficially Owned 6.6% 5.8% 7.1% of the Securities Exchange Act of 1934 requires that the percentages listed in the following table assume for each person or group the acquisition of all shares that the person or group can acquire within sixty days of a recent date, for instance by the exercise of a stock option, but not the acquisition of the shares that can be acquired in that period by any other person or group listed. However, none of the entities listed below have indicated that they have any rights to acquire additional Based on 27,034,575shares of our common stock in the future. In addition, noneoutstanding as of the Company's directors or executive officers holds any stock options or other rights to acquire shares of the Company's common stock.Except as otherwise indicated, the address of each beneficial owner is the address of the Company.1,906,200 9.64% Marian M. Davenport (2) 18,338 † Maarten D. Hemsley (2)(3) 194,121 † Charles R. Patton (2) 23,313 † Richard O. Schaum (2) 35,033 † Milton L. Scott (2) 43,202 † Paul J. Varello (4) 612,203 3.10% Ronald A. Ballschmiede (5) 100,000 † Roger M. Barzun 24,161 † Kevan M. Blair (6) 12,546 † Peter E. MacKenna (7) 211,328 1.07% Thomas R. Wright (8) 162,004 † All current directors and executive officers as a group (9 persons) (9) 1,055,240 5.34% † Less than one percent.The information for the entity identified in footnote 1, below, is based on an amended Schedule 13G that was filed with the Securities and Exchange Commission by the named entity on the date indicated.Based on a Schedule 13G filed with the SEC on February 1, 2018, by BlackRock, Inc. on its own behalf and on behalf of its subsidiaries identified therein, reflecting beneficial ownership as of December 31, 2017. The Schedule 13G reflects 1,779,241 shares held with sole dispositive power and 1,729,468 shares held with sole voting power. Based on a Schedule 13G filed with the SEC on February 9, 2018, by Dimensional Fund Advisors LP, reflecting beneficial ownership as of December 31, 2017. The Schedule 13G reflects 1,566,403 shares held with sole dispositive power and 1,480,152 shares held with sole voting power. Based on Schedule 13G filed with the SEC on February 14, 2018, by Renaissance Technologies LLC, reflecting beneficial ownership as of December 31, 2017. The Schedule 13G reflects: (i) 1,811,731 share held with sole dispositive power and 112,969 shares held with shared dispositive power; and (ii) 1,749,481 shares held with sole voting power. -20- Voting Power Dispositive Power Name Filing Date Sole Shared Sole Shared (1) FMR LLC November 10, 2014 56,200 — 1,906,200 — In its filing, FMR states that the filing reflects the securities beneficially owned, or that may be deemed to be beneficially owned, by FMR LLC, certain of its subsidiaries and affiliates, and other companies (collectively, the "FMR Reporters") and that the filing does not reflect securities, if any, beneficially owned by certain other companies whose beneficial ownership of securities is disaggregated from that of the FMR Reporters in accordance with Securities and Exchange Commission Release No. 34-39538 (January 12, 1998). (2) This director's shares include 12,135 shares that are subject to restrictions on their sale or other transfer. The shares were awarded to the non-employee as director compensation — see the section above entitledDirector Compensation under the headingBoard Operations. The restrictions expire on May 5, 2016, the day before the 2016 Annual Meeting of Stockholders, but earlier if the director dies or becomes disabled, or if there is a change in control of the Company. The shares are forfeited before the expiration of the restrictions if the director ceases to be a director other than because of his or her death or disability, or a change in control of the Company. (3) Mr. Hemsley's shares do not include the shares owned by the Maarten and Mavis Hemsley Family Foundation. (4) Of these shares, 400,000 are subject to restrictions on their sale or other transfer. The restrictions expire in two equal installments, on March 9, 2017 and March 9, 2018. (5) These shares are subject to restrictions on their sale or other transfer. The restrictions expire in two equal installments, on November 9, 2016 and November 9, 2017. (6) Of these shares, 8,973 shares are subject to restrictions on their sale or other transfer. The restrictions lapse as follows: as to 1,031 shares on May 8, 2017; 3,971 shares on December 31, 2017; and 3,971 shares on January 29, 2018. (7) Mr. MacKenna left the Company on January 31, 2015; these are the shares that he held at that time. (8) Mr. Wright left the Company on July 3, 2015; these are the shares that he held at that time. (9) For all current directors and executive officers as a group, see footnotes 2 through 6, above, for a description of certain of the shares included in the total for the group. Con L. Wadsworth became an executive officer effective March 10, 2016 and accordingly, his 4,869 shares are included in this total. . the Company’sour directors and executive officers and directors, and persons who own more than 10%10 percent of the Company’s equity securities (insiders)our common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission reports of beneficial ownership of those securities, as well as certain changes in beneficial ownership on Forms 3, 4 and 5, and to give the Company a copy of those reports.aour review of Forms 3 and 4such reports and amendments to them furnished to the Companythereto filed during 2015; any Forms 5 and amendments to them furnished to the Company relating to 2015;2017, and written representations from our directors and executive officers, we believe that no Form 5 isall required all Section 16(a) filing requirements applicable toreports were timely filed.Company’s insiders were satisfied.EXECUTIVE COMPENSATIONThe Executive Officers. The Company is required under applicable rules and regulations to furnish information aboutcontext of the compensation paid during the last fiscal year to our current chief executive officer, our former chief executive officer, our chief financial officer and the each of the following executives:·Any persons who served during 2015 as the Company's principal executive officer and any persons who served during 2015 as the Company's principal financial officer; and·The Company's three most highly-compensated executive officers (other than the principal executive officer and the principal financial officer) who were serving as executive officers of the Company on December 31, 2015. -21- The table below shows the names and titles of those executives. They areour other three executive officers during 2017 (collectively referred to as theour named executive officers because they areor NEOs). Our named in theSummary Compensation Tableexecutive officers for 2015.NameTitle/Position in 2015Paul J. VarelloTitle Joseph A. Cutillo Chief Executive Officer (Since February 2015)Ronald A. Ballschmiede Executive Vice President & Chief Financial Officer, Chief Accounting Officer, Since November 9, 2015TreasurerRoger M. BarzunCon L. WadsworthSenior Vice President & General Counsel, SecretaryKevan M. BlairSenior Vice President & Chief Financial Officer (July 3 – November 9, 2015)Peter E. MacKennaPresident & Chief Executive Officer (January 1 - 31, 2015)Thomas R. WrightExecutive Vice President & Chief FinancialOperating Officer (January 1 – July 3, 2015)Richard E. Chandler, Jr. Executive Vice President, General Counsel & Secretary Paul J. Varello former Chief Executive Officer Roger M. Barzun former Senior Vice President & General Counsel; Secretary DiscussionGovernance and AnalysisBest Practices. This discussion and analysis ofcoversprogram is designed and managed by the independent compensation committee of our board. The committee annually reviews the components and structure of our compensation program to ensure that the program supports our business objectives and is aligned with the interests of our stockholders. As part of this review, the committee seeks input from its independent compensation consultant as it deems necessary to provide an outside perspective and evaluation of our program. The committee also values our stockholders’ views on our program. Based on last year’s annual stockholder advisory vote on executive compensation (say-on-pay), more than 90% of our stockholders indicated their support for our program.awardedcommittee from time to earned by, or paidtime retains an independent compensation consultant to provide advice and ongoing recommendations on these matters that are consistent with our business goals and pay philosophy. We believe that this input and advice produces more informed decision-making and assures that an objective perspective is considered in this important governance process. The compensation committee has retained Meridian Compensation Partners, LLC (Meridian) as its executive compensation consultant. The compensation committee assessed Meridian’s independence and concluded that Meridian’s work does not raise any conflicts of interest.named executive officers. It coversscope of Meridian’s engagement included providing market data which the material elementscommittee referenced in evaluating 2017 compensation levels and assisting with the redesign of theirour compensation including the following:·The objectives of the Company's compensation programs and what they are designed to reward;·The elements of the named executive officers' compensation, and why the Compensation Committee has chosen those elements;·How the amounts and compensation formulas were determined, and how they fit into the Company's overall compensation objectives; and·The results of the most recent stockholder advisory vote on executive compensation.The objectives of the Company's compensation programsprogram structure for 2018.what they are designedPeer Group.reward. The Compensation Committee of the Board of Directors, which is currently composed of three directors, all of whom are independent, oversees and approvesbenchmark the compensation of the namedour executive officers. The Committee's compensation objectives are as follows:·To provide a rate of pay for the work the executive does that is appropriate in comparison to similar companies in the industry, and that is considered fair by the executive and the Committee;·To give the executive a significant incentive to perform at a high level, to reward that performance if achieved, and thereby to contribute to the Company's financial success;·To give the executive an incentive to remain with the Company; and·In the case of newly-hired executives, to provide them with an incentive to leave a prior employer and join the Company, and in some cases, also to relocate.The elements of the named executive officers' compensation, and why the Compensation Committee has chosen those elements.Except as noted otherwise, executives are compensated through annual salaries and an incentive compensation arrangement or plan. Annual salaries are designed to compensate the executive for the performance of his or her day-to-day responsibilities. The incentive compensation arrangements are designed to give the executives the opportunity to earn additional compensation (a portion of which is to be paid in shares of the Company's common stock) if certain goals are met.Performance-Based Incentive Compensation. Incentive compensation consists of both cash and Company shares. While cash is an obvious incentive, the stock portion of incentive compensation is designed to encourage executives to take a longer-term perspective in fulfilling their responsibilities, and to align their financial interests with those of the Company's stockholders. -22- Incentive compensation is performance-based because it is dependent on the achievement of Company financial goals and the executive's individual performance goals. Financial goals, which for some executives also include operating unit financial goals, tie a portion of incentive compensation to the team effort required for Company-wide success, while the individual performance goals are designed to concentrate the executives' attention on their own contributions to the overall effort.Change-in-Control Agreements. The Company does not currently have a change in control agreement with any employee. However, it is the Committee's policy to provide that restrictions on outstanding restricted stock lapse in the event of a change in control because the Committee believes that the adverse effect on non-transferable stock held by employees when a change in control occurs, particularly in a public company, can be significant. The Compensation Committee believes that in the future, change-in-control agreements may be appropriate for executives whose employment is likely to be adversely affected by a change in control. Change-in-control agreements can be in the best interests of the Company and its stockholders because they provide the executive with a clear incentive to remain neutral as to any change-in-control transaction, should one arise, and undistracted by concerns as to his or her future employment. Generally, the Committee believes that severance should only be payable if both a change-in-control transaction is consummated and the executive's employment is terminated without cause.Having somewhat the same effect as change-in-control agreements are retention agreements in which compensation is paid to an employee for remaining with the Company during the negotiation of a change-in-control transaction. The Committee believes these types of agreements are another appropriate way of ensuring an executive remains neutral as to any change-in-control transaction and undistracted by concerns about his or her future employment.How the amounts and compensation formulas were determined, and how they fit into the Company's overall compensation objectives.Generally, the amount of an executive's compensation is based in part on a determination of comparable compensation levels in the construction industry and the personal judgement of the members of the Compensation Committee, drawing on their own business experience. The Committee attempts to set executives' salaries neither substantially higher nor substantially lower than the median in the industry.Current Executive Officers.Mr. Varello's compensation of one dollar per year is unusual, and was adopted at his request to conserve the Company's cash resources and because of his faith in the future of the Company. His restricted stock award was made in lieu of a cash salary and was submitted to, and approved by, stockholders at the 2015 Annual Meeting of Stockholders.Mr. Ballschmiede servedofficers as a consultantreference for our committee to the Company's Audit Committee for several weeks prior to being hired as Chief Financial Officer, for which work he was paid $97,809. Hisdetermine 2017 compensation as an employee was negotiated by him and the Compensation Committee using comparable salaries in the industry, and reflects his extensive accounting and financial expertise evidenced by his distinguished résumé.Mr. Barzun's salary was established in 2006 at $60,000 based on the fact that he would be serving onlevels. In seeking a part-time basis as the Company's General Counsel; by 2013, it had risen to its current level through merit increases.Mr. Blair's salary was first established when he was hired as Chief Financial Officer of the Company's Ralph L. Wadsworth Construction Company, LLC subsidiary. It has since been increased as a result of his assuming the role of the Company's Senior Vice President, Corporate Finance, and having served twice as the Company's Chief Financial Officer on an interim basis. -23- Former Executive Officers.In setting Mr. MacKenna's salary in September 2012 and making initial restricted stock awards to him, the Compensation Committee took into account his twenty-five years of experience in the construction industry;useful peer group, the compensation he was being paid by his former employer; chief executive officer compensation levels at similar companies; the desirability of having the Chief Executive Officer of the Company own stock in the Company as a long-term incentive; the factcommittee and Meridian recognized that Mr. MacKenna would be required to move his family from New York to Texas; his compensation requests; and the fact that by joining the Company, he would be giving up incentive compensation at his prior employer.In establishing Mr. Wright's salary, the Compensation Committee obtained salary information from four different sources about public-company chief financial officers in the Houston area andthere are few publicly-traded companies in the heavy civil construction industry.business that are close to the company's size. Most other publicly-traded heavy civil construction companies are much larger than the company and are companies with which we rarely compete. Accordingly, we use a number of comparative factors incorporating financial, industry-specific, and both objectiveinformation was then reviewedmost common criterion for peer group inclusion is industry similarity. Other criterion includes similar business model, competition for business or executive talent, size (including revenue, market capitalization, assets, and validated bygeographic presence. Following this analysis, the search firmcompensation committee decided to use the following peer group, which reflects companies with a median revenue that the Company had employed to identify chief financial officer candidates.Mr. Wright's incentive compensation for 2015 was basedapproximated our own (based on the Company's short-term and long-term incentive compensation plans. The plan had a short-term incentive payable in cash based on the achievement of individual performance goals by Mr. Wright himself and a Company earnings-per-share goal, as well as a long-term incentive payable equally in restricted stock and restricted stock units. The restricted stock depended on his remaining with the Company for a three-year period, and restricted stock units depended on the Company achieving a total shareholder return goal relative to the peer group described below in three years.The results of the most recent stockholder advisory vote on executive compensation.The Company conducts annual advisory votes on executive compensation. At the 2015 Annual Meeting of Stockholders, the vote was as follows:Number of Shares
Entitled to VoteVoted For Voted Against Abstained 13,173,921 95% 2.2% 2.3% The Compensation Committee believes that this vote indicates general stockholder satisfaction with the Company's executive compensation policies and decisions. In the event that stockholders do not approve executive compensation for a given year, the Compensation Committee will review its decisions on compensation structure and levels, as well as the comparability of the executives' compensation to that of a peer group of companies, before deciding whether to make any change in the compensation of one or more of the executives.New incentive compensation arrangements for 2016. In February 2016, the Compensation Committee adopted an incentive compensation plan for executives and others. The 2016 Executive Incentive Compensation Programis a one-year program that provides for establishing for participantstrailing four quarter revenue as of the beginning of 2016 a target amount, which is the amount that can be earned by the participant if all the goals of the program are achieved in 2016, and is expressed as a percent of the participant's base salary.Incentive compensation is earned based on the level of achievement of a Company earnings-per-share (EPS) goal for 2016 and individual performance goals. For participants in the Company's operating units, there is also an operating-unit goal based on its earnings before interest and taxes. The EPS goal and the individual performance goals of officers of the Company and of the chief executives of the Company's subsidiaries are subject to approval by the Compensation Committee. -24- Payment of one-half of any incentive compensation earned under the plan is to be made in cash, and one-half in the form of an award of shares of the Company's common stock that are subject to restrictions on their sale or other transfer and to forfeiture in certain circumstances, except that with respect to one executive officer, his incentive compensation, if any is earned, will be payable all in cash. The restrictions on the restricted stock lapse at the end of three years if the participant is then still an employee of the Company.The effect of the termination of employment of a participant during 2016 ranges from forfeiture of all of the benefits of the program, in the case of a termination for cause or a resignation by the participant, to full benefits based on the actual financial results for the year and an assumption that the participant completed all his individual performance goals satisfactorily, in the event of a termination of employment without cause, for permanent disability or the death of the participant.The plan has no long-term goal reflecting the Compensation Committee's view that in light of the volatility of the Company's common stock, a long-term goal, such as the total shareholder return goal that was a feature of the 2015 incentive compensation plan, would be unlikely to serve as an incentive to current executives, who are fully concentrated on the short-term in furtherance of the Company's return to profitability. The Compensation Committee will consider adding a long-term goal to future incentive compensation plans when it believes it will be of benefit to the Company to do so. The Committee established three years for the vesting of restricted stock, believing the period to be long enough to provide a continuing incentive, but not so long as to make the goal seem out of reach, or unattainable.The following table shows some additional information about the program, including various program and participant percentages. As noted above, neither Messrs. Varello nor Barzun are participants in the program.Program Term:One year (January 1 – December 31, 2016)Target Amount as a percent of salary:Con L. Wadsworth 100%Ronald A. Ballschmiede 170% Kevan M. Blair 40%The EPS Goal:Minimum Required Achievement Level: Cap on Achievement Level:Accounts for 50% of the Target Amount80% of the EPS Goal 120% of the EPS GoalIndividual Performance Goals:Account for 50% of the Target AmountThere is no minimum; and achievement cannot exceed 100%.Additional information on executive compensation.·All incentive compensation, whether paid in cash or stock, is subject to recovery by the Company, irrespective of culpability, if the Company restates the financial statements on which the incentive compensation was based.·For more information on payments to the executives in the event of the termination of their employment, see the section below entitledPotential Payments upon Termination or Change-in-Control.·A description of the material terms of the employment agreements of the named executive officers is set forth below in the section entitledEmployment Agreements of the Named Executive Officers. -25- ·A description of the material terms of the 2015 Incentive Compensation Plan is set forth below in the section entitledGrants of Plan-Based Awards in 2015.·The peer group that the Compensation Committee used for Messrs. MacKenna's and Wright's compensation was as follows (for comparison purposes, the Compensation Committee used the compensation of the Executive Vice President of Tutor Perini's civil group not Tutor Perini's chief executive):Granite Construction IncorporatedLayne Christensen CompanyMichael Baker InternationalOrion Marine Group, Inc.Primoris Services CorporationTutor Perini Corporation*$1,113 ·When the Compensation Committee established the Long-Term Incentive Compensation Program for 2015, an element consisted of a goal based on the Company's three-year total shareholder return (TSR) compared to the TSR of the following peer group, which is believed by the Committee to be more representative:Argan,Willbros Group Inc.MasTec, Inc.$785 Dycom Industries Inc.Orion Marine Group, Inc.Granite Construction IncorporatedPrimoris Services CorporationGreat Lakes Dredge & Dock Corporation Tutor Perini Corporation*$777 Integrated Electrical Services, Inc.U.S. Concrete, Inc.Layne Christensen Company Willbros$632 IES Holdings, Inc. $696 Orion Group Holdings, Inc. $596 Argan, Inc. $585 25th Percentile $614 50th Percentile $696 75th Percentile $781 STERLING CONSTRUCTION CO INC $674 Estimated Percentile Rank 44 % Policies & Practices — Risk ManagementSurvey for companies across a variety of industries with revenues between $500 million and $900 million (median of $692 million).Committee has reviewedProgramCompany'scompensation committee believes that the risks arising from our compensation policies and practices and in particular its incentive compensation and bonus policies, as they relate to risk management, and has determined that they support the Committee's compensation objectives without encouraging inappropriate, unintended, or excessive risk-taking byfor our employees, andincluding our executive officers, are not reasonably likely to have a material adverse effect on the Company.company. Further, the compensation committee believes that certain features of our compensation program, including our clawback, anti-hedging and anti-pledging policies, our stock ownership guidelines and our use of both cash- and equity-based awards, help to manage any compensation-related risks.Compensation Committee elected notcompensation committee also approved a modest increase to hire an outside adviserthe base salary of Mr. Ballschmiede during 2017. These changes are reflected in undertaking its risk review in 2015. For a full descriptionthe table below:Name $325,000 $550,000 69% Mr. Ballschmiede...... $414,874 $439,874 6% Mr. Wadsworth......... $425,000 $425,000 —% n/a $325,000 n/a Company's significant risk factors, seeItem 1A. Risk Factors in the Company's 2015 Annual Report on Form 10-K, which is available with this Proxy Statement.In reaching its conclusions, the Compensation Committee took into account many factors, including the fact that becauselast day of the naturerelevant calendar year, and include adjustments made during the calendar year. Amounts shown do not reflect the total base salary paid for such calendar year. The actual amount of base salary paid to each NEO during each relevant calendar year is listed on the "2017 Summary Compensation" table on page 29.Company's business, any short-term manipulationcompany, and then effective April 28, 2017, his base salary was increased to $550,000 in recognition of financial results will have an adverse effect over time,his promotion to chief executive officer.follows:·Incentive compensation is paid in part in equity that does not vest for a minimum of three years after it is awarded, thereby subjecting the recipient's stock to extended market risk.·Officers of the Company and its subsidiaries are subject to stock retention requirements, which also subject their stockholdings to market risk.·There are appropriate caps on the amount of incentive compensation that can be earned.·Most of the Company's projects are performed over the course of more than one calendar year, so that a manipulated increase in profits in one year will have the effect of reducing profits in the subsequent year and vice versa.·The Company's claw-back policy applies to both cash and equity incentive compensation irrespective of whether or not the recipient of the compensation was at fault. -26- Percentage-of-Completion Accounting. The Compensation Committee considers that, by their nature,applicable. In February 2017, the percentage-of-completion accounting and revenue recognition rules under whichcompensation committee established the Company is required to prepare its financial statements mayframework for the 2017 executive incentive compensation program. Under the program, the incentive awards for our NEOs could be susceptible to manipulation. Percentage-of-completion accounting requires management to make estimates at least every monthearned based on the following: 75% of the cost of completing projects that are on-going at the date of the review. These estimates directly affect reported profits, and profits, directly or indirectly, are the basis for the award of half or more of the Company's incentive compensation. The Compensation Committee believes that this risk is mitigated in the following ways:·Senior executives perform rigorous project reviews on a monthly basis to review estimates for any potential inaccuracies.·The Company's independent auditors review the current year's estimates and compare them to actual, prior-year results, so that over time, any manipulation of results should become evident.·As noted above, because most of the Company's large projects are performed over the course of more than one fiscal year, a manipulated increase in profits in one year will have the effect of reducing profits in the subsequent year, and vice versa.The Total Stockholder Return Goal. Under the 2015 incentive compensation program, the long-term goal for the vesting of restricted stock units is based on the changecompany’s achievement ofCompany'sprogram for 2017, and each was assigned a target award level based on a percentage of his base salary received during 2017, as described below:Name Annual Base Salary Target Award (EPS) Target Award (Individual) Mr. Cutillo................. $503,274 195% 75% $736,038 25% $245,346 Mr. Ballschmiede...... $439,874 170% 75% $560,839 25% $186,946 Mr. Wadsworth......... $425,000 170% 75% $541,875 25% $180,625 priceunits (RSUs) that are subject to a three-year vesting period, with one-third of the RSUs vesting on January 1, 2019 and on each of the next two anniversaries thereof. The number of RSUs is determined using the simple average of the closing prices of the common stock in December 2017.Name Value Paid in Cash Value Paid in RSUs Mr. Cutillo............ 120% $883,246 100% $245,346 $1,128,592 $564,296 $564,296 32,904 Mr. Ballschmiede 120% $673,007 100% $186,946 $859,954 $429,977 $429,977 25,072 Mr. Wadsworth.... 120% $650,250 85% $153,531 $803,781 $401,891 $401,891 23,434 periodrestatement, the compensation shall be adjusted, if necessary, so that the employee will have received no more and no less than the amount that he or she would have received had the incentive award been calculated based on the restated financial results. The policy applies regardless of the employee’s culpability or fault with respect to the error, event, act or omission that caused the restatement.(total shareholder return, or TSR) comparedeach has until January 17, 2023 to reach his target ownership level.TSR ofbenefits provided to our executive officers. As a peer group of companies over the same period. The Committee believes that manipulationresult, we provide limited perquisites to our executive officers. Please see “Executive Compensation Tables—2017 Summary Compensation Table” for a description of the Company's stock priceperquisites provided in 2017.achieve this goal would be particularly difficult because the Company's small float makes the stock price susceptibleour other full-time employees. We maintain a 401(k) plan, a tax-qualified defined contribution retirement plan in which our executive officers are eligible to swingsparticipate, which currently provides a 5% employer match. We do not maintain any excess benefit plans, defined benefit or pension plans, or any deferred compensation plans. variations unaffected by the Company's financial performance, and becauseChange of the unpredictabilityControl Benefitswhich events and circumstances actually affect the Company's stock price.Employment Agreements of the Named Executive Officers. For the effects ofour executive officers, nor do we have any agreements or plans in place providing for cash payments in connection with a termination of employment underor a change of control transaction. However, the employment agreementsterms of our outstanding restricted stock awards provide that vesting of the named executive officers, seeaward will be accelerated in connection with certain terminations of employment and also upon the section below entitledPotentialoccurrence of a qualifying change of control.Change-in-Control.following table showsaccounting and tax treatment of compensation generally has not been a factor in determining the material financial featuresamounts of compensation awarded to our executive officers. However, the compensation committee and management have considered the accounting and tax impact of various program designs to balance the potential cost to the company with the benefit or value to the executive officer.employment agreements or employment arrangementsboard has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K, and based on such review and discussion, the named executive officers. Messrs. Varello and Barzun do not participate in an incentive plan. Mr. Ballschmiede, who joined the Company in late 2015, participates in the 2016 executive incentive compensation plan described above. Messrs. Ballschmiede and Blair do not have employment agreements.Name Annual Salary Target Incentive Compensation as a Percent of Salary Percent Allocated to EPS Goal Percent Allocated to Individual Performance Goals Percent Paid in Cash Percent Paid in Restricted Stock Paul J. Varello $1.00 N/A N/A N/A N/A N/A Ronald A. Ballschmiede (1) 400,000 170% 50% 50% 50% 50% Roger M. Barzun (2) $100,000 N/A N/A N/A N/A N/A Peter E. MacKenna (3) $600,000 120% 50% 50% 70% 30% Thomas R. Wright (3) $375,000 120% 50% 50% 50% 50% (1)Mr. Ballschmiede's numbers are based on the 2016 incentive compensation plan.(2)The Compensation Committee has determined that Mr. Barzun's salary amounts to an annual retainer for the performance of routine matters of $100,000. After the end of the year, his salary is subject to increase by an amount that the Compensation Committee believes reflects appropriate compensation for the non-routine matters on which he worked during the year.(3)For Mr. MacKenna, these percentages were established in his employment agreement. For Mr. Wright they were established in the Company's 2015 Incentive Compensation Plan in which he participated.Messrs. MacKenna and Wright left the Company in January and July 2015, respectively. -27- Mr. Varello's Employment Agreement. Mr. Varello entered into an employment agreement with the Company in March 2015 when he resigned as Chairman of the Board and ceased to be Chief Executive Officer of the Company on only an interim basis. The agreement expires on the third anniversary of its March 9, 2015 effective date. It provides for a salary of $1.00 per year and a single restricted stock award of 600,000 shares that vests in equal installments over three years, but subject to stockholder approval, which occurred at the 2015 Annual Meeting of Stockholders. In place of participating in the Company's health plan, the agreement provides for the reimbursement of his out-of-pocket costs of maintaining the family health insurance coverage that he was maintaining prior to becoming Chief Executive Officer, or any replacement coverage that he may elect to obtain from time to time. He is also entitledcommittee recommended to the use of a Company-owned vehicle.Mr. Ballschmiede. Mr. Ballschmiede does not have an employment agreement. He was hired on an at-will basisboard that provides that his annual salary is subject to annual reviews by the Chief Executive Officer, with any increase being subject to the approval of the Compensation Committee. In addition, he was awarded 100,000 shares of restricted stock vestingDiscussion and Analysis be included in two annual installments.Mr. Barzun's Employment Agreement. Mr. Barzun's employment agreement became effective in March 2006 and continues until terminatedthis proxy statement. the Company or by Mr. Barzun. His salary is subject to annual merit increases and he is eligible to earn an annual cash bonus, both in the discretion of the Compensation Committee based on March 1, 2018:number and scope of non-routine legal matterstotal compensation paid to which he devoted substantial time during the year, and on such other matters as the Compensation Committee deems relevant. In reviewing Mr. Barzun's employment agreement, the Compensation Committee considers his salary an annual retaineror earned by our named executive officers for the performance of routine matters, which, after the end of the year is subject to increase by an amount that the Committee believes reflects appropriate compensation for the non-routine matters on which he worked during the year.Mr. MacKenna's Employment Agreement. In September 2012, Mr. MacKenna entered into an employment agreement with the Company in connection with his hiring as Chief Executive Officer. The employment agreement had no fixed term, but continued in effect until terminated by either the Company or by Mr. MacKenna, which occurred on January 31, 2015. The employment agreement provided for a signing bonus of $250,000; relocation expense reimbursement; and reimbursement for any income taxes paid on the relocation benefits. His base salary was subject to merit and cost of living increases in the discretion of the Compensation Committee starting with calendar year 2014.His agreement also provided for a restricted stock award of 100,000 shares in each of 2012 and 2013. The 2012 restricted stock award was to vest in five equal annual installments. The 2013 award was to vest on March 31, 2018 if the Company had achieved a 5% average return on equity for the five fiscal years ended December 31, 2017. The vesting of both awards, by their terms, was accelerated when Mr. MacKenna left the Company.Of his target incentive compensation, 50% was based on the Company achieving an earnings-per-share (EPS) goal,2017, 2016 and 50% was based on his completing his individual performance goals.Under his employment agreement, no incentive compensation was paid for the EPS goal if less than 80% of the goal were achieved, and the maximum payment of incentive compensation was capped at a 120% level of achievement. The shares of restricted stock payable for 30% of his incentive compensation in 2015 were to vest at the end of a three-year restriction period unless earlier forfeited because of a termination of his employment for cause or if he resigned his employment. Vesting would be accelerated if his employment were terminated without cause. The number of shares awarded, if any, was calculated using the average closing price of the Company's common stock during December of the prior year. -28- Mr. Wright's Employment Agreement. In September 2013, Mr. Wright entered into an employment agreement with the Company in connection with his hiring as Chief Financial Officer. The employment agreement had a term of one year with automatic annual renewals unless the Company gave Mr. Wright notice of non-renewal sixty days prior to the annual renewal date. The agreement provided for annual reviews of his base salary for merit increases, and for a signing bonus of $100,000; a restricted stock award of 10,000 shares that vested in three substantially equal annual installments on the first three anniversaries of the award date; and reimbursement of relocation expenses. The agreement also provided that he was eligible to participate in the annual incentive compensation plan made available to the Company's senior management team. His agreement was amended in 2014 to replace a change-in-control provision with a retention payment of a year's salary in the event of a change in control of the Company.Potential Payments upon Termination or Change-in-Control. The table below describes the events that would trigger payments or the provision of other benefits to the named executive officers in the event of the termination of their employment or a change in control of the Company. The Company would provide all the payments and benefits described below. The amounts assume that the termination or change in control occurred on December 31, 2015.Irrespective of the reason for the termination of employment, the employment agreements of each of Messrs. Varello, MacKenna and Wright prohibit the executive from competing with the Company or soliciting its employees while employed by the Company and after his employment terminates. For Messrs. Varello and MacKenna, the post-employment non-competition/non-solicitation period is eighteen months, and for Mr. Wright, twelve months. Messrs. Ballschmiede, Barzun and Blair are not subject to those prohibitions.Messrs. Varello, MacKenna and Wright are prohibited by their employment agreements from disclosing the Company's confidential information indefinitely.Triggering EventExecutivePayments & BenefitsTermination of theexecutive's employment by the Company withoutcause.(1)Mr. VarelloMr. BallschmiedeMr. BlairNone other than severance compensation traditionally paid to other salaried employees. Mr. BarzunOne year's salary.Mr. MacKennaPayment in a lump sum of an amount equal to eighteen months' salary which, at December 31, 2015, would have been $900,000 had he been an employee of the Company at the time.Reimbursement of COBRA expenses for an 18-month period at a cost to the Company of approximately $27,944 with a gross-up of approximately $9,222 in taxes.Mr. WrightPayment in a lump sum of an amount equal to twelve months' salary which, at December 31, 2015, would have been $375,000 had he been an employee of the Company at the time.Reimbursement of COBRA expenses for a 12-month period at a cost to the Company of approximately $16,769 with a gross-up of approximately $5,534 in taxes.Termination by theCompany for cause.(2)All executivesNo severance compensation is paid, and all of the shares under their outstanding restricted stock awards, if any, are forfeited. Voluntary resignation bythe executive.All executivesNo severance compensation is paid, and all of the shares under their outstanding restricted stock awards, if any, are forfeited. -29- Triggering EventExecutivePayments & BenefitsA change in control of theCompany, withouta termination of employment.All executivesAll of the shares under the executives' outstanding restricted stock awards, if any, vest in full.(3)At December 31, 2015 the closing price of the Company's common stock was $6.08 per share. Accordingly, the total market value of the shares subject to restrictions that would have vested in a change in control of the Company on December 31, 2015 are as follows:Mr. Varello $3,648,000Mr. Ballschmiede $608,000Mr. Blair $35,209Mr. Barzun held no restricted stock at December 31, 2015.Messrs. MacKenna and Wright were not employees at December 31, 2015. All their restricted stock was vested in connection with their departure from the Company.Mr. WrightIn addition to the vesting of his restricted stock, Mr. Wright would have been entitled to a lump sum payment equal to one year's salary ($375,000) on the consummation of a change in control of the Company provided that during the negotiations of the transaction he remained an employee of the Company and diligently to the best of his abilities carried out his duties and responsibilities. A change in controlpreceded or followedby a termination ofemployment withoutcause.(1)All executivesAs described in the immediately preceding section, all of the shares under their outstanding restricted stock awards, if any, vest in full.(3)Mr. MacKennaIf the termination of employment without cause had occurred during a period starting ninety days before and ending two years after a change in control, he would have been entitled in a lump sum to —· The payment and benefits that are described above for a termination of his employment without cause not in connection with a change in control; and· A net, lump sum, change-in-control severance payment of $900,000.Mr. WrightThe $375,000 payment described in the previous section that would be made upon the consummation of a change in control; andThe payment and benefits that are described above for a termination of his employment without cause irrespective of a change in control.(1)A termination without cause is a termination for any reason other than a termination for cause, permanent disability, death or a voluntary resignation, but includes a resignation by the executive that is the result of a breach by the Company of a material provision of his employment agreement.(2)The term "cause" is a defined term for executives with employment agreements, and means what is commonly referred to as cause in employment matters, such as gross negligence, dishonesty, insubordination, inadequate performance of responsibilities after notice, and the like.(3)The accelerated release of restrictions triggers no additional Company payment obligation, but it does accelerate the recognition by the Company of the cost of the award.Compensation & Stock Tables. for 2015. The following table sets forth for calendar years 2013, 2014 and 2015, all compensation awarded to, earned by, or paid to —All individuals who served as the Company's principal executive officer during 2015;All individuals who served as the Company's principal financial officer during 2015; andThe Company's three most highly compensated executive officers other than those falling into the above two categories who were serving as executive officers at December 31, 2015. At that date, the Company had a total of only three executive officers serving. Messrs. MacKenna and Wright left the Company in January and July, 2015, respectively.The Company does not pay any additional compensation to any executive officer for serving on the Board of Directors. The amounts include any compensation that was deferred by the executive through contributions to a defined contribution plan account under Section 401(k) of the Internal Revenue Code. All dollar amounts are rounded to the nearest dollar.Year
sation
(principal executive officer)2015 1.00 — 1,932,000 — 27,342 1,959,343
Chief Financial Officer
(principal financial officer)2015 60,000 — 467,000 — $97,809 624,809
General Counsel, Secretary
Chief Financial Officer
(principal financial officer)2015 304,504 75,000 25,001 — 10,642 415,147
Officer (principal executive officer)
Chief Financial Officer
(principal financial officer) -31- $503,274 — $1,039,796 $564,296 $27,327 $2,134,693 2016 $314,423 — $87,750 $87,750 $13,250 $503,173 $439,874 — $429,977 $429,977 $13,500 $1,313,328 Executive Vice President & $403,420 — $136,000 $136,000 $27,551 $702,971 Chief Financial Officer, Chief $60,000 — $467,000 — $97,809 $624,809 Accounting Officer, Treasurer 2017 $425,000 — — — $28,257 $453,257 2016 $420,482 — — — $26,450 $446,932 Chief Operating Officer 2017 $65,000 — $386,250 — — $451,250 Executive Vice President, 2017 $1 — $53,148 — $43,497 $96,646 2016 $1 — — — $26,155 $26,156 2015 $1 — $1,932,000 — $27,342 $1,959,343 2017 $96,914 $150,000 — — $115,770 $362,684 Former Senior Vice President & 2016 $250,000 — — — — $250,000 2015 $250,000 — — — — $250,000 This isAmounts included for 2017 reflect the aggregate grant date value of restricted stock awarded in 2017, as well as RSUs awarded in 2018 in payment of 50% of the 2017 executive incentive compensation award. The grant date fair value of the restricted stock and RSUs is computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, namely718. See the number“Grants of Plan-Based Awards” table for more information regarding the RSU awards granted as part of our executive incentive compensation program. For Mr. Varello, represents a grant of 5,257 shares of commonrestricted stock multipliedreceived on June 8, 2017 for compensation as a director of the company, which award was forfeited upon his retirement from the board on December 31, 2017.The amounts reported in the “All Other Compensation” column for 2017reflect, for each named executive officer as applicable, the sum of the incremental cost to the company of all perquisites and other personal benefits and all other additional compensation required by SEC rules to be separately quantified, including (a) personal use of company-owned vehicles, (b) health insurance reimbursements, (c) amounts contributed by the closing price of the Company's common stock on the award datecompany to defined contribution plans, (d) director fees, and (e) paid or in the case of incentive compensation plan shares, the price at which the number of shares was calculated. The accounting for stock awards is described in Note 14 of Notes to Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.accrued severance payments.In this column, for Messrs. Blair and Wright, their 2015 long-term incentive compensation was computed in dollars but paid in the form of shares of restricted stock that vest after three years if they remain with the Company, 3,971 shares for Mr. Blair and 29,781 shares for Mr. Wright. Under the 2015 plan, the number of shares was based on the simple average closing price of the Company's common stock during December 2014, $6.296 per share. Perquisites and Other Personal Benefits Additional All Other Compensation Name Use of Company-Owned Vehicles Health Insurance Reimbursements Plan Contributions Director Fees Severance Payments Mr. Cutillo $13,737 — $13,500 — — Mr. Ballschmiede — — $13,500 — — Mr. Wadsworth $15,027 — $13,500 — — Mr. Chandler — — — — — Mr. Varello $5,092 — $37,083 — Mr. Barzun — — — — (2)A breakdown of the amounts shown in this column is set forth in the table below except with respect to a directors' fee paid to Mr. Varello that is included in his other compensation. Mr. Varello was paid directors' fees of $10,833 during 2015 for the period during which he was a director but not an employee of the Company.(3)Mr. Varello's stock award represents a special, one-time stock award (approved by stockholders at the 2015 Annual Meeting) that is in lieu of a cash salary.(4)Mr. Ballschmiede served as a consultant to the Company's Audit Committee for several weeks prior to being hired as Chief Financial Officer, for which work he was paid $97,809, the amount set forth above under All Other Compensation. Mr. Ballschmiede's shares were awarded to him in connection with his joining the Company and becoming Chief Financial Officer.(5)While in prior years part of Mr. Barzun's total compensation for the year was characterized as a bonus, the Compensation Committee has determined that, more appropriately, Mr. Barzun's contractual salary is an annual retainer for the performance of routine matters, which, after the end of the year is subject to increase by an amount that the Compensation Committee believes reflects appropriate compensation for the non-routine matters on which he worked during the year.(6)Of Mr. Blair's 2015 bonus amount, $25,000 was in recognition of the excellent job he did in undertaking the interim Chief Financial Officer role on short notice in July 2015, and $50,000 was in lieu of what he would have earned had he been able to participate in the Company's 2015 Short-Term Incentive Compensation Program.All Other CompensationName Year Company
Contribution
to 401(k)
Plan Account
($)Relocation
Expenses Paid
or
Reimbursed
by the
Company
($)Tax
Gross-Ups
($)COBRA/
Health
Insurance
Reim-
bursement
($)Use of
Company-
Owned
Vehicle
($)Country
Club
Dues
($)Severance
PaymentsPaul J. Varello (1) 2015 — — — 8,299 8,210 — — Kevan M. Blair 2015 5,777 — — — 4,865 — — Peter E. MacKenna (2) 2013 — 106,445 16,699 22,862 8,410 2,090 — 2014 — 264,050 112,322 3,811 7,229 12,540 — 2015 — — — — — 10,251 1,783,249 Thomas R. Wright (3) 2013 2,154 41,348 — — — 2,090 — 2014 10,200 — — — — 12,540 — 2015 — — — 7,734 — — 441,884 (1)(a)Mr. Varello's employment agreement providesprovided that in place of his participation in the Company's health plan, the Company willwould reimburse him for his out-of-pocket costs of maintaining the family health insurance coverage that he was maintaining prior to becoming Chief Executive Officer, or any replacement coverage that he may elect to obtain from time to time. -32- (2)All of Mr. MacKenna's severance payments were based on the terms of his employment agreement for a termination without cause: $147,945 in lieu of 90 days notice of termination; $900,000 for 18-months of salary continuation; $15,304 for COBRA reimbursement; $44,641, the value of the acceleration of certain of his restricted stock; and $720,000 in payment of his full, target incentive compensation for 2015.In April 2017, Mr. MacKenna's COBRA reimbursements for 2013 and 2014 were based on his employment agreement that provided that in lieuCutillo was appointed Chief Executive Officer of participating in the Company's health insurance program, he could elect to haveCompany.In October 2017, Mr. Chandler was appointed Executive Vice President & General Counsel, Secretary of the Company reimburse him the cost of maintaining the health coverage of his former employer pursuant to the applicable provisionsfollowing Mr. Barzun’s resignation.In April 2017, Mr. Varello resigned as Chief Executive Officer of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) for so long as it was available to him. These COBRA reimbursements ceased in March 2014.(3)Mr. Wright's severance payment is the grant-date fair market value ($4.15 per share)Company, although he remained a director of the 106,478 unrestricted shares awarded to him.Company until December 31, 2017.2015. The following table shows each grant of an award in 2015 to named executive officers under a Company plan. No grants of stock options were made to the named executive officers in 2015, and no named executive officer holds a stock option. A portion of incentive compensation for 2015 was calculated in dollars, but was paid in shares of restricted stock. For amounts actually paid for 2015, see theSummary Compensation Table for 2015, above. Mr. MacKenna left the Company in January 2015 and Mr. Wright left the Company in July 2015. Executive's Name Threshold (1) Target (2) Maximum (3) (#) ($) Paul J. Varello(4) N/A N/A N/A 600,000) 1,932,000 Ronald A. Ballschmiede(5) N/A N/A N/A 100,000 467,000 Roger M. Barzun(6) — — — — — Kevan M. Blair(7) — — — 3,971 25,000 Peter E. MacKenna( 8) 720,000 720,000 720,000 — — Thomas R. Wright 220,500 420,000 462,000 29,781(9) 187,501 29,781(10) 187,501 Name Grant Date Threshold Target Maximum Grant Date Fair Value of Stock and Option Awards 4/28/2017 $588,830 $981,384 $1,128,592 — — 4/28/2017 — — — 50,000 $475,500 Incentive Compensation 2/10/2017 $448,671 $747,786 $859,954 — — Incentive Compensation 2/10/2017 $433,500 $722,500 $830,875 — — Richard E. Chandler, Jr. Restricted Stock Grant 10/27/2017 — — — 25,000 $386,250 Paul J. Varello Restricted Stock Grant 06/08/2017 — — — 5,257 $53,148 Roger M. Barzun N/A N/A N/A N/A N/A N/A TheThreshold representsFor 2017, under our incentive compensation program, Messrs. Cutillo, Ballschmiede and Wadsworth had a target award based on a multiple of salary, with the sum of —·80% achievementamount to be earned based on (a) the company’s performance relative to a pre-established EPS target (representing 75% of the financial goal, which wastarget award), and (b) the minimum level of achievement that was required for any payout for the financial goal; and·25% achievement ofexecutive’s performance relative to pre-established individual performance goals which is a notional percentage since there was no required minimum, or threshold, level of achievement for a payout for individual performance goals.(2)TheTarget represents the sum of —·100% achievement(representing 25% of the financial goal;target award). The amounts reported represent the estimated threshold, target and·100% achievement of individual performance goals.(3)TheMaximum represents the sum of —·120% achievement of the financial goal, which was the maximum possible incentive payments that could have been be earned even ifreceived by each named executive officer pursuant to the achievement level was higher than 120%;program for 2017. The estimated amounts in the “Target” column were approved by the compensation committee and·100% reflect 195% of base salary for Mr. Cutillo, and 170% of base salary for each of Mr. Ballschmiede and Mr. Wadsworth. The estimated amounts in the “Threshold” column reflect achievement of the threshold level of performance relative to the EPS target, resulting in a payout of 80% of the target award for that component, and 0% achievement on the individual component, as there is no minimum level required for payout. The estimated amounts in the “Maximum” column reflect achievement of the maximum level of performance goals, which wasrelative to the EPS target, resulting in a payout of 120% of the target award for that component, and a payout of 100% of target award on the individual component, as that is the maximum that could have beencan be earned even if in some mannerunder that component. Under the actual achievement level was higher than 100%. -33- (4)Mr. Varello did not participate in any cash-based incentive compensation plan in 2015. His shares represent an award under a one-time restricted stock plan forterms of the Company’s Chief Executive Officer that wasprogram as approved by stockholdersthe compensation committee in May 2015. The sharesFebruary 2017, any earned award will be paid 50% in cash and 50% in RSUs that will vest in three installmentsone-third increments on the first three anniversaries of the March 9, 2015 awardgrant date, when the closing price of the Company's common stock was $3.22 per share.(5)Mr. Ballschmiede did not participate in any incentive compensation plan in 2015. His shares represent a restricted stock award made to him in connection with his joining the Company in November 2015. The shares vest in two installments, on the first two anniversaries of the November 9, 2015 award date, when the closing price of the Company's common stock was $4.67 per share.(6)Mr. Barzun does not participate in the Company's incentive compensation plans.(7)Mr. Blair did not participate in any cash incentive compensation plan for 2015 with the result that there is no possible payout at any level for 2015. His shares represent an award under the 2015 Long-Term Incentive Compensation Program of restricted stock as of January 1, 2015 that vest on January 1, 2018. The number of shares awarded is based on 10% of his annual salary divided by the average closing price of the Company's stock in December 2014 ($6.296 per share) as provided in the plan.(8)Mr. MacKenna's employment terminated in early 2015, with the result that, as provided in his employment agreement, what would have been his incentive compensation for 2015 was paid in full in cash as if all 2015 goals (financial and individual) had been achieved.(9)These are shares of restricted stock awarded to Mr. Wright on January 1, 2015 under the Company's Long-Term Incentive Compensation Program and were intended to vest if he remained an employee on January 1, 2018. However, the vesting was accelerated when he left the Company in July 2015. As provided in the incentive plan, the number of shares awarded was based on half of his $375,000 annual salary divided by the average closing price of the Company's stock in December 2014 ($6.296 per share.)(10)These are restricted stock units awarded to Mr. Wright under the Company's Long-Term Incentive Compensation Program that were intended to vest if the Company's total shareholder return (TSR) over the following three years met a goal based on the TSR of a peer group of companies. The number of restricted stock units was calculated in the same manner as described in footnote 9, above. When Mr. Wright left the Company in July 2015, the units were forfeited.The following table shows the percentages on which the estimated possible payouts to Mr. Wright in the table above are based. Mr. Wright's targets were established in the Company's 2015 Short-Term (STIP) and Long-Term (LTIP) Incentive Compensation Programs in both of which he participated. As noted above, Messrs. Varello, Ballschmiede and Barzun did not participate in the 2015 incentive compensation programs and Mr. MacKenna left the Company in January 2015. Mr. Blair only participated in the equity-based Long-Term Incentive Compensation Program. Mr. MacKenna left the Company in January 2015 and pursuant to his employment agreement he was entitled to his full target incentive compensation payable in cash as if all financial and individual performance goals had been met.Name Target
Incentive
Compensation
as a Percent
of SalaryPercent
Allocated
to a
Financial
GoalPercent
Allocated
to a TSR
GoalPercent
Allocated to
Individual
Performance
GoalsPercent
Payable
in CashPercent
Payable
in Time-Based
Restricted
Stock(1)Percent
Payable in
Restricted
Stock
Units(1)375,000 70% 50% — 50% 100% — — 375,000 100% — 50% — — 50% 50% (1)Restricted stock and restricted stock units are calculated in dollars, but are paid in shares of restricted stock or units. The number of shares is computedRSUs determined using the simple average of the daily closing prices of the Company'sour common stock in December 2014, $6.296 per share as provided in the plan.2017. -34- The restrictions on the restricted stock lapse on the third anniversary of the award date provided the employee remains with the Company or earlier if the executive's employment is terminated by the Company without cause, or upon a changeAwards in control of the Company. The restricted stock units vest if a goal based on the Company's total shareholder return (TSR) compared to the TSR of a peer group of companies is met at the end of the three-year period of the plan.Mr. Wright left the Company in July 2015 and pursuant to his separation agreement, the lapse of restrictions on his then-outstanding restricted stock was accelerated and his restricted stock units were forfeited.For the incentive compensation actually paid to the named executive officers for 2015, see theSummary Compensation Table for 2015, above.For a description of the executives' employment agreements, see the sections, above, entitledEmployment Agreements of the Named Executive Officersand Potential Payments upon Termination or Change-in-Control.Option Exercises and Stock Vested for 2015. The following table shows information for each named executive officer holding restricted stock or restricted stock units that vested during 2015, computed on an aggregated basis. No named executive officer held stock options or SAR's. Stock Awards Name
Shares
Acquired on
Vesting
Dollar Value
Realized Paul J. Varello 6,203 (2) 25,122 Peter E. MacKenna 178,408 619,076 Thomas R. Wright 55,526 230,433 (1)This value is based on the closing price of the Company's common stock on the date the shares vested.(2)These sharesthis column represent (a) special grants of restricted stock were issuedto Messrs. Cutillo and Chandler, in connection with Mr. Cutillo’s promotion to chief executive officer in April 2017, and Mr. Chandler’s appointment as executive vice president, general counsel and secretary in October 2017, and (b) the grant of restricted stock to Mr. Varello on May 9, 2014in June 2017 as part of his non-employee director compensation package. As noted above, Mr. Varello forfeited this award when he was a non-employee director of the Company pursuant to the standard compensation arrangements for non-employee directorsretired from our board in 2014. The award consisted of restricted stock having a value of $50,000 based on the closing price per share of the Company's common stock on the award date, which on May 9, 2014 was $8.06. The restrictions on these shares expired on May 7, 2015, when the closing price per share was $4.05.December 2017.2015. None2017 Stock Awards Name Joseph A. Cutillo 60,272 $981,228 Ronald A. Ballschmiede 15,921 $259,194 Con L. Wadsworth — — Richard E. Chandler, Jr. 25,000 $407,000 Paul J. Varello — — Roger M. Barzun — — Unless the award is forfeited or vesting is accelerated because of a termination of employment or change of control as described below under “Potential Payments upon Termination or Change in Control,” the restrictions on the restricted stock held by the NEOs will lapse and the awards will vest as follows: Name Restricted Stock Vesting Date Mr. Cutillo 10,272 1/3 on each of February 10, 2018, 2019 and 2020 50,000 1/2 on each of April 28, 2018 and 2019 Mr. Ballschmiede 15,921 1/3 on each of February 10, 2018, 2019 and 2020 Mr. Chandler 25,000 1/2 on each of October 27, 2018 and 2019 The market value of the awards as reflected in this table was based on the $16.28 closing market price per share of our common stock on December 29, 2017. Stock Awards Name Number of Shares Acquired on Vesting Joseph A. Cutillo 25,000 $427,500 Ronald A. Ballschmiede 50,000 $855,000 Con L. Wadsworth — — Richard E. Chandler, Jr. — — Paul J. Varello 400,000 $3,788,000 Roger M. Barzun — — No named executive officer exercised options during 2017 and there are no outstanding option awards. The value realized on vesting of restricted stock is based on the closing sale price on the date of vesting of the restricted stock or, if there were no reported sales on such date, on the last preceding date on which any reported sale occurred. held(other than Messrs. Varello and Barzun) that would vest as a result of a change of control, or due to a termination of employment due to death, permanent disability, or a termination by the company without cause occurring on December 31, 2017. To calculate the value of the awards, we have used the closing price of ouroptionsof $16.28 on December 29, 2017, as reported on NASDAQ. The table does not include amounts that may be payable under our 401(k) plan or other benefits payable to all company employees. Joseph A. Cutillo 60,272 $981,228 Ronald A. Ballschmiede 15,921 $259,194 Con L. Wadsworth — — Richard E. Chandler, Jr. 25,000 $407,000 2015,the "2017 Stock Vested" table on page 32. Upon his retirement from our board on December 31, 2017, 5,257 shares of restricted stock granted in 2017 as part of his compensation as a director were forfeited.no outstanding stock options.showsdiscloses the aggregate fees billed for professional services rendered by Grant Thornton in 2017 and 2016: 2017 2016 $870,589 $900,946 $1,590 $158,978 Tax Fees — — All Other Fees — — Audit Fees were primarily for professional services rendered to comply with all statutory and financial audit requirements for the company and its subsidiaries including audit services rendered related to the accounting or disclosure treatment of transaction or events and the impact of final or proposed rules, standards or interpretations by regulatory and standard setting bodies. In 2016, a portion of the audit fees related to our May 2016 public offering of common stock. We incurred these audit-related fees for a due diligence project on a target company in 2016, and for due diligence related to our new credit facility in 2017. aggregated basisannual “evergreen” provision. The Plan authorizes a limited number of shares, and stockholder approval is required to increase the maximum number of shares of common stock which may be issued under the Plan. In addition, other material amendments to the Plan require stockholder approval.information concerningcorporate transactions. For purposes of equity awards, we generally define fair market value as the unvested closing sale price of a share of our common stock on the stock exchange or national market system on which our common stock is listed on such date or, if no sale occurred on the date in question, the closing sale price for a share of our common stock on the last preceding date for which such quotation exists. The closing sale price for a share of our common stock on the NASDAQ, on March 13, 2018 was $13.01.eachshares of common stock and other awards that are denominated in, payable in, valued in whole or in part by reference to, or are otherwise based on the value of, or the appreciation in value of, shares of common stock (other stock-based awards). The committee has discretion to determine the times at which such awards are to be made, the size of such awards, the form of payment, and all other conditions of such awards, including any restrictions, deferral periods or performance requirements, provided that the minimum vesting requirements described above are satisfied. Other stock-based awards may be granted with dividend equivalent rights; provided, however, that any and all dividend equivalent rights with respect to the award will be subject to the same vesting and forfeitability conditions, including attainment of any performance goals, as are applicable to the underlying award.named executive officerscompany or to provide services to us for any reason, including death, disability, or retirement, the participant’s outstanding awards may be exercised, shall vest or shall expire at such time or times as may be determined by the committee and described in the award agreement.
The federal income tax consequences related to the issuance of the different types of awards that may be granted under the Plan are summarized below. Participants who are granted awards under the Plan should consult their own tax advisors to determine the tax consequences based on their particular circumstances.outstandingacquired through the exercise of an ISO and have not been held for the holding periods, the optionee will recognize income on such exchange, and the basis of the shares received will be equal to the fair market value of the shares surrendered. If the applicable holding period has been met on the date of exercise, there will be no income recognition and the basis and the holding period of the previously owned2015. These are2017. No awards have been issued under the Plan as it is not yet effective.Plan Category
To be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
(a)Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
(c)Equity compensation plans approved by security holders — n/a 400,289 Equity compensation plans not approved by security holders n/a n/a n/a Total — n/a 400,289 that the named executive officers held onas of December 31, 2015.2017 were unvested shares of restricted stock, which represent issued shares. These awards are not reflected in column (b) as they do not have an exercise price. -35- Stock Awards Equity Incentive Plan Awards Name
Unearned Shares,
Units or Other
Rights That Have
Not Vested
Have Not Vested (2)Paul J. Varello(3) 600,000 3,648,000 — — Ronald A. Ballschmiede(4) 100,000 608,000 — — Roger M. Barzun — — — — Kevan M. Blair(5) 1,820 11,066 3,971 24,144 Peter E. MacKenna — — — — Thomas R. Wright — — — — (1)All shares of restricted stock and restricted stock units in the table were issued by the Company. All of the shares of restricted stock vest in full if the executive's employment is terminated by the Company without cause, or upon a change in control of the Company.(2)This amount is based on the $6.08 closing price per share of the Company's common stock on December 31, 2015.(3)Mr. Varello's shares of restricted stock vest in three equal installments on March 9, 2016, 2017 and 2018.(4)Mr. Ballschmiede's shares of restricted stock vest in two equal installments on November 9, 2016 and 2017.(5)Mr. Blair's shares of restricted stock vest or vested as follows789 shares on March 10, 20161,031 shares on May 8, 20173,971 shares on December 31, 2017.Equity Compensation Plan Information. The following table contains information at December 31, 2015 about compensation plans (including individual compensation arrangements) under which the Company has authorized the issuance of equity securities.Plan Category
to be issued upon
exercise of outstanding
options, warrants and
rights
outstanding
options,
available for future issuance under
equity compensation plans,
excluding securities reflected inEquity compensation plans approved by security holders: -0- N/A 646,886 Equity compensation plans not approved by security holders: None N/A N/A -36- PERFORMANCE GRAPHThe following graph compares the percentage change in the Company's cumulative total stockholder return on its common stock for the last five years with the Dow Jones US Index, a broad market index,present in person or by proxy and the Dow Jones US Heavy Construction Index, a group of companies whose marketing strategy is focused on a limited product line, such as civil construction. Both indices are published in The Wall Street Journal. The returns are calculated assuming that an investment with a value of $100 was made in the Company's common stock and in each index at the end of 2009, and that all dividends were reinvested in additional shares of common stock, although the Company has paid no dividends during the periods shown. The graph lines merely connect the measuring dates, and do not reflect fluctuations between those dates. The stock performance shownentitled to vote on the graph is not intended to be indicative of future stock performance.
Sterling Construction Company, Inc. 100.00 82.59 76.23 89.95 49.00 46.63 Dow Jones US Total Return Index 100.00 101.34 117.89 156.76 177.06 178.18 Dow Jones US Heavy Construction Index 100.00 82.45 100.11 131.42 97.88 86.60 -37- TRANSACTIONS WITH RELATED PERSONS.This section describes transactions since the beginning of 2015, and currently proposed transactions in which the Company (or its affiliates) was or is to be a participant, and in which any related person had or will have a direct or indirect material interest.Con L. Wadsworth. Mr. Wadsworth was a Senior Vice PresidentCompany from June 2014 through February 13, 2015 when he voluntarily gave upBoard of Directors position, but remained the President of the Company's Ralph L. Wadsworth Construction Company, LLC subsidiary (RLW). Effective March 10, 2016, Mr. Wadsworth was elected the Company's Executive Vice President & Chief Operating Officer, and was replaced as President of RLW by Brandon Squire, its Executive Vice President & Chief Operating Officer.Mr. Wadsworth and some of his immediate family members are part owners of the following companies with which RLW had a business relationship in 2015. Their ownership interests are shown in the table below.·Wadsworth & Sons II (W&S2).RLW is the general contractor on a $3.7 million project designated as Exchange Building "B" in Draper Utah, which is owned by W&S2. The project was 99% complete at the end of 2015.·W&S2 & Wadsworth Corporate Center Building A, LLC(WCC). RLW leases its primary office space from W&S2 through WCC, an entity owned and managed by W&S2, at an annual rent of $298,909, plus common area maintenance charges of $125,181. This lease expires in 2022.·Wadsworth Dannon Way, LLC (WDW) andWadsworth & Sons III (W&S3). In 2015, RLW leased —oafacility for RLW's equipment maintenance shop from WDW at an annual rent of $195,245 plus common area maintenance charges of $76,543; andoa facility to provide temporary living quarters for field employees from W&S3 at an annual rent of $42,000.The W&S3 lease expired in 2014 and was renewed on a month to month basis starting in November 2014 at the same rent.·Big Sky, LLC. Big Sky, LLC is an entity owned and managed by W&S3. Big Sky owns a plane that RLW has rented since 2014 for certain business travel of its employees, including Mr. Wadsworth, for which RLW paid Big Sky rental fees and expenses totaling $38,576 in 2015.Name (Relationship) W&S2 WDW W&S3 Con L. Wadsworth 32.50% 24.38% 31.80% Kip L. Wadsworth (brother) 32.50% 24.38% 31.80% Tod L. Wadsworth (brother) 32.50% 24.38% 36.40% Nic L. Wadsworth (brother) — 24.38% — Ralph L. Wadsworth (father) 1.30% 1.24% — Peggy Wadsworth (mother) 1.30% 1.24% — -38- Policies & Procedures for the Review, Approval or Ratification of Transactions with Related Persons.General. The Board's policy on transactions between the Company and related persons is set forth in the written charter of the Audit Committee. The policy requires the Audit Committee to review in advance the terms of any transaction between the Companycompany (including its subsidiaries) and a director, executive officer, nominee for election as a director or stockholder;stockholder and any of their affiliates or immediate family members that involves more than $100,000.Any new transaction is taken under consideration by the Audit Committee,$100,000 must be reviewed and both newapproved in advance and existing transactions, such as the W&S3 plane rental fees, are reviewed periodically by an independentthe audit firm retained by the Audit Committeecommittee to ensure, among other considerations, that theysuch transactions are in compliance with Delaware law and are on terms that are no less favorable to the Companycompany (including its subsidiaries) than could be obtained from unrelated third parties.Name (Relationship) W&S LLC W&S II, LLC W&S III, LLC Con L. Wadsworth 32.45% 24.38% 31.80% Kip L. Wadsworth (brother) 32.45% 24.38% 36.40% Tod L. Wadsworth (brother) 32.45% 24.38% 31.80% Nic L. Wadsworth (brother) — 24.38% — Ralph L. Wadsworth (father) 1.325% 1.24% — Peggy Wadsworth (mother) 1.325% 1.24% — o a facility for RLW's equipment maintenance shop from WDW at an annual rent of $281,437 plus common area maintenance charges of $76,307; and o a facility to provide temporary living quarters for field employees from W&S III, LLC on a month-to-month basis for total 2017 rent of $22,500. Companycompany reviewed the relationships and transactions between RLW, Mr. Wadsworth and Mr. Wadsworth's family members, and concluded that the prices being charged to RLW or by RLW, as the case may be, are competitive and no less favorable to RLW than could be obtained from unrelated third parties. These amounts are alsoperiodicallyannually and approved by the independent audit firm referred to above.INFORMATION ABOUT AUDIT FEES & AUDIT SERVICESA representative ofcommittee.Company's independent registered public accounting firm, Grant Thornton LLP, is expected to be available at theProxy Materials, Annual Meeting and will haveVotingopportunity to make a statement, if he or she wishes, and to respond to appropriate questions from stockholders.The following table sets forthclose of business on March 13, 2018, the aggregate fees that Grant Thornton billed to the Companyrecord date for the years ended December 31, 2015annual meeting, and, 2014.Fee Category 2015 ($) Percentage Approved
by the Audit
Committee2014 ($) Percentage Approved
by the Audit
CommitteeAudit Fees: 1,047,180 100% 872,764 100% Audit-Related Fees: — N/A — N/A Tax Fees: — N/A — N/A — N/A — N/A Audit Fees. In 2015 and 2014, audit fees includedtherefore, are entitled to vote at the fees and expenses for Grant Thornton's auditannual meeting. You do not need to attend the annual meeting in person to vote your shares of the consolidated financial statements included in the Company's Annual Report on Form 10-K for those years; the reviews of the consolidated financial statements included in the Company's quarterly reports on Form 10-Q; the resolution of issues that arose during the audit process; attestation work required by Section 404 of the Sarbanes-Oxley Act of 2002; and other audit services that are normally provided in connection with statutory and regulatory filings. In 2014, a portion of the audit fees related to the Company's May 2014 public offering ofour common stock.Of This proxy statement, along with the audit fees for 2015 reflected in the above table, $778,771 had been billed by December 31, 2015. Of the audit fees for 2014 reflected in the above table, $619,188 had been billed by December 31, 2014.Audit-Related Fees. In 2015 and 2014, the Company incurred no fees in this category. -39- Tax Fees. The Company's independent registered public accounting firm occasionally provides tax consulting services to the Company. No fees for such services were incurred in 2015 or 2014.All Other Fees (Non-Audit Fees). In 2015 and 2014, there were no fees paid to Grant Thornton that are related to any other services provided to the Company.Procedures for Approval of Services. All requests for services that are to be provided by the Company's independent registered public accounting firm, which must include a detailed description of the services to be rendered and the amount of corresponding estimated fees, are submitted to both the Company's Chief Financial Officer and the Chair of the Audit Committee. The Chief Financial Officer authorizes services that2017 annual report, have been approved by the Audit Committee within pre-set limits. If there is any question asmade available to whether a proposed service fits within an approved service, the Chair of the Audit Committee is consulted for a determination. The Chief Financial Officer submits to the Audit Committee any requests for services thatstockholders on or about March 20, 2018. We have not already been approved by the Audit Committee. The request must include an affirmation by the Chief Financial Officer and the independent registered public accounting firm that the request is consistent with the SEC’s rules on auditor independence.SUBMISSION OF STOCKHOLDER PROPOSALSAny proposal that a stockholder intends to present at the 2016 Annual Meeting of Stockholders must be submitted to the Secretary of the Company no later than November 24, 2016 in order to be considered timely received.By Order of the Board of DirectorsRoger M. Barzun,Secretary -40- Important Notice of Availability of Proxy Materials for the Annual Meeting of Stockholders ofSterling Construction Company, Inc.To Be Held as follows:May 6, 20168:30 a.m. Local Time1800 Hughes Landing Blvd.The Woodlands, Texas 77380COMPANY NUMBERACCOUNT NUMBERCONTROL NUMBERThis communication presents only an overview of the more complete proxymade these materials that are available to you on the Internet. We encourageinternet and, in some cases, we have delivered printed proxy materials to you. This proxy statement summarizes the information that you need to know in order to cast your vote at the annual meeting or submitting your proxy and voting instructions prior to the annual meeting.all of the important information contained in the proxy materials before voting.wantwould like to receive a paperprinted or e-mailedemail copy of theour proxy materials, you must request one. There is no charge to youplease follow the instructions for requesting a copy. To facilitate timely delivery, please make the request as instructed below beforeApril 25, 2016.Please visithttp://www.amstock.com/ProxyServices/ViewMaterial.asp?CoNumber=04770materials in the notice.following materials are available for view:·Notice of Annual Meeting of Stockholders·Proxy Statement·Form of Electronic Proxy Card·2014 Annual ReportTO REQUEST MATERIAL:Telephone:888-776-9962; For international callers: 718-921-8562E-Mail: info@amstock.comWebsite:http://www.amstock.com/proxyservices/requestmaterials.aspTO VOTE:Online:To access your online proxy card, please visitwww.voteproxy.com and follow the on-screen instructions. You may enter your voting instructions atwww.voteproxy.com up until 11:59 PM Eastern Time on the day before the meeting date.- or -In Person:You may vote your shares in person by attending the Annual Meeting.- or -Telephone:To vote by telephone, please visit https://secure.amstock.com/voteproxy/login2.asp to view the materials and to obtain the toll-free number to call.- or -Mail:You may request a proxy card by following the instructions above for requesting materials, then fill out the card and mail it to the Company.1. To elect three (5) directors to the Board of Directors of the Company to serve until their terms expire and until their successors are duly elected and qualified.2.To ratify the selection of Grant Thornton LLP as the Company's independent registered public accounting firm for 2016.Nominees:NameTerm3.Advisory vote to approve named executive officer compensation.Maarten D. HemsleyOne-year termCharles R. PattonOne-year termannual meeting be held? also address any other business that properlyMilton L. ScottOne-year termcomes before it.Paul J. VarelloOne-year termItems 1-3 are more fully described in the Proxy Statement.Please note that you cannot use this notice to vote by mail.The record date for the Annual Meeting is Tuesday, March 8,2016. Only stockholders of record at the close of business onthat date may vote at the meeting or any adjournment thereof.STERLING CONSTRUCTION COMPANY, INC.ANNUAL MEETING OF STOCKHOLDERS MAY 6, 2016THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSThe undersigned, having received a Notice of the Annual Meeting of Stockholders of Sterling Construction Company, Inc. (the Company) to be held on May 6, 2016 at 8:30 a.m., local time, on Wednesday, May 2, 2018, at the Company'sour headquarters officelocated at 1800 Hughes Landing Blvd., Boulevard—Suite 250, The Woodlands, Texas (the Annual Meeting) as well as having received a Notice of Internet Availability of Proxy Materials for77380. You can obtain directions to the Annual Meeting; and revoking all prior proxies, hereby appoint(s) Milton L. Scott, Chairman of the Board of Directors, Ronald A. Ballschmiede, Chief Financial Officer, and Roger M. Barzun, General Counsel, and each of them (with full power of substitution) as proxies of the undersignedannual meeting by contacting our corporate secretary at (281) 214-0800.Annual Meetingannual meeting in person?any adjourned sessions thereof and thereif your shares of our common stock are held in “street name,” meaning a bank, broker, trustee or other nominee is the stockholder of record of your shares, please bring acceptable proof of ownership, which is either an account statement or a letter from your bank, broker, trustee or other nominee confirming that you beneficially owned shares of Sterling Construction Company, Inc. common stock on the record date.act uponreturning the followingproxy card or voting instruction form, or by submitting your proxy and voting instructions via the internet, you are authorizing the proxy holders to vote your shares of our common stock at the annual meeting as you have instructed (or in their best judgement as provided below).allour common stock that you owned on March 13, 2018, the record date for the annual meeting.Company whichrecord date for the undersigned wouldannual meeting will entitle the holder to one vote.act upon, withrepresented by proxy, will constitute a quorum at the annual meeting. The inspector of election will determine whether a quorum is present at the annual meeting. Stockholders of record who are present at the annual meeting in person or by proxy will be counted as present at the annual meeting for purposes of determining whether a quorum exists, whether or not such holder of record abstains from voting on any or all powers the undersigned would possess, if personally present.Attendance of the undersignedproposals. If you are a beneficial owner (as defined below) of shares of our common stock, even if you do not instruct your bank, broker, trustee or other nominee how to vote your shares on any of the proposals, if your bank, broker, trustee or other nominee submits a proxy as the record holder with respect to your shares on a matter with respect to which discretionary voting is permitted, your shares will be counted as present at the Annual Meetingannual meeting for purposes of determining whether a quorum exists.adjourned session thereof will not be deemed to revoke this proxy unless the undersigned affirmatively indicates at the Annual Meeting the intentionadjournment of the undersignedmeeting, each with the power to vote said shares in person. If the undersigned holds any shares in a fiduciary, custodial or joint capacity or capacities, this proxy is signed by the undersigned in every one of those capacities as well as individually.(Continuedappoint his substitute, and to be signed onrepresent and vote your shares of our common stock as you directed, if applicable.reverse side)ANNUAL MEETING OF STOCKHOLDERS OFSTERLING CONSTRUCTION COMPANY, INC.May 6, 2016▪ PROXY VOTING INSTRUCTIONSUse the internet to submit your proxy and voting instructions 24 hours a day, seven days a week until 11:59 p.m., Central Time, on May 1, 2018.▪ INTERNET- Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. HavePlease have your proxy card available when you access the web page.
TELEPHONE-Call toll-free1-800-PROXIES(1-800-776-9437) in the United States or1-718-921-8500from foreign countries from any touch-tone telephone and follow the instructions. Have yourinstructions on the proxy card available when you call.card.Vote online/phone until 11:59 PM EST▪Obtain a printed copy of the day before the meeting.MAIL—Sign, date and mail your proxy card in the manner described in the notice of internet availability.▪ Complete, date and sign your proxy card and return it in the postage-paid envelope provided as soon as possible.provided. COMPANY NUMBERIN PERSON—You may vote your shares in person by attending the Annual Meeting. ACCOUNT NUMBERGO GREEN—e-Consent makes it easy go paperless. With e-Consent, you can quickly access yourAdopt the Proposal proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS; AND FOR PROPOSALS 2 and 3.PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x1.No. 1: Election of DirectorsNomineesForAgainstAbstainMaarten D. Hemsleythe seven director nominees Charles R. PattonFor, against or abstain for each nominee Richard O. SchaumMajority of the votes cast* Milton L. ScottNo effect No effect Paul J. VarelloNo. 2: Approval, on an advisory basis, of the compensation of our named executive officers For, against or abstain Affirmative vote of a majority of the shares of common stock present in person or by proxy and entitled to vote on the proposal Treated as votes against No effect 2. To ratifyselectionappointment of Grant Thornton LLP as the Company'sour independent registered public accounting firm for 2016. 3. Advisory vote to approve named executive officer compensation.For, against or abstain Affirmative vote of a majority of the shares of common stock present in person or by proxy and entitled to vote on the proposal Treated as votes against N/A TheNo. 4: Adoption of the 2018 stock incentive planFor, against or abstain Affirmative vote of a majority of the shares representedof common stock present in person or by this proxy and entitled to vote on the proposalTreated as votes against No effect (a) designate Participants; (b) determine the type or types of Awards to be voted as directedgranted to an Eligible Individual;(c) determine the number of Shares to be covered by, the undersigned. If no direction is givenor with respect to which payments, rights, or other matters are to be calculated in connection with, Awards;(d) determine the terms and conditions of any Award; (e) cancel, modify, or waive rights with respect to, or to alter, discontinue, suspend, or terminate Awards; (f) determine whether, to what extent, and under what circumstances an Award may be settled or exercised in cash, whole Shares, other whole securities, other Awards, other property, or other cash amounts payable by the Company upon the exercise of that or other Awards, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (g) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable by the Company with respect to an Award shall be deferred either automatically or at the election of directorsthe holder thereof or proposals 2 or 3, specified above, this proxy will be voted FORof the election of each director; and FOR Proposals 2 and 3. All proposals are made by the Board of Directors.Committee;IF YOU WISH TO VOTE IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS, YOU NEED ONLY SIGN AND DATE THIS PROXY. YOU DO NOT NEED TO MARK ANY BOXES.(h)interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; Signature(i)establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of Stockholder __________________________ Date ______________ Signaturethe Plan; and(j) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of Stockholder Date _________________the Plan.
