Sterling Construction Company, Inc. 20810 Fernbush Lane Houston, Texas 77073

1.  

By the execution of this amendment to your Employment Agreement, you agree that the election of your successor as Chief Executive Officer of the Company by the Board of Directors of the Company will constitute an automatic, simultaneous resignation by you as Chief Executive Officer of the Company and as an officer and/or director of the Company's subsidiaries and affiliates.

2.  

Notwithstanding anything in your Employment Agreement to the contrary, subsequent to, and in consideration of, your resignation, you and the Company agree as follows:

(a)  

Your resignation will not be deemed a resignation to which either Section 9.1 or Section 9.2 of your Employment Agreement applies, nor shall your resignation be deemed a termination of your employment by the Company under any other provisions of your Employment Agreement.

(b)  

You will continue as a full-time employee under your Employment Agreement, which will continue in full force, subject to the amendments described herein, and you will retain your current office in the Company's headquarters building.

(c)  

Subject to the provisions of the Company's Certificate of Incorporation, you will remain a director of the Company until your current term expires at the 2014 Annual Meeting of Stockholders.

(d)  

The "Duties & Responsibilities" and "Salary" sections of Exhibit A to your Employment Agreement are amended in their entirety to read as follows:

Duties & Responsibilities:

(e)  

For calendar year 2012, you shall be entitled to Annual Incentive Compensation as set forth in Exhibit B to your Employment Agreement except that Exhibit B is hereby amended in the following respects:

(i)  

Section 2(a) of Exhibit B is hereby amended in its entirety to read as follows:

 

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

(ii)  

A new Subsection (c) is hereby added to Section 2 of Exhibit B to read as follows:

 

In the event that in a given year there is an extraordinary item or event that has a significant effect on the net earnings of the Company, whether that effect is positive or negative, the Committee shall have the sole discretion to determine whether to exclude some or all of such effect from the calculation of Defined Earnings and/or from the calculation of the three-year AROE (as defined below) for the year in which such item or event is recorded and for any subsequent year.

(iii)  

In calendar year 2013 you will be entitled to earn Annual Incentive Compensation as set forth in Exhibit B, except that —

(A)  

The amount of the Annual Incentive Compensation paid to you for calendar year 2013 will be no less than $120,000 (the "Guaranteed Incentive Compensation"); and

(B)  

The Guaranteed Incentive Compensation will be paid to you during 2013 in twelve equal monthly installments.  Any Annual Incentive Compensation that you are entitled to for 2013 under Exhibit B in excess of the Guaranteed Incentive Compensation will be paid to you at the same time as Annual Incentive Compensation is paid to the Company's executive officers.

(iv)  

All Annual Incentive Compensation earned by you shall be paid to you in cash.

(v)  

Your personal goals for 2013 will be the satisfactory performance of the advisory services described in Exhibit A as amended hereby.