Sterling Construction Company, Inc. (NasdaqGS:STRL) (“Sterling” or “the
Company”) today announced that Paul J. Varello, who was elected acting
CEO in February, has entered into a multi-year employment agreement with
the Company effective March 9, 2015. In connection with the change in
his status, Mr. Varello has resigned as Chairman, and the Board has
elected Milton L. Scott, who is Chair of the Board's Audit Committee,
Chairman of the Board of Directors.
To further align his interests with those of shareholders, Mr. Varello’s
employment agreement calls for an annual salary of $1.00, and an award
of 600,000 shares of restricted common stock that vests over three
years, and that will be subject to the approval of the Company's
stockholders at the Annual Meeting of Stockholders on May 8, 2015.
Mr. Varello commented, “I look forward to leading Sterling through a
business turnaround. Over the past year, I have spent a great deal of
time learning about the Company, visiting our various operations and job
sites, talking to our employees, and analyzing our systems and
processes, and I firmly believe that we have the capacity to be a
best-in-class company. We have struggled to deliver consistent results
over the past several years; however, Sterling is a business that has
all of the elements necessary for success in the heavy civil
construction industry, including a strong competitive position, a solid
reputation in our primary markets, a team of experienced people, a large
fleet of modern equipment, and a record-high backlog of projects that,
if managed diligently, can markedly improve our profitability. I’d like
to thank the Board for their vote of confidence, and I look forward to
reporting on our progress in the coming months."
Mr. Varello, who has been a member of Sterling’s Board since January
2014, was named Board Chairman in December 2014 and as noted, became
acting Chief Executive Officer on February 1, 2015. He has spent his
entire career in the construction industry, after spending much of his
youth working in his family’s road-building business. He spent 18 years
with Fluor Corporation (NYSE:FLR), a Fortune 500 company that provides
engineering, procurement, construction, maintenance, and project
management services. Mr. Varello started with Fluor as a project
construction manager, and rose to President of the Process Sector. He
was Chairman and CEO of American Ref-Fuel Company, a Houston,
Texas-based 50/50 joint venture between Air Products & Chemicals and
Browning Ferris International that was involved in the development,
design, construction and operation of plants that converted solid
municipal waste into energy. In May 2003, he founded Commonwealth
Engineering & Construction, LLC (CEC), a Houston-based engineering and
construction management company specializing in the design and
construction of major capital projects. Mr. Varello is a graduate of the
Villanova University College of Engineering and Harvard Business
School’s Advanced Management Program, and is a Registered Professional
Engineer in California, Texas and Louisiana.
Milton Scott is one of the Audit Committee's two financial experts, and
has been a director of the Company since 2005. He was a partner of
Arthur Andersen, LLP from 1977 to 1999, and since then has had extensive
experience as an executive, a director and chairman of various
companies. In addition to his new role, Mr. Scott will remain Chair of
the Audit Committee.
Marian Davenport, a Sterling Director and Chair of its Corporate
Governance & Nominating Committee, stated, “Milton's ten-year background
on the Board and in other directorship positions, and Paul’s extensive
experience in the engineering and construction industry and as a senior
executive make them both highly qualified to lead the Board and the
Company as we work to deliver improved results and shareholder value.
Since joining the Board, Paul has been active and energetic in building
his knowledge of the Company, our markets and our strengths and
weaknesses. We are pleased to have been able to hire an executive of
Paul’s caliber and boundless energy to be our chief executive, and to
have Milton leading the Board of Directors.”
Sterling is a leading heavy civil construction company that specializes
in the building and reconstruction of transportation and water
infrastructure projects in Texas, Utah, Nevada, Arizona, California,
Hawaii, and other states where there are construction opportunities. Its
transportation infrastructure projects include highways, roads, bridges
and light rail and its water infrastructure projects include water,
wastewater and storm drainage systems.
This press release includes certain statements that fall within the
definition of “forward-looking statements” under the Private Securities
Litigation Reform Act of 1995. Any such statements are subject to risks
and uncertainties, including overall economic and market conditions,
federal, state and local government funding, competitors’ and customers’
actions, and weather conditions, which could cause actual results to
differ materially from those anticipated, including those risks
identified in the Company’s filings with the Securities and Exchange
Commission. Accordingly, such statements should be considered in light
of these risks. Any prediction by the Company is only a statement of
management’s belief at the time the prediction is made. There can be no
assurance that any prediction once made will continue thereafter to
reflect management’s belief, and the Company does not undertake to
update publicly its predictions or to make voluntary additional
disclosures of nonpublic information, whether as a result of new
information, future events or otherwise.
Copyright Business Wire 2015