AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This
Amended and Restated Employment Agreement (“ Agreement
”) is entered into December 31, 2008, but is effective as of
January 1, 2008 (the “ Effective Date ”),
by and between The Shaw Group Inc., a Louisiana corporation
(collectively with its affiliates and subsidiaries hereinafter
referred to as, the “ Company ”), and Brian K.
Ferraioli (“ Employee ”). The Company and
Employee may hereinafter be referred to, individually, as a “
Party ” and, collectively, as the “
Parties ”.
WHEREAS , the Company and Employee are parties to that
certain Employment Agreement dated effective as of July 17,
2007 (the “ Original Agreement ”);
and
WHEREAS , the Parties desire to amend certain provisions
of the Original Agreement and to restate the Original Agreement in
its entirety.
NOW, THEREFORE , in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and
for other valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Parties agree as follows:
1. Employment . The Company hereby
employs Employee, and Employee hereby accepts employment by the
Company, on the terms and conditions set forth in this
Agreement.
2. Term of Employment . Subject to
the provisions for earlier termination provided in this Agreement,
the term of this Agreement (the “ Term ”) shall
be two years, commencing on the Effective Date, and shall be
automatically renewed on each day following the Effective Date so
that on any given day the unexpired portion of the Term of this
Agreement shall be two years. Notwithstanding the foregoing
provision, at any time after the Effective Date, the Company or
Employee may give written notice to the other Party that the Term
shall not be further renewed from and after a subsequent date
specified in such notice (the “ fixed term date
”), in which event the Term shall become fixed, and this
Agreement shall terminate on the second anniversary of such fixed
term date.
3. Employee’s Duties
.
(a) During the Term, Employee shall serve
as Executive Vice President & Chief Financial Officer of the
Company, or such other similar position(s) as the Parties may
mutually agree, with such duties and responsibilities as may from
time to time be assigned to him by the Board of Directors of the
Company (the “ Board ”) or the Chief Executive
Officer of the Company, provided that such duties are comparable to
the customary duties of such position(s).
(b) Employee agrees to devote
Employee’s full attention and time during normal business
hours to the business and affairs of the Company and to use
reasonable best efforts to perform faithfully and efficiently
Employee’s duties and responsibilities. Employee shall not,
either directly or indirectly, enter into any business or
employment with or for any Person (defined below) other than the
Company during the Term; provided , however , that
Employee shall not be prohibited from making financial investments
in any other company or business or from serving on the board of
directors of any other company, subject in each case to the
provisions set forth in the Company’s Code of Conduct or
other similar written guidelines. For the purposes of this
Agreement, the term “ Person ” shall mean any
individual, corporation, limited or general partnership, limited
liability company, joint venture, association, trust or other
entity or organization, whether or not a legal entity. Employee
shall at all times observe and comply with all lawful directions
and instructions of the Board of which Employee is notified in
writing.
4. Compensation .
(a) Base Compensation . For
services rendered by Employee under this Agreement, the Company
shall pay to Employee Employee’s current base salary as of
the Effective Date (“ Base Compensation ”), per
annum, payable in accordance with the Company’s customary pay
periods and subject to tax and other customary withholdings.
Employee’s Base Compensation will be subject to review by the
Board on an annual basis as of the close of each fiscal year of the
Company and may be increased as the Board may deem appropriate. In
the event that the Board deems it appropriate to increase
Employee’s Base Compensation, that increased amount shall
thereafter be the Base Compensation for the purposes of this
Agreement. Employee’s Base Compensation, as increased from
time to time, may not be decreased unless agreed to by Employee.
Nothing contained herein shall prevent the Board from paying
additional compensation to Employee in the form of bonuses or
otherwise from time to time during the Term.
(b) Annual Bonus . During the Term,
Employee shall participate in the Company’s discretionary
management incentive program as established by the Board (as the
same may be amended from time to time), with an annual performance
bonus range of not less than 25%, and not more than-200%, of
Employee’s bonus target (the “ Bonus Target
”), which Bonus Target shall initially be an amount equal to
100% of Employee’s Base Compensation. The Bonus Target may be
adjusted annually. Annual bonus payments will be subject to tax and
other customary withholdings.
(c) Long Term Incentive Awards
.
(i) Employee will be eligible to
participate in the Company’s discretionary Long Term
Incentive (defined below) plan(s) as established by the Board (as
the same may be amended from time to time), subject to the terms
and conditions of the applicable plan(s). The overall target value
of the annual Long Term Incentive grants to Employee on the date of
grant will be in the range of 100% to 200% of Employee’s Base
Compensation.
(ii) All Long Term Incentive awards that
are to be settled by the delivery of shares are subject to
shareholders’ approval of shares to be allocated to the
Company’s Long Term Incentive plan(s) and are granted under
the strict purview of the Compensation Committee of the
Board.
(iii) Long Term Incentive (awards will be
determined utilizing the valuation methodology used for other
similarly situated executive officers of the Company.
(iv) Notwithstanding any provision to the
contrary in the plan(s) governing such Long Term Incentives, in the
event that this Agreement is terminated by Employee pursuant to
Section 7(a)(ii), (iv) or (v) or by the Company
pursuant to Section 7(a)(iii)(A) (other than for Misconduct)
or 7(a)(iii)(D), Employee shall have not less than one year from
the Date of Termination in which to exercise all Long Term
Incentives granted to Employee by the Company on or before the Date
of Termination (including any Long Term Incentives that become
vested pursuant to Section 7 of this Agreement);
provided that in no event shall such one year period extend
the vesting period for any Long Term Incentives beyond the date
that is 10 years from the date of grant of such Long Term
Incentives.
5. Additional Benefits . In
addition to the compensation provided for in Section 4,
Employee shall be entitled to the following:
(a) Business Expenses . The Company
shall, in accordance with any rules and policies that it may
establish from time to time for its executive officers, reimburse
Employee for business expenses reasonably incurred in the
performance of Employee’s duties. It is understood that
Employee is authorized to incur reasonable business expenses for
promoting the business of the Company, including reasonable
expenditures for travel, lodging, meals and client or business
associate entertainment. The Company shall also reimburse you for
the cost of relevant professional memberships and licenses.
Requests for reimbursement for all business expenses must be
accompanied by appropriate documentation.
(b) Point of Origin; Relocation Expenses
.
(i) Employee’s point of origin (the
“ Point of Origin ”) will be Califon, New
Jersey, and Employee’s business assignment location will be
the Company’s corporate offices in Baton Rouge, Louisiana
(the “ Business Location ”). From the Effective
Date until June 17, 2008, the Company will reimburse Employee
for expenses reasonably incurred by Employee for living expenses at
the Business location and air travel between the Point of Origin
and the Business Location each weekend. Business class seating may
be used by Employee in Employee’s reasonable discretion.
Employee will also have access to the Company’s aircraft on
an as-available basis for the purposes, and during the period,
described in this Section 5(b)(i). Notwithstanding anything in
this Agreement to the contrary, to the extent that any amount
received by Employee under this Section 5(b)(i) in connection
with the reimbursement by the Company of travel and living expenses
is determined by the Company or the Internal Revenue Service to
constitute taxable income to Employee, the Company shall fully
“gross up” such amount so that Employee is in the same
“net” after tax position he would have been if such
payment and gross up payments had not constituted taxable income to
Employee.
(ii) The Company will provide relocation
assistance to Employee in connection with Employee’s
permanent relocation from the Point of Origin to the Business
Location, including moving expenses, home sale assistance,
customary real estate fees and commissions and home purchase
assistance, in each case in accordance with the relocation policies
of the Company at the time such relocation occurs. Employee
acknowledges that such relocation assistance does not include the
purchase by the Company of Employee’s residence at the Point
of Origin.
(c) Vacation . Employee shall be entitled
to four weeks of vacation per year without any loss of compensation
or benefits. Employee shall be entitled to carry forward any unused
vacation time.
(d) Country Club Membership . The Company
will pay, on behalf of Employee, one country club membership
initiation fee. Employee shall be responsible for monthly dues in
connection with such membership.
(e) General Benefits . Employee shall be
entitled to participate in (i) the various employee benefit
plans or programs provided to the employees of the Company in
general, including, but not limited to, health (including
ExecuCare), dental, disability, accident and life insurance plans
and 401k plans, and (ii) the Flexible Perquisites Plan, which
provides Employee an amount equal to 4% of Employee’s Base
Compensation in each calendar year in lieu of customary perquisite
benefits. Benefits are subject to the eligibility requirements as
may be approved by the Board from time to time during the Term.
Nothing in this Section 5(e) shall be deemed to prohibit the
Company from making any changes in, or elimination of, any of the
plans, programs or benefits described in this Section 5(e),
provided the change similarly affects all executive officers of the
Company that are similarly situated.
6. Confidentiality .
(a) Employee hereby acknowledges that the
Company possesses certain Confidential Information (defined below)
that is peculiar to the businesses in which the Company is or may
be engaged. Employee hereby affirms that such Confidential
Information is the exclusive property of the Company and that the
Company has proprietary interests in such Confidential Information.
For the purposes of this Agreement, the term “
Confidential Information ” shall mean any and all
information of any nature and in any form that at the time or times
concerned is not generally known to Persons (other than the
Company) that are engaged in businesses similar to that conducted
or contemplated by the Company (other than by the act or acts of an
employee not authorized by the Company to disclose such
information) which may include, without limitation, the
Company’s existing and contemplated products and services;
the Company’s purchasing, accounting, marketing and
merchandising methods or practices; the Company’s development
data, theories of application and/or methodologies; the
Company’s customer/client contact and/or supplier information
files; the Company’s existing and contemplated policies
and/or business strategies; any and all samples and/or materials
submitted to Employee by the Company; and any and all directly and
indirectly related records, documents, specifications, data and
other information with respect thereto. For the purposes of this
Agreement, “Confidential Information” shall not include
(i) information, knowledge or data that, through no fault of
Employee, becomes publicly available or (ii) information,
knowledge or data acquired from, or published by, third parties
that have no direct or indirect confidentiality obligation to the
Company. Employee further acknowledges by signing this Agreement
that the Company has expended much time, cost and difficulty in
developing and maintaining the Company’s
customers.
(b) Employee shall (i) use the
Confidential Information solely for the purpose of performing
Employee’s duties on behalf of the Company and for no other
purpose whatsoever, (ii) not, directly or indirectly, at any
time during or after Employee’s employment by the Company,
disclose Confidential Information to any other Person (except to
the Company’s officers in connection with Employee’s
duties on behalf of the Company) or use or otherwise exploit
Confidential Information to the detriment of the Company, and
(iii) not lecture on or publish articles with respect to
Confidential Information without the prior written approval of the
General Counsel of the Company. In the event of a breach or
threatened breach of the provisions of this Section 6(b), the
Company shall be entitled, in addition to any other remedies
available to the Company, to an injunction restraining Employee
from disclosing such Confidential Information.
(c) Upon termination of employment of
Employee for whatever reason, Employee shall surrender to the
Company any and all documents, manuals, correspondence, reports,
records and similar items that have or thereafter come into the
possession of Employee that contain any Confidential Information;
provided , however , that the Company will provide
Employee reasonable access to such Confidential Information to the
extent required by Employee in connection with the defense of any
cause of action, dispute, proceeding or investigation made or
initiated against Employee by any Person other than the Company
related to the employment of Employee by the Company or the
performance by Employee of its duties in the course of such
employment.
7. Termination .
(a) This Agreement may be terminated prior
to the end of the Term as set forth below:
(i) Resignation (other than for Good
Reason) . Employee may resign Employee’s position at any
time, including by reason of retirement, by providing written
notice of resignation to the Company. In the event of such
resignation (except in the case of resignation for Good Reason
(defined in Section 7(a)(iv) below)), this Agreement shall
terminate on the Date of Termination (defined in Section 7(c)
below), and Employee shall not be entitled to further compensation
pursuant to this Agreement other than the payment of any Base
Compensation and General Benefits (e.g., vacation, unreimbursed
business expenses, Flexible Perquisites, etc.) accrued and unpaid
as of the Date of Termination and the retention of any and all
option shares, restricted shares or units or other similar awards
granted to Employee by the Company under any long term incentive
plan duly adopted by the Board (collectively, “ Long Term
Incentives ”) that have vested or become exercisable on
or before the Date of Termination in accordance with the plan(s)
governing such Long Term Incentives (which Long Term Incentives
remain subject to, and must thereafter be exercised in accordance
with, the plan(s) governing such Long Term Incentives).
(ii) Death . If Employee’s
employment is terminated due to Employee’s death, the Company
shall pay to Employee’s surviving spouse or estate, subject
to tax and other customary withholdings, not later than
30 days after Employee’s death, (A) any Base
Compensation and General Benefits accrued and unpaid as of the date
of Employee’s death and (B) a lump sum amount, in cash,
equal to to the cost for Employee to obtain one year of paid group
health and dental insurance benefits covering Employee’s
spouse and dependents that are substantially similar to those that
Employee’s surviving spouse and dependen
