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AMENDED & RESTATED EMPLOYMENT
AGREEMENT
This Amended & Restated Employment Agreement
(this " 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 " Company "), and J.M. Bernhard,
Jr. (" 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 as of
January 23, 2007 (the " Original Agreement "); and
WHEREAS , the Company and Employee 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 continues
to employ Employee, and Employee hereby agrees to continued
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 Section 7 of
this Agreement, the term of this Agreement (the " Term ")
shall be three (3) 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
shall be three (3) years.
3. Employee’s Duties .
(a) During the Term, Employee shall serve as
the Chairman of the Board of Directors, President & Chief
Executive Officer of the Company, 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 "), provided
that such duties are consistent with the customary duties of such
position.
(b) Employee agrees to devote a substantial
amount of his 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 his duties and
responsibilities. 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, so long as
such does not interfere with Employee’s fiduciary duties to
the Company. Employee shall at all times observe and comply with
all lawful directions and instructions of the Board.
(c) Employee’s place of business shall
be at the Company’s principal executive offices in Baton
Rouge, Louisiana.
4. Compensation .
(a) Base Compensation . For services
rendered by Employee under this Agreement, the Company shall pay to
Employee a base salary (" Base Compensation ") as set by the
Board, payable in accordance with the Company’s customary pay
periods and subject to customary withholdings. Employee’s
Base Compensation shall be reviewed 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 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
thereafter be decreased unless agreed to by Employee in
writing.
(b) Bonus . Nothing contained herein
shall prevent the Board from paying additional compensation to
Employee in the form of bonuses or otherwise during the Term.
Employee shall be entitled to participate in and receive bonus
awards under any bonus program established by the Company for its
management or key personnel. In the absence of or in addition to
such a program, Employee shall be entitled to receive such bonus,
if any, as may be determined from time to time by the Board in its
discretionary and sole judgment based on merit and the
Company’s performance.
(c) Long Term Incentives . Nothing
contained herein shall prevent the Board from paying additional
compensation to Employee in the form of options, restricted shares
or units or other similar awards (" Long Term Incentives ")
under any Company plan during the Term. Employee shall be entitled
to participate in and receive Long Term Incentives under any
program established by the Company for its management or key
personnel.
5. Additional Benefits . In addition
to the compensation provided for in Section 4 herein, Employee
shall be entitled to the following:
(a) Expenses . The Company shall, in
accordance with any rules and policies that it may establish from
time to time for executive officers, reimburse Employee for
business expenses reasonably incurred in the performance of his
duties. The Company shall also reimburse Employee for membership
and initiation fees for clubs the Board deems reasonable in order
for Employee to carry out the duties set forth herein and, at the
Board’s discretion, provide Employee a mid-size jet aircraft
(which shall mean a jet aircraft comparable to or better than the
jet aircraft currently being used by Employee as of the Effective
Date) for his personal use and benefit. Requests for reimbursement
for all business expenses must be accompanied by appropriate
documentation.
(b) Automobile Allowance . The
Company shall provide Employee, for his business and private use,
with an automobile suitable to Employee’s position. In
addition, the Company shall either directly pay or reimburse
Employee for all costs of operating and maintaining such
automobile, including insurance thereon in accordance with Company
policies.
(c) Vacation . Employee shall be
entitled to a reasonable period of vacation per year at his
discretion, but not less than 5 weeks, without any loss of
compensation or benefits. Employee shall be entitled to carry
forward any unused vacation time.
(d) General Benefits . Employee and
Employee’s spouse and dependents shall be entitled to
participate in the various employee benefit plans or programs
provided to employees (and their families) of the Company in
general, including, but not limited to, health, dental, disability,
accident and life insurance plans and 401k plans, subject to the
eligibility requirements with respect to each of such benefit plans
or programs, and such other benefits or perquisites as may be
approved by the Board during the Term. Nothing in this Section 5(d)
shall be deemed to prohibit the Company from making any changes in
any of the plans, programs or benefits described in this
Section 5(d), provided the change similarly affects all
executive officers (and their families) of the Company that are
similarly situated.
6. Reserved .
7. Termination .
(a) This Agreement may be terminated prior to
the expiration of its Term only under the terms and conditions set
forth below:
(i) Resignation (other than for Good Reason)
. Employee may resign his 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 (as defined 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 (A) the payment of any
Base Compensation and General Benefits (e.g., unused vacation,
unreimbursed business expenses, etc.) accrued and unpaid as of the
Date of Termination, and (B) payments and benefits due under
Section 8(a).
(ii) Death . If Employee’s employment
is terminated due to his death, the Company shall pay to
Employee’s surviving spouse or estate (in accordance with
applicable law), subject to 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, (B) a lump sum amount, in cash,
equal to one year of Employee’s Base Compensation,
(C) to the extent that, but for his death, Employee would have
otherwise been entitled to a bonus under any bonus plan then
maintained by the Company, or to the extent that other officers or
Company executives are awarded bonuses or otherwise in the
discretion of the Board, a lump sum amount, in cash, equal to a pro
rata bonus for the year of his death, (D) a lump sum amount, in
cash, equal to the amount due under Section 8(a)(i), as a
death benefit, and (E) a lump sum amount, in cash, equal to
the cost for Employee to obtain, for the period commencing on the
Date of Termination and ending on the date that is 30 months
following the Date of Termination, health and dental insurance
benefits covering Employee and Employee’s spouse and
dependents that are substantially similar to those that Employee
(and Employee’s spouse and dependents) were receiving
immediately prior to the Date of Termination. Notwithstanding any
provision to the contrary in the plan(s) governing such Long Term
Incentives, Employee shall also be considered as immediately and
totally vested in any and all Long Term Incentives previously
granted to Employee by Company prior to the Date of Termination
that have not previously vested in full. After all payments,
benefits and vesting of Long Term Incentives specified under this
Section 7(a)(ii) have been paid or performed, this Agreement
shall terminate, and the Company shall have no obligations to
Employee or his legal representatives with respect to this
Agreement.
(iii) Discharge .
(A) The Company may terminate Employee’s
employment for any reason at any time upon written notice thereof
delivered to Employee in accordance with Section 7(b).
(B) In the event that Employee’s
employment is terminated during the Term by the Company for any
reason other than his Misconduct or Disability (both as defined
below), the following shall occur:
(I) the Company shall pay to Employee, subject
to customary withholdings, not later than 15 days after the
Date of Termination:
(x) a lump sum amount, in cash, equal to the
product of (1) the sum of (a) Employee’s Base
Compensation as in effect immediately prior to the Date of
Termination, plus (b) Employee’s highest bonus
paid by the Company during the three years immediately prior to the
Date of Termination, multiplied by (2) 3.0;
(y) the amount due under Section 8(a)(i);
and
(z) a lump sum amount, in cash, equal to the
cost for Employee to obtain, for the three year period commencing
on the Date of Termination, disability, accident, dental and health
insurance benefits ("Welfare Benefits") covering Employee (and, as
applicable, Employee’s spouse and dependents) and other
benefits provided to Employee that, in each case, are substantially
similar to those that Employee (and/or Employee’s spouse and
dependents) were receiving immediately prior to the Date of
Termination; and
(II) notwithstanding any provision to the
contrary in the plan(s) governing such Long Term Incentives,
Employee shall be considered as immediately and totally vested in
any and all Long Term Incentives previously granted to Employee by
the Company prior to the Date of Termination.
(C) Notwithstanding anything to the contrary
in this Agreement, in the event Employee is terminated because of
Misconduct, the Company shall have no obligations pursuant to this
Agreement after the Date of Termination other than the payment of
any Base Compensation and General Benefits accrued and unpaid
through the Date of Termination and the payment due under
Section 8(a)(i). As used herein, " Misconduct "
means:
(I) the continued failure by Employee to
substantially perform his duties with the Company (other than any
such failure resulting from Employee’s incapacity due to a
Disability or any such actual or anticipated failure after the
issuance of a Notice of Termination by Employee for Good Reason),
after a written demand for substantial performance is delivered to
Employee by the Board, which demand specifically identifies the
manner in which the Board believes that Employee has not
substantially performed his duties and allows such 30 days for
Employee to effect any potential cure,
(II) the engaging by Employee in conduct which
is demonstrably and materially injurious to the Company, monetarily
or otherwise (other than such conduct resulting from
Employee’s incapacity due to physical or mental illness and
other than any such actual or anticipated conduct after the
issuance of a Notice of Termination by Employee for Good Reason),
or
(III) Employee’s conviction for the
commission of a felony.
A finding of Misconduct shall only be made by
unanimous approval, excluding Employee, of a resolution by the
Board after a meeting called for such purpose upon thirty
(30) days’ notice to Employee, and at which Employee is
entitled to appear with counsel and be heard.
(D) Disability . If Employee shall have been
absent from the full-time performance of Employee’s duties
with the Company for 180 consecutive calendar days as a result of
Employee’s incapacity due to a Disability, Employee’s
employment may be terminated by the Company. For the purposes of
this Agreement, a " Disability " shall exist if:
(I) Employee is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be reasonably
expected to result in death or can be expected to last for a
continuous period of not less than 12 months; or
(II) Employee is, by reason of any medically
determinable physical or mental impairment that can be reasonably
expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the
Company.
If Employee is terminated pursuant to this
Section 7(a)(iii)(D), Employee shall not be entitled to
further compensation pursuant to this Agreement, except that:
(w) the Company shall (1) for the
12 month period beginning with the Date of Termination, pay to
Employee monthly the amount by which Employee’s monthly Base
Compensation as in effect immediately prior to the Date of
Termination exceeds the monthly benefit received by Employee
pursuant to any disability insurance covering Employee;
(2) not later than 15 days after the Date of Termination,
pay to Employee (a) the amount due under Section 8(a)(i),
(b) any Base Compensation and General Benefits accrued and
unpaid as of the Date of Termination, and (c) a lump sum
amount, in cash, equal to the cost for Employee to obtain, for the
period commencing on the Date of Termination and ending on the date
that is 30 months following the Date of Termination, health
and dental insurance benefits covering Employee and
Employee’s spouse and dependents that are substantially
similar to those that Employee (and Employee’s spouse and
dependents) were receiving immediately prior to the Date of
Termination; and (3) to the extent that, but for his
Disability, Employee would have otherwise been entitled to a bonus
under any bonus plan then maintained by the Company, or to the
extent that other officers or Company executives are awarded
bonuses, the Company shall, not later than the earlier of
(a) 15 days after the date on which the Company awards
such bonuses and (b) February 28 th of the
calendar year following the year in which the Date of Termination
occurs, pay to Employee a pro rata bonus for the year in which the
Company terminates Employee’s employment pursuant to this
Section 7(a)(iii)(D);
(x) notwithstanding any provision to the
contrary in the plan(s) governing such Long Term Incentives,
Employee shall become immediately and totally vested in any and all
Long Term Incentives granted to Employee by Company prior to the
Date of Termination that have no
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