AMENDED &
RESTATED EMPLOYMENT AGREEMENT
This Amended & Restated
Employment Agreement (this “ Agreement ”) is
entered into effective as of December 31, 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 Ronald W. Oakley (“ 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 August 3, 2006 (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 commence on the Effective Date
and shall end on February 28, 2011.
3. Employee’s
Duties.
(a) During the Term, Employee
shall serve as the Managing Director of Shaw Group UK Holdings with
responsibility for European sales/business development activities,
concentrating initially on Power Group opportunities, and support
for operational activities, or such other similar position(s) with
similar duties and responsibilities as may from time to time be
assigned to Employee by the Chief Executive Officer of The Shaw
Group Inc.
(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 his
duties and responsibilities. Employee shall not, either directly or
indirectly, enter into any business or employment with or for any
Person (as 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 similar 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.
4. Compensation.
(a) For services rendered by
Employee under this Agreement, the Company shall pay to Employee a
base salary (“ Base Compensation ”) of $600,000
per annum, payable in accordance with the Company’s customary
pay periods and subject to tax and other customary withholdings.
The amount of Employee’s Base Compensation will 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 be decreased unless agreed to by Employee in
writing. Nothing contained herein shall prevent the Board from
paying additional compensation to Employee in the form of bonuses
or otherwise during the Term.
(b) Annual Bonus .
During the Term, Employee will be eligible to participate in
Company’s discretionary management incentive plan as
established by the Board (as the same may be amended from time to
time), with an annual performance bonus range of 25-200% of
Employee’s bonus target (the “ Bonus Target
”), which Bonus Target shall initially be an amount equal to
75% of Employee’s Base Compensation. The Bonus Target may be
adjusted annually. Notwithstanding the foregoing, Employee’s
annual performance bonus shall be not less than 25% of
Employee’s Base Compensation each contract year. Annual bonus
payments will be subject to tax and other customary
withholdings.
(c) Long Term
Incentives .
(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 not
less than 100% of Employee’s Base Compensation each contract
year.
(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 (iii)(D), Employee shall have not less than one year from the
date of such vesting 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) 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 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. Request for reimbursement for such
expenses must be accompanied by appropriate documentation.
(b) Vacation . Employee
shall be entitled to four weeks of vacation per year, without any
loss of compensation or benefits.
(c) General Benefits.
Employee shall be entitled to participate in (i) the various
employee benefit plans or programs provided to 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 with respect to each of such benefit plans
or programs. Nothing in this Section 5(c) shall be deemed to
prohibit the Company from making any changes in any of the plans,
programs or benefits described in this Section 5(c), provided
the change similarly affects all executive officers of the Company
that are similarly situated.
6. Confidentiality;
Nonsolicitation and Noncompete .
(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 the Section 6(b), the
Compnay shall be entitled, in addition to any other remedies
available to the Company, to an injuction 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 and responsibilities in the course of such employment.
7. Termination
(a) This Agreement may be
terminated prior to the expiration the 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 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., unused vacation,
unreimbursed business expenses, etc.) accrued and unpaid as of the
Date of Termination.
(ii)
Death . If Employee’s employment is terminated due to
his 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 (1) year of health and dental insurance benefits
covering Employee’s surviving spouse and dependents that are
substantially similar to those that Employee’s surviving
spouse and dependents were receiving immediately prior to
Employee’s death. Notwithstanding any provision to the
contrary in the plan(s) governing such Long Term Incentives,
Employee, as of the date of Employee’s death, shall also
become immediately and totally vested in any and all Long Term
Incentives granted to Employee by the 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 Employee’s
Misconduct or Disability (both as defined below), the following
shall occur:
(I) the
Company shall pay to Employee, within fifteen (15) days
following 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) the highest annual bonus paid by the Company to Employee
during the most recent two years immediately prior to the Date of
Termination, multiplied by (2) the remaining portion of
the Term (by way of example, if the Term of Employee’s
employment expires 2 1/2 years
after the Date of Termination, Employee’s Base Compensation
should be multiplied by 2.5), and (y) a lump amount, in cash,
equal to the cost for Employee to obtain, for the period commencing
on the Date of Termination and ending on the earlier to occur of
(1) the date that is 18 months following the Date of
Termination and (2) February 28, 2011, disability, accident
and group health insurance benefits (“ Welfare
Benefits ”) covering Employee (and, as applicable,
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
(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 Company or its
subsidiaries.
(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. As used herein, “
Misconduct ” means:
(I) any
willful breach or habitual neglect of duty or Employee’s
material and continued failure
