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EMPLOYMENT AGREEMENT

Employee Retention Agreement

EMPLOYMENT AGREEMENT | Document Parties: SHAW GROUP INC You are currently viewing:
This Employee Retention Agreement involves

SHAW GROUP INC

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Title: EMPLOYMENT AGREEMENT
Governing Law: Louisiana     Date: 1/25/2007
Industry: Misc. Fabricated Products     Law Firm: White Williams     Sector: Basic Materials

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EMPLOYMENT AGREEMENT

     This Employment Agreement (“Agreement”) is entered into effective January ___, 2007 (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”) and supersedes the Employment Agreement dated April 10, 2001, (the “Prior Agreement”).

     WHEREAS, the Company employs Employee and desires to continue such employment relationship and Employee desires to continue such employment;

      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 currently employs Employee, and Employee hereby accepts 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 this Agreement, the term of this agreement (the “Term”) shall be three (3) years commencing on the date hereof, and shall be automatically renewed on each day following the effective date hereof so that on any given day the unexpired portion of the Term of this Agreement shall be three (3) years. (Hereinafter, referred to as the “Remaining Term”.)

     3.  Employee’s Duties. During the Term of this Agreement, 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.

     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.

     Employee’s place of business shall be at the Company’s principal executive offices in Baton Rouge, Louisiana.

     4. (i) 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. The amount of 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 annual base salary, said increased amount shall thereafter be the “Base Compensation”. Employee’s Base Compensation, as increased from time to time, may not thereafter be decreased unless agreed to by Employee.

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     (i)  Bonus . Nothing contained herein shall prevent the Board from paying additional compensation to Employee in the form of bonuses or otherwise during the Term of this Agreement. 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.

     (ii)  Long Term Incentives. Nothing contained herein shall prevent the Board from paying additional compensation to Employee in the form of options, restricted stock or similar awards (“Long Term Incentives”) under any Company plan during the Term of this Agreement. 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

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better than the jet aircraft currently being used by Employee as of the Effective Date) for his personal use and benefit.

     (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 his family shall be entitled to participate in the various employee benefit plans or programs provided to the employees (and their families) of the Company in general, including but not limited to, health, dental, disability, 401K and life insurance 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 of this Agreement. Nothing in this paragraph shall be deemed to prohibit the Company from making any changes in any of the plans, programs or benefits described in this Section 5, provided the change similarly affects all executive officers (and their families) of the Company similarly situated.

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     6. Reserved

     7.  Termination This Agreement may be terminated prior to the end of its Term as set forth below:

     (a) Resignation (other than for Good Reason). Employee may resign, including by reason of retirement, his position at any time by providing written notice of resignation to the Company in accordance with Section 11 hereof. In the event of such resignation, except in the case of resignation for Good Reason (as defined below), this Agreement shall terminate and Employee shall not be entitled to further compensation pursuant to this Agreement other than the payment of any unpaid Base Compensation accrued hereunder as of the effective date of Employee’s resignation and payments and benefits due under Section 8.1.

     (b) Death . If Employee’s employment is terminated due to his death, one (1) year of Employee’s Base Compensation shall be paid by the Company in lump sum in cash within thirty (30) days after Employee’s death to Employee’s surviving spouse or estate, and one (1) year of paid group health and dental insurance benefits shall be provided by the Company to Employee’s surviving spouse and the minor children (plus adult children, such as full time students, who would otherwise be eligible for such benefits in accordance with the Company’s policies), and 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 pro rata bonus for the year of his death

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shall be paid by the Company in lump sum in cash within thirty (30) days after Employee’s death to Employee’s surviving spouse or estate. After the one (1) year of paid group benefit plans described above, Employee’s surviving spouse and dependents shall be entitled at the surviving spouse’s option to continue thereafter their enrollment under such plans at her expense for as long as allowed by law (currently eighteen (18) months thereafter under COBRA, Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. §§ 1161 et seq.) Employee shall also be considered as immediately and totally vested in any and all Long Term Incentives previously granted to Employee by Company or its subsidiaries; in addition, the Company shall pay the sums due under Section 8.1 (i) as a death benefit in cash to Employee’s spouse or estate (in accordance with applicable law) within thirty (30) days after Employee’s death. After said payments and provision of insurance benefits, this Agreement shall terminate and the Company shall have no obligations to Employee or his legal representatives with respect to this Agreement other than the payment of any unpaid Base Compensation previously accrued hereunder.

     (c) Disability . If Employee shall have been absent from the full-time performance of Employee’s duties with the Company for one hundred eighty (180) consecutive calendar days as a result of Employee’s incapacity due to physical or mental illness, Employee’s employment may be terminated by the Company for “Disability” and Employee shall not be entitled to further compensation pursuant to this Agreement, except that Employee shall (1) be paid monthly (but only for up to a twelve (12) month period beginning with the Date

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of Termination) the amount by which Employee’s monthly Base Compensation exceeds the monthly benefit received by Employee pursuant to any disability insurance covering Employee; (2) continue to receive paid group health and dental insurance benefits for Employee and his dependents for up to twelve (12) month period beginning with Date of Termination; (3) be considered as immediately and totally vested in any and all Long Term Incentives previously granted to Employee by Company or its subsidiaries; (4) 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, a pro rata bonus for the year of such disability; (5) an assignment to Employee at no cost and with no apportionment of any prepaid premiums, of all assignable insurance policies benefiting Employee. After the twelve (12) months of paid group benefit plans described above, Employee and his dependents shall be entitled at Employee’s option to continue thereafter their enrollment under such plans at his expense for as long as allowed by law (currently eighteen (18) months thereafter under COBRA). In addition, as a disability benefit, Employee shall be entitled to the payments and benefits due under Section 8.1, and the Company shall pay within thirty (30) days the sums due under Section 8.1 (i).

     (d) Discharge .

     (i) The Company may terminate Employee’s employment for any reason at any time upon written notice thereof delivered to Employee

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in accordance with Section 11 hereof. 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), then (A) the Company shall pay in lump sum in cash to Employee, within fifteen (15) days following the Date of Termination(as defined herein), an amount equal to the product of (i) Employee’s Base Compensation as in effect immediately prior to Employee’s termination, multiplied by (ii) the number of years in the Remaining Term (for this purpose, treating any partial year as a full year), (B) for the Remaining Term, the Company, at its cost, shall provide or arrange to provide Employee (and, as applicable, Employee’s dependents) with disability, accident and group health insurance benefits substantially similar to those which Employee (and Employee’s dependents) were receiving immediately prior to Employee’s termination; however, the welfare benefits otherwise receivable by Employee pursuant to this clause (B) shall be reduced to the extent comparable welfare benefits are actually received by Employee (and/or Employee’s dependents) during such period under any other employer’s welfare plan(s) or program(s) , with Employee being obligated to promptly disclose to the Company any such comparable welfare benefits, (C) in addition to the aforementioned compensation and benefits, the Company shall pay in lump sum in cash to Employee within fifteen (15) days following the Date of Termination an amount equal to the product of (i) Employee’s highest bonus paid by the Company during the most recent

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three (3) years immediately prior to the Date of Termination, multiplied by (ii) the number of years in the Remaining Term (for this purpose, treating any partial year as a full year), (D) Employee shall be considered as immediately and totally vested in any and all Long Term Incentives previously made to Employee by Company or its subsidiaries, and (E) Employee shall be entitled to the payments and benefits due under Section 8.1, and the Company shall pay within fifteen (15) days the sums due under Section 8.1 (i).

     (ii) Notwithstanding the foregoing provisions of this Section 7, 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 unpaid Base Compensation accrued through the Date of Termination and payments due under Section 8.1 (i). As used herein, “Misconduct” means (a) 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 physical or mental illness 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, (b) the engaging by Employee in conduct which is demonstrably and materially

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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 (c) 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.

     (iii) Notwithstanding the provisions of this Section 7, in the event Employee is terminated within thirty (30) days of a Corporate Change for which he has already received compensation and benefits set forth in Paragraph 7(d)(i) and 8.1, Employee shall not be entitled to any further payments under this Agreement.

     (e) Resignation for Good Reason. Employee shall be entitled to terminate his employment for Good Reason as defined herein. If Employee terminates his employment for Good Reason he shall be entitled to the compensation and benefits provided in Paragraphs 7 (d) (i). “Good Reason” shall include the occurrence of any of the following circumstances without Employee’s express written consent unless such breach or circumstances are fully corrected (or rescinded in the case of a Corporate Change) prior to the Date of Termination

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specified in the Notice of Termination given in respect hereof, which notice must be given within thirty (30) days of the occurrence of such circumstance:

     (1) the material breach of any of the Company’s obligations under this Agreement without Employee’s express written consent,

     (2) the failure by the Company to elect or re-elect or to appoint or re-appoint Employee to the office of Chairman, President and Chief Executive Officer;

     (3) the continued assignment to Employee of any duties inconsistent with the office of Chairman, President and Chief Executive Officer or affecting Employee’s authority;

     (4) without Employee’s prior written consent, the relocation of the Company’s principal executive offices outside Baton Rouge, Louisiana or requiring Employee to be based other than at such principal executive offices;

     (5) the failure by the Company to pay to Employee any portion of Employee’s compensation on the date such compensation is due;

     (6) the failure by the Company to continue to provide Employee with benefits substantially similar to those enjoyed by other executive officers who have entered into similar employment agreements with Employer under any of the Company’s medical, health, accident,

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and/or disability plans in which Employee was participating immediately prior to such time;

     (7) the failure of the Company to obtain a satisfactory agreement (as determined by Employee in his sole discretion) from any successor to assume and agree to perform this Agreement, as contemplated in Section 13 hereof; or

     (8) the occurrence of any Corporate Change (as defined below), but only if Employee gives notice of his intent to terminate his employment within ninety (90) days following the effective date of such Corporate Change and has not otherwise received compensation and benefits provided in Paragraph 7(d)(i) as a result of the Corporate Change preceding Employee’s termination.

     (9) the occurrence of any act or omission of the Company, other than that which is the result of Employee’s unreasonable or intentional conduct, which is a material violation of law or regulation and exposes Employee to material personal civil penalty or personal criminal liability.

     A “Corporate Change” shall occur if (i) the Company shall not be the surviving entity in any merger or consolidation (or survives only as a subsidiary of another entity), (ii) the Company sells all or substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary), (iii) the Company is to be dissolved and liquidated, (iv) when

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any “person” as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Sections 13(d) and 14(d) thereof, including a “group” as referred to in Section 13(d) of the Exchange Act, but excluding any 10% or larger shareholder of record of the Company as of January 1, 2001, directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, as amended from time to time) of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities which are entitled to vote with respect to the election of the directors of the Company; or (v) as a result of or in connection with a contested election, the members of the Board as of the date of this Agreement shall cease to constitute a majority of the Board. “Contested” as used herein shall not include selection by a majority of the current Board for approval by shareholders. Upon any uncontested election, the resulting Board shall become the “Board” for purposes of this Section. Notwithstanding anything contained herein to the contrary, upon the occurrence of a Corporate Change, regardless of termination or continued employment, Employee shall immediately be entitled to the compensation and benefits provided in Paragraphs 7(d)(i) without further obligation to the Company.

     (f) Notice of Termination. Any purported termination of Employee’s employment by the Company under Sections 7(c) or 7(d)(ii), or by Employee under Section 7(e), shall be communicated by written Notice of Termination to

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the other party hereto in accordance with Section 11 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which, if by the Company and is for Misconduct or Disability, shall set forth in reasonable detail the reason for such termination of Employee’s employment, or in the case of resignation by Employee for Good Reason, said notice must specify in reasonable detail the basis for such resignation. A Notice of Termination given by Employee pursuant to Section 7(e) shall be effective even if given after the receipt by Employee of notice that the Board has set a meeting to consider terminating Employee for Misconduct. Any purported termination for which a Notice of Termination is required which is not effected pursuant to this Section 7(f) shall not be effective.

     (g) Date of Termination, Etc. “Date of Termination” shall mean the date specified in the Notice of Termination, provided that the Date of Termination shall be at least 15 days following the date the Notice of Termination is given. Notwithstanding the foregoing, in the event Employee is terminated for Misconduct, the Company may refuse to allow Employee access to the Company’s offices (other than to allow Employee to collect his personal belongings under the Company’s supervision) prior to the Date of Termination.

     (h) Mitigation. Employee shall not be required to mitigate the amount of any payment provided for in this Section 7 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by Employee as a result of employment by

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another employer, except that any severance amounts payable to Employee pursuant to the Company’s severance plan or policy for employees in general shall reduce the amount otherwise payable pursuant to Sections 7(c)(i) or 7(e).

     (i) Excess Parachute Payments. Notwithstanding anything in this Agreement to the contrary, to the extent that any payment or benefit received or to be received by Employee hereunder in connection with the termination of Employee’s employment would, as determined by tax counsel selected by the Company, constitute an “Excess Parachute Payment” (as defined in Section 280G of the Internal Revenue Code (the “Code”)) subject to the excise tax imposed by Section 4999 of the Code (together with any interest or penalties imposed with respect to such taxes), the Company shall fully “gross-up” such payment and benefit by paying to Employee additional amounts (“gross-up payments”), which shall include any excise taxes and income taxes imposed upon such gross-up payments, so that Employee is in the same “net” after-tax position he would have been if such payment, benefit and gross-up payments had not constituted Excess Parachute Payments.

     As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that any gross-up payments calculated at the time of the initial determination described above and made by the Company will be less than the gross-up payments that should have been made. If Employee determines from time to time in his sole discretion that he is or will be required to make a payment of any excise taxes under Section 4999 of the Code (together with any interest or

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penalties with respect to such taxes) in addition to that initially determined as described above and that he is therefore entitled to additional gross-up payments, he shall inform the Company of the amount of the additional gross-up payments and any such additional gross-up payments shall be paid promptly by the Company to or for the benefit of Employee.

     8.  Nondisclosure and Noncompetition . Employee agrees that, as part of the consideration for this Agreement and as an integral part hereof, he has signed and agrees to be bound by the Nondisclosure and Noncompetition Agreement attached hereto as Exhibit A, as well as any subsequent addenda thereto.

     8.1 Consideration For Non-Compete . In consideration for the agreement set forth in this Section 8, upon termination or as otherwise provided in this Agreement, Employee shall receive

          (i) the sum of fifteen million ($15,000,000.00) dollars plus interest accrued thereon from the date of deposit which has been set aside in a trust suitable to Employee which trust shall invest the funds in an interest bearing account for the purpose of securing payment hereunder; it being understood that such amounts shall remain subject to claims of the general creditors of the Company. Upon Employee’s termination (no matter whether voluntary resignation by Employee, voluntary termination by the Company, termination by the Company for Misconduct, or Resignation by Employee for Good Reason or any other reason), such amount shall be paid to Employee in a lump sum within thirty (30) days of the Date of Termination. However, in the event of a Corporate Change as defined herein, the entire sum payable hereunder shall be immediately due consistent with Section 7(f).

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          (ii) for ten years from the Date of Termination, the Company shall provide Employee for his private use in his sole discretion, the use of a mid-size jet aircraft (which shall mean a jet aircraft comparable to but not less than the jet aircraft most commonly used by Employee in the year prior to the Date of Termination) for 150 hours annually, the cost (as based on the Company’s current “incremental cost” of operating the current aircraft primarily utilized by Employee) of which shall not exceed $300,000 annually.

     9.  Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Employee’s continuing or future participation in any benefit, bonus, incentive, or other plan or program provided by the Company or any of its affiliated companies and for which Employee may qualify, nor shall anything herein limit or otherwise adversely affect such rights as Employee may have under any Options with the Company or any of its affiliated companies.

     10.  Assignability. The obligations of Employee hereunder are personal and may not be assigned or delegated by him or transferred in any manner whatsoever, nor are such obligations subject to involuntary alienation, assignment or transfer. The Company shall have the right to assign this Agreement and to delegate all rights, duties and obligations hereunder, either in whole or in part, to any parent, affiliate, successor or subsidiary organization or company of the Company, so long as the obligations of the Company under this Agreement remain the obligations of the Company.

     11.  Notice . For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the Company at its principal office address, directed to the attention of the

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Board with a copy to the Secretary of the Company, and to Employee at Employee’s residence address on the records of the Company or to such other address as either party may have furnished to the other in writing in accordance herewith except that notice of change of address shall be effective only upon receipt.

     12.  Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

     13.  Successors; Binding Agreement.

     (a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Employee to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used herein, the term “Company” shall include any successor to its business and/or assets as aforesaid which executes and delivers the Agreement provided

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for in this Section 13 or which otherwise becomes bound by all terms and provisions of this Agreement by operation of law.

     (b) This Agreement and all rights of Employee hereunder shall inure to the benefit of and be enforceable by Employee’s personal or legal representatives, executors, administrators, successors, heirs distributees, devisees and legatees. If Employee should die while any amounts would be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee, or other designee or, if there be no such designee, to Employee’s estate.

     14.  Indemnification: Liability Insurance . The Company shall indemnify and hold Employee (or his legal representative) harmless to the full extent permitted by applicable law for all legal expenses and all liabilities, losses, judgments, fines, expenses, and amounts paid in settlement in connection with any proceeding involving him (including any action by or in the right of the Company) by reason of his being or having been a director, officer, employee, consultant, or agent of the Company or any of its subsidiaries, affiliates, or any other enterprise if he is serving or has served at the request of the Company. In addition, the Company shall cause any such subsidiary, affiliate, or enterprise also to so indemnify and hold Employee harmless to the full extent permitted by applicable law. The foregoing shall not be deemed to limit any rights of Employee pursuant to applicable indemnification provisions of the Company’s Articles of Incorporation or By-Laws or otherwise, and the Company agrees to amend such Articles of Incorporation and Bylaws to provide Employee indemnification

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consistent herewith. The Company also agrees to amend its Articles of Incorporation to provide immunity to Employee to the full extent allowed by law. In addition, the Company shall acquire and maintain with reputable insurance companies or associations acceptable to Employee, directors’ and officers’ liability insurance for the benefit of the directors and officers of the Company, including Employee, providing terms and coverage amounts of at least $75,000,000,. Such insurance shall remain in place, to the extent that the Company is able to purchase the same, as long as necessary under applicable statutes of limitations to cover all events occurring during the term of this Agreement regardless of when the claim is made.

     In the event of any action, proceeding, or claim against Employee arising out of his serving or having served in a capacity specified above, the Company shall provide Employee with counsel, who may be counsel for the Company as well, as long as no conflict of interest exists between the Company and Employee and no ethical or professional responsibility rules prevent the same counsel from representing both Employee and the Company. In the event of any such conflict of interest or other bar to Employee being represented by counsel for the Company, Employee may retain his own separate counsel (such choice of counsel may be made in his sole and absolute discretion), and the Company shall be obligated to advance to Employee (or pay directly to his counsel) reasonable counsel fees and other costs associated with Employee’s defense of such action, proceeding, or claim; provided, however, that in such event, Employee shall first agree in writing, without posting bond or collateral, to repay all sums paid or advanced to him pursuant to this provision in the event the final disposition of such action, proceeding, or claim is one for which Employee would not be entitled to indemnification.

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15. Miscellaneous.

     (a) Amendment and Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and such officer as may be specifically authorized by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or in compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

     (b) Entire Agreement. The Company and Employee have heretofore entered into the Prior Agreement. The Prior Agreement shall continue in full force and effect until the Effective Date, after which it will be superseded by this Agreement; provided that nothing in this Agreement shall be deemed to discharge or otherwise prejudice Employee’s right to receive, or the Company’s obligation to pay or provide, any of the benefits accrued under the Prior Agreement as of the Effective Date. Subject to the foregoing, this Agreement is an integration of the parties’ agreement; no agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party, except those which are set forth expressly in this Agreement.

     (c) Governing Law. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF LOUISIANA, except for

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Section 8, in which case the law of the jurisdiction in which the non-compete is sought to be enforced by the Company shall govern in the event such applicable law is more favorable to the Company.

     16.  Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

     17.  Arbitration. Either party may elect that any dispute or controversy arising under or in connection with this Agreement be settled by arbitration in Baton Rouge, Louisiana in accordance with the rules of the American Arbitration Association then in effect. If the parties cannot mutually agree on an arbitrator, then the arbitration shall be conducted by a three arbitrator panel, with each party selecting one arbitrator and the two arbitrators so selected selecting a third arbitrator. The findings of the arbitrator(s) shall be final and binding, and judgment may be entered thereon in any court having jurisdiction. The findings of the arbitrator(s) shall not be subject to appeal to any court, except as otherwise provided by applicable law. The arbitrator(s) may, in his or her (or their) own discretion, award legal fees and costs to the prevailing party.

     18.  Expenses . In order that the purpose of this Agreement not be frustrated, it is the intent of the Company that the Employee not be required to incur the expenses associated with enforcement of the Employee’s rights under this Agreement by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Employee hereunder, nor be bound to negotiate an


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