This Employment
Agreement (“ Agreement ”) is entered into
effective as of March 23, 2009 (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 Frederick W. Buckman (“ Employee ”). The
Company and Employee may hereinafter be referred to, individually,
as a “ Party ” and, collectively, as the “
Parties ”.
WHEREAS ,
the Company and Employee desire to enter into an employment
relationship.
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 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.
(a) During
the Term, Employee shall serve as the President of the Power Group
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 and
responsibilities are comparable to the customary duties and
responsibilities 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 Nonsolicitation and Noncompete
Agreement (defined below) and the Company’s Code of Conduct
or similar guidelines of which Employee is notified in writing. 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.
(a)
Base Compensation . For services rendered by Employee under
this Agreement, the Company shall pay to Employee a base salary
(“ Base Compensation ”) of $700,000 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 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 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 0-200% 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 as the Board may deem
appropriate based upon competitive peer company analysis. Annual
bonus payments will be subject to tax and other customary
withholdings.
Employee’s annual bonus, if any, for the
Company’s fiscal year ending August 31, 2009, shall be
pro rated.
(c)
Long Term Incentive Awards .
(i)
During the Term, 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 $1,000,000.
(ii)
On the first business day of the month immediately following the
Effective Date, Employee will be granted Long Term Incentives with
an aggregate value of $500,000, which will be divided equally
between stock options and restricted stock units. The actual number
of Long Term Incentives will be determined utilizing the closing
price of the Company’s stock on the date of grant. This grant
of Long Term Incentives will vest in annual installments of 25%
each, with full vesting after four years.
(iii)
All Long Term Incentive awards are subject to shareholders’
approval of shares to be allocated to the Company’s Long Term
Incentive plan and are granted under the strict purview of the
Compensation Committee of the Board.
(iv)
The actual number of Long Term Incentives will be determined
utilizing the valuation methodology used for other similarly
situated executive officers of the Company.
(v)
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
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); provided that in no event shall such one
year period extend the exercise period for any Long Term Incentive
awards beyond the date that is 10 years from the date of grant
of such Long Term Incentive awards.
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 professional memberships and licenses,
travel, lodging, meals and client or business associate
entertainment. Requests for reimbursement for all business expenses
must be accompanied by appropriate documentation.
(b) Vacation;
Sick Days . Employee shall be entitled to four weeks of
vacation per year and five sick days per year, without any loss of
compensation or benefits. Upon termination of employment of
Employee for whatever reason, Employee shall be paid for any unused
vacation time
based on
Employee’s Base Compensation as in effect immediately prior
to the Date of Termination.
(c) General
Benefits . Employee shall be entitled to participate in the
various Employee benefit plans or programs provided to employees of
the Company in general, including, but not limited to, health,
dental, disability, accident and life insurance plans and 401k
plans. Benefits are 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(c) shall be deemed to prohibit the
Company from making any changes in any of the plans or programs
described in this Section 5(c), provided the change similarly
affects all executive officers of the Company that are similarly
situated.
(d) Flexible
Perquisites; Use of Corporate Aircraft . Employee shall be
entitled to participate in the Company’s flexible perquisites
plan, which provides an amount equal to 4% of Employee’s Base
Compensation in each calendar year in lieu of customary perquisite
benefits. Payments under the flexible perquisites plan will be made
on a calendar quarter basis and will be calculated based on
Employee’s Base Compensation from the previous calendar
quarter, less any amounts deducted for approved personal use of the
Company’s corporate aircraft. Employee shall be permitted to
use the Company’s corporate aircraft for personal use subject
to availability and approval of the CEO in accordance with the
Company’s aircraft policy. The cost to Employee for approved
use of the Company’s corporate aircraft is calculated based
on then effective Internal Revenue Service tables.
Nothing
in this Section
5(d) shall be deemed to prohibit the Company from making any
changes in the flexible perquisites plan, provided the change
similarly affects all executive officers of the Company that are
similarly situated.
(e) Point of
Origin; Relocation Expenses .
(i)
Employee’s point of origin (the “ Point of
Origin ”) will be Portland, Oregon, and Employee’s
business assignment location will be the Power Group’s
executive offices in Charlotte, North Carolina (the “
Business Location ”). From the Effective Date until
the earliest to occur of (A) the date that is six months
following the Effective Date, (B) the date of permanent
relocation of Employee to the Business Location and (C) the
Date of Termination, the Company will provide Employee, at the
Company’s expense, housing in the Company’s corporate
apartment in the Business Location.
(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 in accordance with the
domestic 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.
(f) Country
Club Membership . The Company will pay, on behalf of Employee,
one country club membership initiation fee. Employee shall be
responsible for monthly dues, expenses, assessments, etc., in
connection with such membership.
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. 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 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 then or
thereafter coming into the possession of Employee that contain any
Confidential Information; provided , however , that
(i) 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 and (ii) Employee may
retain a copy of any agreement between Employee and the
Company.
(d) Employee
agrees that, as part of the consideration for this Agreement and as
an integral part hereof, Employee has executed, delivered and
agreed to be bound by the Nonsolicitation and Noncompete Agreement
attached hereto as Exhibit A , as well as any
subsequent addenda thereto.
(a) This
Agreement may be terminated prior to the expiration of the Term
only under the terms and conditions 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., unused
vacation, unreimbursed business expenses, etc.) accrued and unpaid
as of the Date of Termination and the retention of any and all
stock options, restricted shares or units or other similar awards
granted to Employee by the Company under any long term incentive
plan(s) duly adopted by the Board (“ Long Term
Incentives ”) that have vested or become exercisable on
or before the Date of Termination in accordance with the plans
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, (A) the Company shall pay to
Employee’s surviving spouse or estate, subject to customary
withholdings, not later than 30 days after Employee’s
death, (I) any Base Compensation and General Benefits accrued
and unpaid as of the date of Employee’s death, and
(II) a lump sum amount, in cash, equal to the cost for
Employee’s surviving spouse or legal
representatives
to obtain one year of pa
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