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.
- 2 -
(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