This Employment Agreement (“Agreement”) is entered into effective as of July 17, 2007 (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 Brian K. Ferraioli (“Employee”). The Company and Employee shall hereinafter be referred to 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 of this Agreement 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.
3. Employee’s Duties.
(a) Commencing upon the Effective Date and continuing until the day immediately preceding the date on which the Company files its Form 10-Q for the third quarter of the Company’s 2007 fiscal year (the “3Q07 Filing Date”), Employee shall serve as an Executive Vice President of the Company. Commencing on the 3Q07 Filing Date and continuing for the remainder of the Term, Employee shall serve as Executive Vice President & Chief Financial Officer 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 are consistent with the customary duties 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 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.
(a) Base Compensation. For services rendered by Employee under this Agreement, the Company shall pay to Employee a base salary (“Base Compensation”) of $585,000 per annum, payable in accordance with the Company’s customary pay periods and subject to customary withholdings. The amount of Base Compensation will be subject to review 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 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. 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 of not less than 25%, and not more than 200%, of Employee’s bonus target (the “Bonus Target”), which Bonus Target shall initially be an amount equal to Employee’s Base Compensation. The Bonus Target may be adjusted annually. Annual bonus payments will be subject to customary withholdings.
(c) Signing Bonus. As additional consideration for this Agreement, the Company shall pay to Employee a signing bonus of $450,000, payable not later than 15 days after the Effective Date and subject to customary withholdings.
(d) Long Term Incentive Awards.