Exhibit 10.2

RESTRUCTURING TRANSACTION RETENTION AGREEMENT

This Restructuring Transaction Retention Agreement (“Agreement”) is by and
between The Babcock & Wilcox Company and James Ferland (“Executive”), dated as
of November 5, 2014 (the “Agreement Date”).

If the Company (as defined in Exhibit A to this Agreement), with the prior
approval of the Board of Directors of the Company, engages in a transaction that
results in the sale or other disposition of all or substantially all of the
operations of either of its Subsidiaries, BWX Technologies, Inc. (“BWXT”) or
Babcock & Wilcox Power Generation Group, Inc., (“PGG”, and each of BWXT and PGG,
an “Operating Sub” and, together, the “Operating Subs”), whether by sale of the
capital stock or assets of one or both of the Operating Subs, spinoff of one or
both of the Operating Subs or otherwise (a “Restructuring Transaction”), with a
Spin Effective Date (as defined in Exhibit A to this Agreement) that occurs
prior to January 1, 2016, Executive shall be entitled to each of the Retention
Incentive Grant and Special Cash Retention Award (each as defined below) under
the circumstances set out below. In addition, if Executive’s employment is
terminated under certain circumstances set out below prior to the Spin Effective
Date, Executive will be entitled to the severance compensation and benefits set
out below. The sale or disposition of less than 100% of the assets or stock of
an Operating Sub shall not be considered a sale or other disposition of
substantially all of the operations of such Operating Sub, unless it is a sale
or other disposition of at least 80% of the stock or assets of such Operating
Sub. As of the date hereof, The Babcock & Wilcox Company, PGG and Executive also
have entered into an Employment Agreement, to be effective as of the Spin
Effective Date, which provides for Executive’s employment by PGG on and after
the Spin Effective Date (the “Employment Agreement”) which, in certain
circumstances described below, supersedes this Agreement on and following the
Spin Effective Date. Reference is also made herein to the Change in Control
Agreement between Executive and the Company, dated November 8, 2013 (the “Change
in Control Agreement”) which, in certain circumstances described below,
supersedes this Agreement on and following a Change in Control (as defined in
Exhibit A to this Agreement). Terms that are capitalized (but not otherwise
defined herein) are used as defined in Exhibit A to this Agreement.

The Company and Executive agree as follows:

 

1. CASH RETENTION AWARD: Executive is hereby granted a cash retention award (the
“Cash Retention Award”) as follows:

 

  (a) Amount of Cash Retention Award. The amount of the Cash Retention Award
shall be equal to the product of (x) two (2) and (y) the sum of Executive’s
annual rate of base salary in effect as of the Agreement Date, plus Executive’s
target incentive award opportunity under the Bonus Plan for the bonus year in
which the Agreement Date occurs.

 

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  (b) Vesting and Payment. Except as provided in Sections 1(c), (d) and
(e) below, if, and only if, Executive remains continuously employed with the
Company through the relevant vesting dates, fifty percent (50%) of the Cash
Retention Award shall vest and be paid on the second anniversary of the Spin
Effective Date, and the remaining fifty percent (50%) of the Cash Retention
Award shall vest and be paid on the third anniversary of the Spin Effective
Date.

 

  (c) Death or Disability. Any unpaid portion of the Cash Retention Award shall
vest and be paid in full upon Executive’s death or Disability provided that
Executive remains continuously employed by the Company through the date of death
or last date of employment due to Disability.

 

  (d) Covered Termination under this Agreement; Certain Terminations of
Employment under the Employment Agreement. Fifty percent (50%) of the Cash
Retention Award shall vest and be immediately paid upon the date of Executive’s
Separation from Service if: (i) prior to the Spin Effective Date, such
Separation from Service is under circumstances pursuant to which Executive is
entitled to receive severance payments under Section 3 of this Agreement; and
(ii) on or after the Spin Effective Date and prior to the third anniversary
thereof, such Separation from Service is under circumstances pursuant to which
Executive is entitled to receive severance payments under Section 4(a) of the
Employment Agreement (other than in a case of a non-renewal of the Employment
Agreement by Executive pursuant to the provisions of Section 1(b) of the
Employment Agreement) (in each such case of clauses (i) and (ii), subject to
Executive’s satisfaction of any conditions to receive such severance payments
provided in the applicable document).

 

  (e) Change in Control. Any unpaid portion of the Cash Retention Award shall
vest and be paid immediately upon a Change in Control which occurs on or
following the Spin Effective Date.

 

2. RETENTION INCENTIVE GRANT: On such date as the Company sets the record date
for the Restructuring Transaction, if Executive’s employment with the Company
has not been terminated prior to such date, then the Company shall cause
Executive to be granted either whole shares of restricted common stock of the
Company (“Company Shares”) or restricted stock units covering Company Shares
under the Company’s 2010 Long-Term Incentive Plan, as amended and restated
February 25, 2014 (the “Retention Incentive Grant”), as follows:

 

  (a)

Number of Shares. The number of Company Shares granted as the Retention
Incentive Grant shall equal, rounded down to the nearest whole number of shares
that is divisible by three (3), (x) the product of (A) 1.5 and (B) the sum of
Executive’s annual rate of base salary in effect as of the Agreement Date, plus
Executive’s target incentive award opportunity under the Bonus Plan for the
bonus year in which the Restructuring

 

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  Transaction occurs, divided by (y) the closing price of one Company Share, as
applicable, on the third trading day following the third quarter release of
earnings of the Company.

 

  (b) Vesting. Except as provided in Section 2(c) below, or in any employment or
other agreement between the Company or an Operating Sub and Executive (including
without limitation the Change in Control Agreement), if, and only if, Executive
remains continuously employed with the Company through the relevant vesting
date, the Retention Incentive Grant will vest as follows: one-third
(1/3rd) shall vest on the thirtieth (30th) day following the Spin Effective Date
and the remaining two-thirds (2/3rds) shall vest on the first anniversary of the
Spin Effective Date.

 

  (c) Death or Disability. The Retention Incentive Grant shall vest in full upon
Executive’s death or date of Separation from Service due to Disability that
occurs prior to any vesting date described in Section 2(b); provided that
Executive remains continuously employed by the Company through the date of death
or date of Separation from Service due to Disability.

 

3. SEVERANCE BENEFITS: If Executive experiences a Covered Termination prior to
the Spin Effective Date, he will be entitled to the payments and benefits set
forth below; provided that the benefits described in Sections 3(b), (c), (d),
(e) and (f) shall only be payable if Executive executes a waiver and release
prepared by the Company, which releases the Company and its affiliates,
directors, officers and other customary persons from any claim or liability
arising out of or related to Executive’s employment with or termination of
employment from the Company or any of its affiliates (except for amounts to
which Executive is legally entitled pursuant to employee benefit plans,
Executive’s right to enforce this Agreement and rights to insurance coverage or
indemnification), and which contains a nondisparagement covenant (the
“Release”), which Release is not revoked within the time period provided
therein, and the executed Release is delivered to the Company no later than
forty-five (45) days after the Covered Termination.

 

  (a) Accrued Benefits. The Accrued Benefits, payable within sixty (60) days
after the Covered Termination, or such earlier time as may be required by
applicable law.

 

  (b) SERP and Restoration Plan. As of the Covered Termination, a fully vested
and non-forfeitable interest in Executive’s account balance in the SERP and the
Restoration Plan, payable in accordance with the terms of SERP or the
Restoration Plan, as applicable.

 

  (c)

Unvested Equity Awards. As of the Covered Termination, a fully vested and
non-forfeitable interest in any outstanding unvested equity awards granted on
Company Shares on or prior to December 31, 2014 (the “Equity Awards”) (excluding
for the avoidance of doubt the Retention

 

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  Incentive Grant), to be vested and in the case of restricted stock and
restricted stock units settled within the 60th day after the Covered
Termination; provided that no such Equity Award that is subject to Code
Section 409A will be paid on a date earlier than is provided in the applicable
Equity Award agreement to the extent necessary to avoid the imposition of tax
penalties pursuant to Code Section 409A; and provided further that, subject to
any adjustment(s) which may be made to the Equity Awards as of the Spin
Effective Date as a result of the Restructuring Transaction (including without
limitation pursuant to the applicable plan or award agreement pursuant to which
the Equity Awards were granted, and/or the Company’s employee matters agreement
executed in connection with the Restructuring Transaction), any
performance-based Equity Awards shall be settled only with respect to the number
of Company Shares earned based on achievement of actual performance through the
applicable performance period, which settlement shall occur at the same time as
if the Covered Termination had not occurred. For the avoidance of doubt, any
Equity Award that is a vested stock option that Executive holds as of the date
of the his Covered Termination (including for this purpose any such stock option
which vests as a result of the preceding sentence) will remain exercisable
through the expiration of the original term of such stock option.

 

  (d) Severance Payment Based on Salary. An amount equal to the product of
(x) 2.5 and (y) the sum of Executive’s (1) Salary plus (2) the product of
(A) the Target Bonus Percentage and (B) Salary, with such total amount paid in a
lump sum in cash within sixty (60) days after the Covered Termination.

 

  (e) Severance Payment Based on Bonus.

 

  (1) Covered Termination Performance Year. An amount equal to the product of
(A) Executive’s Salary and (B) the Applicable Bonus Percentage, with the product
of (A) and (B) prorated based on the number of days Executive was employed
during the bonus year in which Executive’s Covered Termination occurs, paid in a
lump sum in cash within sixty (60) days after the Covered Termination; provided
that if the Covered Termination occurs in calendar year 2014, such payment shall
be made at the same time as would have been the case had the Covered Termination
not occurred.

 

  (2) Prior Performance Year. If a bonus for the prior calendar year has not
been paid under the Bonus Plan as of Executive’s Covered Termination, then
Executive will be entitled to the actual amount of the bonus determined under
the Bonus Plan for such prior calendar year (such amount to be determined
without the exercise of any downward discretion), paid in a lump sum in cash at
the same time such bonus is paid to other Bonus Plan participants.

 

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  (f) Health Care Benefits. An amount equal to three (3) times the full annual
cost of coverage for medical, dental and vision benefits covering Executive and
his covered dependents for the year in which Executive’s Covered Termination
occurs, paid in a lump sum in cash within sixty (60) days after the Covered
Termination.

In no event shall the benefits provided for in Sections 3(a), (d), (e) and
(f) above, or any payment provided for in (c) above that is not subject to Code
Section 409A, be paid later than March 15th of the calendar year immediately
following the calendar year in which Executive’s Covered Termination occurs. For
the avoidance of doubt, in no event shall Executive be entitled to any severance
benefits under the Company executive severance plan if Executive is entitled to
severance benefits hereunder.

 

4. CHANGE IN CONTROL AGREEMENT: In the event of a Change in Control, Executive’s
Change in Control Agreement, as amended by the following sentence, shall govern
in lieu of this Agreement. Effective as of the Agreement Date, Section 2(d) of
the Change in Control Agreement shall be deleted in its entirety and replaced
with the following new provision (with defined terms in the new provision except
as set forth therein having the meaning as set forth in the Change in Control
Agreement):

“Severance Payment Based on Salary. An amount equal to one (1) times the sum of
(i) Salary and (ii) Executive’s target award under the EICP for the year in
which the Covered Termination occurs, in a lump sum in cash within sixty
(60) days after the Covered Termination, provided that in the event of a Covered
Termination occurring prior to record date of the Restructuring Transaction (as
such term is defined in the Restructuring Transaction Retention Agreement
entered into between the Company and Executive, dated as of November 5, 2014),
such multiple shall be two-and-one-half (2 1⁄2) instead of one (1).”

; provided, however, that, if a Spin Effective Date does not occur prior to
January 1, 2016, the foregoing amendment shall be of no further force and
effect, and the Change in Control Agreement shall continue in effect without
regard to such amendment.

For the avoidance of doubt, in no event shall Executive receive duplicate
severance payments or benefits pursuant to Section 3 of this Agreement and
Executive’s Change in Control Agreement (or pursuant to the Employment
Agreement); provided that (i) Executive shall be entitled to the benefit
provided in Section 1(e) of this Agreement, to the extent applicable and
(ii) any Retention Incentive Grant that is outstanding and unvested shall be
immediately vested in full pursuant to Section 2(c) of the Change in Control
Agreement upon a Covered Termination (as defined under the Change in Control
Agreement).

 

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5. INTERNAL REVENUE CODE 409A:

 

  (a) Compliance. It is the intent of the parties that the provisions of this
Agreement either comply with Code Section 409A and the Treasury regulations and
guidance issued thereunder or that one or more elements of compensation or
benefits be exempt from Code Section 409A. Accordingly, the parties intend that
this Agreement be interpreted and operated in a manner consistent with such
requirements in order to avoid the application of penalty taxes under Code
Section 409A to the extent reasonably practicable. The Company shall neither
cause nor permit: (i) any payment, benefit or consideration to be substituted
for a benefit that is payable under this Agreement if such action would result
in the failure of any amount that is subject to Code Section 409A to comply with
the applicable requirements of Code Section 409A; or (ii) any adjustments to any
equity interest to be made in a manner that would result in the equity
interest’s becoming subject to Code Section 409A unless, after such adjustment,
the equity interest is in compliance with the requirements of Code Section 409A
to the extent applicable. A Covered Termination shall constitute an “involuntary
separation from service” for purposes of Code Section 409A.

 

  (b) Waiting Period for Specified Employees. Notwithstanding any provision of
this Agreement to the contrary, if Executive is a “Specified Employee” (as that
term is defined in Code Section 409A) as of Executive’s Covered Termination,
then any amounts or benefits which are payable under this Agreement upon
Executive’s “Separation from Service” (within the meaning of Code Section 409A),
which are subject to the provisions of Code Section 409A and not otherwise
exempt under Code Section 409A, and would otherwise be payable during the first
six-month period following such Separation from Service, shall be paid on the
first business day that (i) is at least six months after the date after
Executive’s Covered Termination or (ii) follows Executive’s date of death, if
earlier (the “Waiting Period”). The benefits in Sections 3(a), (d), (e) and
(f) and certain of the benefits in Section 3(c) are intended to be exempt from
Code Section 409A under the “short-term deferral exemption” and thus the Waiting
Period is not intended to apply to such benefits.

 

6. CONFIDENTIALITY AND NON-DISCLOSURE: Executive acknowledges that pursuant to
this Agreement, the Company agrees to provide to him Confidential Information
and has previously provided him other such Confidential Information. In return
for this and other consideration, provided under this Agreement, Executive
agrees that he will not, while employed by the Company or any Affiliate and
thereafter, disclose or make available to any other person or entity, or use for
his own personal gain, any Confidential Information, except for such disclosures
as required in the performance of his duties hereunder as may otherwise be
required by law or legal process (in which case Executive shall notify the
Company of such legal or judicial proceeding as soon as practicable following
his receipt of notice of such a proceeding, and permit the Company to seek to
protect its interests and information).

 

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7. RETURN OF PROPERTY: Executive agrees that at the time of leaving his or her
employ with the Company or an Affiliate, he will deliver to the Company (and
will not keep in his possession, recreate or deliver to anyone else) all
Confidential Information as well as all other devices, records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, customer or client lists or information, or any
other documents or property (including all reproductions of the aforementioned
items) belonging to the Company or any of its Affiliates, regardless of whether
such items were prepared by Executive.

 

8. NON-SOLICITATION AND NON-COMPETITION:

 

  (a) For consideration provided under this Agreement, including, but not
limited to the Company’s agreement to provide Executive with Confidential
Information regarding the Company and its respective businesses, Executive
agrees that while employed by the Company or an Affiliate and for twenty-four
(24) months following any Separation from Service during the term of this
Agreement he shall not, without the prior written consent of the General Counsel
of the Company, directly or indirectly, (i) hire or induce, entice or solicit
(or attempt to induce, entice or solicit) any employee of the Company or any of
its Affiliates or ventures to leave the employment of the Company or any of its
Affiliates or ventures or (ii) solicit or attempt to solicit, in a manner
competitive with the business of the Company, the business of any customer or
acquisition prospect of the Company or any of its Affiliates or ventures with
whom Executive had any actual contact or Confidential Information about while
employed by the Company or an Affiliate.

 

  (b)

Additionally, for consideration provided under this Agreement, including, but
not limited to the Company’s agreement to provide Executive with Confidential
Information regarding the Company and its respective businesses, Executive
agrees that while employed by the Company or an Affiliate and for twenty-four
(24) months following any Separation from Service during the term of this
Agreement he will not, without the prior written consent of the General Counsel
of the Company, acting alone or in conjunction with others, either directly or
indirectly, engage in any business that is in competition with the Company or an
Affiliate or accept employment with or render services to such a business as an
officer, agent, employee, independent contractor or consultant, or otherwise
engage in activities that are in competition with the Company or an Affiliate.
Notwithstanding the foregoing, the provisions of this Section 8(b) shall not be
violated by Executive being employed by, associating with or otherwise providing
services to a subsidiary, division or unit of any entity where such entity has a
subsidiary, division or unit (other than the

 

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  subsidiary, division or unit with which Executive is employed, associated with
or otherwise provides services to) which is engaged in a business competitive
with the Company so long as Executive does not provide services or advice, with
or without specific compensation, to the subsidiary, division or unit engaged in
such competitive business.

 

  (c) After a termination of employment, the restrictions contained in this
Section 8 are limited to areas or territories within the United States or in any
foreign country where the Company or an Affiliate engages (or has definite plans
to engage) in operations or the marketing of its products or services at the
time of a termination of employment.

 

  (d) Executive acknowledges that these restrictive covenants under this
Agreement, for which Executive received valuable consideration from the Company
as provided in this Agreement, including, but not limited to the Company’s
agreement to provide Executive with Confidential Information regarding the
Company and its respective businesses, are ancillary to otherwise enforceable
provisions of this Agreement, that the consideration provided by the Company
gives rise to the interest of each of the Company in restraining Executive from
competing and that the restrictive covenants are designed to enforce Executive’s
consideration or return promises under this Agreement. Additionally, Executive
acknowledges that these restrictive covenants contain limitations as to time,
geographical area, and scope of activity to be restrained that are reasonable
and do not impose a greater restraint than is necessary to protect the goodwill
or other legitimate business interests of the Company, including, but not
limited to, the Company’s need to protect its Confidential Information.

 

9. NOTICES: For purposes of this Agreement, notices and all other communications
must be in writing and will be deemed to have been given when personally
delivered or when mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

 

If to Company:   The Babcock & Wilcox Company   13024 Ballantyne Corporate
Place, Ste. 700   Charlotte, NC 28277   ATTENTION: General Counsel If to
Executive:   E. James Ferland  

 

    

 

  

or to such other address as either party may furnish to the other in writing in
accordance with this Section.

 

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10. APPLICABLE LAW: The validity, interpretation, construction and performance
of this Agreement will be governed by and construed in accordance with the
substantive laws of the State of Delaware, but without giving effect to the
principles of conflict of laws of such State.

 

11. SEVERABILITY: If any provision of this Agreement is determined to be invalid
or unenforceable, then the invalidity or unenforceability of that provision will
not affect the validity or enforceability of any other provision of this
Agreement and all other provisions will remain in full force and effect.

 

12. WITHHOLDING OF TAXES: The Company may withhold from any payments under this
Agreement all federal, state, local or other taxes as may be required pursuant
to any law or governmental regulation or ruling. Executive acknowledges that
other than the Company’s obligation to withhold and remit applicable income
and/or employment taxes and pay its share of any applicable payroll taxes,
Executive is solely responsible for any and all taxes, interest and penalties
that may be imposed with respect to the payments and benefits provided under
this Agreement.

 

13. NO ASSIGNMENT; SUCCESSORS: Executive’s right to receive payments or benefits
under this Agreement will not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, whether voluntary, involuntary, by
operation of law or otherwise, other than a transfer by will or by the laws of
descent or distribution, and in the event of any attempted assignment or
transfer contrary to this Section 13 the Company will have no liability to pay
any amount so attempted to be assigned or transferred. This Agreement inures to
the benefit of and is enforceable by Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

This Agreement is binding upon and inures to the benefit of the Company and its
successors and assigns (including, without limitation, any company into or with
which the Company may merge or consolidate and any Successor); and to the extent
necessary, the Company may assign its obligations under this Agreement to
Executive’s employer upon the occurrence of the Restructuring Transaction.

 

14. NUMBER AND GENDER: Wherever appropriate herein, words used in the singular
will include the plural, the plural will include the singular, and the masculine
gender will include the feminine gender.

 

15. CONFLICTS: This Agreement constitutes the entire understanding of the
parties with respect to its subject matter and supersedes any other agreement or
other understanding, whether oral or written, express or implied, between them
concerning, related to or otherwise in connection with, the subject matter
hereof; provided that the Change in Control Agreement and the Employment
Agreement shall apply in accordance with their terms as described in herein.

 

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16. 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 Executive and such officer as may be specifically
designated by the Board. No waiver by any party hereto at any time of any breach
by the other party hereto of, or of any lack of compliance with, any condition
or provision of this Agreement to be performed by any other party will be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

 

17. COUNTERPARTS: This Agreement may be executed in several counterparts, each
of which will be deemed to be an original but all of which together will
constitute one and the same instrument.

 

18. TERM: This Agreement shall become effective on the Agreement Date and shall
end on the earliest to occur of: (a) December 31, 2015, provided that if the
Spin Effective Date occurs prior to January 1, 2016, the third anniversary date
of the Spin Effective Date; (b) the date a determination is made by the Board
that a Restructuring Transaction will not occur; and (c) the date on which
Executive’s employment with the Company is terminated; provided that terms of
this Agreement which must survive the termination of this Agreement in order to
be effectuated (including the provisions of Sections 1, 3, 4, 6, 7 and 8) will
in all events survive. For the avoidance of doubt, Section 3 shall become
ineffective on the Spin Effective Date if Executive does not experience a
Covered Termination prior to the Spin Effective Date.

[Signatures on next page]

 

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THE BABCOCK & WILCOX COMPANY By:  

/s/ Stephen G. Hanks

Name:   Stephen G. Hanks Title:   Lead Independent Director

 

EXECUTIVE By:  

/s/ James Ferland

Name:   James Ferland

 

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EXHIBIT A

DEFINITIONS

The following terms have the meanings set forth below.

“Accrued Benefits” shall mean:

 

  i. Any portion of Executive’s Salary earned through the date of the Covered
Termination and not yet paid;

 

  ii. Reimbursement for any and all amounts advanced in connection with
Executive’s employment for reasonable and necessary expenses incurred by
Executive through the date of the Covered Termination in accordance with the
Company’s policies and procedures on reimbursement of expenses;

 

  iii. Any earned vacation pay not theretofore used or paid in accordance with
the Company’s policy for payment of earned and unused vacation time;

 

  iv. If executive participates in the Company’s financial planning services
through AYCO on the date of the Covered Termination, such services through AYCO
will continue until the earlier of June 30 of the calendar year following the
calendar year in which a Covered Termination occurs or the date such program
terminates for all similarly situated employees; and

 

  v. All other payments and benefits to which Executive may be entitled under
the terms of any applicable compensation arrangement or benefit plan or program
of the Company that do not specify the time of distribution; provided that
Accrued Benefits shall not include any entitlement to severance under any
severance plan or policy of the Company.

“Affiliate” means an Affiliate of the Company within the meaning of Rule 12b-2
promulgated under Section 12 of the Exchange Act.

“Applicable Bonus Percentage” means: (i) if the Covered Termination occurs in
calendar year 2014, the percentage applicable to Executive to determine
Executive’s actual bonus due under the applicable Bonus Plan in respect of such
year and (ii) if the Covered Termination occurs in calendar year 2015, the
Target Bonus Percentage for such year.

“Board” means the Board of Directors of the Company.

“Bonus Plan” means the Company’s Executive Incentive Compensation Plan or any
successor plan thereto.

“Cause” means

 

  (i)

the willful and continued failure of Executive to perform substantially
Executive’s duties with the Company or an Affiliate (occasioned by reason other
than physical

 

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  or mental illness or disability of Executive) after a written demand for
substantial performance is delivered to Executive by the Board which
specifically identifies the manner in which the Board believes that Executive
has not substantially performed his duties, after which Executive shall have
thirty days to defend or remedy such failure to substantially perform his
duties;

 

  (ii) the willful engaging by Executive in illegal conduct or gross misconduct
which is materially and demonstrably injurious to the Company; or

 

  (iii) the conviction of Executive with no further possibility of appeal for,
or plea of guilty or nolo contendere by Executive to, any felony.

The cessation of employment of Executive under subparagraph (i) and (ii) above
shall not be deemed to be for “Cause” unless and until there shall have been
delivered to Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters (3/4) of the entire membership of Board of
Directors of the Company at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to Executive and he is given an
opportunity, together with his counsel, to be heard before the Board), finding
that, in the good faith opinion of such Board, Executive is guilty of the
conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.

A “Change in Control” shall have the same meaning as in the Change in Control
Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” means The Babcock & Wilcox Company and any Successors, including,
following a Restructuring Transaction, BWXT or PGG, as applicable.

“Confidential Information” means any and all information, data and knowledge
that has been created, discovered, developed or otherwise become known to the
Company or any of its Affiliates or in which property rights have been assigned
or otherwise conveyed to the Company or any of its Affiliates, which
information, data or knowledge has commercial value in the business in which the
Company or any of its Affiliates or ventures is engaged, except such
information, data or knowledge as is or becomes known to the public without
violation of the terms of this Agreement. By way of illustration, but not
limitation, Confidential Information includes business trade secrets, secrets
concerning the Company’s or any of its Affiliate’s plans and strategies,
nonpublic information concerning material market opportunities, technical trade
secrets, processes, formulas, know-how, improvements, discoveries, developments,
designs, inventions, techniques, marketing plans, manuals, records of research,
reports, memoranda, computer software, strategies, forecasts, new products,
unpublished financial information, projections, licenses, prices, costs, and
employee, customer and supplier lists.

“Covered Termination” means, prior to the Spin Effective Date of a Restructuring
Transaction occurring during the term of this Agreement, there occurs a
termination of Executive’s employment (such that Executive ceases to be employed
by the Company or an Affiliate) that is a “Separation from Service” (as defined
in Code Section 409A and the Treasury regulations and guidance issued
thereunder) (i) by the Company or an Affiliate for a reason other than Cause or
Executive’s death or Disability or (ii) by Executive for Good Reason.

 

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“Disability” means circumstances which would qualify Executive for long term
disability benefits under the Company’s Long Term Disability Plan, whether or
not Executive is covered under such plan.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Good Reason” means any one or more of the following events:

 

  (a) a material diminution in the duties or responsibilities of Executive from
those applicable immediately before the Agreement Date;

 

  (b) a reduction in Executive’s annual Salary or Target Bonus Percentage, in
either such case as in effect immediately before the Agreement Date, but as the
same may be increased (but not decreased) from time to time;

 

  (c) the failure by the Company to continue in effect any compensation plan in
which Executive participates immediately before the Agreement Date which is
material to Executive’s total compensation, unless a comparable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company to continue Executive’s
participation therein (or in such substitute or alternative plan) on a basis not
materially less favorable than existed immediately before the Agreement Date,
unless the action by the Company applies to all similarly situated employees;

 

  (d) the failure by the Company to continue to provide Executive with material
benefits in the aggregate that are substantially similar to those enjoyed by
Executive under any of the Company’s (or its Affiliates’) pension, savings, life
insurance, medical, health and accident, or disability plans in which Executive
was participating immediately before the Agreement Date if such benefits are
material to Executive’s total compensation, the taking of any other action by
the Company which would directly or indirectly materially reduce any of such
benefits or deprive Executive of any fringe benefit enjoyed by Executive at the
time of the Agreement Date if such fringe benefit is material to Executive’s
total compensation, unless the action by the Company applies to all similarly
situated employees; or

 

  (e) a change in the location of Executive’s principal place of employment with
the Company by more than 50 miles from the location where Executive was
principally employed as of the Agreement Date without Executive’s consent.

If any of the events described above occurs (an “Event”), Executive shall give
the Company written notice (the “Executive Notice”) within 60 days following
Executive’s knowledge of an Event that Executive intends to terminate employment
as a result. The Company shall have 30 days

 

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following receipt of Executive Notice in which to cure the Event. If the Company
does not take such action within that time, the Event shall constitute Good
Reason. If Executive does not provide Executive Notice within 60 days as
required above, then the Event shall not constitute Good Reason, and thereafter,
for purposes of determining whether Executive has Good Reason, Executive’s terms
and conditions of employment after the occurrence of the Event shall be
substituted for those terms and conditions of Executive’s employment in effect
immediately prior to the date of this Agreement.

“Restoration Plan” means The Babcock & Wilcox Company Defined Contribution
Restoration Plan, or any similar plan offered by a Successor, as in effect as of
the Covered Termination.

“Salary” means Executive’s annual rate of base salary as in effect immediately
before the Covered Termination or, if higher, in effect immediately before the
first Event constituting Good Reason.

“SERP” means The Babcock & Wilcox Company Supplemental Executive Retirement
Plan, or any supplemental executive retirement plan offered by a Successor, as
in effect as of the Covered Termination.

“Spin Effective Date” means, with respect to a Restructuring Transaction, the
effective date of date of the consummation of the spinoff or split off (i.e.,
the date shares of the Subsidiary subject to the spinoff or split off are first
distributed to the Company’s stockholders) or sale (i.e., the closing date for
the sale) that results in the completion of the Restructuring Transaction.

“Subsidiary” means every corporation, limited liability company, partnership or
other entity of which 50% or more of the total combined voting power of all
classes of voting securities or other equity interests is owned, directly or
indirectly, by The Babcock and Wilcox Company or, upon and following a
Restructuring Transaction, by the Successor.

“Successor” means an entity that has acquired the Company or an Operating Sub in
a Change in Control, or an Operating Sub that is sold off or spun off to the
stockholders of the Company in a Restructuring Transaction.

“Target Bonus Percentage” means the percentage applicable to Executive to
determine Executive’s target incentive award opportunity under the Bonus Plan
applicable to Executive in effect immediately before the Covered Termination or,
if higher, in effect immediately before the first Event constituting Good
Reason.

 

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