Document:

Exhibit 10.36

	 	 	 	 	 

Exhibit 10.36

Performance-Based Restricted Share Unit Award Agreement

under the

SMART Modular Technologies (WWH), Inc.

Amended and Restated Stock Incentive Plan

	 	 	 	 	 
	 

	 	Date of Grant:
	 	September 29, 2009
	 
	 	 	 	 
	 

	 	Name of Participant:	 	 
	 
	 	 	 	 
	 

	 	Number of Target RSUs:	 	 

SMART Modular Technologies (WWH), Inc., an exempted company organised under the laws of the
Cayman Islands (the “Company”), hereby grants the number of restricted share units (each
representing an ordinary share of the company (the “Shares”)) set forth above (the “RSUs”), as of
the date of grant set forth above (the “Grant Date”), to the above-named participant
(“Participant”) pursuant to Section 7 of the Company’s Amended and Restated Stock Incentive Plan
(the “Plan”), in consideration for your services to the Company or any of its Affiliates.

Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.
The terms and conditions of this Restricted Share Unit Award Agreement (this “Agreement”), to the
extent not controlled by the terms and conditions contained in the Plan, are as follows:

1. Vesting. The RSUs shall become vested according to vesting schedule on Schedule A,
subject to Participant remaining an employee of the Company or any of its Affiliates on the
applicable vesting date.

2. Forfeiture of Unvested RSUs. Immediately upon termination of Participant’s employment for
any reason (including death or disability), any unvested RSUs shall be forfeited without
consideration.

3. Conversion into Ordinary Shares. Shares will be issued on, or as soon as practicable
following, the applicable vesting date of the RSUs. As a condition to such issuance, Participant
shall have satisfied his or her tax withholding obligations as specified in this Agreement and
shall have completed, signed and returned any documents and taken any additional action that the
Company deems appropriate to enable it to accomplish the delivery of the Shares. In no event will
the Company be obligated to issue a fractional share. Notwithstanding the foregoing, (i) the
Company shall not be obligated to deliver any Shares during any period when the Company determines
that the conversion of a RSU or the delivery of shares hereunder would violate any federal, state
or other applicable laws and/or may issue shares subject to any restrictive legends that, as
determined by the Company’s counsel, is necessary to comply with securities or other regulatory
requirements, and (ii) the date on which shares are issued may include a delay in order to provide
the Company such time as it determines appropriate to address tax withholding and other
administrative matters.

 

 

 

4. Tax Treatment. Any withholding tax liabilities (whether as a result of federal, state or
other law and whether for the payment and satisfaction of any income tax, social security tax,
payroll tax, or payment on account of other tax related to withholding obligations that arise by
reason of the RSUs) incurred in connection with the RSUs becoming vested and Shares issued, or
otherwise incurred in connection with the RSUs, shall be satisfied in the following manner, unless
otherwise determined by the Company: by the automatic sale by Participant of a number of Shares
that are issued under the RSUs, which the Company determines is sufficient to generate an amount
that meets the tax withholding obligations plus additional shares to account for rounding and
market fluctuations, and payment of such tax withholding to the Company, and such Shares may be
sold as part of a block trade with other participants of the Plan. If determined by the Company,
such tax withholding may be satisfied by another manner, including (i) by the Company withholding a
number of Shares that would otherwise be issued under the RSUs that the Company determines have a
fair market value approximately equal to the minimum amount of taxes that the Company concludes it
is required to withhold under applicable law; or (ii) by payment by Participant to the Company in
cash or by check an amount equal to the minimum amount of taxes that the Company concludes it is
required to withhold under applicable law (which amount shall be due on the business day of the day
the tax event arises unless otherwise determined by the Company). Without limiting the foregoing,
Participant hereby authorizes the Company to withhold such tax withholding amount from any amounts
owing by Participant to the Company and to take any action necessary in accordance with this
paragraph.

Notwithstanding the foregoing, Participant acknowledges and agrees that s/he is responsible
for all taxes that arise in connection with the RSUs becoming vested and Shares being issued or
otherwise incurred in connection with the RSUs, regardless of any action the Company takes pursuant
to this Section. The RSUs are intended to be exempt from Section 409A of the Code under the
short-term deferral exemption thereof, and therefore the Shares shall in no event be issued more
than two and 1/2 months following the end of the taxable year of Participant or the Company
(whichever is later) in which the corresponding RSUs become vested.

5. Lock-up Period. Participant agrees that the Company (or a representative of the
underwriter(s)) may, in connection with any underwritten registration of the offering of any
securities of the Company under the Securities Act, require that Participant not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any Shares or other securities of
the Company held by Participant, for a period of time specified by the underwriter(s) (not to
exceed one hundred eighty (180) days) following the effective date of the registration statement of
the Company filed under the Securities Act; provided that transactions pursuant to Section 4 hereof
shall be exempt from any such lock-up request. Participant further agrees to execute and deliver
such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that
are consistent with the foregoing or that are necessary to give further effect thereto. In order
to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect
to Participant’s Shares until the end of such period. The
underwriters of the Company’s shares are intended third party beneficiaries of this Section
and shall have the right, power and authority to enforce the provisions hereof as though they were
a party hereto.

 

2

 

6. Restrictions on Transfer of Shares. Participant understands and agrees that the RSUs may
not be sold, given, transferred, assigned, pledged or otherwise hypothecated by the holder. In
addition, Participant understands and agrees that any Shares are subject to the applicable
restrictions on transfer set forth in the Plan.

7. Certificates. Certificates issued in respect of the Shares shall, unless the Committee
otherwise determines, be registered in the name of Participant and may be in electronic form. Such
share certificate shall carry such appropriate legends, and such written instructions shall be
given to the Company transfer agent, as may be deemed necessary or advisable by counsel to the
Company in order to comply with the requirements of the Securities Act of 1933, any state
securities laws or any other applicable laws.

8. Shareholder Rights. Participant will have no voting or other rights as the Company’s
other shareholders with respect to the Shares until issuance of the Shares.

9. No Employment/Service Rights. Neither this Agreement nor the grant of the RSUs hereby
confers on Participant any right to continue in the employ or service of the Company or any of its
Affiliates or interferes in any way with the right of the Company or any of its Affiliates to
determine the terms of Participant’s employment or service.

10. Terms of Plan, Interpretations. This Agreement and the terms and conditions herein set
forth are subject in all respects to the terms and conditions of the Plan, which shall be
controlling. All interpretations or determinations of the Committee and/or the Board shall be
binding and conclusive upon Participant and his legal representatives on any question arising
hereunder. Participant acknowledges that s/he has received and reviewed a copy of the Plan.

11. Notices. All notices hereunder to the party shall be delivered or mailed to the following
addresses:

If to the Company:

SMART Modular Technologies (WWH), Inc.

Attn: Stock Plan Administrator

39870 Eureka Drive

Newark, California 94560

If to Participant:

At the address specified on the signature page or the last address for Participant
in the Company’s records.

Such addresses for the service of notices may be changed at any time provided notice of such
change is furnished in advance to the other party.

12. Entire Agreement. This Agreement contains the entire understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement together with the Plan
supersedes all prior agreements and understandings between the parties hereto with respect to the
subject matter hereof.

 

3

 

13. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the Cayman Islands, without application of the conflict of laws principles thereof.

14. Counterparts. This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the
date first above written.

	 	 	 	 	 
	 	SMART MODULAR TECHNOLOGIES
(WWH), INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	Iain MacKenzie 	 
	 	 	Title:  	President and CEO 	 
	 
	 	PARTICIPANT:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Address: 	 	 
	 	 	 	 	 

 

4

 

SCHEDULE A

	 	 	 
	Performance Period:

	 	October 9, 2009 – October 12, 2012

Performance Criteria and RSUs to be Awarded:

Subject to the minimum and maximum awards in the following table, the number of RSUs to be awarded
shall be determined based on the performance of the Company’s stock price during the Performance
Period compared to the performance of the Russell Microcap Index (IWC) during the same period.

	 	 	 
	Performance of SMOD vs. IWC	 	Awarded RSUs
	 
	 
	Lower than 50%

	 	50% of Target RSUs
	50% – 150%

	 	X% of Target RSUs, where X = over/under performance
	Higher than 150%

	 	150% of Target RSUs

To measure the performance of SMOD and IWC, the average stock price of the Company and the IWC
during the ninety (90) trading days immediately preceding the Performance Period start date and the
ninety (90) trading days immediately preceding the Performance Period end date shall be used.

	 
	As of Performance Period start date, October 9, 2009, the “baseline” is as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	SMOD:
	 	$	3.38	*	 	IWC:	 	$	35.84	*

	 	 	 
	*	 	See Schedule B for the calculation of the baseline.

Assume 100K Target RSUs and various end date stock price averages of SMOD and IWC for 90 trading
days before 10/12/2012:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[A]	 	 	 	 	 	[B]	 	 	 	 	 	 	 
	 	 	SMOD’s	 	 	%	 	 	IWC’s	 	 	%	 	 	 	 	 	 	 
	 	 	end date	 	 	change	 	 	end date	 	 	change	 	 	 	 	 	 	 
	 	 	average	 	 	from	 	 	average	 	 	from	 	 	 	 	 	 	 
	 	 	stock price	 	 	$3.38	 	 	stock price	 	 	$35.84	 	 	A
– B	 	 	A – B + 100% * Target	 
	 
	 	 	 
	EX 1:
	 	$	1.00	 	 	 	(70	%)	 	$	30.00	 	 	 	(16	%)	 	 	(54	%)	 	Min. 50% * 100K = 50K
	EX 2:
	 	$	4.00	 	 	 	18	%	 	$	38.00	 	 	 	6	%	 	 	12	%	 	 	112% * 100K = 112K	 
	EX 3:
	 	$	3.00	 	 	 	(11	%)	 	$	38.00	 	 	 	6	%	 	 	(17	%)	 	 	83% * 100K = 83K	 
	EX 4:
	 	$	3.00	 	 	 	(11	%)	 	$	34.00	 	 	 	(5	%)	 	 	(6	%)	 	 	94% * 100K = 94K	 
	EX 5:
	 	$	3.50	 	 	 	4	%	 	$	34.00	 	 	 	(5	%)	 	 	9	%	 	 	109% * 100K = 109K	 
	EX 6:
	 	$	5.50	 	 	 	63	%	 	$	38.00	 	 	 	6	%	 	 	57	%	 	Max. 150% * 100K = 150K

	 	 	 
	Performance Determination Date:

	 	Friday, October 12, 2012
	 
	 	 
	Vesting Date:

	 	Monday, October 15, 2012

 

5Exhibit 10.65

Exhibit 10.65

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (“Agreement”) is entered into effective as of
December 18, 2009 (“Effective Date”) by and between The Shaw Group Inc., a Louisiana corporation
(collectively with the affiliates and subsidiaries hereinafter referred to as “Company”), and John
Donofrio (“Employee”). The Company and Employee shall hereinafter be referred to collectively as
the “Parties”.

WHEREAS, the Company and Employee are parties to an Employment Agreement dated October 5, 2009
(the “Original Agreement”);

WHEREAS, the Company and the Employee desire to amend the Original Agreement and restate the
Original Agreement in its entirety;

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 with 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 (2) years commencing on the
Effective Date date hereof and shall be automatically renewed on each day following the date hereof
so that on any given day the unexpired portion of the Term of this Agreement shall be two (2)
years. Notwithstanding the foregoing provision, at any time after the date hereof the Company or
Employee may give written notice to the other party that the Term of this Agreement shall not be
further renewed from and after a subsequent date specified in such notice
(the “fixed term date”), in which event the Term of this Agreement shall become fixed and this
Agreement shall terminate on the second anniversary of the fixed term date.

 

 

 

3. Employee’s Duties. During the Term of this Agreement, Employee shall serve as the
Corporate Secretary for the Company, and hold the title Executive Vice President, General Counsel
and Corporate Secretary, 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, as
the case may be, provided that such duties are consistent with the customary duties of such
position.

Employee agrees to devote his 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 his duties and responsibilities. Employee shall not, either directly or indirectly,
enter into any business or employment with or for any person, firm, association or corporation
other than the Company during the Term of this Agreement; 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. Employee shall at all times observe and
comply with all lawful directions and instructions of the Board.

4. Compensation.

(a) Base Compensation. For services rendered by Employee under this Agreement,
the Company shall pay to Employee a base salary (“Base Compensation”) of $575,000 per annum
payable in accordance with the Company’s customary pay periods and subject to customary
withholdings. The amount of Base Compensation may 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.
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.

 

Page 2 of 26

 

(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 75% of Employee’s Base Compensation earned during the plan year. 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.

(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 target value of the annual Long Term
Incentive grants to Employee is 150% of Employee’s Base Compensation on the date of
grant, though the actual amount, if any, remains in the discretion of the Board.

 

Page 3 of 26

 

(ii) As soon as administratively possible after Employee’s first day of
employment, Employee will be granted Long Term Incentives with an aggregate value of
$862,500 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(s) 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)(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.

 

Page 4 of 26

 

5. Additional Benefits. In addition to the Base 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.

(b) Bonus. The Company shall pay Employee a cash sign-on bonus in the amount
of $400,000, to be paid as soon as administratively possible after Employee’s start date.
The sign-on bonus is considered taxable income, and all regular payroll taxes will be
withheld. If, within 12 months of the Employee’s start date, (i) Employee fails to relocate
to Louisiana, or (ii) this Agreement is terminated by Employee pursuant to Section 7(a)(i)
or by Company pursuant to 7(a)(iii)(C), the Company has the right to require Employee to pay
back this bonus in full.

(c) Vacation. Employee shall be entitled to four (4) weeks of vacation per
year. Employee shall be entitled to carry forward any unused vacation time.

(d) General Benefits. Employee shall be entitled to participate in the various
employee benefit plans or programs provided to the employees 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 of the
Company similarly situated.

 

Page 5 of 26

 

(e) 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. Nothing in this Section 5(e) 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.

(f) Point of Origin; Relocation Expenses.

(i) Employee’s point of origin (the “Point of Origin”) will be Bloomfield
Hills, Michigan, and Employee’s business assignment location will be the Corporate
Offices in Baton Rouge, Louisiana (the “Business Location”).

 

Page 6 of 26

 

(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. From the date hereof until the
earliest to occur of (A) one year from the date hereof, (B) the date of permanent
relocation of Employee to the Business Location or (C) the Date of Termination,
employee will also have access to the Company’s aircraft on an as-available basis
for travel between the Business Location and the Point of Origin, as well as other
reasonable travel necessitated by Employee’s relocation. Notwithstanding anything
in this Agreement to the contrary, to the extent that any amount received by
Employee under this Section 5(f)(ii) is determined by the Company or the Internal
Revenue Service to constitute taxable income to Employee, the Company shall fully
“gross up” such amount so that Employee is in the same “net” after tax position he
would have been if such payment and gross up payments had not constituted taxable
income to Employee.

(g)  Country Club Membership. The Company will reimburse Employee for one
country club membership initiation fee. Employee shall be responsible for monthly dues,
expenses, assessments, etc., in connection with such membership.

 

Page 7 of 26

 

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 Chief Operating Officer 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.

 

Page 8 of 26

 

(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.

 

Page 9 of 26

 

7. Termination.

(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 plan(s) 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, 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 paid group health
and dental insurance benefits covering Employee’s surviving spouse and dependents
that are substantially similar to those that Employee’s surviving spouse and
dependents were receiving immediately prior to Employee’s death. After all payments
and benefits under this Section 7(a)(ii) have been paid
or performed, this Agreement shall terminate, and the Company shall have no
obligations to Employee or Employee’s surviving spouse, dependents or estate with
respect to this Agreement. This provision shall not be exclusive and shall be in
addition to death benefits payable by the Company or any insurer under any insurance
plan or program covering Employee.

 

Page 10 of 26

 

(iii) Discharge.

(A) The Company may terminate Employee’s employment for any reason at
any time upon written notice delivered to Employee in accordance with
Section 7(b).

(B) In the event that Employee’s employment is terminated during the
Term by the Company for any reason other than Employee’s Misconduct or
Disability (both as defined below), the following shall occur:

(I) the Company shall pay to Employee, subject to tax and other
customary withholdings, not later than 15 days after the Date of
Termination, (x) any Base Compensation and General Benefits accrued
and unpaid as of the Employee’s Date of Termination, (y) a lump sum
amount, in cash, equal to the sum of (1) the product of (a)
Employee’s Base Compensation as in effect immediately prior to the
Date of Termination, multiplied by (b) the remaining portion of the
Term, plus (2) an amount equal to Employee’s highest annual bonus
actually paid by the Company during the two year period immediately
preceding the Date of
Termination, or, if Termination occurs within one year of the
effective date and no such bonus has yet been paid, an amount equal
to $431,250.00, and (z) a lump amount, in cash, equal to the cost for
Employee to obtain, for the period commencing on the Date of
Termination and ending on the earlier to occur of (1) the date that
is 18 months following the Date of Termination and (2) the fixed term
date (if any), life, disability, accident, dental and health
insurance benefits (“Welfare Benefits”) covering Employee (and, as
applicable, Employee’s spouse and dependents) that are substantially
similar to those that Employee (and Employee’s spouse and dependents)
were receiving immediately prior to the Date of Termination; and

 

Page 11 of 26

 

(II) notwithstanding any provision to the contrary in the
plan(s) governing such Long Term Incentives, Employee shall become
immediately and totally vested in any and all Long Term Incentives
granted to Employee by the Company prior to the Date of Termination.

(C) Notwithstanding anything to the contrary in this Agreement, in the
event that Employee is terminated because of Misconduct, the Company shall
have no obligations pursuant to this Agreement after the the Date of
Termination other than the payment of any Base Compensation and General
Benefits accrued and unpaid through the the Date of Termination. As used
herein, “Misconduct” means:

(I) (A) any willful breach or habitual neglect of duty by
Employee or (B) Employee’s material and continued failure to
substantially perform Employee’s duties with the Company (other than
any such failure resulting from Employee’s incapacity due to a
Disability or any such actual or anticipated failure after the
issuance of a Notice of Termination by Employee for Good Reason) (I)
in a professional manner and (II) in a manner that is reasonably
expected as appropriate for the position, in the case of either (A)
or (B), which breach, neglect or failure is not cured by Employee
within 30 days from receipt by Employee of written notice from the
Company that specifies the alleged breach, neglect or failure;

 

Page 12 of 26

 

(II) the misappropriation or attempted misappropriation by
Employee of a material business opportunity of the Company, including
attempting to secure any personal profit in connection with entering
into any transaction on behalf of the Company;

(III) the misappropriation or attempted misappropriation by
Employee of any of the Company’s funds or property;

(IV) an intentional violation by Employee of the Company’s
Code of Corporate Conduct or Fraud Policy; or

(V) (A) the commission by Employee of a felony offense or a
misdemeanor offense involving violent or dishonest behavior
or (B) Employee engaging in conduct
involving fraud or dishonesty in connection with his duties
with the Company.

 

Page 13 of 26

 

(D) Disability. If Employee shall have been absent from the full time
performance of Employee’s duties with the Company for 120 consecutive
calendar days as a result of Employee’s incapacity due to a Disability,
Employee’s employment may be terminated by the Company. For the purposes of
this Agreement, a “Disability” shall exist if:

(I) Employee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months; or

(II) Employee is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death
or can be expected to last for a continuous period of not less than
12 months, receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering
employees of the Company.

 

Page 14 of 26

 

If Employee is terminated pursuant to this Section 7(a)(iii)(D),
Employee shall not be entitled to further compensation pursuant to this
Agreement, except that (x) the Company shall (1) not later than 15 days
after the Date of Termination, pay to Employee any Base Compensation and
General Benefits accrued and unpaid as of the date of the Date of
Termination, (2) for the 12 month period beginning with the Date of
Termination, pay to Employee monthly the amount by which Employee’s monthly
Base Compensation as in effect immediately prior to the Date of Termination
exceeds the monthly benefit received by Employee pursuant to any disability
insurance covering Employee, and (3) not later than 15 days after the Date
of Termination, pay to Employee a lump amount, in cash, equal to the cost
for Employee to obtain, for the period commencing on the Date of Termination
and ending on the earlier to occur of (a) the date that is 18 months
following the Date of Termination and (b) the fixed term date (if any),
health and dental insurance benefits covering Employee and Employee’s spouse
and dependents that are substantially similar to those that Employee (and
Employee’s spouse and dependents) was receiving immediately prior to the
Date of Termination; and (y) notwithstanding any provision to the contrary
in the plan(s) governing such Long Term Incentives, Employee shall become
immediately and totally vested in any and all Long Term Incentives granted
to Employee by Company prior to the Date of Termination that have not
previously vested in full.

 

Page 15 of 26

 

(iv) Resignation for Good Reason. Employee shall be entitled to
terminate Employee’s employment for Good Reason (as defined herein). If Employee
terminates employment for Good Reason, Employee shall be entitled to the
compensation and benefits provided in Section 7(a)(iii)(B). For the purposes
of this Agreement, the term “Good Reason” shall mean the occurrence of any of
the following circumstances without Employee’s express written consent:

(A) any material diminution of Employee’s duties or responsibilities
(other than in connection with the termination of Employee for Misconduct or
Disability in accordance with the terms of this Agreement);

(B) any material diminution of Employee’s Base Compensation;

(C) the relocation of Employee’s office more than 50 miles from its
location at the commencement of this Agreement; or

(D) any other material breach by the Company of its obligations under
this Agreement; provided, however, Employee shall provide written notice (a
“Good Reason Notice”) to the Company of the initial existence of the
condition causing the change in terms or status no more than 90 days after
the change in terms or status occurs, and the Company shall have 30 days
from receipt of the Good Reason Notice to resolve the issue causing the
change in terms or status. If the Company resolves such issue, then
Employee’s employment shall not be subject to the Good Reason provisions of
this Agreement as to such issue.

 

Page 16 of 26

 

(v) Resignation for Corporate Change. Employee shall be entitled to
terminate Employee’s employment for a Corporate Change (as defined herein) if
Employee is not retained in Employee’s current (or a comparable) position, but only
if Employee gives notice of Employee’s intent to terminate employment
within 90 days following the effective date of such Corporate Change (provided
that, notwithstanding the foregoing, the Notice of Termination may not be given
later than February 13th of the year following the year in which the Corporate
Change occurs). If Employee terminates employment for a Corporate Change, Employee
shall be entitled to the compensation and benefits provided in Section 7(a)(iii)(B).
For the purposes of this Agreement, the term “Corporate Change” means a “change in
ownership,” a “change in effective control,” or a “change in the ownership of
substantial assets” of the Company.

(A) A “change in ownership” of the Company occurs on the date that any
one person, or more than one person acting as a group, acquires ownership of
stock of the Company that, together with stock held by such person or group,
constitutes more than 50% of the total fair market value or total voting
power of the stock of the Company. However, if any one person, or more than
one person acting as a group, is considered to own more than 50% percent of
the total fair market value or total voting power of the stock of the
Company, the acquisition of additional stock by the same person or persons
is not considered to cause a change in ownership of the Company (or to cause
a change in the effective control of the Company (within the meaning of
Section 7(v)(B)).

 

Page 17 of 26

 

(B) Notwithstanding that the Company has not undergone a change in
ownership under Section 7(v)(A), a “change in effective control” of the
Company occurs on the date that a majority of members of the Board is
replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of
the Board prior to the date of the appointment or election. For purposes of
this Section 7(v)(B), the term “Company” refers solely to the relevant
corporation identified in the opening paragraph of this Agreement, for which
no other corporation is a majority shareholder.

(C) A “change in the ownership of substantial assets” of the Company
occurs on the date that any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) assets from
the Company that have a total gross fair market value equal to or more than
75% percent of the total gross fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions. For this
purpose, “gross fair market value” means the value of the assets of the
Company, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.

 

Page 18 of 26

 

(b) Notice of Termination. Any purported termination of Employee’s employment
by the Company under Sections 7(a)(iii)(C) or (D), or by Employee under Section 7(a)(i),
(iv) or (v), shall be communicated by a written Notice of Termination to the other Party in
accordance with Section 10. For purposes of this Agreement, a “Notice of Termination” shall
mean a notice that (i) in the case of termination by the Company, shall set forth in
reasonable detail the reason for such termination of Employee’s employment and the Date of
Termination, or (ii) in the case of resignation by Employee, shall specify in reasonable
detail the basis for such resignation and the Date of
Termination. A Notice of Termination given by Employee pursuant to Section 7(a)(iv)
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. A Notice of Termination
given by Employee pursuant to Section 7(a)(iv) shall be considered effective only after 30
days have elapsed since Employee delivered the applicable Good Reason Notice and the Company
has failed to resolve the issue causing the change in terms or status during such 30 day
period. Employee shall not be expected to provide further services after the Date of
Termination. Any purported termination for which a Notice of Termination is required that
does not materially comply with this Section 7(b) shall not be effective.

(c) Date of Termination, Etc. The “Date of Termination” shall mean the date
specified in the Notice of Termination, provided that the Date of Termination shall be at
least 15 calendar days, but not more than 45 calendar days, following the date the Notice of
Termination is given. Notwithstanding anything herein to the contrary, if a Notice of
Termination is given pursuant to Section 7(a)(v), then the Date of Termination may not be
later than February 28th of the year following the year in which the Change of Control
occurs. 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 Employee’s
personal belongings under the Company’s supervision) prior to the Date of Termination.
Employee shall not be expected to provide further services after the Date of Termination.

 

Page 19 of 26

 

(d) 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 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 Section
7(a)(iii)(B).

(e) 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 Company shall fully “gross
up” such payment so that Employee is in the same “net” after tax position he would have been
if such payment and gross up payments had not constituted Excess Parachute Payments. No
payment of a gross up shall occur until the first business day occurring after the date that
is six months after the Date of Termination. Payment of the gross up will be made no later
than the end of Employee’s taxable year next following Employee’s taxable year in which
Employee remits the related taxes.

8. 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 and for which Employee may qualify, nor shall anything herein limit
or otherwise adversely affect such rights as Employee may have under any Long Term Incentives
granted by the Company.

 

Page 20 of 26

 

9. Assignability. The obligations of Employee hereunder are personal and may not be
assigned or delegated by Employee 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 of the Company, so long as
the obligations of the Company under this Agreement remain the obligations of the Company.

10. Notice. For the purpose of this Agreement, all notices and other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered by Federal Express or similar courrier addressed (a) to the Company, at its principal
office address, directed to the attention of the Board with a copy to the Corporate Secretary of
the Company, and (b) 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.

11. Severability. In the event that one or more of the provisions set forth in this
Agreement shall for any reason be held to be invalid, illegal, overly broad or unenforceable, the
same shall not affect the validity or enforceability of any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal, overly broad or unenforceable
provisions had never been contained therein; provided, however, that no provision shall be severed
if it is clearly apparent under the circumstances that the Parties would not have entered into the
Agreement without such provision.

 

Page 21 of 26

 

12. 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 constitute Good Reason under Section
7(a)(iv); provided 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
that executes and delivers the Agreement provided for in this Section 12 or that 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.

13. Miscellaneous.

(a) 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 of the Company as may be specifically authorized by the Board.

(b) No waiver by either Party at any time of any breach by the other Party 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.

 

Page 22 of 26

 

(c) Together with the Nonsolicitation and Noncompete Agreement, 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 and the
Nonsolicitation and Noncompete Agreement.

(d) THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF LOUISIANA.

(e) Notwithstanding anything herein to the contrary, this Agreement is intended to
comply with Internal Revenue Code Section 409A and the regulations and other guidance of
general applicability thereunder and shall at all times be interpreted in accordance with
such intent such that amounts credited under this Agreement shall not be taxable until such
amounts are distributed in accordance with the terms of this Agreement. In the event that
Employee is a “specified employee” at the Date of Termination, any amounts that are
considered nonqualified deferred compensation for purposes of Internal Revenue Code Section
409A and that are distributable because of a separation from service shall be delayed until
the first business day occuring after the date that is six months after the Date of
Termination. Any provision of this Agreement to the contrary is without effect.

(f) Reimbursements provided for under this Agreement shall be provided in accordance
with policies of the Company established from time to time.

 

Page 23 of 26

 

14. 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.

15. Arbitration.

(a) Employee and the Company agree that any dispute regarding the covenants herein
and/or the validity of this Agreement and its addenda, if any, shall be resolved through
arbitration. Employee and the Company hereby expressly acknowledge that Employee’s position
in the Company and the Company’s business have a substantial impact on interstate commerce
and that Employee’s development and involvement with the Company and the Company’s business
have a national and international territorial scope commercially. Any arbitration-related
matter or arbitration proceeding of a dispute regarding the covenants herein and/or the
validity of this Agreement and its addenda, shall be governed, heard, and decided under the
provisions and the authority of the Federal Arbitration Act, 9 U.S.C.A. §1, et seq., and
shall be submitted for arbitration to the office of the American Arbitration Association
(“AAA”) in New Orleans, Louisiana, on demand of either Party.

 

Page 24 of 26

 

(b) Such arbitration proceedings shall be conducted in New Orleans, Louisiana, and
shall be conducted in accordance with the then-current Employment Arbitration Rules and
Mediation Procedures of the AAA, with the exception that the Employee expressly waives the
right to request interim measures or injunctive relief from a judicial authority. Employee
acknowledges that the Company alone retains the right to seek injunctive relief from a
judicial authority based on the nature of this Agreement. Each Party shall have the right
to be represented by counsel or other designated representatives. The Parties shall
negotiate in good faith to appoint a mutually acceptable arbitrator; provided, however,
that, in the event that the Parties are unable to agree upon an arbitrator within 30 days
after the commencement of the arbitration proceedings, the
AAA shall appoint the arbitrator. The arbitrator shall have the right to award or include
in his or her award any relief that he or she deems proper under the circumstances,
including, without limitation, all types of relief that could be awarded by a court of law,
such as money damages (with interest on unpaid amounts from date due), specific performance
and injunctive relief. The arbitrator shall issue a written opinion explaining the reasons
for his or her decision and award. The award and decision of the arbitrator shall be
conclusive and binding upon both Parties, and judgment upon the award may be entered in any
court of competent jurisdiction. The Parties acknowledge and agree that any arbitration
award may be enforced against either or both of them in a court of competent jurisdiction,
and each waives any right to contest the validity or enforceability of such award. The
Parties further agree to be bound by the provisions of any statute of limitations that would
be otherwise applicable to the controversy, dispute, or claim that is the subject of any
arbitration proceeding initiated hereunder. Without limiting the foregoing, the Parties
shall be entitled in any such arbitration proceeding to the entry of an order by a court of
competent jurisdiction pursuant to a decision of the arbitrator for specific performance of
any of the requirements of this Agreement. The provisions of this Section 15 shall survive
and continue in full force and effect subsequent to and notwithstanding expiration or
termination of this Agreement for any reason. Employee agrees to pay arbitration fees in an
amount not to exceed the amount required to file a lawsuit in a court of law. The Company
agrees to pay the remaining amount of arbitration fees. The arbitrator shall have the right
to award reasonable attorney’s fees and costs to the prevailing Party. Employee and the
Company acknowledge and agree that any and all rights they may have to resolve their claims
by a jury trial are hereby
expressly waived. The provisions of this Section 15 do not preclude Employee from filing a
complaint with any federal, state, or other governmental administrative agency, if
applicable.

 

Page 25 of 26

 

IN
WITNESS WHEREOF, the parties have executed this Agreement on
December 18, 2009, effective
for all purposes as provided above.

	 	 	 	 	 
	 	THE SHAW GROUP INC.

 	 
	 	By:  	/s/  J.M. Bernhard, Jr.
 	 
	 	 	J.M. Bernhard, Jr., Chairman of the Board, 	 
	 	 	President and Chief Executive Officer 	 

	 	 	 	 	 
	EMPLOYEE:
	 
	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 

John Donofrio
	 	 
	 

	 	Executive Vice President, General Counsel
and Corporate Secretary	 	 

 

Page 26 of 26

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