EX-10.3






PHANTOM STOCK AGREEMENT

The Shaw Group Inc.




2005 Non-Employee Director Stock Incentive Plan




This Phantom Stock Agreement (“Agreement”) dated as of      , 200     (“Grant Date”) is
entered into between The Shaw Group Inc. (the “Company”) and (the “Awardee”), pursuant to The Shaw
Group Inc. 2005 Non-Employee Director Stock Incentive Plan (the “Plan”).



THE PARTIES HERETO AGREE AS FOLLOWS:



1. Award of Phantom Stock. In consideration of the services performed and to be performed by the
Awardee, the Company hereby awards (the “Award”) to the Awardee under the Plan a total of
     phantom shares of the Company (the “Phantom Stock”), subject to the following terms
and restrictions.



2. Incorporation of Plan Provisions. The Award evidenced hereby is made under and pursuant to
the Plan, a copy of which is available from the Company’s Secretary and incorporated herein by
reference, and the Award is subject to all of the provisions thereof. Capitalized terms used
herein without definition shall have the same meanings given such terms in the Plan. The Awardee
represents and warrants that he or she has read the Plan and is fully familiar with all the terms
and conditions of the Plan and agrees to be bound thereby.



3. Vesting of Phantom Shares The shares of Phantom Stock shall become fully vested on the
first anniversary of the Grant Date. Notwithstanding the foregoing, in the event the Plan is not
approved by the shareholders at the 2006 annual meeting of the shareholders of the Company, the
Phantom Stock shall be automatically forfeited unpaid on such date. While a share of Phantom Stock
remains “outstanding” pursuant to this Agreement, an amount equivalent to the distributions made on
a share of the Company’s no par value common stock (“Share”) during such period shall be held by
the Company without interest until the share of Phantom Stock becomes vested or is forfeited and
then paid to you or forfeited, as the case may be.



4. Payment/Certificates. Upon vesting of the Phantom Stock, subject to Paragraph 6(c) below,
the Company shall cause a certificate or certificates for Shares to be issued without legend
(except for any legend required pursuant to applicable securities laws or any other agreement to
which you are a party) in your name in cancellation of the Phantom Stock that has vested.



5. Nontransferability of Phantom Stock. You may not sell, transfer, pledge, exchange,
hypothecate or dispose of the Phantom Stock in any manner otherwise than by will or by the laws of
descent or distribution or as otherwise provided in the Plan. A breach of these terms of this
Agreement shall cause a forfeiture of the Phantom Stock.



6. Miscellaneous.




(a) No Representations or Warranties. Neither the Company nor the Committee or
any of their representatives or agents has made any representations or warranties to the
Awardee with respect to the income tax or other consequences of the transactions
contemplated by this Agreement, and the Awardee is in no manner relying on the Company, the
Committee or any of their representatives or agents for an assessment of such tax or other
consequences.




(b) Membership. Nothing in this Agreement or in the Plan or in the making of
the Award shall confer on the Awardee any right to or guarantee of continued membership on
the Board or in any way limit the right of the Board or the shareholders of the Company to
terminate the membership of the Awardee on the Board at any time.




(c) Withholding of Tax. To the extent that the grant or vesting of the Phantom
Stock results in the receipt of compensation by you with respect to which the Company or
its affiliates has a tax withholding obligation pursuant to applicable law, unless other
arrangements have been made by you that are acceptable to the Company or such affiliate
which, with the consent of the Committee, may include withholding a number of Shares that
would otherwise be delivered on vesting that have an aggregate Fair Market Value that does
not exceed the amount of taxes to be withheld, you shall deliver to the Company or the
affiliate such amount of money as the Company or the affiliate may require to meet its
withholding obligations under such applicable law. No delivery of Shares shall be made
under this Agreement until you have paid or made arrangements approved by the Company or
the affiliate to satisfy in full the applicable tax withholding requirements of the Company
or the affiliate.




(d) Necessary Acts. The Awardee and the Company hereby agree to perform any
further acts and to execute and deliver any documents which may be reasonably necessary to
carry out the provisions of this Agreement.




(e) Binding Effect; Applicable Law. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns, and the Awardee and any heir,
legatee, or legal representative of the Awardee. This Agreement shall be interpreted under
and governed by and construed in accordance with the laws of the State of Louisiana.




(f) Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the Committee shall
have all powers with respect to this Agreement as it has with respect to the Plan. Any
interpretation of the Agreement by the Committee and any decision made by it with respect
to the Agreement is final and binding.




(g) Amendment. This Agreement may be amended by written agreement of the
Awardee and the Company, without the consent of any other person.



Executed in duplicate as of the day and year first above written.




THE SHAW GROUP INC.



By: Gary P. Graphia

Title: Secretary and General Counsel





DIRECTOR:




[Name of Awardee]



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