exv10w5



 





Exhibit 10.5



THE SHAW GROUP INC.




2005 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN

(As amended and restated through November 2, 2007)




1. Purpose of the Plan.




     This 2005 Non-Employee Director Stock Incentive Plan (the “Plan”) is intended to assist The
Shaw Group Inc. (the “Company”) in attracting and retaining highly qualified and experienced
persons, who are not officers or employees of the Company or any of its subsidiaries or affiliates,
for service as directors of the Company by providing such directors with a proprietary interest in
the Company’s success through the grant to such directors of Phantom Stock Awards (as described in
Section 6 hereof) and nonqualified stock options (the “Options”) (collectively, “Awards”) to
acquire shares of the common stock, no par value per share, of the Company (the “Shares”).



     The Plan as set forth herein constitutes an amendment and restatement of The Shaw Group Inc.
2005 Non-Employee Director Stock Option Plan (as amended and restated through April 6, 2006) (the
“Existing Plan”).



2. Participation.




     Each member of the Company’s Board of Directors (the “Board”) who is not, and who has not been
during the one-year period immediately preceding the Effective Date (as defined below), or the date
the director is first elected to the Board, whichever is later, an officer or employee of the
Company or of any of its subsidiaries or affiliates (each, an “Eligible Director”) shall be
eligible to participate in the Plan.



3. Administration of Plan.




     The Plan shall be administered, construed and interpreted by a committee (the “Committee”)
which shall be comprised of one or more members of the Board appointed by the Board, who are not
eligible under Section 2 hereof to receive grants of Awards under the Plan. The Committee shall
prescribe the form of Award agreement to be used to evidence grants of Awards under the Plan,
consistent with the terms of the Plan and all applicable laws and regulations, including, without
limitation, Rule 16b-3 (or successor provision) promulgated by the Securities and Exchange
Commission.



4. Shares Subject to the Plan; Fair Market Value.




     (a) Maximum Shares. The number of Shares which are hereby reserved for purposes of the Plan
shall be, in the aggregate, 300,000 Shares, subject to further adjustment as provided in Section
4(b) hereof. Shares issued under the Plan may be either authorized but unissued Shares or Shares
which have been or may be reacquired by the Company, including treasury shares. Any Shares
released upon forfeiture of an Award shall again be available for grants of future Awards under the
Plan.



 









 





     (b) Adjustments in Event of Changes in Capitalization. In the event that the Shares are
changed into or exchanged for a different kind or number of shares of stock or securities of the
Company as the result of any stock dividend, stock split, combination of shares, exchange of
shares, merger, consolidation, reorganization, recapitalization or other change in capital
structure of the Company (each, a “Capitalization Change”), then the number of Shares subject to
this Plan and the number of Shares subject to Awards previously granted hereunder shall be
equitably adjusted by the Committee to prevent the dilution or enlargement of such previously
granted Awards, and any new stock or securities into which the Shares are changed or for which they
are exchanged shall be substituted for the Shares subject to this Plan and to Awards granted
hereunder; provided, however, that fractional shares may be deleted from any such adjustment or
substitution. There shall be no such equitable adjustment for the number of Shares subject to
Awards in the event the effective date of the Capitalization Change occurs prior to the grant of
the Award.



     (c) Fair Market Value. The term “Fair Market Value” means the fair market value of a Share as
determined in good faith by the Committee in the following manner:




     (i) If the Shares are then listed on any national or regional stock exchange or traded
in the over-the-counter market and prices are quoted on the NASDAQ National Market, the Fair
Market Value shall be the last quoted sales price of a Share on the date in question or, if
there are no reported sales on such date, on the last preceding date on which sales were
reported;




     (ii) If the Shares are not so listed or quoted, then the Fair Market Value shall be the
mean between the bid and ask prices quoted by a market maker or other recognized specialist
in the Shares at the close of the date in question; or




     (iii) In the absence of either of the foregoing, the Fair Market Value shall be
determined by the Committee in its absolute discretion after giving consideration to the
book value, the revenues, the earnings history and the prospects of the Company in light of
market conditions generally.


The Fair Market Value determined in such manner shall be final, binding and conclusive on all
parties.




5. Options Granted Under the Plan.




     (a) Option Grants.




	 	      (i)   As of the date of the annual meeting of the shareholders of the Company in each
year that the Plan is in effect, beginning with the 2008 annual meeting, each Eligible
Director who is elected to the Board or re-elected to the Board at such meeting shall be
granted Options having a fair market value, in the aggregate, equal to the product of: (i)
        .5 and (ii) $85,000, as determined by the Black-Scholes valuation model utilizingthe Fair
Market Value of a Share on the date of such annual meeting, with any fractional Share being
rounded up to the next whole Share. Each Option granted pursuant to this Section 5(a)(i)
shall be referred to in the Plan as an “Annual Option.”
	 
	 	      (ii)   The price at which Shares may be acquired pursuant to each Option (the “Exercise
Price”) shall be the Fair Market Value of the Shares, as defined in Section 4(c) hereof, as
of the date such Option is granted.




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     (b) Exercise Rights.




	 	      (i)   Each Annual Option shall be fully exercisable one year after the date of grant.
	 
	 	      (ii)   Once vested, each Option (or vested portion thereof) shall be fully exercisable,
and shall remain exercisable for a period of ten years from the date such Option is granted,
at which time any unexercised portion of the Option shall terminate. In the event that the
optionee ceases to be a member of the Board prior to the vesting of the Option (or
applicable portion thereof), the Option (or the unvested portion thereof) shall be
forfeited.





     (c) Exercise of Options. Subject to Section 5(b), an Option may be exercised with respect to
all or part of the Shares covered by the Option, but in no event with respect to less than 100
Shares, unless the exercise relates to all Shares covered by the Option at the date of exercise.
Options may be exercised by delivery of a signed written notice to the Company, which notice shall
state the election to exercise the Option and the number of whole Shares in respect to which it is
being exercised, together with payment in full of the Exercise Price, which payment shall be made
either (i) in cash (by a certified check, bank draft or money order); (ii) with the consent of the
Committee, by constructively delivering Shares already owned by the optionee valued at Fair Market
Value; (iii) with the consent of the Committee, by irrevocably authorizing a third party to sell
Shares (or a sufficient portion thereof) acquired upon exercise of the Option and remit to the
Company a sufficient portion of the sales proceeds to pay the entire Exercise Price; or (iv) by a
combination of the foregoing forms of payment. Notice of exercise and payment of the Exercise Price
shall be delivered to the Company at the following address:


The Shaw Group Inc.

4171 Essen Lane

Baton Rouge, La 70809

Attn: Secretary




6. Phantom Stock Awards Granted Under the Plan.




     (a) Phantom Stock Awards. Phantom Stock Awards are rights to receive Shares. As of the date
of the annual meeting of the shareholders of the Company in each year that the Plan is in effect,
beginning with the 2008 annual meeting, each Eligible Director who is elected to the Board or
re-elected to the Board at such meeting shall be granted a Phantom Stock Award with rights to
receive a number of Shares equal to the product of: (i) .5 and (ii) the quotient of $85,000 divided
by the Fair Market Value of a Share on the date of such annual meeting, with any fractional Share
being rounded up to the next whole Share.



     (b) Award Period. Each Phantom Stock Award made after April 6, 2006, shall vest in three (3)
equal annual installments of 331/3% each, beginning one year after the date of grant.



     (c) Payment. Upon vesting of a Phantom Stock Award, the holder of a Phantom Stock Award shall
be entitled to receive a number of Shares equal to the number of Phantom Stock shares then vesting.



     (d) Termination of Award. In the event that the Eligible Director ceases to be a member of
the Board prior to the one year anniversary of the date of grant of the Phantom Stock



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Award, the Phantom Stock Award shall be automatically forfeited unpaid. In the event that the
Eligible Director ceases to be a member of the Board at any time after the one year anniversary of
the date of grant of the Phantom Stock Award, the vesting of the Phantom Stock Award (or applicable
unvested portion thereof) shall be automatically accelerated and thereupon entitle the holder of
such Phantom Stock Award to receive a number of Shares equal to the number of Phantom Stock shares
then vesting



7. Restrictions on Transfers.




     (a) Limitations on Transfer. Except as provided by the Committee, no Award granted under the
Plan may be assigned, encumbered or transferred, except (i) by will or the laws of descent and
distribution or (ii) pursuant to a qualified domestic relation order as defined by the Internal
Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act or the
rules thereunder. The Committee shall have the discretionary authority to grant Options that would
be transferable to members of an Eligible Director’s immediate family, including trusts for the
benefit of such family members and partnerships in which such family members are the only partners.
For purposes of Section 5(c), a transferred Option may be exercised by the transferee to the extent
that the Eligible Director would have been entitled had the Option not been transferred.



     (b) Government Regulations. This Plan and Awards granted under the Plan are subject to all
applicable federal and state laws, rules and regulations and to such approvals by any regulatory or
governmental agency (including without limitation “no action” positions of the Securities and
Exchange Commission) which may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith. Without limiting the generality of the foregoing, no Awards may
be granted, satisfied, or exercised under the Plan unless and until all applicable legal
requirements have, in the opinion of counsel to the Company, been complied with. In connection with
any Shares issued pursuant to Awards, the person acquiring such Shares shall, if requested by the
Company, give assurances satisfactory to counsel to the Company in respect to such matters as the
Company may deem desirable to assure compliance with all applicable legal requirements. The Company
shall not be required to deliver any Shares under the Plan prior to (i) the admission of such
Shares to listing on any stock exchange or NASDAQ Stock Market, as applicable, on which Shares may
then be listed and (ii) the completion of such registration or other qualification of such Shares
under any state or federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable.



8. Termination.




     The Plan shall terminate automatically on the tenth anniversary of the Effective Date (as
defined in Section 11), and the Board may suspend or terminate the Plan at any earlier time. Upon
termination of the Plan, no additional Awards shall be granted under the Plan; provided, however,
that the terms of the Plan shall continue in full force and effect until all Options granted under
the Plan have been exercised or expired and all Phantom Stock Awards have been satisfied or
expired.



9. Amendment.




     (a) The Plan. The Board of Directors may amend the Plan from time to time in its sole
discretion, provided that, unless the requisite approval of shareholders is obtained, no amendment
shall be made to the Plan if such amendment would (i) increase the number of Shares available for
issuance under the Plan or increase the limits applicable to Awards under the Plan, in each case,
except as provided in Section 4(b); (ii) lower the



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Exercise Price of an Option below 100% of the fair market value of one share on the date of grant,
except as provided in Section 4(b); (iii) remove the repricing restriction set forth in Section
9(b); or (iv) require shareholder approval pursuant to applicable federal, state or local law or
under rules of the New York Stock Exchange, if the Shares are then listed on such exchange. No
amendment shall adversely affect the rights of any Eligible Director under any Award theretofore
made under the Plan, without the Eligible Director’s consent.



     (b) Awards. Notwithstanding any provision of the Plan to the contrary, the Committee shall
not have the authority to accept the surrender or cancellation of any Options that relate to such
Options outstanding hereunder (to the extent not theretofore exercised) and grant new Options that
relate to such new Options hereunder in substitution therefore (to the extent not theretofore
exercised) at an Exercise Price that is less than the Exercise Price of the Options surrendered or
canceled. The foregoing shall not limit any adjustments made under Section 4(b) of the Plan.



10. Indemnification.




     In addition to such other rights of indemnification as they may have, the members of the
Committee and the officers and employees of the Company who may take actions relating to the Plan
shall be indemnified by the Company to the fullest extent permitted by law against the reasonable
expenses, including attorney’s fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal thereof, to which they
or any of them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Award granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action, suit or proceeding
that such Committee member, officer or employee is liable for gross negligence or willful
misconduct in the performance of his duties, provided that within sixty (60) days after institution
of any such action, suit or proceeding, a Committee member, officer or employee shall in writing
offer the Company the opportunity, at its own expense, to handle and defend the same.



11. Effective Date.




     The Effective Date of the Plan shall be January 24, 2005.




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