EX-10.1




INCENTIVE STOCK OPTION AGREEMENT




The Shaw Group Inc.




2001Employee Incentive Compensation Plan




This Incentive Stock Option Agreement (“Agreement”) dated as of    , 200   (the
date on which the option evidenced hereby was granted) is entered into between The Shaw Group Inc.
(the “Company”) and    (the “Optionee”), pursuant to the The Shaw Group Inc. 2001
Employee Incentive Compensation Plan (the “Plan”).




THE PARTIES HERETO AGREE AS FOLLOWS:



1. Grant of Option. In consideration of the services performed and to be performed by
the Optionee, the Company hereby grants to the Optionee an option (the “Option”) under the Plan to
purchase a total of    of the Company’s no par value common stock (the “Common Stock”), upon
the following terms and conditions:



(a) The Option is granted under and pursuant to the Plan, a copy of which is attached hereto
as Exhibit A and incorporated herein by reference, and the Option is subject to all of the
provisions thereof. In case of conflict between one or more provisions of this Agreement and one
ore more provisions of the Plan, the provision(s) of the Plan shall govern. Capitalized terms used
herein without definition shall have the same meanings given such terms in the Plan. The Optionee
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.



(b) The Option is an incentive stock option or ISO (as defined in the Plan) that is intended
to be governed by Section 422 of the Internal Revenue Code, as amended (the “Code”).



(c) The Exercise Price of the Option is $  per share (the fair market value per share on
the date of grant of the Option).




2. Exercise of Option.



(a) With the exception of the Optionee’s death, disability or retirement, the ramifications of
which are expressly provided for in the Plan, and subject to earlier expiration of this Option as
set forth below and in the Plan, the Option shall not be exercisable for more than a percentage of
the aggregate number of shares subject to the Option determined by the number of full years from
the date of this Agreement to the date of exercise in accordance with the following schedule:



	 	 	 	 	 
	Number of Full Years	 	Percentage of Shares that may be Purchased

(b) Notwithstanding any other provision of this Agreement or the Plan, the Option shall not be
exercised prior to the date on which the shareholders of the Company approve the adoption of the
Plan. The Option may not be exercised unless, at the date of exercise (i) a registration statement
under the Securities Act of 1933, as amended, relating to the Shares covered by the Option shall be
in effect, or (ii) an exemption from registration is applicable to the shares in the opinion of
counsel for the Company.



3. Termination of Option. Except as otherwise provided herein, the Option shall
terminate:




(a) upon the expiration of ten (10) years from the date of this Agreement, or if sooner,



(b) three (3) months after termination of employment of the Optionee, unless employment is
terminated (i) as a result of death, disability or retirement, in which case the right of the
Optionee or his or her representative to purchase shares of Common Stock hereunder shall expire as
of the first anniversary following such termination, or (ii) for “Cause” (as defined in the Plan)
in which case the Option shall immediately terminate and no longer be exercisable.



In no case shall the Option continue to vest during the limited period of exercisability following
the Optionee’s termination of employment provided for in (b)(i) above. During such period, the
Option may only be exercised with respect to the number of shares for which it was exercisable at
the time of such termination of employment.



4. Rights Prior to Exercise of Option. The Optionee shall have no rights as a
stockholder with respect to the shares of Common Stock subject to the Option until the exercise of
his or her rights hereunder and the issuance and delivery to Optionee of a certificate or
certificates evidencing such shares.




5. Miscellaneous.



(a) No Representations or Warranties. Neither the Company nor the Committee nor any
of their representatives or agents has made any representations or warranties to the Optionee with
respect to the income tax or other consequences of the transactions contemplated by this Agreement,
and the Optionee 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) Employment. Nothing in this Agreement nor in the Plan nor in the granting of the
Option shall confer on the Optionee any right to or guarantee of continued employment with the
Company or any of its Affiliates or in any way limit the right of the Company or any of its
Affiliates to terminate the employment of the Optionee at any time.



(c) Investment. The Optionee hereby agrees and represents that the Option and any
purchase of the shares of Common Stock under the Option is for the Optionee’s own account for
investment purposes only and not with a view of resale or distribution unless such shares acquired
pursuant to the Option are registered under the Securities Act of 1933, as amended.



(d) Stock Issuance. The exercise by the Optionee of the Option granted herein will
not become final nor will shares of Common Stock be issued pursuant thereto unless such exercise
fully complies with the requirements of the Plan and all applicable federal, state and local laws.



(e) Necessary Acts. The Optionee 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.



(f) No Transfer. The Option may not be assigned, encumbered or transferred, except by
will or the laws of descent and distribution in the event of death of the Optionee or pursuant to a
qualified domestic relations order pursuant to the Code or the Employee Retirement Security Act of
1974, as amended.



(g) Severability. The provisions of this Agreement are severable and if any one or
more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part,
the remaining provisions, and any partially enforceable provision to the extent enforceable in any
jurisdiction, shall nevertheless be binding and enforceable.



(h) Waiver. The waiver by the Company of a breach of any provision of this Agreement
by the Optionee shall not operate or be construed as a waiver of any subsequent breach by the
Optionee.



(i) Binding Effect; Applicable Law. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns, and the Optionee and any heir, legatee,
legal representative or assignee as specified in Section 5(f) above of the Optionee. This
Agreement shall be interpreted under and governed by and constructed in accordance with the laws of
the State of Louisiana.



IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement effective as of
the date first above written.




COMPANY:




THE SHAW GROUP INC.




    




By: Gary P. Graphia


Title: Secretary and General Counsel




OPTIONEE:




Signature of Optionee