Document:

EX-10.2

NONQUALIFIED STOCK OPTION AGREEMENT

The Shaw Group Inc.

2005 Non-Employee Director Stock Incentive Plan

This Nonqualified 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 “Director”), pursuant to The Shaw Group Inc. 2005
Non-Employee Director Stock Incentive Plan (the “Plan”).

THE PARTIES HERETO AGREE AS FOLLOWS:

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

(a) The Annual 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 Annual Option is subject
to all of the provisions thereof. In case of conflict between one or more provisions of this
Agreement and one or 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 Director 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 Annual Option is a nonqualified stock option as set forth in the Plan.

(c) The Exercise Price of the Annual Option is $    per share (the Fair Market Value per
share on the date of grant of the Annual Option).

2. Exercise of Annual Option.

(a) Subject to the earlier expiration and forfeiture of this Annual Option as herein provided,
this Annual Option may be exercised, by written notice to the Company at its principal executive
office addressed to the attention of the Secretary, at any time and from time to time after the
date of grant hereof, but, except as otherwise provided below, this Annual Option shall not be
exercisable for more than a percentage of the aggregate number of shares covered by this Annual
Option determined by the number of full years from the date of grant hereof to the date of such
exercise, in accordance with the following schedule:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Percentage of Shares
	Number of Full Years	 	That May Be Purchased
	Less than
	 	 	1	 	 	year
	 	 	0	%
	 
	 	 	1	 	 	year or more
	 	 	100	%

(b) Notwithstanding any other provision of this Agreement or the Plan, the Annual Option may
not be exercised unless (1) at the date of exercise (i) a registration statement under the
Securities Act of 1933, as amended, relating to the Shares covered by the Annual Option shall be in
effect, or (ii) an exemption from registration is applicable to the shares in the opinion of
counsel for the Company and (2) the Plan is approved by the shareholders at the 2006 annual meeting
of the shareholders of the Company.

3. Termination of Annual Option. This Annual Option may be exercised only while
Director remains a member of the Board of Directors of the Company (the “Board”) and will terminate
and cease to be exercisable upon Director’s termination of membership on the Board, except that:

(a) If Director’s membership on the Board terminates by reason of death or disability, this
Annual Option may be exercised by Director (or Director’s estate or the person who acquires this
Annual Option by will or the laws of descent and distribution or otherwise by reason of the death
of Director) at any time during the period of one year following such termination, but in each case
only as to the number of shares Director was entitled to purchase hereunder upon exercise of this
Annual Option as of the date Director’s membership on the Board so terminates. Disability shall
exist when Director 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
that has lasted, or can be expected to last, for a continuous period of not less than 12 months, as
determined by the Committee in its sole discretion.

(b) If Director’s membership on the Board terminates for any reason other than as described in
(a) above, this Annual Option may be exercised by Director at any time during the period of three
months following such termination, but in each case only as to the number of shares Director was
entitled to purchase hereunder upon exercise of this Annual Option as of the date Director’s
membership on the Board so terminates.

This Annual Option shall not be exercisable in any event after the expiration of ten years from the
date of grant hereof. The purchase price of shares as to which this Annual Option is exercised
shall be paid in full in the manner provided in the Plan. No fraction of a share of Common Stock
shall be issued by the Company upon exercise of an Annual Option or accepted by the Company in
payment of the purchase price thereof; rather, Director shall provide a cash payment for such
amount as is necessary to effect the issuance and acceptance of only whole shares of Common Stock.

4. Rights Prior to Exercise of Annual Option. The Director shall have no rights as a
stockholder with respect to the shares of Common Stock subject to the Annual Option until the
exercise of his or her rights hereunder and the issuance and delivery to Director 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 Director with
respect to the income tax or other consequences of the transactions contemplated by this Agreement,
and the Director 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 nor in the Plan nor in the granting of the
Annual Option shall confer on the Director 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 Director’s membership on the Board at any time.

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

(d) Stock Issuance. The exercise by the Director of the Annual 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 Director 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. Except as the Committee may otherwise determine in accordance with
Section 7(a) of the Plan, the Annual 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 Director 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 Director shall not operate or be construed as a waiver of any subsequent breach by the
Director.

(i) Binding Effect; Applicable Law. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns, and the Director and any heir, legatee,
legal representative or permitted assignee as specified in Section 5(f) above of the Director.
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.

THE COMPANY:

THE SHAW GROUP INC.

	 	 	 
	By:

Title:

	 	Gary P. Graphia

Secretary and General Counsel

DIRECTOR:

[Name of Director]

141078EX-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]

141,079

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