Document:

EX-10.1

AMENDED & RESTATED EMPLOYMENT AGREEMENT

This Amended & Restated Employment Agreement (this “Agreement”) is entered into
effective as of December 22, 2008 (the “Effective Date”), by and between The Shaw Group
Inc., a Louisiana corporation (collectively with its affiliates and subsidiaries hereinafter
referred to as “Company”), and Gary P. Graphia (“Employee”). The Company and
Employee may hereinafter be referred to, individually, as a “Party” and, collectively, as
the “Parties”.

WHEREAS, the Company and Employee are parties to that certain Employment Agreement dated as of
October 14, 2005 (the “Original Agreement”); and

WHEREAS, the Company and Employee desire to amend certain provisions of the Original Agreement
and to 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 continues to employ Employee, and Employee hereby agrees
to continued employment by 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
Section 7 of this Agreement, the term of this Agreement (the “Term”) shall be three years
commencing on the Effective Date and shall be automatically renewed on each day following the
Effective Date so that on any given day the unexpired portion of the Term shall be three years.
Notwithstanding the foregoing provision, at any time after the Effective Date the Company or
Employee may give written notice to the other Party that the Term shall not be further renewed from
and after a subsequent date specified in such notice (the “fixed term date”), in which
event the Term shall become fixed, and this Agreement shall terminate on the third anniversary of
such fixed term date.

3. Employee’s Duties.

(a) During the Term, Employee shall serve as Executive Vice President & Chief Operating
Officer of the Company, or such other similar position(s) as the Parties may mutually agree,
reporting directly to the Chief Executive Officer of the Company and with such duties and
responsibilities as may from time to time be assigned to Employee 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 comparable to the customary duties and responsibilities of such position(s).

(b) Employee agrees to devote Employee’s 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 Employee’s duties and responsibilities. Employee shall not, either directly or
indirectly, enter into any business or employment with or for any Person (as defined below) other
than the Company during the Term; 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, subject in each case to the provisions set forth in
the Nonsolicitation and Noncompete Agreement (defined below) and the Company’s Code of Conduct or
similar guidelines of which Employee is notified in writing. For the purposes of this Agreement,
the term “Person” shall mean any individual, corporation, limited or general partnership,
limited liability company, joint venture, association, trust or other entity or organization,
whether or not a legal entity. Employee shall at all times observe and comply with all lawful
directions and instructions of the Board of which Employee is notified in writing.

4. Compensation.

(a) Base Compensation. For services rendered by Employee under this Agreement, the
Company shall pay to Employee Employee’s current base salary as of the Effective Date (“Base
Compensation”), per annum, payable in accordance with the Company’s customary pay periods and
subject to tax and other customary withholdings. Employee’s 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 Base Compensation, that increased amount shall thereafter be the Base
Compensation for the purposes of this Agreement. Employee’s Base Compensation, as increased from
time to time, may not thereafter be decreased unless agreed to by Employee in writing. Nothing
contained herein shall prevent the Board from paying additional compensation to Employee in the
form of bonuses or otherwise during the Term.

(b) Annual Bonus. During the Term, Employee shall 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 100% of
Employee’s Base Compensation. The Bonus Target may be adjusted annually. Annual bonus payments
will be subject to tax and other customary withholdings.

(c) Retention Amount. As additional consideration for this Agreement, the Company
agrees to pay to Employee a retention amount (the “Retention Amount”) in the amount of
$1,000,000, which shall be paid, subject to tax and other customary withholdings, on the following
dates: (i) $333,334, not later than 15 days after execution of this Agreement by Employee,
(ii) $333,333, on the first anniversary of the Effective Date and (iii) $333,333, on the second
anniversary of the Effective Date. In the event that Employee voluntarily terminates employment
with the Company (other than for Good Reason (as defined below) or is terminated for Misconduct (as
defined below) prior to the completion of 12 months of continuous employment in any of the first
three contract years commencing on the Effective Date, Employee shall repay to the Company the pro
rata portion of the Retention Amount that was paid to Employee on or before the Date of Termination
(as defined below) for the contract year in which the Date of Termination occurs and shall forfeit
all rights to the unpaid portion (if any) of the Retention Amount. For example, if Employee is
terminated for Misconduct effective May 15, 2010, Employee (i) would retain the first installment
of the Retention Amount since Employee would have completed the requisite 12 months’ continuous
employment for the first contract year, (ii) would be obliged to pay to the Company $166,666.50 (or
50% (six months divided by 12 months) of the second installment of the Retention Amount) since
Employee would not have completed the requisite 12 months’ continuous employment for the second
contract year and (iii) would thereafter forfeit any rights to $333,333 (the remaining unpaid third
installment of the Retention Amount).

(d) Long Term Incentives.

(i) Employee will be eligible to participate in the Company’s discretionary Long Term
Incentive (as defined in Section 7(a)(i) 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 overall target value of the annual Long Term Incentive grants to
Employee on the date of grant will be not less than 150% of Employee’s Base Compensation.

(ii) On the Effective Date, Employee will be granted Long Term Incentives with an
aggregate value of $525,000, which will be divided equally between option shares (or stock
appreciation rights) and restricted shares (or restricted share units) and will vest in
annual installments of 25% each, with full vesting after four years. In accordance with the
Company’s Long Term Incentive policies, such Long Term Incentives will have a grant date of,
and the exercise price of the option shares (or stock appreciation rights) shall be the
closing price on, the first business day of January, 2009.

(iii) All Long Term Incentive awards that are to be settled by the delivery of shares
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.

(iii) Long Term Incentive awards will be determined utilizing the valuation methodology
used for other similarly situated executive officers of the Company.

(iv) 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)(ii), (iv) or (v) or by the Company pursuant to Section 7(a)(iii)(A) (other than
for Misconduct) or (iii)(D) of this Agreement, Employee shall have not less than one year
from the Date of Termination in which to exercise all Long Term Incentive awards granted to
Employee by the Company on or before the Date of Termination (including any Long Term
Incentive awards that become vested pursuant to Section 7 of this Agreement);
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.

5. Additional Benefits. In addition to the 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 Employee’s duties. It is understood that Employee is
authorized to incur reasonable business expenses for promoting the business of the Company,
including reasonable expenditures for professional memberships and licenses, travel, lodging, meals
and client or business associate entertainment. Requests for reimbursement for all business
expenses must be accompanied by appropriate documentation.

(b) Vacation. Employee shall be entitled to four weeks of vacation per year, without
any loss of compensation or benefits. Employee shall be entitled to carry forward any unused
vacation time. Upon termination of employment of Employee for whatever reason, Employee shall be
paid for any unused vacation time based on Employee’s Base Compensation as in effect immediately
prior to the Date of Termination.

(c) General Benefits. Employee shall be entitled to participate in (i) the various
employee benefit plans or programs provided to the employees of the Company in general, including,
but not limited to, health (including ExecuCare), dental, disability, accident and life insurance
plans and 401k plans and (ii) the Flexible Perquisites Plan, which provides Employee an amount
equal to 4% of Employee’s Base Compensation in each calendar year in lieu of customary perquisite
benefits. Benefits are subject to the eligibility requirements with respect to each of such
benefit plans or programs. Nothing in this Section 5(c) shall be deemed to prohibit the Company
from making any changes in any of the plans, programs or benefits described in this Section 5(c),
provided the change similarly affects all executive officers of the Company that are similarly
situated.

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. For the
purposes of this Agreement, “Confidential Information” shall not include (i) information, knowledge
or data that, through no fault of Employee, becomes publicly available or (ii) information,
knowledge or data acquired from, or published by, third parties that have no direct or indirect
confidentiality obligation to the Company. 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 the prior written consent of the General Counsel 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.

(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
that have or thereafter come into the possession of Employee that contain any Confidential
Information; provided, however, that 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 and responsibilities in the course of such employment.

(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
executed by the Company and Employee.

7. Termination.

(a) This Agreement may be terminated prior to the end 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 (A) 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 (B) the retention of
any and all option shares, 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 plans 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, (A) any Base Compensation and
General Benefits accrued and unpaid as of the date of Employee’s death, (B) a lump sum
amount, in cash, equal to one year of Employee’s Base Compensation, (C) the remaining unpaid
portion (if any) of the Retention Amount and (D) a lump sum amount, in cash, equal to to the
cost for Employee to obtain one year of paid group health and dental insurance benefits
covering Employee’s spouse and dependents that are substantially similar to those that
Employee’s surviving spouse and dependents were receiving immediately prior to Employee’s
death. Notwithstanding any provision to the contrary in the plan(s) governing such Long
Term Incentives, Employee, as of the date of Employee’s death, shall also become immediately
and totally vested in any and all Long Term Incentives granted to Employee by the Company
prior to the Date of Termination that have not previously vested in full. After all
payments, benefits and vesting of Long Term Incentives specified under this Section 7(a)(ii)
have been paid or performed, this Agreement shall terminate, and the Company shall have no
obligations to Employee, Employee’s spouse and dependents or Employee’s legal
representatives with respect to this Agreement. This provision shall not be exclusive, and
shall be in adddition to death benefits payable by the Company or any insurer under any
insurance plan or program covering Employee.

(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) a lump sum amount, in cash, equal to the product of (1) the
sum of (a) Employee’s Base Compensation as in effect immediately prior to
the Date of Termination, plus (b) Employee’s highest bonus paid by
the Company during the three years immediately prior to the Date of
Termination, multiplied by (2) the remaining portion of the Term,
(y) the remaining unpaid portion (if any) of the Retention Amount, 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 last day of the remaining portion of the Term and (2) the
fixed term date (if any), 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

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

(I) (x) any willful breach or habitual neglect of duty by Employee or
(y) 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), (1) in a professional manner and (2) in a manner
that is reasonably expected as appropriate for the position, in the case of
either (x) or (y), 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;

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

(IV) the intentional material violation by Employee of the Company’s
Code of Corporate Conduct or Fraud Policy of which Employee is notified in
writing; or

(V) (x) the commission by Employee of a felony or a misdemeanor offense
involving violent or dishonest behavior or (y) Employee engaging in any
other conduct involving fraud or dishonesty.

Anything contained in this Agreement to the contrary notwithstanding, the Chief
Executive Officer of the Company shall have the sole power and authority to
terminate the employment of Employee on behalf of the Company.

(D) Disability. If Employee shall have been absent from the full-time
performance of Employee’s duties with the Company for 90 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 reasonably 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 reasonably 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.

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) for the 12 month period beginning with the Date of Termination,
pay to Employee (a) 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 (2) 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) were receiving immediately prior to the Date of Termination;
(y) the Company shall pay to Employee, not later than 15 days after the Date of
Termination, a lump sum amount, in cash, equal to the remaining unpaid portion (if
any) of the Retention Amount; and (z) 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.

(iv) Resignation for Good Reason. Employee shall be entitled to terminate
Employee’s employment for Good Reason (as defined herein). If Employee terminates
Employee’s 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 the Company’s principal executive offices outside Baton
Rouge, Louisiana or requiring Employee to be based other than at such principal
executive offices; 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.

(v) Resignation for Corporate Change. Employee shall be entitled to terminate
Employee’s employment for a Corporate Change (as defined herein), 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)).

(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.

(b) Notice of Termination. Any purported termination of Employee’s employment by the
Company under Sections 7(a)(iii), or by Employee under Section 7(a)(i), (iv) or (v), shall be
communicated by written Notice of Termination to the other Party in accordance with Section 10.
For the purposes of this Agreement, a “Notice of Termination” shall mean a notice that (i)
in the case of a terminaton 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. Any purported termination
for which a Notice of Termination is required that is not effected pursuant to 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.

(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 Sections 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.

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 courier, 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.

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), except 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.

(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.

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 a mutually agreed location, on
demand of either Party.

(b) Such arbitration proceedings shall be conducted in accordance with the then-current
Employment Arbitration Rules and Mediation Procedures of the AAA. Each Party shall have the right
to be represented by counsel or other designated representatives. The Parties shall negotiate in
good faith to designate a location for the arbitration and to appoint a mutually acceptable
arbitrator; provided, however, that, in the event that the Parties are unable to
agree upon a location and/or an arbitrator within 30 days after the commencement of the arbitration
proceedings, the AAA shall designate the location for the arbitration and/or appoint the
arbitrator, as applicable. 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 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.

1

IN WITNESS WHEREOF, the Parties have executed this Agreement on December 22, 2008,
effective for all purposes as of the Effective Date.

THE SHAW GROUP INC.

	 	 	 
	
 
	 	By

Name: /s/ Clifton S. Rankin
	
 
	 	 
	EMPLOYEE:

	 	Clifton S. Rankin

General Counsel & Corporate Secretary
	Name: /s/ Gary P. Graphia

	 	

	 

	 	

	Gary P. Graphia

	 	

2

EXHIBIT A

Form of Nonsolicitation and Noncompete Agreement

See attached.

3EX-4.1

=============================================================================================

	 	 	 
	NUMBER CPP-1

	 	7,503 SHARES

Incorporated under the laws of the State of New York

	 	 	 	 	 
	50,000,000 Shares $0.01 Par Value

	 	FINANCIAL INSTITUTIONS, INC.
	 	210,000 Shares $100.00 Par Value
	Common Stock

	 	Total Authorized Issue 50,210,000 Shares
	 	Preferred Stock

THIS CERTIFIES THAT: UNITED STATES DEPARTMENT OF THE TREASURY is the owner of

**Seven Thousand Five Hundred Three** fully paid and non-assessable Shares

of Fixed Rate Cumulative Perpetual Preferred Stock, Series A of

FINANCIAL INSTITUTIONS, INC.

Transferable only on the books of the Corporation by the holder hereof in person or by

duly authorized Attorney upon surrender of this Certificate properly endorsed.

In Witness Whereof, the said Corporation has caused this Certificate to be signed

by its duly authorized officers and to be sealed with the Seal of the Corporation

this 23rd  day of December A.D. 08

	 	 	 
	/s/ Ronald A. Miller

	 	/s/ Peter G. Humphrey
	Ronald A. Miller, Secretary

	 	Peter G. Humphrey, President

=============================================================================================

1

THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO
IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS. EACH PURCHASER OF THE SECURITIES REPRESENTED BY THIS
INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY
THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT OFFER, SELL
OR OTHERWISE TRANSFER THE SECURITIES REPRESENTED BY THIS INSTRUMENT EXCEPT (A) PURSUANT TO A
REGISTRATION STATEMENT WHICH IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.

THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS, THE POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTION, OR OTHER SPECIAL RIGHTS OF EACH
CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to

	applicable laws or regulations. Additional abbreviations may also be used though not in the list.
	 	 	 	 	 	 	 	 
	TEN COM	 	 	 	- as tenants in common	 	UNIF GIFT MIN ACT	 	 	 	- ____________Custodian______________ (Minor)
	TEN ENT	 	 	 	- as tenants by the entireties	 	 	 	under Uniform Gifts to Minors Act _________________________(State)	 	 
	JT TEN	 	 	 	- as joint tenants with right of survivorship	 	UNIF TRF MIN ACT	 	 	 	- ____________Custodian______________ (Minor)
	 	 	 	 	and not as tenants in common	 	 	 	under _____________________ (State) Uniform Transfers to Minors Act	 	 
	For value received, the undersigned hereby sells, assigns and transfers unto
	 	 	 	 	 	 	 	PLEASE INSERT SOCIAL SECURITY OR
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	OTHER IDENTIFYING NUMBER OF ASSIGNEE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE	 	 	 	 	 	 	 	 	 	 
	
 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Shares
	represented by the within Certificate, and hereby irrevocably constitutes and appoints
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Attorney to transfer the
	
 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	said
	 	

	shares on the books of the within-named Corporation with full power of substitution in the premises.
	 	 	 	 	 	 	 	 	 	 
	Dated,

	 	

	 	

	 	

	 	

	 	

	 	

	 	

	 	

	 	

	
 
	 	 	 	In presence of
	 	

	 	

	 	

	 	

	 	

	 	

	 	

	 	 	 	 	 	 	 	 	 	 	NOTICE: The signature to this assignment must correspond with the
	 	 	 	 	 	 	 	 	 	 	name as written upon the face of the certificate in every particular
	 	 	 	 	 	 	 	 	 	 	without alteration or enlargement, or any change whatever.	 	 

2

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