Document:

exv10w8

Table of Contents

 

    Exhibit 10.8

 

    The Shaw
    Group Inc.

 

    2008
    Omnibus Incentive Plan

 

    Contents

 

 

	 	 	 	 	 
	

    Article 1. Establishment, Purpose, and
    Duration

	
 
	 
	
    1
	 

	

    Article 2. Definitions

	
 
	 
	
    1
	 

	

    Article 3. Administration

	
 
	 
	
    5
	 

	

    Article 4. Shares Subject to This Plan and
    Maximum Awards

	
 
	 
	
    6
	 

	

    Article 5. Eligibility and Participation

	
 
	 
	
    8
	 

	

    Article 6. Stock Options

	
 
	 
	
    8
	 

	

    Article 7. Stock Appreciation Rights

	
 
	 
	
    10
	 

	

    Article 8. Restricted Stock

	
 
	 
	
    11
	 

	

    Article 9. Restricted Stock Units

	
 
	 
	
    12
	 

	

    Article 10. Performance Shares

	
 
	 
	
    13
	 

	

    Article 11. Performance Units

	
 
	 
	
    13
	 

	

    Article 12. Cash-Based Awards and Other
    Stock-Based Awards

	
 
	 
	
    14
	 

	

    Article 13. Transferability of Awards and
    Shares

	
 
	 
	
    14
	 

	

    Article 14. Performance Measures

	
 
	 
	
    15
	 

	

    Article 15. Nonemployee Director Awards

	
 
	 
	
    16
	 

	

    Article 16. Dividend Equivalents

	
 
	 
	
    16
	 

	

    Article 17. Beneficiary Designation

	
 
	 
	
    16
	 

	

    Article 18. Rights of Participants

	
 
	 
	
    16
	 

	

    Article 19. Change of Control

	
 
	 
	
    17
	 

	

    Article 20. Amendment and Termination

	
 
	 
	
    18
	 

	

    Article 21. Withholding

	
 
	 
	
    19
	 

	

    Article 22. Successors

	
 
	 
	
    19
	 

	

    Article 23. General Provisions

	
 
	 
	
    19
	 

    

    i

Table of Contents

    The Shaw
    Group Inc.

    2008 Omnibus Incentive Plan

 

    Article 1. Establishment, Purpose and Duration

 

    1.1       Establishment.  The
    Shaw Group Inc., a Louisiana corporation (hereinafter referred
    to as the “Company”), establishes an incentive
    compensation plan to be known as The Shaw Group Inc. 2008
    Omnibus Incentive Plan (hereinafter referred to as, the
    “Plan”), as set forth in this document. This
    Plan permits the grant of Nonqualified Stock Options, Incentive
    Stock Options, Stock Appreciation Rights, Restricted Stock,
    Restricted Stock Units, Performance Shares and Other Stock-Based
    Awards. This Plan shall become effective upon shareholder
    approval (the “Effective Date”) and shall
    remain in effect as provided in Section 1.3.

 

    1.2       Purpose of this
    Plan.  The purpose of this Plan is to provide a
    means whereby Employees, Directors, and Third-Party Service
    Providers of the Company develop a sense of proprietorship and
    personal involvement in the development and financial success of
    the Company and to encourage them to devote their best efforts
    to the business of the Company, thereby advancing the interests
    of the Company and its shareholders. A further purpose of this
    Plan is to provide a means through which the Company may attract
    able individuals to become Employees or Third-Party Service
    Providers of the Company and to provide a means whereby those
    individuals upon whom the responsibilities of the successful
    administration and management of the Company are of importance
    can acquire and maintain stock ownership, thereby strengthening
    their concern for the welfare of the Company and its
    shareholders.

 

    1.3       Duration of this
    Plan.  Unless sooner terminated as provided
    herein, this Plan shall terminate ten (10) years from the
    Effective Date. After this Plan is terminated, no Awards may be
    granted but Awards previously granted shall remain outstanding
    in accordance with their applicable terms and conditions and
    this Plan’s terms and conditions.

 

    Article 2. Definitions

 

    Whenever used in this Plan, the following terms shall have the
    meanings set forth below, and when the meaning is intended, the
    initial letter of the word shall be capitalized.

 

			
	 	    2.1       
	
    “Affiliate” shall mean any corporation or other
    entity (including, but not limited to, a partnership or a
    limited liability company), that is affiliated with the Company
    through stock or equity ownership or otherwise, and is
    designated as an Affiliate for purposes of this Plan by the
    Committee.

	 
	 	    2.2       
	
    “Annual Award Limit” or “Annual Award
    Limits” have the meaning set forth in Section 4.3.

	 
	 	    2.3       
	
    “Award” means, individually or collectively, a
    grant under this Plan of Nonqualified Stock Options, Incentive
    Stock Options, SARs, Restricted Stock, Restricted Stock Units,
    Performance Shares, Performance Units, Cash-Based Awards or
    Other Stock-Based Awards, in each case subject to the terms of
    this Plan.

	 
	 	    2.4       
	
    “Award Agreement” means either (i) a
    written or electronic agreement entered into by the Company and
    a Participant setting forth the terms and provisions applicable
    to an Award granted under this Plan, including any amendment or
    modification thereof, or (ii) a written or electronic
    statement issued by the Company to a Participant describing the
    terms and provisions of such Award, including any amendment or
    modification thereof. The Committee may provide for the use of
    electronic, Internet or other non-paper Award Agreements, and
    the use of electronic, Internet or other non-paper means for the
    acceptance thereof and actions thereunder by a Participant.

	 
	 	    2.5       
	
    “Beneficial Owner” or “Beneficial
    Ownership” shall have the meaning ascribed to such term
    in
    Rule 13d-3
    of the General Rules and Regulations under the Exchange Act.

	 
	 	    2.6       
	
    “Board” or “Board of Directors”
    means the Board of Directors of the Company.

	 
	 	    2.7       
	
    “Cash-Based Award” means an Award, denominated
    in cash, granted to a Participant as described in
    Article 12.

    

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	 	    2.8       
	
    “Cause” means, unless otherwise specified in an
    Award Agreement or in an applicable employment agreement between
    the Company and a Participant, with respect to any Participant:

 

			
	 	    (a) 
	
    Willful failure to substantially perform his or her duties as an
    Employee (for reasons other than physical or mental illness) or
    Director after reasonable notice to the Participant of that
    failure;

 

			
	 	    (b) 
	
    A fraud against, or theft of property of, the Company or any
    Subsidiary or Affiliate;

	 
	 	    (c) 
	
    Conviction of, or entering into a plea of nolo contendere
    or guilty to, a felony or a misdemeanor offense involving
    violent or dishonest behavior under the laws of the United
    States or any State;

	 
	 	    (d) 
	
    Gross negligence or willful misconduct that causes, or the
    knowing failure to take reasonable and appropriate action to
    prevent, any material injury to the financial condition or
    business reputation of the Company or any Subsidiary or
    Affiliate; or

	 
	 	    (e) 
	
    A material breach of any written covenant or agreement with the
    Company or any Subsidiary or Affiliate.

 

			
	 	    2.9       
	
    “Change of Control” 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
    paragraph (b) below).

	 
	 	    (b) 
	
    Notwithstanding that the Company has not undergone a change in
    ownership under paragraph (a) above, 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
    paragraph (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.

 

			
	 	    2.10       
	
    “Code” means the U.S. Internal Revenue
    Code of 1986, as amended from time to time. For purposes of this
    Plan, references to sections of the Code shall be deemed to
    include references to any applicable regulations thereunder and
    any successor or similar provision.

	 
	 	    2.11       
	
    “Commission” means the Securities and Exchange
    Commission.

	 
	 	    2.12       
	
    “Committee” means the Compensation Committee of
    the Board or a subcommittee thereof or any other committee
    designated by the Board to administer this Plan. The members of
    the Committee shall be appointed from time to time by and shall
    serve at the discretion of the Board. If the Committee does not
    exist or cannot function for any reason, the Board may take any
    action under the Plan that would otherwise be the responsibility
    of the Committee.

    

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	 	    2.13       
	
    “Company” means The Shaw Group Inc., a
    Louisiana corporation, and any successor thereto as provided in
    Article 22.

	 
	 	    2.14       
	
    “Covered Employee” means any Employee who is or
    may become a “Covered Employee,” as defined in Code
    Section 162(m), and who is designated, either as an
    individual Employee or class of Employees, by the Committee
    within the shorter of (i) 90 days after the beginning
    of the Performance Period, or (ii) 25% of the Performance
    Period has elapsed, as a “Covered Employee” under this
    Plan for such applicable Performance Period.

	 
	 	    2.15       
	
    “Director” means any individual who is a member
    of the Board of Directors of the Company.

	 
	 	    2.16       
	
    “Disability” has the meaning assigned to such
    term in Code Section 22(e)(3).

	 
	 	    2.17       
	
    “Dividend Equivalent” means a credit, made at
    the discretion of the Committee, to the account of a Participant
    in an amount equal to the dividends paid on one Share for each
    Share represented by an Award held by such Participant

	 
	 	    2.18       
	
    “Effective Date” has the meaning set forth in
    Section 1.1.

	 
	 	    2.19       
	
    “Employee” means any individual performing
    services for the Company, an Affiliate or a Subsidiary and
    designated as an employee of the Company, the Affiliate or the
    Subsidiary on its payroll records. An Employee shall not include
    any individual during any period he or she is classified or
    treated by the Company, Affiliate or Subsidiary as an
    independent contractor, a consultant or an employee of an
    employment, consulting or temporary agency or any other entity
    other than the Company, Affiliate or Subsidiary, without regard
    to whether such individual is subsequently determined to have
    been, or is subsequently retroactively reclassified, as a
    common-law employee of the Company, Affiliate or Subsidiary
    during such period. An individual shall not cease to be an
    Employee in the case of (i) any leave of absence approved
    by the Company or (ii) transfers between locations of the
    Company or between the Company, any Affiliates or any
    Subsidiaries. For purposes of Incentive Stock Options, no such
    leave may exceed 90 days, unless reemployment upon
    expiration of such leave is guaranteed by statute or contract.
    If reemployment upon expiration of a leave of absence approved
    by the Company is not so guaranteed, then three months following
    the 91st day of such leave, any Incentive Stock Option held
    by a Participant shall cease to be treated as an Incentive Stock
    Option and shall be treated for tax purposes as a Nonqualified
    Stock Option. Neither service as a Director nor payment of a
    director’s fee by the Company shall be sufficient to
    constitute “employment” by the Company.

	 
	 	    2.20       
	
    “Exchange Act” means the Securities Exchange
    Act of 1934, as amended from time to time, or any successor act
    thereto.

	 
	 	    2.21       
	
    “Extraordinary Items” means
    (i) extraordinary, unusual
    and/or
    nonrecurring items of gain or loss; (ii) gains or losses on
    the disposition of a business; (iii) changes in tax or
    accounting regulations or laws; or (iv) the effect of a
    merger or acquisition, all of which must be identified in the
    audited financial statements, including footnotes, or the
    Management Discussion and Analysis section of the Company’s
    annual report.

	 
	 	    2.22       
	
    “Fair Market Value” or “FMV”
    means, as applied to a specific date, the price of a Share
    that is based on the opening, closing, actual, high, low or
    average selling prices of a Share reported on any established
    stock exchange or national market system including without
    limitation the New York Stock Exchange and the National Market
    System of the National Association of Securities Dealers, Inc.
    Automated Quotation System on the applicable date, the preceding
    trading day, the next succeeding trading day, or an average of
    trading days, as determined by the Committee in its discretion.
    Unless the Committee determines otherwise, Fair Market Value
    shall be deemed to be equal to the closing price of a Share on
    the most recent date on which Shares were publicly traded.

	 
	 	    2.23       
	
    “Full Value Award” means an Award other than in
    the form of an ISO, NQSO or SAR that is settled by the issuance
    of Shares.

	 
	 	    2.24       
	
    “Grant Date” means the date an Award is granted
    to a Participant pursuant to the Plan.

    

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	 	    2.25       
	
    “Grant Price” means the price established at
    the time of grant of an SAR pursuant to Article 7.

	 
	 	    2.26       
	
    “Incentive Stock Option” or “ISO”
    means an Option to purchase Shares granted under
    Article 6 to an Employee that is designated as an Incentive
    Stock Option and that is intended to meet the requirements of
    Code Section 422 or any successor provision.

	 
	 	    2.27       
	
    “Insider” shall mean an individual who is, on
    the relevant date, an officer (as defined in
    Rule 16a-1(f)
    (or any successor provision) promulgated by the Commission under
    the Exchange Act) or Director of the Company, or a more than 10%
    Beneficial Owner of any class of the Company’s equity
    securities that is registered pursuant to Section 12 of the
    Exchange Act, as determined by the Board in accordance with
    Section 16 of the Exchange Act.

	 
	 	    2.28       
	
    “Nonemployee Director” means a Director who is
    not an Employee.

	 
	 	    2.29       
	
    “Nonemployee Director Award” means any NQSO,
    SAR or Full Value Award granted, whether singly, in combination
    or in tandem, to a Participant who is a Nonemployee Director
    pursuant to such applicable terms, conditions and limitations as
    the Board or Committee may establish in accordance with this
    Plan.

	 
	 	    2.30       
	
    “Nonqualified Stock Option” or
    “NQSO” means an Option that is not intended to
    meet the requirements of Code Section 422, or that
    otherwise does not meet such requirements.

	 
	 	    2.31       
	
    “Option” means an Award granted to a
    Participant pursuant to Article 6, which Award may be an
    Incentive Stock Option or a Nonqualified Stock Option.

	 
	 	    2.32       
	
    “Option Price” means the price at which a Share
    may be purchased by a Participant pursuant to an Option.

	 
	 	    2.33       
	
    “Other Stock-Based Award” means an equity-based
    or equity-related Award not otherwise described by the terms of
    this Plan that is granted pursuant to Article 12.

	 
	 	    2.34       
	
    “Participant” means any eligible individual as
    set forth in Article 5 to whom an Award is granted.

	 
	 	    2.35       
	
    “Performance-Based Compensation” means
    compensation under an Award that is intended to satisfy the
    requirements of Code Section 162(m) for certain
    performance-based compensation paid to Covered Employees.
    Notwithstanding the foregoing, nothing in this Plan shall be
    construed to mean that an Award that does not satisfy the
    requirements for performance-based compensation under Code
    Section 162(m) does not constitute performance-based
    compensation for other purposes, including Code
    Section 409A.

	 
	 	    2.36       
	
    “Performance Measures” means measures, as
    described in Article 14, upon which performance goals are
    based and that are approved by the Company’s shareholders
    pursuant to this Plan in order to qualify Awards as
    Performance-Based Compensation.

	 
	 	    2.37       
	
    “Performance Period” means the period of time
    during which pre-established performance goals must be met in
    order to determine the degree of payout
    and/or
    vesting with respect to an Award.

	 
	 	    2.38       
	
    “Performance Share” means an Award granted to a
    Participant pursuant to Article 10.

	 
	 	    2.39       
	
    “Performance Unit” means an Award granted to a
    Participant pursuant to Article 11.

	 
	 	    2.40       
	
    “Period of Restriction” means the period when
    Restricted Stock or Restricted Stock Units are subject to a
    substantial risk of forfeiture (based on the passage of time,
    the achievement of performance goals or upon the occurrence of
    other events as determined by the Committee, in its discretion)
    as provided in Articles 8 and 9.

	 
	 	    2.41       
	
    “Person” shall have the meaning ascribed to
    such term in Section 3(a)(9) of the Exchange Act and used in
    Sections 13(d) and 14(d) thereof, including a
    “group” as defined in Section 13(d) thereof.

	 
	 	    2.42       
	
    “Plan” means The Shaw Group Inc. 2008 Omnibus
    Incentive Plan, as the same may be amended from time to time.

    

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	 	    2.43       
	
    “Plan Year” means the Company’s fiscal
    year.

	 
	 	    2.44       
	
    “Prior Plans” means The Shaw Group Inc. 2001
    Employee Incentive Compensation Plan, as amended and restated
    through November 2, 2007 and the 2005 Non-Employee Director
    Stock Incentive Plan, as amended and restated through
    November 2, 2007.

	 
	 	    2.45       
	
    “Restricted Stock” means an Award granted to a
    Participant pursuant to Article 9.

	 
	 	    2.46       
	
    “Restricted Stock Unit” means an Award granted
    to a Participant pursuant to Article 9 that represents an
    unfunded and unsecured promise to deliver Shares, some other
    form of payment, or a combination thereof in accordance with the
    terms of the applicable Award Agreement.

	 
	 	    2.47       
	
    “Share” means a share of common stock of the
    Company, no par value per share.

	 
	 	    2.48       
	
    “Stock Appreciation Right” or
    “SAR” means an Award designated as an SAR
    pursuant to the terms of Article 7.

	 
	 	    2.49       
	
    “Subsidiary” means any corporation or other
    entity, whether domestic or foreign, in which the Company has or
    obtains, directly or indirectly, an interest of more than 50% by
    reason of stock ownership or otherwise.

	 
	 	    2.50       
	
    “Third-Party Service Provider” means any
    consultant, agent, advisor or independent contractor who renders
    services to the Company, a Subsidiary or an Affiliate that
    (a) are not in connection with the offer and sale of the
    Company’s securities in a capital raising transaction and
    (b) do not directly or indirectly promote or maintain a
    market for the Company’s securities.

 

    Article 3. Administration

 

    3.1       General.  The
    Committee shall be responsible for administering this Plan,
    subject to this Article 3 and the other provisions of this
    Plan. The Committee may employ attorneys, consultants,
    accountants, agents and other individuals, any of whom may be an
    Employee, and the Committee, the Company, and its officers and
    Directors shall be entitled to rely upon the advice, opinions or
    valuations of any such individuals. All actions taken and all
    interpretations and determinations made by the Committee shall
    be final and binding upon the Participants, the Company, any
    Affiliate or Subsidiary, and all other interested individuals.

 

    3.2       Authority of the
    Committee.  Subject to any express limitations set
    forth in the Plan, the Committee shall have full and exclusive
    discretionary power and authority to take such actions as it
    deems necessary and advisable with respect to the administration
    of the Plan including, but not limited to, the following:

 

			
	 	    (a) 
	
    To determine from time to time which of the persons eligible
    under the Plan shall be granted Awards, when and how each Award
    shall be granted, what type or combination of types of Awards
    shall be granted, the provisions of each Award granted (which
    need not be identical), including the time or times when a
    person shall be permitted to receive Shares pursuant to an
    Award, and the number of Shares subject to an Award;

	 
	 	    (b) 
	
    To construe and interpret the Plan and Awards granted under it,
    and to establish, amend, and revoke rules and regulations for
    its administration. The Committee, in the exercise of this
    power, may correct any defect, omission or inconsistency in the
    Plan or in an Award Agreement, in a manner and to the extent it
    shall deem necessary or expedient to make the Plan fully
    effective;

	 
	 	    (c) 
	
    To approve forms of Award Agreements for use under the Plan;

	 
	 	    (d) 
	
    To determine Fair Market Value of a Share in accordance with
    Section 2.19 of the Plan;

	 
	 	    (e) 
	
    To amend the Plan or any Award Agreement as provided in the Plan;

	 
	 	    (f) 
	
    To adopt sub-plans
    and/or
    special provisions applicable to stock awards regulated by the
    laws of a jurisdiction other than and outside of the United
    States. Such sub-plans
    and/or
    special provisions may take precedence over other provisions of
    the Plan, but unless otherwise superseded by the terms of such
    sub-plans
    and/or
    special provisions, the provisions of the Plan shall govern;

    

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	 	    (g) 
	
    To authorize any person to execute on behalf of the Company any
    instrument required to effect the grant of an Award previously
    granted by the Board;

	 
	 	    (h) 
	
    To determine whether Awards will be settled in shares of common
    stock, cash or in any combination thereof;

	 
	 	    (i) 
	
    To determine whether Awards will be adjusted for Dividend
    Equivalents;

	 
	 	    (j) 
	
    To establish a program whereby Participants designated by the
    Committee may reduce compensation otherwise payable in cash in
    exchange for Awards under the Plan;

	 
	 	    (k) 
	
    To authorize a program permitting eligible Participants to
    surrender outstanding Awards in exchange for newly granted
    Awards;

	 
	 	    (l) 
	
    To impose such restrictions, conditions or limitations as it
    determines appropriate as to the timing and manner of any
    resales by a Participant or other subsequent transfers by a
    Participant of any Shares, including, without limitation,
    (i) restrictions under an insider trading policy and
    (ii) restrictions as to the use of a specified brokerage
    firm for such resales or other transfers; and

	 
	 	    (m) 
	
    To provide, either at the time an Award is granted or by
    subsequent action, that an Award shall contain as a term
    thereof, a right, either in tandem with the other rights under
    the Award or as an alternative thereto, of the Participant to
    receive, without payment to the Company, a number of Shares,
    cash or a combination thereof, the amount of which is determined
    by reference to the value of Shares.

 

    3.3       Delegation.  The
    Committee may delegate to one or more of its members or to one
    or more officers of the Company or any Subsidiary or Affiliate
    or to one or more agents or advisors such administrative duties
    or powers as it may deem advisable, and the Committee or any
    individuals to whom it has delegated duties or powers as
    aforesaid may employ one or more individuals to render advice
    with respect to any responsibility the Committee or such
    individuals may have under this Plan. The Committee may, by
    resolution, authorize one or more officers of the Company to do
    one or both of the following on the same basis as can the
    Committee: (a) designate Employees to be recipients of
    Awards; and (b) determine the size of any such Awards;
    provided, however, (i) the Committee shall
    not delegate such responsibilities to any such officer for
    Awards granted to an Employee who is considered an Insider;
    (ii) the resolution providing such authorization sets forth
    the total number of Awards such officer(s) may grant; and
    (iii) the officer(s) shall report periodically to the
    Committee regarding the nature and scope of the Awards granted
    pursuant to the authority delegated.

 

    Article 4. Shares Subject to This Plan and Maximum
    Awards

 

    4.1       Number of Shares
    Authorized and Available for Awards.  The number
    of Shares authorized and available for Awards under the Plan
    shall be determined in accordance with the following provisions:

 

			
	 	    (a) 
	
    Subject to adjustment as provided in Section 4.4 of the
    Plan, the maximum number of Shares available for issuance under
    the Plan shall be 4.5 million Shares plus the number of
    Shares subject to Awards outstanding under the Prior Plans as of
    Effective Date but only to the extent that such outstanding
    Awards are forfeited, expire or otherwise terminate without the
    issuance of such Shares. To the extent that a Share is issued
    pursuant to the grant or exercise of a Full Value Award, it
    shall reduce the number of Shares reserved under the Plan by
    1.57 Shares, and to the extent that a Share is issued
    pursuant to the grant or exercise of an Award other than a Full
    Value Award, it shall reduce the number of Shares reserved under
    the Plan by 1.00 Share.

	 
	 	    (b) 
	
    The maximum number of Shares that may be issued pursuant to ISOs
    under the Plan shall be 4.5 million Shares.

 

    4.2       Share
    Usage.  Shares covered by an Award shall be
    counted as used only to the extent they are actually issued;
    provided, however, the full number of Stock
    Appreciation Rights granted that are to be settled by the
    issuance of Shares shall be counted against the number of Shares
    available for award under the Plan, regardless of the number of
    Shares actually issued upon settlement of such Stock
    Appreciation Rights and the full number of Options granted that
    are exercised and settled by the issuance of Shares shall be
    counted against the number of Shares available for award under
    the Plan, regardless of the number of Shares actually issued
    upon exercise of such

    

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    Options. Further, any Shares withheld to satisfy tax withholding
    obligations on Awards issued under the Plan and Shares tendered
    to pay the exercise price of Awards under the Plan will no
    longer be eligible to be returned as available Shares under the
    Plan. Any Shares related to Awards under this Plan that
    terminate by expiration, forfeiture, cancellation or otherwise
    without the issuance of the Shares, are settled in cash in lieu
    of Shares, or are exchanged with the Committee’s
    permission, prior to the issuance of Shares, for Awards not
    involving Shares shall be available again for grant under this
    Plan. The Shares available for issuance under this Plan may be
    authorized and unissued Shares or treasury Shares.

 

    4.3       Annual Award
    Limits.  Unless and until the Committee determines
    that an Award to a Covered Employee shall not be designed to
    qualify as Performance-Based Compensation, the following limits,
    as adjusted pursuant to Sections 4.4 and 20.2, shall apply
    to grants of such Awards under this Plan:

 

			
	 	    (a) 
	
    Options and SARs:  The maximum aggregate number
    of Shares subject to Options and SARs granted to any one
    Participant in any one Plan Year shall be 2.5 million.

	 
	 	    (c) 
	
    Restricted Stock and Restricted Stock
    Units:  The maximum aggregate number of Shares
    subject to Restricted Stock and Restricted Stock Units granted
    to any one Participant in any one Plan Year shall be 500,000.

	 
	 	    (e) 
	
    Performance Units:  The maximum aggregate
    amount awarded or credited with respect to Performance Units to
    any one Participant in any one Plan Year may not exceed
    $2,000,000 determined as of the date of payout.

	 
	 	    (f) 
	
    Performance Shares:  The maximum aggregate
    number of Shares subject to Performance Shares that a
    Participant may receive in any one Plan Year shall be
    100,000 Shares determined as of the date of payout.

	 
	 	    (g) 
	
    Cash-Based Awards:  The maximum aggregate
    amount awarded or credited with respect to Cash-Based Awards to
    any one Participant in any one Plan Year may not exceed
    $10 million determined as of the date of payout.

	 
	 	    (h) 
	
    Other Stock-Based Awards:  The maximum
    aggregate number of Shares subject to an Other Stock-Based
    Awards to any one Participant in any one Plan Year may not
    exceed 100,000 Shares determined as of the date of payout.

 

    4.4       Adjustments in
    Authorized Shares.  Adjustment in authorized
    Shares available for issuance under the Plan or under an
    outstanding Award and adjustments in Annual Award Limits shall
    be subject to the following provisions:

 

			
	 	    (a) 
	
    In the event of any corporate event or transaction (including,
    but not limited to, a change in the Shares of the Company or the
    capitalization of the Company), such as a merger, consolidation,
    reorganization, recapitalization, separation, partial or
    complete liquidation, stock dividend, stock split, reverse stock
    split, split up, spin-off or other distribution of stock or
    property of the Company, combination of Shares, exchange of
    Shares, dividend in kind or other like change in capital
    structure, number of outstanding Shares or distribution (other
    than normal cash dividends) to shareholders of the Company, or
    any similar corporate event or transaction, the Committee, in
    order to prevent dilution or enlargement of Participants’
    rights under this Plan, shall substitute or adjust, as
    applicable, the number and kind of Shares that may be issued
    under this Plan or under particular forms of Awards, the number
    and kind of Shares subject to outstanding Awards, the Option
    Price or Grant Price applicable to outstanding Awards, the
    Annual Award Limits and other value determinations applicable to
    outstanding Awards; provided that the Committee, in its
    sole discretion, shall determine the methodology or manner of
    making such substitution or adjustment.

	 
	 	    (b) 
	
    The Committee, in its sole discretion, may also make appropriate
    adjustments in the terms of any Awards under this Plan to
    reflect or related to such changes or distributions and to
    modify any other terms of outstanding Awards, including
    modifications of performance goals and changes in the length of
    Performance Periods.

    

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	 	    (c) 
	
    The determination of the Committee as to the foregoing
    adjustments, if any, shall be conclusive and binding on
    Participants under this Plan.

	 
	 	    (d) 
	
    Subject to the provisions of Article 19 and notwithstanding
    anything else herein to the contrary, without affecting the
    number of Shares reserved or available hereunder, the Committee
    may authorize the issuance or assumption of benefits under this
    Plan in connection with any merger, consolidation, acquisition
    of property or stock or reorganization upon such terms and
    conditions as it may deem appropriate, subject to compliance
    with the rules under Code Sections 422 and 424, as and where
    applicable.

 

    Article 5. Eligibility and Participation

 

    5.1       Eligibility.  Individuals
    eligible to participate in this Plan include all Employees,
    Directors and Third-Party Service Providers.

 

    5.2       Actual
    Participation.  Subject to the provisions of this
    Plan, the Committee may, from time to time, select from all
    eligible individuals, those individuals to whom Awards shall be
    granted and shall determine, in its sole discretion, the nature
    of, any and all terms permissible by law, and the amount of each
    Award.

 

    Article 6. Stock Options

 

    6.1       Grant of
    Options.  Subject to the terms and provisions of
    this Plan, an Option may be granted to a Participant in such
    number, and upon such terms, and at any time and from time to
    time as shall be determined by the Committee, in its sole
    discretion.

 

    6.2       Option Award
    Agreement.  Each Option grant shall be evidenced
    by an Award Agreement that shall specify the Option Price, the
    term of the Option, the number of Shares to which the Option
    pertains, the conditions upon which the Option shall become
    vested and exercisable, and such other provisions as the
    Committee shall determine that are not inconsistent with the
    terms of this Plan. The Award Agreement also shall specify
    whether the Option is intended to be an ISO or an NQSO.

 

    6.3       Option
    Price.  The Option Price for each grant of an
    Option shall be determined by the Committee in its sole
    discretion and shall be specified in the Award Agreement;
    provided, however, the Option Price must be at
    least equal to 100% of the FMV of a Share as of the
    Option’s Grant Date, subject to adjustment as provided for
    under Section 4.4.

 

    6.4       Term of
    Option.  The term of an Option granted to a
    Participant shall be determined by the Committee, in its sole
    discretion; provided, however, no Option shall be exercisable
    later than the tenth anniversary date of its grant.
    Notwithstanding the foregoing, for Nonqualified Stock Options
    granted to Participants outside the United States, the Committee
    has the authority to grant Nonqualified Stock Options that have
    a term greater than ten years.

 

    6.5       Exercise of
    Option.  An Option shall be exercisable at such
    times and be subject to such restrictions and conditions as the
    Committee shall in each instance approve, which terms and
    restrictions need not be the same for each grant or for each
    Participant.

 

    6.6       Payment.  An
    Option shall be exercised by the delivery of a notice of
    exercise to the Company or an agent designated by the Company in
    a form specified or accepted by the Committee, or by complying
    with any alternative procedures that may be authorized by the
    Committee, setting forth the number of Shares with respect to
    which the Option is to be exercised, accompanied by full payment
    for the Shares. A condition of the issuance of the Shares as to
    which an Option shall be exercised shall be the payment of the
    Option Price. The Option Price of any exercised Option shall be
    payable to the Company in accordance with one of the following
    methods:

 

			
	 	    (a) 
	
    In cash or its equivalent;

	 
	 	    (b) 
	
    By tendering (either by actual delivery or attestation)
    previously acquired Shares having an aggregate Fair Market Value
    at the time of exercise equal to the Option Price;

	 
	 	    (c) 
	
    By a cashless (broker-assisted) exercise;

    

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	 	    (d) 
	
    By any combination of (a), (b) and (c); or

	 
	 	    (e) 
	
    Any other method approved or accepted by the Committee in its
    sole discretion.

 

    Subject to any governing rules or regulations, as soon as
    practicable after receipt of written notification of exercise
    and full payment (including satisfaction of any applicable tax
    withholding), the Company shall deliver to the Participant
    evidence of book entry Shares, or upon the Participant’s
    request, Share certificates in an appropriate amount based upon
    the number of Shares purchased under the Option. Unless
    otherwise determined by the Committee, all payments under all of
    the methods indicated above shall be paid in United States
    dollars or Shares, as applicable.

 

    6.7       Termination of
    Employment.  Each Award Agreement shall set forth
    the extent to which a Participant shall have the right to
    exercise an Option following termination of the
    Participant’s employment or provision of services to the
    Company or any Affiliate or Subsidiary, as the case may be. Such
    provisions shall be determined in the sole discretion of the
    Committee, shall be included in the Award Agreement entered into
    with each Participant, need not be uniform among all Options,
    and may reflect distinctions based on the reasons for
    termination.

 

    6.8       Special
    Rules Regarding ISOs.  Notwithstanding any
    provision of the Plan to the contrary, an Option granted in the
    form of an ISO to a Participant shall be subject to the
    following rules:

 

			
	 	    (a) 
	
    Special ISO definitions:

 

			
	 	    (i) 
	
    “Parent Corporation” shall mean as of any applicable
    date a corporation in respect of the Company that is a parent
    corporation within the meaning of Code Section 424(e).

	 
	 	    (ii) 
	
    “ISO Subsidiary” shall mean as of any applicable date
    any corporation in respect of the Company that is a subsidiary
    corporation within the meaning of Code Section 424(f).

	 
	 	    (iii) 
	
    A “10% Owner” is an individual who owns stock
    possessing more than ten percent (10%) of the total combined
    voting power of all classes of stock of the Company or its
    Parent Corporation or any ISO Subsidiary.

 

			
	 	    (b) 
	
    Eligible employees.  An ISO may be granted
    solely to eligible Employees of the Company, Parent Corporation,
    or ISO Subsidiary.

	 
	 	    (c) 
	
    Specified as an ISO.  An Award Agreement
    evidencing the grant of an ISO shall specify that such grant is
    intended to be an ISO.

	 
	 	    (d) 
	
    Option price.  The Option Price of an ISO
    granted shall be determined by the Committee in its sole
    discretion and shall be specified in the Award Agreement;
    provided, however, the Option Price must be at least equal 100%
    of the Fair Market Value of a Share as of the ISO’s Grant
    Date (in the case of 10% owners, the Option Price may not be not
    less than 110% of such Fair Market Value), subject to adjustment
    provided for under Section 4.4.

	 
	 	    (e) 
	
    Right to exercise.  Any ISO granted to a
    Participant shall be exercisable during his or her lifetime
    solely by such Participant.

	 
	 	    (f) 
	
    Exercise period. The period during which a Participant
    may exercise an ISO shall not exceed ten years (five years in
    the case of a Participant who is a 10% owner) from the date on
    which the ISO was granted.

	 
	 	    (g) 
	
    Termination of employment.  In the event a
    Participant terminates employment due to death or Disability,
    the Participant (or, in the case of death, the person(s) to whom
    the Option is transferred by will or the laws of descent and
    distribution) shall have the right to exercise the
    Participant’s ISO award during the period specified in the
    applicable Award Agreement solely to the extent the Participant
    had the right to exercise the ISO on the date of his death or
    Disability; as applicable, provided, however that such period
    may not exceed one year from the date of such termination of
    employment or if shorter, the remaining term of the ISO. In the
    event a Participant terminates employment for reasons other than
    death or disability, the Participant shall have the right to
    exercise the Participant’s ISO during the period specified
    in the applicable Award Agreement solely to the extent the
    Participant had the right to

    

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    exercise the ISO on the date of such termination of employment;
    provided, however, that such period may not exceed
    three months from the date of such termination of employment or
    if shorter, the remaining term of the ISO.

 

			
	 	    (h) 
	
    Dollar limitation.  To the extent that the
    aggregate Fair Market Value of (a) the Shares with respect
    to which Options designated as Incentive Stock Options plus
    (b) the shares of stock of the Company, Parent Corporation
    and any ISO Subsidiary with respect to which other Incentive
    Stock Options are exercisable for the first time by a holder of
    an ISO during any calendar year under all plans of the Company
    and any Affiliate and Subsidiary exceeds $100,000, such Options
    shall be treated as Nonqualified Stock Options. For purposes of
    the preceding sentence, (a) Options shall be taken into
    account in the order in which they were granted, and
    (b) the Fair Market Value of the Shares shall be determined
    as of the time the Option or other incentive stock option is
    granted.

 

			
	 	    (i) 
	
    Duration of plan.  No ISO may be granted more
    than ten years after the earlier of (a) adoption of this
    Plan by the Board and (b) the Effective Date.

	 
	 	    (j) 
	
    Notification of disqualifying disposition.  If
    any Participant shall make any disposition of Shares issued
    pursuant to the exercise of an ISO, such Participant shall
    notify the Company of such disposition within 30 days
    thereof. The Company shall use such information to determine
    whether a disqualifying disposition as described in Code
    section 421(b) has occurred.

 

			
	 	    (k) 
	
    Transferability.  No ISO may be sold,
    transferred, pledged, assigned or otherwise alienated or
    hypothecated, other than by will or by the laws of descent and
    distribution; provided, however, at the discretion
    of the Committee, an ISO may be transferred to a grantor trust
    under which Participant making the transfer is the sole
    beneficiary.

 

    Article 7. Stock Appreciation Rights

 

    7.1       Grant of
    SARs.  Subject to the terms and conditions of this
    Plan, an SAR may be granted to a Participant in such number, and
    upon such terms, and at any time and from time to time as shall
    be determined by the Committee, in its sole discretion.

 

    7.2       SAR Award
    Agreement.  Each SAR Award shall be evidenced by
    an Award Agreement that shall specify the Grant Price, the term
    of the SAR, the number of shares to which the SAR pertains, the
    conditions upon which the SAR shall become vested and
    exercisable, and such other provisions as the Committee shall
    determine that are not inconsistent with the terms of this Plan.

 

    7.3       Grant
    Price.  The Grant Price for each grant of an SAR
    shall be determined by the Committee and shall be specified in
    the Award Agreement; provided, however, the Grant
    Price must be at least equal to 100% of the FMV of a Share as of
    the Grant Date, subject to adjustment as provided for under
    Section 4.4.

 

    7.4       Term of
    SAR.  The term of an SAR granted to a Participant
    shall be determined by the Committee, in its sole discretion;
    provided, however, no SAR shall be exercisable
    later than the tenth anniversary date of its grant.
    Notwithstanding the foregoing, for SARs granted to Participants
    outside the United States, the Committee has the authority to
    grant SARs that have a term greater than ten years.

 

    7.5       Exercise of
    SAR.  An SAR shall be exercisable at such times
    and be subject to such restrictions and conditions as the
    Committee shall in each instance approve, which terms and
    restrictions need not be the same for each grant or for each
    Participant.

 

    7.6       Notice of
    Exercise.  An SAR shall be exercised by the
    delivery of a notice of exercise to the Company or an agent
    designated by the Company in a form specified or accepted by the
    Committee, or by complying with any alternative procedures that
    may be authorized by the Committee, setting forth the number of
    Shares with respect to which the SAR is to be exercised.

    

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    7.7       Settlement of
    SARs.  Upon the exercise of an SAR, pursuant to a
    notice of exercise properly completed and submitted to the
    Company in accordance with Section 7.6, a Participant shall
    be entitled to receive payment from the Company in an amount
    equal to the product of (a) and (b) below:

 

			
	 	    (a) 
	
    The excess of the Fair Market Value of a Share on the date of
    exercise over the Grant Price.

	 
	 	    (b) 
	
    The number of Shares with respect to which the SAR is exercised.

 

    7.8       Form of
    Payment.  Payment, if any, with respect to an SAR
    settled in accordance with Section 7.7 of the Plan shall be
    made in accordance with the terms of the applicable Award
    Agreement. If payment is made in Shares, then subject to any
    governing rules or regulations, as soon as practicable after
    receipt of written notification of exercise (including
    satisfaction of any applicable tax withholding), the Company
    shall deliver to the Participant evidence of book entry Shares,
    or upon the Participant’s request, Share certificates in an
    appropriate amount based upon the number of Shares issued under
    the SAR.

 

    7.9       Termination of
    Employment.  Each Award Agreement shall set forth
    the extent to which a Participant shall have the right to
    exercise the SAR following termination of the Participant’s
    employment with or provision of services to the Company or any
    Affiliate or Subsidiary, as the case may be. Such provisions
    shall be determined in the sole discretion of the Committee,
    shall be included in the Award Agreement entered into with
    Participants, need not be uniform among all SARs issued pursuant
    to this Article 7, and may reflect distinctions based on
    the reasons for termination.

 

    Article 8. Restricted Stock

 

    8.1       Grant of
    Restricted Stock.  Subject to the terms and
    provisions of this Plan, Restricted Stock may be granted to a
    Participant in such number, and upon such terms, and at any time
    and from time to time as shall be determined by the Committee,
    in its sole discretion.

 

    8.2       Restricted Stock
    Award Agreement.  Each Restricted Stock grant
    shall be evidenced by an Award Agreement that shall specify the
    number of Shares of Restricted Stock granted, the Period of
    Restriction, and such other provisions as the Committee shall
    determine that are not inconsistent with the terms of this Plan.

 

    8.3       Other
    Restrictions.  The Committee shall impose such
    other conditions or restrictions on any grant of Restricted
    Stock granted as it may deem advisable including, without
    limitation, one or more of the following:

 

			
	 	    (a) 
	
    A requirement that a Participant pay a stipulated purchase price
    for each Share of Restricted Stock;

	 
	 	    (b) 
	
    Restrictions based upon the achievement of specific performance
    goals;

	 
	 	    (c) 
	
    Time-based restrictions on vesting following the attainment of
    the performance goals;

	 
	 	    (d) 
	
    Time-based restrictions; or

	 
	 	    (e) 
	
    Restrictions under applicable laws and restrictions under the
    requirements of any stock exchange or market on which such
    Shares are listed or traded.

 

    8.4       Issuance of
    Shares.  To the extent deemed appropriate by the
    Committee, the Company may retain the certificates representing
    Shares of Restricted Stock in the Company’s possession
    until such time as all conditions or restrictions applicable to
    such Shares have been satisfied or lapse. Shares of Restricted
    Stock covered by each Restricted Stock grant shall become freely
    transferable by the Participant after all conditions and
    restrictions applicable to such Shares have been satisfied or
    lapsed (including satisfaction of any applicable tax withholding
    obligations); provided that subject to any governing
    rules or regulations, as soon as practicable after such Shares
    become freely transferable, the Company shall deliver to the
    Participant evidence of book entry Shares, or upon the
    Participant’s request, Share certificates in an appropriate
    amount.

 

    8.5       Certificate
    Legend.  In addition to any legends placed on
    certificates pursuant to Section 8.3, each certificate
    representing Shares of Restricted Stock granted pursuant to this
    Plan may bear a legend such as the following or as otherwise
    determined by the Committee in its sole discretion: The
    sale or transfer of Shares of stock represented by this
    certificate, whether voluntary, involuntary, or by operation of
    law, is subject to certain 

    

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    restrictions on transfer as set forth in The Shaw Group
    Inc. 2008 Omnibus Incentive Plan, and in the associated Award
    Agreement. A copy of this Plan and such Award Agreement may be
    obtained from The Shaw Group Inc.

 

    8.6       Voting
    Rights.  Unless otherwise determined by the
    Committee and set forth in a Participant’s Award Agreement,
    to the extent permitted or required by law, as determined by the
    Committee, a Participant holding Shares of Restricted Stock
    granted hereunder may be granted the right to exercise full
    voting rights with respect to those Shares during the Period of
    Restriction.

 

    8.7       Termination of
    Employment.  Each Award Agreement shall set forth
    the extent to which a Participant shall vest in or forfeit a
    Restricted Stock grant following termination of the
    Participant’s employment with or provision of services to
    the Company or any Affiliate or Subsidiary, as the case may be.
    Such provisions shall be determined in the sole discretion of
    the Committee, shall be included in the Award Agreement entered
    into with each Participant, need not be uniform among all Shares
    of Restricted Stock and may reflect distinctions based on the
    reasons for termination.

 

    Article 9. Restricted Stock Units

 

    9.1       Grant of
    Restricted Stock Units.  Subject to the terms and
    provisions of this Plan, Restricted Stock Units may be granted
    to a Participant in such number, and upon such terms, and at any
    time and from time to time as shall be determined by the
    Committee, in its sole discretion. A grant of a Restricted Stock
    Unit or Restricted Stock Units shall not represent the grant of
    Shares but shall represent a promise to deliver a corresponding
    number of Shares based upon the completion of service,
    performance conditions, or such other terms and conditions as
    specified in the applicable Award Agreement over the Restriction
    Period.

 

    9.2       Restricted Stock
    Unit Award Agreement.  Each grant of Restricted
    Stock Units shall be evidenced by an Award Agreement that shall
    specify the number of the number of Restricted Stock Units
    granted, the Period of Restriction, and such other provisions as
    the Committee shall determine that are not inconsistent with the
    terms of this Plan.

 

    9.3       Other
    Restrictions.  The Committee shall impose such
    other conditions or restrictions on any grant of Restricted
    Stock Units as it may deem advisable including, without
    limitation, one or more of the following:

 

			
	 	    (a) 
	
    A requirement that a Participant pay a stipulated purchase price
    for each Restricted Stock Unit;

	 
	 	    (b) 
	
    Restrictions based upon the achievement of specific performance
    goals;

	 
	 	    (c) 
	
    Time-based restrictions on vesting following the attainment of
    the performance goals;

	 
	 	    (d) 
	
    Time-based restrictions; and/or

	 
	 	    (e) 
	
    Restrictions under applicable laws or under the requirements of
    any stock exchange on which Shares are listed or traded.

 

    9.4       Voting
    Rights.  A Participant shall have no voting rights
    with respect to any Restricted Stock Units granted hereunder.

 

    9.5       Settlement and
    Payment Restricted Stock Units.  Unless otherwise
    elected by the Participant or otherwise provided for in the
    Award Agreement, Restricted Stock Units shall be settled upon
    the date such Restricted Stock Units vest. Such settlement may
    be made in Shares, cash or a combination thereof, as specified
    in the Award Agreement. If Restricted Stock Units are settled in
    Shares, then as soon as practicable following the date of
    settlement the Company shall deliver to the Participant evidence
    of book entry Shares, or upon the Participant’s request,
    Share certificates in an appropriate amount.

 

    9.6       Termination of
    Employment.  Each Award Agreement shall set forth
    the extent to which a Participant shall vest in or forfeit
    Restricted Stock Units following termination of the
    Participant’s employment with or provision of services to
    the Company or any Affiliate or Subsidiary, as the case may be.
    Such provisions shall be determined in the sole discretion of
    the Committee, shall be included in the Award Agreement entered
    into with each Participant, need not be uniform among all grants
    of Restricted Stock Units, and may reflect distinctions based on
    the reasons for termination.

    

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    Article 10. Performance Shares

 

    10.1       Grant of
    Performance Shares.  Subject to the terms and
    provisions of this Plan, Performance Shares may be granted to a
    Participant in such number, and upon such terms and at any time
    and from time to time as shall be determined by the Committee,
    in its sole discretion.

 

    10.2       Performance
    Share Award Agreement.  Each grant of Performance
    Shares shall be evidenced by an Award Agreement that shall
    specify the number of Performance Shares granted, the
    Performance Period over which such Performance Shares may be
    earned, the applicable performance measures and performance
    goals and such other provisions as the Committee shall determine
    that are not inconsistent with the terms of this Plan.

 

    10.3       Value of
    Performance Shares.  Each Performance Share shall
    have an initial value equal to the Fair Market Value of a Share
    on the Grant Date. The Committee shall set performance goals in
    its discretion that, depending on the extent to which they are
    met over the specified Performance Period, shall determine the
    number of Performance Shares that shall be paid to a Participant.

 

    10.4       Earning of
    Performance Shares.  After the applicable
    Performance Period has ended, the number of Performance Shares
    earned by the Participant over the Performance Period shall be
    determined as a function of the extent to which the applicable
    corresponding performance goals have been achieved. This
    determination shall be made solely by the Committee.

 

    10.5       Form and Timing
    of Payment of Performance Shares.  The Committee
    shall pay at the close of the applicable Performance Period, or
    as soon as practicable thereafter, any earned Performance Shares
    in the form of cash or in Shares or in a combination thereof, as
    specified in a Participant’s Award Agreement. Any Shares
    paid to a Participant under this Section 10.5 may be
    subject to any restrictions deemed appropriate by the Committee.
    If Performance Shares are settled in Shares, then as soon as
    practicable following the date of settlement the Company shall
    deliver to the Participant evidence of book entry Shares, or
    upon the Participant’s request, Share certificates in an
    appropriate amount.

 

    10.6       Termination of
    Employment.  Each Award Agreement shall set forth
    the extent to which a Participant shall vest in or forfeit
    Performance Shares following termination of the
    Participant’s employment with or provision of services to
    the Company or any Affiliate or Subsidiary, as the case may be.
    Such provisions shall be determined in the sole discretion of
    the Committee, shall be included in the Award Agreement entered
    into with each Participant, need not be uniform among all Awards
    of Performance Shares issued pursuant to this Plan, and may
    reflect distinctions based on the reasons for termination.

 

    Article 11. Performance Units

 

    11.1       Grant of
    Performance Units.  Subject to the terms and
    provisions of this Plan, Performance Units may be granted to a
    Participant in such number, and upon such terms and at any time
    and from time to time as shall be determined by the Committee,
    in its sole discretion.

 

    11.2       Performance
    Share Award Agreement.  Each grant of Performance
    Units shall be evidenced by an Award Agreement that shall
    specify the number of Performance Shares granted, the
    Performance Period over which such Performance Units may be
    earned, the applicable performance measures and performance
    goals and such other provisions as the Committee shall determine
    that are consistent with the terms of this Plan.

 

    11.3       Value of
    Performance Units.  Each Performance Unit shall
    have an initial notional value equal to a dollar amount
    determined by the Committee, in its sole discretion. The
    Committee shall set performance goals in its discretion that,
    depending on the extent to which they are met over the specified
    Performance Period, will determine the number of Performance
    Units that shall be settled and paid to the Participant.

 

    11.4       Earning of
    Performance Units.  After the applicable
    Performance Period has ended, the number of Performance Shares
    earned by the Participant over the Performance Period shall be
    determined as a function of the extent to which the applicable
    corresponding performance goals have been achieved. This
    determination shall be made solely by the Committee.

 

    11.5       Form and Timing
    of Payment of Performance Units.  The Committee
    shall pay at the close of the applicable Performance Period, or
    as soon as practicable thereafter, any earned Performance Units
    in the form of

    

    13

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    cash or in Shares or in a combination thereof, as specified in a
    Participant’s Award Agreement. Any Shares paid to a
    Participant under this Section 11.5 may be subject to any
    restrictions deemed appropriate by the Committee. If Performance
    Units are settled in Shares, then as soon as practicable
    following the date of settlement the Company shall deliver to
    the Participant evidence of book entry Shares, or upon the
    Participant’s request, Share certificates in an appropriate
    amount.

 

    11.6       Termination of
    Employment.  Each Award Agreement shall set forth
    the extent to which a Participant shall vest in or forfeit
    Performance Shares following termination of the
    Participant’s employment with or provision of services to
    the Company or any Affiliate or Subsidiary, as the case may be.
    Such provisions shall be determined in the sole discretion of
    the Committee, shall be included in the Award Agreement entered
    into with each Participant, need not be uniform among all Awards
    of Performance Shares issued pursuant to this Plan, and may
    reflect distinctions based on the reasons for termination.

 

    Article 12. Cash-Based Awards and Other Stock-Based
    Awards

 

    12.1       Other
    Cash-Based and Stock-Based Awards.  The Committee
    may grant other types of equity-based or equity-related Awards
    not otherwise described by the terms of this Plan (including the
    grant or offer for sale of unrestricted Shares) in such amounts
    and subject to such terms and conditions, as the Committee shall
    determine. Such Awards may involve the transfer of actual Shares
    to Participants, or payment in cash or otherwise of amounts
    based on the value of Shares. In addition, the Committee, at any
    time and from time to time, may grant Cash-Based Awards to a
    Participant in such amounts and upon such terms as the Committee
    shall determine, in its sole discretion.

 

    12.2       Value of
    Cash-Based Awards and Other Stock-Based
    Awards.  Each Other Stock-Based Award shall be
    expressed in terms of Shares or units based on Shares, as
    determined by the Committee, in its sole discretion. Each
    Cash-Based Award shall specify a payment amount or payment range
    as determined by the Committee, in its sole discretion. If the
    Committee exercises its discretion to establish performance
    goals, the value of Cash-Based Awards that shall be paid to the
    Participant will depend on the extent to which such performance
    goals are met.

 

    12.3       Payment of
    Cash-Based Awards and Other Stock-Based
    Awards.  Payment, if any, with respect to
    Cash-Based Awards and Other Stock-Based Award shall be made in
    accordance with the terms of the Award, in cash or Shares as the
    Committee determines.

 

    12.4       Termination of
    Employment.  The Committee shall determine the
    extent to which the Participant shall vest in or forfeit
    Cash-Based Awards and Other Stock-Based Awards following
    termination of the Participant’s employment with or
    provision of services to the Company or any Affiliate or
    Subsidiary, as the case may be. Such provisions shall be
    determined in the sole discretion of the Committee and may be
    included in an agreement entered into with each Participant, but
    need not be uniform among all Cash-Based Awards or Other
    Stock-Based Awards, and may reflect distinctions based on the
    reasons for termination.

 

    Article 13. Transferability of Awards and Shares

 

    13.1       Transferability
    of Awards.  Except as provided in
    Section 13.2, during a Participant’s lifetime, Options
    shall be exercisable only by the Participant. Awards shall not
    be transferable other than by will or the laws of descent and
    distribution or, subject to the consent of the Committee,
    pursuant to a domestic relation order entered into by a court of
    competent jurisdiction; no Awards shall be subject, in whole or
    in part, to attachment, execution or levy of any kind; and any
    purported transfer in violation of this Section 13.1 shall
    be null and void. The Committee may establish such procedures as
    it deems appropriate for a Participant to designate a
    beneficiary to whom any amounts payable or Shares deliverable in
    the event of, or following, the Participant’s death may be
    provided.

 

    13.2       Committee
    Action.  Except as provided in
    Section 6.8(k), the Committee may, in its discretion,
    determine that notwithstanding Section 13.1, any or all
    Awards shall be transferable, without compensation to the
    transferor, to and exercisable by such transferees, and subject
    to such terms and conditions, as the Committee may deem
    appropriate; provided, however, no Award may be
    transferred for value without shareholder approval.

 

    13.3       Restrictions on
    Share Transferability.  The Committee may impose
    such restrictions on any Shares acquired by a Participant under
    the Plan as it may deem advisable, including, without
    limitation, minimum holding

    

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    period requirements, restrictions under applicable federal
    securities laws, under the requirements of any stock exchange or
    market upon which such Shares are then listed or traded or under
    any blue sky or state securities laws applicable to such Shares.

 

    Article 14. Performance Measures

 

    14.1       Performance
    Measures.  The performance goals upon which the
    payment or vesting of an Award to a Covered Employee that is
    intended to qualify as Performance-Based Compensation shall be
    limited to the following Performance Measures:

 

			
	 	    (a) 
	
    Net earnings or net income (before or after taxes);

	 
	 	    (b) 
	
    Earnings per share;

	 
	 	    (c) 
	
    Net sales or revenue growth;

	 
	 	    (d) 
	
    Net operating profit;

	 
	 	    (e) 
	
    Return measures (including, but not limited to, return on
    assets, capital, invested capital, equity, sales, or revenue);

	 
	 	    (f) 
	
    Cash flow (including, but not limited to, operating cash flow,
    free cash flow, cash flow return on equity, and cash flow return
    on investment);

	 
	 	    (g) 
	
    Earnings before or after taxes, interest, depreciation,
    and/or
    amortization;

	 
	 	    (h) 
	
    Gross or operating margins;

	 
	 	    (i) 
	
    Productivity ratios;

	 
	 	    (j) 
	
    Share price (including, but not limited to, growth measures and
    total shareholder return);

	 
	 	    (k) 
	
    Expense targets;

	 
	 	    (l) 
	
    Cost reduction or savings;

	 
	 	    (m) 
	
    Performance against operating budget goals;

	 
	 	    (n) 
	
    Margins;

	 
	 	    (o) 
	
    Operating efficiency;

	 
	 	    (p) 
	
    Market share;

	 
	 	    (q) 
	
    Customer satisfaction;

	 
	 	    (r) 
	
    Working capital targets;

	 
	 	    (s) 
	
    Economic value added or
    EVA®

    (net operating profit after tax minus the sum of capital
    multiplied by the cost of capital);

	 
	 	    (t) 
	
    Completion of securities offering; and

	 
	 	    (u) 
	
    Completion of corporate refinancing.

 

    Any Performance Measure(s) may be used to measure the
    performance of the Company, any Subsidiary or Affiliate as a
    whole or any business unit of the Company, any Subsidiary or
    Affiliate or any combination thereof, as the Committee may deem
    appropriate, or any of the above Performance Measures as
    compared to the performance of a group of comparator companies,
    or published or special index that the Committee, in its sole
    discretion, deems appropriate. The Committee also has the
    authority to provide for accelerated vesting of any Award based
    on the achievement of performance goals pursuant to the
    Performance Measures specified in this Article 14.

 

    14.2       Evaluation of
    Performance.  The Committee may provide in any
    such Award that any evaluation of performance may include or
    exclude any of the following events that occurs during a
    Performance Period: (a) asset write-downs,
    (b) litigation or claim judgments or settlements,
    (c) the effect of changes in tax laws, accounting

    

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    principles, or other laws or provisions affecting reported
    financial results, (d) any reorganization and restructuring
    programs, (e) Extraordinary Items, (f) acquisitions or
    divestitures, and (g) foreign exchange gains and losses. To
    the extent such inclusions or exclusions affect Awards to
    Covered Employees, they shall be prescribed in a form that meets
    the requirements of Code Section 162(m) for deductibility.

 

    14.3       Adjustment of
    Performance-Based Compensation.  Awards that are
    intended to qualify as Performance-Based Compensation may not be
    adjusted upward. The Committee shall retain the discretion to
    adjust such Awards downward, either on a formula or
    discretionary basis or any combination, as the Committee
    determines, in its sole discretion.

 

    14.4       Committee
    Discretion.  In the event that applicable tax or
    securities laws change to permit Committee discretion to alter
    the governing Performance Measures without obtaining shareholder
    approval of such changes, the Committee shall have sole
    discretion to make such changes without obtaining shareholder
    approval. In addition, in the event that the Committee
    determines that it is advisable to grant Awards that shall not
    qualify as Performance-Based Compensation, the Committee may
    make such grants without satisfying the requirements of Code
    Section 162(m) and base vesting on Performance Measures
    other than those set forth in Section 14.1.

 

    Article 15. Nonemployee Director Awards

 

    15.1       Awards to
    Nonemployee Directors.  The Board or Committee
    shall determine and approve all Awards to Nonemployee Directors.
    The terms and conditions of any grant of any Award to a
    Nonemployee Director shall be set forth in an Award Agreement.

 

    15.2       Awards in Lieu
    of Fees.  The Board or Committee may permit a
    Nonemployee Director the opportunity to receive an Award in lieu
    of payment of all or a portion of future director fees
    (including but not limited to cash retainer fees and meeting
    fees) or other types Awards pursuant to such terms and
    conditions as the Board or Committee may prescribe and set forth
    in an applicable sub-plan or Award Agreement.

 

    Article 16. Dividend Equivalents

 

    The Committee may grant dividend equivalents to a Participant
    based on the dividends declared on Shares that are subject to
    any Award granted to the Participant with such dividend
    equivalents credited to the Participant as of the applicable
    dividend payment dates that occur during a period determined by
    the Committee. Such dividend equivalents shall be converted to
    and paid in cash or additional Shares or Awards by such formula
    and at such time and subject to such limitations as may be
    determined by the Committee. Notwithstanding any provision to
    the contrary, the Committee shall not grant dividend equivalents
    to a Participant based on dividends declared on Shares that are
    subject to any Options or SARs granted to the Participant.

 

    Article 17. Beneficiary Designation

 

    Each Participant under this Plan may, from time to time, name
    any beneficiary or beneficiaries (who may be named contingently
    or successively) to whom any benefit under this Plan is to be
    paid in case of his death before he receives any or all of such
    benefit. Each such designation shall revoke all prior
    designations by the same Participant, shall be in a form
    prescribed by the Committee, and will be effective only when
    filed by the Participant in writing with the Company during the
    Participant’s lifetime. In the absence of any such
    beneficiary designation, benefits remaining unpaid or rights
    remaining unexercised at the Participant’s death shall be
    paid to or exercised by the Participant’s executor,
    administrator or legal representative.

 

    Article 18. Rights of Participants

 

    18.1       Employment.  Nothing
    in this Plan or an Award Agreement shall (a) interfere with
    or limit in any way the right of the Company, any Subsidiary or
    Affiliate, to terminate any Participant’s employment with
    the Company, any Subsidiary or Affiliate at any time or for any
    reason not prohibited by law or (b) confer upon any
    Participant any right to continue his employment or service as a
    Director or Third-Party Service Provider for any specified
    period of time. Neither an Award nor any benefits arising under
    this Plan shall constitute an employment contract with the
    Company or any Subsidiary or Affiliate and, accordingly, subject
    to Articles 3 and 20, this Plan and the benefits hereunder
    may be terminated at any time in the sole and exclusive
    discretion of the Committee without giving rise to any liability
    on the part of the Company, any Subsidiary or Affiliate.

    

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    18.2       Participation.  No
    individual shall have the right to be selected to receive an
    Award under this Plan, or, having been so selected, to be
    selected to receive a future Award.

 

    18.3       Rights as a
    Shareholder.  Except as otherwise provided herein,
    a Participant shall have none of the rights of a shareholder
    with respect to Shares covered by any Award until the
    Participant becomes the record holder of such Shares.

 

    Article 19. Change of Control

 

    19.1       Change of
    Control of the Company.  Notwithstanding any other
    provision of this Plan to the contrary, the provisions of this
    Article 19 shall apply in the event of a Change of Control,
    unless otherwise determined by the Committee in connection with
    the grant of an Award as reflected in the applicable Award
    Agreement.

 

			
	 	    (a) 
	
    Outstanding Options and SARs exchanged for Replacement
    Awards.  Upon a Change of Control, if an Award
    meeting the requirements of Section 19.2 (a
    “Replacement Award”) is provided to a
    Participant to replace the Participant’s then outstanding
    Options or Stock Appreciation Rights (the “Replaced
    Award”), then the Replaced Award shall be deemed
    cancelled and shall have no further force or effect and the
    Company shall have no further obligation with respect to the
    Replaced Award.

	 
	 	    (b) 
	
    Outstanding Options and SARs not exchanged for Replacement
    Awards.  Upon a Change of Control, to the extent a
    Participant’s then-outstanding Options and Stock
    Appreciation Rights are not exchanged for Replacement Awards as
    provided for in paragraph (a) above, then such Options and
    Stock Appreciation Rights shall immediately become fully vested
    and exercisable.

	 
	 	    (c) 
	
    Service-Based Outstanding Awards other than Options and
    SARs.  Upon a Change of Control, all
    then-outstanding Awards, other than Options and SARs, that are
    not vested and as to which vesting depends solely on the
    satisfaction of a service obligation by a Participant to the
    Company, or any Subsidiary or Affiliate shall vest in full and
    be free of restrictions related to the vesting or
    transferability of such Awards.

	 
	 	    (d) 
	
    Other Awards.  Upon a Change of Control, the
    treatment of then-outstanding Awards not subject to
    subparagraphs (a), (b), or (c) above shall be determined by
    the terms and conditions set forth in the applicable Award
    Agreement.

	 
	 	    (e) 
	
    Committee Discretion Regarding Treatment of Awards Not
    Exchanged for Replacement Awards. Except to the extent that
    a Replacement Award is provided to the Participant, the
    Committee may, in its sole discretion:

 

			
	 	    (i) 
	
    Determine that any or all outstanding Awards granted under the
    Plan, whether or not exercisable or vested, shall be canceled
    and terminated and that in connection with such cancellation and
    termination the holder of such Award may receive for each Share
    of Common Stock subject to such Awards a cash payment (or the
    delivery of shares of stock, other securities or a combination
    of cash, stock and securities equivalent to such cash payment)
    equal to the excess, if any, of the consideration received by
    shareholders of the Company in respect of a Share of Common
    Stock in connection with such transaction over the purchase
    price per Share, if any, under such Award multiplied by the
    number of Shares of Common Stock subject to such Award;
    provided that if such product is zero or less, the Awards
    shall be canceled and terminated without payment
    therefore, or

 

			
	 	      (ii) 
	
    Provide that the period to exercise Options or Stock
    Appreciation Rights shall be extended (but not beyond the
    expiration date of such Option or Stock Appreciation Right).

 

    19.2       Replacement
    Awards.  An Award shall qualify as a Replacement
    Award if: (i) it has a value at least equal to the value of
    the Replaced Award as determined by the Committee in its sole
    discretion; (ii) it relates to publicly traded equity
    securities of the Company or its successor in the Change of
    Control or another entity that is affiliated with the Company or
    its successor following the Change of Control; and
    (iii) its other terms and conditions are not less favorable
    to the Participant than the terms and conditions of the Replaced
    Award (including the

    

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    provisions that would apply in the event of a subsequent Change
    of Control). Without limiting the generality of the foregoing,
    the Replacement Award may take the form of a continuation of the
    Replaced Award if the requirements of the preceding sentence are
    satisfied. The determination of whether the conditions of this
    Section 19.2 are satisfied shall be made by the Committee,
    as constituted immediately before the Change of Control, in its
    sole discretion.

 

    19.3       Termination of
    Employment.  Upon a termination of employment of a
    Participant occurring in connection with or during the period of
    two years after such Change of Control, other than for Cause,
    (i) all Replacement Awards held by the Participant shall
    become fully vested and (if applicable) exercisable and free of
    restrictions, and (ii) all Options and Stock Appreciation
    Rights held by the Participant immediately before the
    termination of employment that the Participant held as of the
    date of the Change of Control or that constitute Replacement
    Awards shall remain exercisable for not less than one year
    following such termination or until the expiration of the stated
    term of such Option or Stock Appreciation Right, whichever
    period is shorter; provided that if the applicable Award
    Agreement provides for a longer period of exercisability, that
    provision shall control.

 

    Article 20. Amendment and Termination

 

    20.1       Amendment and
    Termination of the Plan.

 

			
	 	    (a)     
	
    Subject to subparagraphs (b) and (c) of this
    Section 20.1 and Section 20.3 of the Plan, the Board
    may at any time terminate the Plan.

 

			
	 	    (b)     
	
    Except as provided for in Section 4.4, the terms of an
    outstanding Award may not be amended to reduce the Option Price
    of an outstanding Option or to reduce the Grant Price of an
    outstanding SAR or cancel an outstanding Option or SAR in
    exchange for cash, other Awards or Options or SARs with an
    Option Price or Grant Price, as applicable, that is less than
    the Option Price of the cancelled Option or the Grant Price of
    the cancelled SAR without shareholder approval.

 

			
	 	    (c)     
	
    Notwithstanding the foregoing, no amendment of this Plan shall
    be made without shareholder approval if shareholder approval is
    required pursuant to rules promulgated by any stock exchange or
    quotation system on which Shares are listed or quoted or by
    applicable U.S. state corporate laws or regulations,
    applicable U.S. federal laws or regulations and the
    applicable laws of any foreign country or jurisdiction where
    Awards are, or will be, granted under the Plan.

 

			
	 	    20.2       
	
    Adjustment of Awards Upon the Occurrence of Certain Unusual
    or Nonrecurring Events. Subject to Section 14.3, the
    Committee may make adjustments in the terms and conditions of,
    and the criteria included in, Awards in recognition of unusual
    or nonrecurring events (including, without limitation, the
    events described in Section 4.4) affecting the Company or
    the financial statements of the Company or of changes in
    applicable laws, regulations, or accounting principles, whenever
    the Committee determines that such adjustments are appropriate
    in order to prevent unintended dilution or enlargement of the
    benefits or potential benefits intended to be made available
    under this Plan. The determination of the Committee as to the
    foregoing adjustments, if any, shall be conclusive and binding
    on Participants under this Plan. By accepting an Award under
    this Plan, a Participant agrees to any adjustment to the Award
    made pursuant to this Section 20.2 without further
    consideration or action.

 

    20.3       Awards
    Previously Granted.  Notwithstanding any other
    provision of this Plan to the contrary, other than
    Sections 20.2 and 20.4, no termination or amendment of this
    Plan or an Award Agreement shall adversely affect in any
    material way any Award previously granted under this Plan,
    without the written consent of the Participant holding such
    Award.

 

    20.4       Amendment to
    Conform to Law.  Notwithstanding any other
    provision of this Plan to the contrary, the Committee may amend
    the Plan or an Award Agreement, to take effect retroactively or
    otherwise, as deemed necessary or advisable for the purpose of
    conforming the Plan or an Award Agreement to any law relating to
    plans of this or similar nature, and to the administrative
    regulations and rulings promulgated thereunder. By accepting an
    Award under this Plan, a Participant agrees to any amendment
    made pursuant to this Section 20.4 to the Plan and any
    Award without further consideration or action.

    

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    Article 21. Withholding

 

    21.1       Tax
    Withholding.  The Company shall have the power and
    the right to deduct or withhold, or require a Participant to
    remit to the Company, the minimum statutory amount to satisfy
    applicable federal, state, and local tax withholding
    requirements, domestic or foreign, with respect to any taxable
    event arising as a result of this Plan but in no event shall
    such deduction or withholding or remittance exceed the minimum
    statutory withholding requirements.

 

    21.2       Share
    Withholding.  With respect to withholding required
    upon the exercise of Options or SARs, upon the lapse of
    restrictions on Restricted Stock, upon the settlement of
    Restricted Stock Units, or upon the achievement of performance
    goals related to Performance Shares, or any other taxable event
    arising as a result of an Award granted hereunder (collectively
    and individually referred to as a “Share Payment”), a
    Participant may elect, subject to the approval of the Committee,
    to satisfy the withholding requirement, in whole or in part, by
    having the Company withhold from a Share Payment the number of
    Shares having a Fair Market Value on the date the withholding is
    to be determined equal to the minimum statutory withholding
    requirement but in no event shall such withholding exceed the
    minimum statutory withholding requirement. All such elections
    shall be irrevocable, made in writing, and signed by the
    Participant, and shall be subject to any restrictions or
    limitations that the Committee, in its sole discretion, deems
    appropriate.

 

    Article 22. Successors

 

    All obligations of the Company under this Plan with respect to
    Awards granted hereunder shall be binding on any successor to
    the Company, whether the existence of such successor is the
    result of a direct or indirect purchase, merger, consolidation,
    or otherwise, of all or substantially all of the business
    and/or
    assets of the Company.

 

    Article 23. General Provisions

 

    23.1       Forfeiture
    Events.

 

			
	 	    (a) 
	
    The Committee may specify in an Award Agreement that the
    Participant’s rights, payments and benefits with respect to
    an Award shall be subject to reduction, cancellation, forfeiture
    or recoupment upon the occurrence of certain specified events,
    in addition to any otherwise applicable vesting of an Award.
    Such events may include, but shall not be limited to,
    termination of employment for Cause, termination of the
    Participant’s provision of services to the Company,
    Affiliate or Subsidiary, violation of material Company,
    Affiliate or Subsidiary policies, breach of noncompetition,
    confidentiality or other restrictive covenants that may apply to
    the Participant, or other conduct by the Participant that is
    detrimental to the business or reputation of the Company, any
    Affiliate or Subsidiary.

	 
	 	    (b) 
	
    If any of the Company’s financial statements are required
    to be restated resulting from errors, omissions, or fraud, the
    Committee may (in its sole discretion, but acting in good
    faith), but shall not be obligated to, direct that the Company
    recover all or a portion of any Award granted or paid to a
    Participant with respect to any fiscal year of the Company the
    financial results of which are negatively affected by such
    restatement. The amount to be recovered from the Participant
    shall be the amount by which the Award exceeded the amount that
    would have been payable to the Participant had the financial
    statements been initially filed as restated, or any greater or
    lesser amount (including, but not limited to, the entire Award)
    that the Committee shall determine. In no event shall the amount
    to be recovered by the Company be less than the amount required
    to be repaid or recovered as a matter of law (including but not
    limited to amounts that are required to be recovered or
    forfeited under Section 304 of the Sarbanes-Oxley Act of
    2002). The Committee shall determine whether the Company shall
    effect any such recovery: (i) by seeking repayment from the
    Participant, (ii) by reducing (subject to applicable law
    and the terms and conditions of the applicable plan, program or
    arrangement) the amount that would otherwise be payable to the
    Participant under any compensatory plan, program or arrangement
    maintained by the Company, an Affiliate or any Subsidiary,
    (iii) by withholding payment of future increases in
    compensation (including the payment of any discretionary bonus
    amount) or grants of compensatory awards that would otherwise
    have been made in accordance with the Company’s otherwise
    applicable compensation practices or (iv) by any
    combination of the foregoing.

    

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    23.2       Legend.  The
    certificates for Shares may include any legend that the
    Committee deems appropriate to reflect any restrictions on
    transfer of such Shares.

 

    23.3       Gender and
    Number.  Except where otherwise indicated by the
    context, any masculine term used herein also shall include the
    feminine, the plural shall include the singular, and the
    singular shall include the plural.

 

    23.4       Severability.  In
    the event any provision of this Plan shall be held illegal or
    invalid for any reason, the illegality or invalidity shall not
    affect the remaining parts of this Plan, and this Plan shall be
    construed and enforced as if the illegal or invalid provision
    had not been included.

 

    23.5       Requirements of
    Law.  The granting of Awards and the issuance of
    Shares under this Plan shall be subject to all applicable laws,
    rules, and regulations, and to such approvals by any
    governmental agencies or national securities exchanges as may be
    required.

 

    23.6       Delivery of
    Title.  The Company shall have no obligation to
    issue or deliver evidence of title for Shares issued under this
    Plan prior to:

 

			
	 	    (a) 
	
    Obtaining any approvals from governmental agencies that the
    Company determines are necessary or advisable; and

	 
	 	    (b) 
	
    Completion of any registration or other qualification of the
    Shares under any applicable national or foreign law or ruling of
    any governmental body that the Company determines to be
    necessary or advisable.

 

    23.7       Inability to
    Obtain Authority.  The inability of the Company to
    obtain authority from any regulatory body having jurisdiction,
    which authority is deemed by the Company’s counsel to be
    necessary to the lawful issuance and sale of any Shares
    hereunder, shall relieve the Company of any liability in respect
    of the failure to issue or sell such Shares as to which such
    requisite authority shall not have been obtained.

 

    23.8       Investment
    Representations.  The Committee may require any
    individual receiving Shares pursuant to an Award under this Plan
    to represent and warrant in writing that the individual is
    acquiring the Shares for investment and without any present
    intention to sell or distribute such Shares.

 

    23.9       Employees Based
    Outside of the United States.  Notwithstanding any
    provision of this Plan to the contrary, in order to comply with
    the laws in other countries in which the Company, its
    Affiliates,
    and/or its
    Subsidiaries operate or have Employees, Directors or Third-Party
    Service Providers, the Committee, in its sole discretion, shall
    have the power and authority to:

 

			
	 	    (a) 
	
    Determine which Affiliates and Subsidiaries shall be covered by
    this Plan;

	 
	 	    (b) 
	
    Determine which Employees, Directors or Third-Party Service
    Providers outside the United States are eligible to participate
    in this Plan;

	 
	 	    (c) 
	
    Modify the terms and conditions of any Award granted to
    Employees, Directors or Third-Party Service Providers outside
    the United States to comply with applicable foreign laws;

	 
	 	    (d) 
	
    Establish subplans and modify exercise procedures and other
    terms and procedures, to the extent such actions may be
    necessary or advisable. Any subplans and modifications to Plan
    terms and procedures established under this Section 20.9 by
    the Committee shall be attached to this Plan document as
    appendices; and

	 
	 	    (e) 
	
    Take any action, before or after an Award is made, that it deems
    advisable to obtain approval or comply with any necessary local
    government regulatory exemptions or approvals.

 

    Notwithstanding the above, the Committee may not take any
    actions hereunder, and no Awards shall be granted, that would
    violate applicable law.

 

    23.10       Uncertificated
    Shares.  To the extent that this Plan provides for
    issuance of certificates to reflect the transfer of Shares, the
    transfer of such Shares may be effected on a noncertificated
    basis, to the extent not prohibited by applicable law or the
    rules of any stock exchange.

    

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    23.11       Unfunded
    Plan.  Participants shall have no right, title or
    interest whatsoever in or to any investments that the Company,
    its Subsidiaries or its Affiliates may make to aid it in meeting
    its obligations under this Plan. Nothing contained in this Plan,
    and no action taken pursuant to its provisions, shall create or
    be construed to create a trust of any kind, or a fiduciary
    relationship between the Company and any Participant,
    beneficiary, legal representative or any other individual. To
    the extent that any individual acquires a right to receive
    payments from the Company or any Affiliate or Subsidiary under
    this Plan, such right shall be no greater than the right of an
    unsecured general creditor of the Company or the Subsidiary or
    Affiliate, as the case may be. All payments to be made hereunder
    shall be paid from the general funds of the Company, or the
    Subsidiary or Affiliate, as the case may be, and no special or
    separate fund shall be established, and no segregation of assets
    shall be made to assure payment of such amounts except as
    expressly set forth in this Plan.

 

    23.12       No Fractional
    Shares.  No fractional Shares shall be issued or
    delivered pursuant to this Plan or any Award. The Committee
    shall determine whether cash, Awards, or other property shall be
    issued or paid in lieu of fractional Shares or whether such
    fractional Shares or any rights thereto shall be forfeited or
    otherwise eliminated.

 

    23.13       Retirement and
    Welfare Plans.  Neither Awards made under this
    Plan nor Shares or cash paid pursuant to such Awards may be
    included as “compensation” for purposes of computing
    the benefits payable to any Participant under the Company’s
    or any Subsidiary’s or Affiliate’s retirement plans
    (both qualified and nonqualified) or welfare benefit plans
    unless such other plan expressly provides that such compensation
    shall be taken into account in computing a Participant’s
    benefit.

 

    23.14       Deferred
    Compensation.  If a Participant is a
    “specified employee” as defined under Code
    Section 409A and the Participant’s Award is to be
    settled on account of the Participant’s separation from
    service (for reasons other than death) and such Award
    constitutes “deferred compensation” as defined under
    Code Section 409A, then any portion of the
    Participant’s Award that would otherwise be settled during
    the six-month period commencing on the Participant’s
    separation from service shall be settled as soon as practicable
    following the conclusion of the six-month period (or following
    the Participant’s death if it occurs during such six-month
    period).

 

    23.15       Nonexclusivity
    of this Plan.  The adoption of this Plan shall not
    be construed as creating any limitations on the power of the
    Board or Committee to adopt such other compensation arrangements
    as it may deem desirable for any Participant.

 

    23.16       No Constraint
    on Corporate Action.  Nothing in this Plan shall
    be construed to: (i) limit, impair, or otherwise affect the
    Company’s or a Subsidiary’s or an Affiliate’s
    right or power to make adjustments, reclassifications,
    reorganizations or changes of its capital or business structure,
    or to merge or consolidate, or dissolve, liquidate, sell or
    transfer all or any part of its business or assets; or,
    (ii) limit the right or power of the Company or a
    Subsidiary or an Affiliate to take any action that such entity
    deems to be necessary or appropriate.

 

    23.17       Governing
    Law.  The Plan and each Award Agreement shall be
    governed by the laws of the State of, Louisiana excluding any
    conflicts or choice of law rule or principle that might
    otherwise refer construction or interpretation of this Plan to
    the substantive law of another jurisdiction. Unless otherwise
    provided in the Award Agreement, recipients of an Award under
    this Plan are deemed to submit to the exclusive jurisdiction and
    venue of the federal or state courts of Louisiana to resolve any
    and all issues that may arise out of or relate to this Plan or
    any related Award Agreement.

 

    23.18       Delivery and
    Execution of Electronic Documents.  To the extent
    permitted by applicable law, the Company may (i) deliver by
    email or other electronic means (including posting on a web site
    maintained by the Company or by a third party under contract
    with the Company) all documents relating to the Plan or any
    Award thereunder (including without limitation, prospectuses
    required by the Commission) and all other documents that the
    Company is required to deliver to its security holders
    (including without limitation, annual reports and proxy
    statements) and (ii) permit Participant’s to
    electronically execute applicable Plan documents (including, but
    not limited to, Award Agreements) in a manner prescribed to the
    Committee.

 

    23.19       No
    Representations or Warranties Regarding Tax
    Effect.  Notwithstanding any provision of the Plan
    to the contrary, the Company, its Affiliates, and Subsidiaries,
    the Board and the Committee neither represent nor warrant the
    tax treatment under any federal, state, local, or foreign laws
    and regulations thereunder (individually and collectively
    referred to as the “Tax Laws”) of any Award
    granted or any amounts paid to any Participant under

    

    21

Table of Contents

    the Plan including, but not limited to, when and to what extent
    such Awards or amounts may be subject to tax, penalties and
    interest under the Tax Laws.

 

    23.20       Indemnification.  Subject
    to requirements of Louisiana law, each individual who is or
    shall have been a member of the Board, or a Committee appointed
    by the Board, or an officer of the Company to whom authority was
    delegated in accordance with Article 3, shall be
    indemnified and held harmless by the Company against and from
    any loss, cost, liability, or expense that may be imposed upon
    or reasonably incurred by him or her in connection with or
    resulting from any claim, action, suit or proceeding to which he
    or she may be a party or in which he or she may be involved by
    reason of any action taken or failure to act under this Plan and
    against and from any and all amounts paid by him or her in
    settlement thereof, with the Company’s approval, or paid by
    him or her in satisfaction of any judgment in any such action,
    suit, or proceeding against him or her, provided he or she shall
    give the Company an opportunity, at its own expense, to handle
    and defend the same before he or she undertakes to handle and
    defend it on
    his/her own
    behalf, unless such loss, cost, liability or expense is a result
    of his/her
    own willful misconduct or except as expressly provided by
    statute. The foregoing right of indemnification shall not be
    exclusive of any other rights of indemnification to which such
    individuals may be entitled under the Company’s Articles of
    Incorporation or Bylaws, as a matter of law or otherwise, or any
    power that the Company may have to indemnify them or hold them
    harmless.

    

    22exv10w9

Exhibit 10.9

INCENTIVE STOCK OPTION AGREEMENT

The Shaw Group Inc.

2008 Omnibus Incentive Plan

     This Incentive Stock Option Agreement (“Agreement”) dated as of Grant Date (the date on which
the option evidenced hereby was granted) is entered into between The Shaw Group Inc. (the
“Company”) and Award Recipient (the “Optionee”), pursuant to the The Shaw Group Inc. 2008 Omnibus
Incentive 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 # Options 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 $price per share (the fair market value per share on
the date of grant of the Option).

     2. Exercise of Option.

          (a) Subject to earlier expiration of the Option as set forth below and in the Plan, the Option
shall be exercisable for more than a percentage of the aggregate number of shares subject to the
Option in accordance with the following schedule:

	 	 	 	 	 
	 	 	Percentage of Shares that may be
	Vesting Dates	 	Purchased
	1st Vesting Date
	 	 	25	%
	2nd Vesting Date
	 	 	50	%
	3rd Vesting Date
	 	 	75	%
	4th Vesting Date
	 	 	100	%

          (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. Acceleration in the Event of Death of Optionee. Notwithstanding anything to the
contrary in this Agreement or in the Plan, and pursuant to the express authority granted to the
Committee under the Plan, the Committee and the Optionee hereby agree that the vesting period for
any unexpired Option under this Agreement shall immediately accelerate upon Optionee’s death, and
in the event of death, any such Option shall be immediately exercisable in full by Optionee’s
appropriate representative(s).

     5. 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.

     6. 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.

-2-

 

          (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 6(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.

          (j) 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.

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.

 	 
	 	 	/s/ Clifton S. Rankin
 	 
	 	 	     By: Clifton S. Rankin 	 
	 	 	Title:  	Secretary and General Counsel 	 
	 
	 	OPTIONEE:

 	 
	 	 	 
	 	Grant Recipient	 
	 	 	 

-3-

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