Document:

EX-10.1

 AMENDED & RESTATED EMPLOYMENT AGREEMENT

This Amended & Restated Employment Agreement (this “Agreement”) is entered into
December 31, 2008, but is effective as of January 1, 2008 (the “Effective Date”), by and
between The Shaw Group Inc., a Louisiana corporation (collectively with its affiliates and
subsidiaries hereinafter referred to as “Company”), and J.M. Bernhard, Jr.
(“Employee”). The Company and Employee may hereinafter be referred to, individually, as a
“Party” and, collectively, as the “Parties”.

WHEREAS, the Company and Employee are parties to that certain Employment Agreement dated as of
January 23, 2007 (the “Original Agreement”); and

WHEREAS, the Company and Employee desire to amend certain provisions of the Original Agreement
and to restate the Original Agreement in its entirety.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, and
agreements contained herein, and for other valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Parties agree as follows:

1. Employment. The Company continues to employ Employee, and Employee hereby agrees
to continued employment by the Company, on the terms and conditions set forth in this Agreement.

2. Term of Employment. Subject to the provisions for earlier termination provided in
Section 7 of this Agreement, the term of this Agreement (the “Term”) shall be three (3)
years, commencing on the Effective Date, and shall be automatically renewed on each day following
the Effective Date so that on any given day the unexpired portion of the Term shall be three (3)
years.

3. Employee’s Duties.

(a) During the Term, Employee shall serve as the Chairman of the Board of Directors, President
& Chief Executive Officer of the Company, with such duties and responsibilities as may from time to
time be assigned to him by the Board of Directors of the Company (the “Board”), provided
that such duties are consistent with the customary duties of such position.

(b) Employee agrees to devote a substantial amount of his attention and time during normal
business hours to the business and affairs of the Company and to use reasonable best efforts to
perform faithfully and efficiently his duties and responsibilities. Employee shall not be
prohibited from making financial investments in any other company or business or from serving on
the board of directors of any other company, so long as such does not interfere with Employee’s
fiduciary duties to the Company. Employee shall at all times observe and comply with all lawful
directions and instructions of the Board.

(c) Employee’s place of business shall be at the Company’s principal executive offices in
Baton Rouge, Louisiana.

4. Compensation.

(a) Base Compensation. For services rendered by Employee under this Agreement, the
Company shall pay to Employee a base salary (“Base Compensation”) as set by the Board,
payable in accordance with the Company’s customary pay periods and subject to customary
withholdings. Employee’s Base Compensation shall be reviewed by the Board on an annual basis as of
the close of each fiscal year of the Company and may be increased as the Board may deem
appropriate. In the event the Board deems it appropriate to increase Employee’s Base Compensation,
that increased amount shall thereafter be the Base Compensation for the purposes of this Agreement.
Employee’s Base Compensation, as increased from time to time, may not thereafter be decreased
unless agreed to by Employee in writing.

(b) Bonus. Nothing contained herein shall prevent the Board from paying additional
compensation to Employee in the form of bonuses or otherwise during the Term. Employee shall be
entitled to participate in and receive bonus awards under any bonus program established by the
Company for its management or key personnel. In the absence of or in addition to such a program,
Employee shall be entitled to receive such bonus, if any, as may be determined from time to time by
the Board in its discretionary and sole judgment based on merit and the Company’s performance.

(c) Long Term Incentives. Nothing contained herein shall prevent the Board from paying
additional compensation to Employee in the form of options, restricted shares or units or other
similar awards (“Long Term Incentives”) under any Company plan during the Term. Employee
shall be entitled to participate in and receive Long Term Incentives under any program established
by the Company for its management or key personnel.

5. Additional Benefits. In addition to the compensation provided for in Section 4
herein, Employee shall be entitled to the following:

(a) Expenses. The Company shall, in accordance with any rules and policies that it
may establish from time to time for executive officers, reimburse Employee for business expenses
reasonably incurred in the performance of his duties. The Company shall also reimburse Employee
for membership and initiation fees for clubs the Board deems reasonable in order for Employee to
carry out the duties set forth herein and, at the Board’s discretion, provide Employee a mid-size
jet aircraft (which shall mean a jet aircraft comparable to or better than the jet aircraft
currently being used by Employee as of the Effective Date) for his personal use and benefit.
Requests for reimbursement for all business expenses must be accompanied by appropriate
documentation.

(b) Automobile Allowance. The Company shall provide Employee, for his business
and private use, with an automobile suitable to Employee’s position. In addition, the Company
shall either directly pay or reimburse Employee for all costs of operating and maintaining such
automobile, including insurance thereon in accordance with Company policies.

(c) Vacation. Employee shall be entitled to a reasonable period of vacation per year
at his discretion, but not less than 5 weeks, without any loss of compensation or benefits.
Employee shall be entitled to carry forward any unused vacation time.

(d) General Benefits. Employee and Employee’s spouse and dependents shall be entitled
to participate in the various employee benefit plans or programs provided to employees (and their
families) of the Company in general, including, but not limited to, health, dental, disability,
accident and life insurance plans and 401k plans, subject to the eligibility requirements with
respect to each of such benefit plans or programs, and such other benefits or perquisites as may be
approved by the Board during the Term. Nothing in this Section 5(d) shall be deemed to prohibit
the Company from making any changes in any of the plans, programs or benefits described in this
Section 5(d), provided the change similarly affects all executive officers (and their families) of
the Company that are similarly situated.

6. Reserved.

7. Termination.

(a) This Agreement may be terminated prior to the expiration of its Term only under the terms
and conditions set forth below:

(i) Resignation (other than for Good Reason). Employee may resign his position
at any time, including by reason of retirement, by providing written notice of resignation
to the Company. In the event of such resignation, except in the case of resignation for
Good Reason (as defined below), this Agreement shall terminate on the Date of Termination
(defined in Section 7(c) below), and Employee shall not be entitled to further compensation
pursuant to this Agreement other than (A) the payment of any Base Compensation and General
Benefits (e.g., unused vacation, unreimbursed business expenses, etc.) accrued and unpaid as
of the Date of Termination, and (B) payments and benefits due under Section 8(a).

(ii) Death. If Employee’s employment is terminated due to his death, the
Company shall pay to Employee’s surviving spouse or estate (in accordance with applicable
law), subject to customary withholdings, not later than 30 days after Employee’s death, (A)
any Base Compensation and General Benefits accrued and unpaid as of the date of Employee’s
death, (B) a lump sum amount, in cash, equal to one year of Employee’s Base Compensation,
(C) to the extent that, but for his death, Employee would have otherwise been entitled to a
bonus under any bonus plan then maintained by the Company, or to the extent that other
officers or Company executives are awarded bonuses or otherwise in the discretion of the
Board, a lump sum amount, in cash, equal to a pro rata bonus for the year of his death, (D)
a lump sum amount, in cash, equal to the amount due under Section 8(a)(i), as a death
benefit, and (E) a lump sum amount, in cash, equal to the cost for Employee to obtain, for
the period commencing on the Date of Termination and ending on the date that is 30 months
following the Date of Termination, health and dental insurance benefits covering Employee
and Employee’s spouse and dependents that are substantially similar to those that Employee
(and Employee’s spouse and dependents) were receiving immediately prior to the Date of
Termination. Notwithstanding any provision to the contrary in the plan(s) governing such
Long Term Incentives, Employee shall also be considered as immediately and totally vested in
any and all Long Term Incentives previously granted to Employee by Company prior to the Date
of Termination that have not previously vested in full. After all payments, benefits and
vesting of Long Term Incentives specified under this Section 7(a)(ii) have been paid or
performed, this Agreement shall terminate, and the Company shall have no obligations to
Employee or his legal representatives with respect to this Agreement.

(iii) Discharge.

(A) The Company may terminate Employee’s employment for any reason at any time
upon written notice thereof delivered to Employee in accordance with Section 7(b).

(B) In the event that Employee’s employment is terminated during the Term by
the Company for any reason other than his Misconduct or Disability (both as defined
below), the following shall occur:

(I) the Company shall pay to Employee, subject to customary
withholdings, not later than 15 days after the Date of Termination:

(x) a lump sum amount, in cash, equal to the product of (1) the
sum of (a) Employee’s Base Compensation as in effect immediately
prior to the Date of Termination, plus (b) Employee’s highest
bonus paid by the Company during the three years immediately prior to
the Date of Termination, multiplied by (2) 3.0;

(y) the amount due under Section 8(a)(i); and

(z) a lump sum amount, in cash, equal to the cost for Employee
to obtain, for the three year period commencing on the Date of
Termination, disability, accident, dental and health insurance
benefits (“Welfare Benefits”) covering Employee (and, as applicable,
Employee’s spouse and dependents) and other benefits provided to
Employee that, in each case, are substantially similar to those that
Employee (and/or Employee’s spouse and dependents) were receiving
immediately prior to the Date of Termination; and

(II) notwithstanding any provision to the contrary in the plan(s)
governing such Long Term Incentives, Employee shall be considered as
immediately and totally vested in any and all Long Term Incentives
previously granted to Employee by the Company prior to the Date of
Termination.

(C) Notwithstanding anything to the contrary in this Agreement, in the event
Employee is terminated because of Misconduct, the Company shall have no obligations
pursuant to this Agreement after the Date of Termination other than the payment of
any Base Compensation and General Benefits accrued and unpaid through the Date of
Termination and the payment due under Section 8(a)(i). As used herein,
“Misconduct” means:

(I) the continued failure by Employee to substantially perform his
duties with the Company (other than any such failure resulting from
Employee’s incapacity due to a Disability or any such actual or anticipated
failure after the issuance of a Notice of Termination by Employee for Good
Reason), after a written demand for substantial performance is delivered to
Employee by the Board, which demand specifically identifies the manner in
which the Board believes that Employee has not substantially performed his
duties and allows such 30 days for Employee to effect any potential cure,

(II) the engaging by Employee in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise (other than
such conduct resulting from Employee’s incapacity due to physical or mental
illness and other than any such actual or anticipated conduct after the
issuance of a Notice of Termination by Employee for Good Reason), or

(III) Employee’s conviction for the commission of a felony.

A finding of Misconduct shall only be made by unanimous approval, excluding
Employee, of a resolution by the Board after a meeting called for such purpose upon
thirty (30) days’ notice to Employee, and at which Employee is entitled to appear
with counsel and be heard.

(D) Disability. If Employee shall have been absent from the full-time
performance of Employee’s duties with the Company for 180 consecutive calendar days
as a result of Employee’s incapacity due to a Disability, Employee’s employment may
be terminated by the Company. For the purposes of this Agreement, a
“Disability” shall exist if:

(I) Employee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can
be reasonably expected to result in death or can be expected to last for a
continuous period of not less than 12 months; or

(II) Employee is, by reason of any medically determinable physical or
mental impairment that can be reasonably expected to result in death or can
be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than three
months under an accident and health plan covering employees of the Company.

If Employee is terminated pursuant to this Section 7(a)(iii)(D), Employee shall not
be entitled to further compensation pursuant to this Agreement, except that:

(w) the Company shall (1) for the 12 month period beginning with the
Date of Termination, pay to Employee monthly the amount by which Employee’s
monthly Base Compensation as in effect immediately prior to the Date of
Termination exceeds the monthly benefit received by Employee pursuant to any
disability insurance covering Employee; (2) not later than 15 days after the
Date of Termination, pay to Employee (a) the amount due under Section
8(a)(i), (b) any Base Compensation and General Benefits accrued and unpaid
as of the Date of Termination, and (c) a lump sum amount, in cash, equal to
the cost for Employee to obtain, for the period commencing on the Date of
Termination and ending on the date that is 30 months following the Date of
Termination, health and dental insurance benefits covering Employee and
Employee’s spouse and dependents that are substantially similar to those
that Employee (and Employee’s spouse and dependents) were receiving
immediately prior to the Date of Termination; and (3) to the extent that,
but for his Disability, Employee would have otherwise been entitled to a
bonus under any bonus plan then maintained by the Company, or to the extent
that other officers or Company executives are awarded bonuses, the Company
shall, not later than the earlier of (a) 15 days after the date on which the
Company awards such bonuses and (b) February 28th of the calendar
year following the year in which the Date of Termination occurs, pay to
Employee a pro rata bonus for the year in which the Company terminates
Employee’s employment pursuant to this Section 7(a)(iii)(D);

(x) notwithstanding any provision to the contrary in the plan(s)
governing such Long Term Incentives, Employee shall become immediately and
totally vested in any and all Long Term Incentives granted to Employee by
Company prior to the Date of Termination that have not previously vested in
full; and

(y) the Company shall assign to Employee at no cost and with no
apportionment of any prepaid premiums of all assignable insurance policies
benefiting Employee.

(iv) Resignation for Good Reason. Employee shall be entitled to terminate his
employment for Good Reason (as defined herein). If Employee terminates his employment for
Good Reason, he shall be entitled to the compensation and benefits provided in Section
7(a)(iii)(B). For the purposes of this Agreement, the term “Good Reason” shall mean
the occurrence of any of the following circumstances without Employee’s express written
consent:

(A) any material diminution of Employee’s duties or responsibilities (other
than in connection with the termination of Employee for Misconduct or Disability in
accordance with the terms of this Agreement);

(B) any material diminution of Employee’s Base Compensation;

(C) the relocation of the Company’s principal executive offices outside Baton
Rouge, Louisiana or requiring Employee to be based other than at such principal
executive offices; or

(D) any other material breach by the Company of its obligations under this
Agreement;

provided, however, Employee shall provide written notice (a “Good Reason
Notice”) to the Company of the initial existence of the condition causing the change in
terms or status no more than 90 days after the change in terms or status occurs, and the
Company shall have 30 days after receipt of the Good Reason Notice to resolve the issue
causing the change in terms or status. If the Company resolves such issue, then Employee’s
employment shall not be subject to the Good Reason provisions of this Agreement as to such
issue.

(v) Resignation for Corporate Change. Employee shall be entitled to
terminate Employee’s employment for a Corporate Change (as defined herein), but only if
Employee gives notice of Employee’s intent to terminate employment within 90 days following
the effective date of such Corporate Change (provided that, notwithstanding the foregoing,
the Notice of Termination may not be given later than February 13th of the year following
the year in which the Corporate Change occurs). If Employee terminates employment for a
Corporate Change, Employee shall be entitled to the compensation and benefits provided in
Section 7(a)(iii)(B). For the purposes of this Agreement, the term “Corporate Change” means
a “change in ownership,” a “change in effective control,” or a “change in the ownership of
substantial assets” of the Company.

(A) A “change in ownership” of the Company occurs on the date that any one
person, or more than one person acting as a group, acquires ownership of stock of
the Company that, together with stock held by such person or group, constitutes more
than 50% of the total fair market value or total voting power of the stock of the
Company. However, if any one person, or more than one person acting as a group, is
considered to own more than 50% percent of the total fair market value or total
voting power of the stock of the Company, the acquisition of additional stock by the
same person or persons is not considered to cause a change in ownership of the
Company (or to cause a change in the effective control of the Company (within the
meaning of Section 7(v)(B)).

(B) Notwithstanding that the Company has not undergone a change in ownership
under Section 7(v)(A), a “change in effective control” of the Company occurs on the
date that a majority of members of the Board is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election. For purposes
of this Section 7(v)(B), the term “Company” refers solely to the relevant
corporation identified in the opening paragraph of this Agreement, for which no
other corporation is a majority shareholder.

(C) A “change in the ownership of substantial assets” of the Company occurs on
the date that any one person, or more than one person acting as a group, acquires
(or has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 75% percent of the total gross fair
market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions. For this purpose, “gross fair market value” means the
value of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

(b) Notice of Termination. Any purported termination of Employee’s employment by the
Company under Section 7(a)(iii), or by Employee under Sections 7(a)(i) or (iv), shall be
communicated by written Notice of Termination to the other Party hereto in accordance with Section
11. A Notice of Termination shall not be required in connection with a termination by Employee
under Section 7(a)(v). For the purposes of this Agreement, a “Notice of Termination” shall
mean a notice that (i) in the case of a termination by the Company, shall set forth in reasonable
detail the reason for such termination of Employee’s employment and the Date of Termination, or
(ii) in the case of a resignation by Employee, shall specify in reasonable detail the basis for
such resignation and the Date of Termination. A Notice of Termination given by Employee pursuant
to Section 7(a)(iv) shall be effective even if given after the receipt by Employee of notice that
the Board has set a meeting to consider terminating Employee for Misconduct. A Notice of
Termination given by Employee pursuant to Section 7(a)(iv) shall be considered effective only after
30 days have elapsed since Employee delivered the applicable Good Reason Notice and the Company has
failed to resolve the issue causing the change in terms or status during such 30 day period. Any
purported termination for which a Notice of Termination is required that does not materially comply
with this Section 7(b) shall not be effective.

(c) Date of Termination, Etc. The “Date of Termination” shall mean the date
specified in the Notice of Termination, provided that the Date of Termination shall be at least 15
calendar days, but not more than 45 calendar days, following the date the Notice of Termination is
given. Notwithstanding anything herein to the contrary, in the case of a termination of this
Agreement pursuant to Section 7(a)(v), the Date of Termination shall be the date that the Change of
Control occurs. In the event Employee is terminated for Misconduct, the Company may refuse to
allow Employee access to the Company’s offices (other than to allow Employee to collect his
personal belongings under the Company’s supervision) prior to the Date of Termination. Employee
shall not be expected to provide further services after the Date of Termination.

(d) Mitigation. Employee shall not be required to mitigate the amount of any payment
provided for in this Section 7 by seeking other employment or otherwise, nor shall the amount of
any payment provided for in this Agreement be reduced by any compensation earned by Employee as a
result of employment by another employer, except that any severance amounts payable to Employee
pursuant to the Company’s severance plan or policy for employees in general shall reduce the amount
otherwise payable pursuant to Section 7(a)(iii)(B).

(e) Excess Parachute Payments.

(i) Notwithstanding anything in this Agreement to the contrary, to the extent that any
payment or benefit received or to be received by Employee hereunder in connection with the
termination of Employee’s employment would, as determined by tax counsel selected by the
Company, constitute an “Excess Parachute Payment” (as defined in Section 280G of the
Internal Revenue Code (the “Code”)) subject to the excise tax imposed by Section
4999 of the Code (together with any interest or penalties imposed with respect to such
taxes), the Company shall fully “gross-up” such payment and benefit by paying to Employee
additional amounts (“gross-up payments”), which shall include any excise taxes and income
taxes imposed upon such gross-up payments, so that Employee is in the same “net” after-tax
position he would have been if such payment, benefit and gross-up payments had not
constituted Excess Parachute Payments.

(ii) As a result of the uncertainty in the application of Section 4999 of the Code, it
is possible that any gross-up payments calculated at the time of the initial determination
described above and made by the Company will be less than the gross-up payments that should
have been made. If Employee determines from time to time in his sole discretion that he is
or will be required to make a payment of any excise taxes under Section 4999 of the Code
(together with any interest or penalties with respect to such taxes) in addition to that
initially determined as described above and that he is therefore entitled to additional
gross-up payments, he shall inform the Company of the amount of the additional gross-up
payments and any such additional gross-up payments shall be paid promptly by the Company to
or for the benefit of Employee.

(iii) No payment of a gross up shall occur until the first business day occurring after
the date that is six months after the Date of Termination. Payment of the gross up will be
made no later than the end of Employee’s taxable year next following Employee’s taxable year
in which Employee remits the related taxes.

8. Nondisclosure and Noncompetition. Employee agrees that, as part of the
consideration for this Agreement and as an integral part hereof, he has signed and agrees to be
bound by the Nondisclosure and Noncompetition Agreement attached hereto as Exhibit A, as well as
any subsequent addenda thereto.

(a) Consideration For Non-Compete. In consideration for the agreement set forth in
this Section 8, upon termination or as otherwise provided in this Agreement, Employee shall
receive:

(i) the sum of fifteen million ($15,000,000.00) dollars plus interest accrued thereon
from the date of deposit which has been set aside in a trust suitable to Employee which
trust shall invest the funds in an interest bearing account for the purpose of securing
payment hereunder; it being understood that such amounts shall remain subject to claims of
the general creditors of the Company; and

(ii) for ten years, commencing on the first day following the six month anniversary of
the Date of Termination, the Company shall provide Employee for his private use in his sole
discretion, the use of a mid-size jet aircraft (which shall mean a jet aircraft comparable
to but not less than the jet aircraft most commonly used by Employee in the year prior to
the Date of Termination) for 150 hours annually, the cost (as based on the Company’s
“incremental cost” of operating the current aircraft primarily utilized by Employee as of
January 23, 2007) of which shall not exceed $300,000 annually.

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Employee’s continuing or future participation in any benefit, bonus, incentive or other plan or
program provided by the Company and for which Employee may qualify, nor shall anything herein limit
or otherwise adversely affect such rights as Employee may have under any Long Term Incentives
granted by the Company.

10. Assignability. The obligations of Employee hereunder are personal and may not be
assigned or delegated by him or transferred in any manner whatsoever, nor are such obligations
subject to involuntary alienation, assignment or transfer. The Company shall have the right to
assign this Agreement and to delegate all rights, duties and obligations hereunder, either in whole
or in part, to any parent, affiliate, successor or subsidiary of the Company, so long as the
obligations of the Company under this Agreement remain the obligations of the Company.

11. Notice. For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered Federal Express or similar courier, addressed (a) to the Company, at its principal office
address, directed to the attention of the Board with a copy to the Corporate Secretary of the
Company, and (b) to Employee, at Employee’s residence address on the records of the Company, or to
such other address as either Party may have furnished to the other in writing in accordance
herewith except that notice of change of address shall be effective only upon receipt.

12. Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

13. Successors; Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of any such succession
shall constitute Good Reason under Section 7(a)(iv); provided, that, for purposes of
implementing the foregoing, the date on which any such succession becomes effective shall be deemed
the Date of Termination. As used herein, the term “Company” shall include any successor to its
business and/or assets as aforesaid that executes and delivers the Agreement provided for in this
Section 13 or that otherwise becomes bound by all terms and provisions of this Agreement by
operation of law.

(b) This Agreement and all rights of Employee hereunder shall inure to the benefit of and be
enforceable by Employee’s personal or legal representatives, executors, administrators, successors,
heirs distributees, devisees and legatees. If Employee should die while any amounts would be
payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to Employee’s devisee,
legatee, or other designee or, if there be no such designee, to Employee’s estate.

14. Indemnification: Liability Insurance.

(a) The Company shall indemnify and hold Employee (or his legal representative) harmless to
the full extent permitted by applicable law for all legal expenses and all liabilities, losses,
judgments, fines, expenses, and amounts paid in settlement in connection with any proceeding
involving him (including any action by or in the right of the Company) by reason of his being or
having been a director, officer, employee, consultant, or agent of the Company or any of its
subsidiaries, affiliates, or any other enterprise if he is serving or has served at the request of
the Company. In addition, the Company shall cause any such subsidiary, affiliate, or enterprise
also to so indemnify and hold Employee harmless to the full extent permitted by applicable law.
The foregoing shall not be deemed to limit any rights of Employee pursuant to applicable
indemnification provisions of the Company’s Articles of Incorporation or By-Laws or otherwise, and
the Company agrees to amend such Articles of Incorporation and Bylaws to provide Employee
indemnification consistent herewith. The Company also agrees to amend its Articles of
Incorporation to provide immunity to Employee to the full extent allowed by law. In addition, the
Company shall acquire and maintain with reputable insurance companies or associations acceptable to
Employee, directors’ and officers’ liability insurance for the benefit of the directors and
officers of the Company, including Employee, providing terms and coverage amounts of at least
$75,000,000,. Such insurance shall remain in place, to the extent that the Company is able to
purchase the same, as long as necessary under applicable statutes of limitations to cover all
events occurring during the term of this Agreement regardless of when the claim is made.

(b) In the event of any action, proceeding, or claim against Employee arising out of his
serving or having served in a capacity specified above, the Company shall provide Employee with
counsel, who may be counsel for the Company as well, as long as no conflict of interest exists
between the Company and Employee and no ethical or professional responsibility rules prevent the
same counsel from representing both Employee and the Company. In the event of any such conflict of
interest or other bar to Employee being represented by counsel for the Company, Employee may retain
his own separate counsel (such choice of counsel may be made in his sole and absolute discretion),
and the Company shall be obligated to advance to Employee (or pay directly to his counsel)
reasonable counsel fees and other costs associated with Employee’s defense of such action,
proceeding, or claim; provided, however, that in such event, Employee shall first agree in writing,
without posting bond or collateral, to repay all sums paid or advanced to him pursuant to this
provision in the event the final disposition of such action, proceeding, or claim is one for which
Employee would not be entitled to indemnification.

15. Miscellaneous.

(a) Amendment and Waiver. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by
Employee and such officer of the Company as may be specifically authorized by the Board. No waiver
by either Party hereto at any time of any breach by the other Party hereto of, or in compliance
with, any condition or provision of this Agreement to be performed by such other Party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

(b) Entire Agreement. The Company and Employee have heretofore entered into the
Original Agreement. The Original Agreement shall continue in full force and effect until the
Effective Date, after which it will be superseded by this Agreement; provided that nothing
in this Agreement shall be deemed to discharge or otherwise prejudice Employee’s right to receive,
or the Company’s obligation to pay or provide, any of the benefits accrued under the Original
Agreement as of the Effective Date. Subject to the foregoing, this Agreement is an integration of
the Parties’ agreement; no agreement or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either Party, except those that are set
forth expressly in this Agreement.

(c) Governing Law. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF LOUISIANA, except for Section 8, in which
case the law of the jurisdiction in which the non-compete is sought to be enforced by the Company
shall govern in the event such applicable law is more favorable to the Company.

(d) Notwithstanding anything herein to the contrary, this Agreement is intended to comply with
Internal Revenue Code Section 409A and the regulations and other guidance of general applicability
thereunder and shall at all times be interpreted in accordance with such intent such that amounts
credited under this Agreement shall not be taxable until such amounts are distributed in accordance
with the terms of this Agreement. In the event that Employee is a “specified employee” at the Date
of Termination, any amounts that are considered nonqualified deferred compensation for purposes of
Internal Revenue Code Section 409A and that are distributable because of a separation from service
shall be delayed until the first business day occurring after the date that is six months after the
Date of Termination. Any provision of this Agreement to the contrary is without effect.

(f) Reimbursements provided for under this Agreement shall be provided in accordance with
policies of the Company established from time to time.

16. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.

17. Arbitration. Either Party may elect that any dispute or controversy arising under
or in connection with this Agreement be settled by arbitration in Baton Rouge, Louisiana in
accordance with the rules of the American Arbitration Association then in effect. If the Parties
cannot mutually agree on an arbitrator, then the arbitration shall be conducted by a three
arbitrator panel, with each Party.

18. Expenses. In order that the purpose of this Agreement not be frustrated, it is
the intent of the Company that the Employee not be required to incur the expenses associated with
enforcement of the Employee’s rights under this Agreement by litigation or other legal action
because the cost and expense thereof would substantially detract from the benefits intended to be
extended to the Employee hereunder, nor be bound to negotiate any settlement of the Employee’s
rights hereunder under threat of incurring such expenses. Accordingly, if following the Effective
Date it should appear to the Employee that the Company has failed to comply with any of its
obligations under this Agreement or, if at any time, in the event that the Company or any other
person takes any action to declare this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish or to recover from the Employee the
benefits intended to be provided to the Employee hereunder, and that the Employee has complied with
all of the Employee’s obligations under this Agreement, the Company irrevocably authorizes the
Employee from time to time to retain counsel of the Employee’s choice at the expense of the Company
to represent the Employee in connection with the initiation or defense of any litigation or other
legal action, whether by or against the Company or any director, officer, stockholder or other
person affiliated with the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel (other than a counsel acting on
behalf of the Company in connection with this Agreement), the Company irrevocably consents to the
Employee’s entering into an attorney-client relationship with such counsel, and in that connection
the Company and the Employee agree that a confidential relationship shall exist between the
Employee and such counsel. The Company agrees to pay as incurred, to the full extent permitted by
law, all costs and expenses which the Employee may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Employee or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including, without limitation, as a result of any contest by the Employee
about the amount of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate. Included within such costs and expenses shall be
the reasonable fees and expenses of counsel selected from time to time by the Employee as
hereinabove provided, which fees and expenses shall be paid or reimbursed to the Employee by the
Company on a regular, periodic basis upon presentation by the Employee of a statement or statements
prepared by such counsel in accordance with its customary practices.

1

IN WITNESS WHEREOF, the Parties have executed this Agreement on December 31, 2008, effective
for all purposes as of the Effective Date.

THE SHAW GROUP INC.

By /s/ Clifton S. Rankin

Clifton S. Rankin, General Counsel & Corporate

Secretary

EMPLOYEE:

J.M. Bernhard, Jr.

J.M. Bernhard, Jr.

2EX-10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (“Agreement”) is entered into December
31, 2008, but is effective as of January 1, 2008 (the “Effective Date”), by and between The
Shaw Group Inc., a Louisiana corporation (collectively with its affiliates and subsidiaries
hereinafter referred to as, the “Company”), and Brian K. Ferraioli (“Employee”).
The Company and Employee may hereinafter be referred to, individually, as a “Party” and,
collectively, as the “Parties”.

WHEREAS, the Company and Employee are parties to that certain Employment Agreement dated
effective as of July 17, 2007 (the “Original Agreement”); and

WHEREAS, the Parties desire to amend certain provisions of the Original Agreement and to
restate the Original Agreement in its entirety.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and
agreements contained herein, and for other valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Parties agree as follows:

1. Employment. The Company hereby employs Employee, and Employee hereby accepts
employment by the Company, on the terms and conditions set forth in this Agreement.

2. Term of Employment. Subject to the provisions for earlier termination provided in
this Agreement, the term of this Agreement (the “Term”) shall be two years, commencing on
the Effective Date, and shall be automatically renewed on each day following the Effective Date so
that on any given day the unexpired portion of the Term of this Agreement shall be two years.
Notwithstanding the foregoing provision, at any time after the Effective Date, the Company or
Employee may give written notice to the other Party that the Term shall not be further renewed from
and after a subsequent date specified in such notice (the “fixed term date”), in which
event the Term shall become fixed, and this Agreement shall terminate on the second anniversary of
such fixed term date.

3. Employee’s Duties.

(a) During the Term, Employee shall serve as Executive Vice President & Chief Financial
Officer of the Company, or such other similar position(s) as the Parties may mutually agree, with
such duties and responsibilities as may from time to time be assigned to him by the Board of
Directors of the Company (the “Board”) or the Chief Executive Officer of the Company,
provided that such duties are comparable to the customary duties of such position(s).

(b) Employee agrees to devote Employee’s full attention and time during normal business hours
to the business and affairs of the Company and to use reasonable best efforts to perform faithfully
and efficiently Employee’s duties and responsibilities. Employee shall not, either directly or
indirectly, enter into any business or employment with or for any Person (defined below) other than
the Company during the Term; provided, however, that Employee shall not be
prohibited from making financial investments in any other company or business or from serving on
the board of directors of any other company, subject in each case to the provisions set forth in
the Company’s Code of Conduct or other similar written guidelines. For the purposes of this
Agreement, the term “Person” shall mean any individual, corporation, limited or general
partnership, limited liability company, joint venture, association, trust or other entity or
organization, whether or not a legal entity. Employee shall at all times observe and comply with
all lawful directions and instructions of the Board of which Employee is notified in writing.

4. Compensation.

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

(b) Annual Bonus. During the Term, Employee shall participate in the Company’s
discretionary management incentive program as established by the Board (as the same may be amended
from time to time), with an annual performance bonus range of not less than 25%, and not more
than-200%, of Employee’s bonus target (the “Bonus Target”), which Bonus Target shall
initially be an amount equal to 100% of Employee’s Base Compensation. The Bonus Target may be
adjusted annually. Annual bonus payments will be subject to tax and other customary withholdings.

(c) Long Term Incentive Awards.

(i) Employee will be eligible to participate in the Company’s discretionary Long Term
Incentive (defined below) plan(s) as established by the Board (as the same may be amended
from time to time), subject to the terms and conditions of the applicable plan(s). The
overall target value of the annual Long Term Incentive grants to Employee on the date of
grant will be in the range of 100% to 200% of Employee’s Base Compensation.

(ii) All Long Term Incentive awards that are to be settled by the delivery of shares
are subject to shareholders’ approval of shares to be allocated to the Company’s Long Term
Incentive plan(s) and are granted under the strict purview of the Compensation Committee of
the Board.

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

(iv) Notwithstanding any provision to the contrary in the plan(s) governing such Long
Term Incentives, in the event that this Agreement is terminated by Employee pursuant to
Section 7(a)(ii), (iv) or (v) or by the Company pursuant to Section 7(a)(iii)(A) (other than
for Misconduct) or 7(a)(iii)(D), Employee shall have not less than one year from the Date of
Termination in which to exercise all Long Term Incentives granted to Employee by the Company
on or before the Date of Termination (including any Long Term Incentives that become vested
pursuant to Section 7 of this Agreement); provided that in no event shall such one
year period extend the vesting period for any Long Term Incentives beyond the date that is
10 years from the date of grant of such Long Term Incentives.

5. Additional Benefits. In addition to the compensation provided for in Section 4,
Employee shall be entitled to the following:

(a) Business Expenses. The Company shall, in accordance with any rules and
policies that it may establish from time to time for its executive officers, reimburse
Employee for business expenses reasonably incurred in the performance of Employee’s duties.
It is understood that Employee is authorized to incur reasonable business expenses for
promoting the business of the Company, including reasonable expenditures for travel,
lodging, meals and client or business associate entertainment. The Company shall also
reimburse you for the cost of relevant professional memberships and licenses. Requests for
reimbursement for all business expenses must be accompanied by appropriate documentation.

(b) Point of Origin; Relocation Expenses.

(i) Employee’s point of origin (the “Point of Origin”) will be Califon, New
Jersey, and Employee’s business assignment location will be the Company’s corporate offices
in Baton Rouge, Louisiana (the “Business Location”). From the Effective Date until
June 17, 2008, the Company will reimburse Employee for expenses reasonably incurred by
Employee for living expenses at the Business location and air travel between the Point of
Origin and the Business Location each weekend. Business class seating may be used by
Employee in Employee’s reasonable discretion. Employee will also have access to the
Company’s aircraft on an as-available basis for the purposes, and during the period,
described in this Section 5(b)(i). Notwithstanding anything in this Agreement to the
contrary, to the extent that any amount received by Employee under this Section 5(b)(i) in
connection with the reimbursement by the Company of travel and living expenses is determined
by the Company or the Internal Revenue Service to constitute taxable income to Employee, the
Company shall fully “gross up” such amount so that Employee is in the same “net” after tax
position he would have been if such payment and gross up payments had not constituted
taxable income to Employee.

(ii) The Company will provide relocation assistance to Employee in connection with
Employee’s permanent relocation from the Point of Origin to the Business Location, including
moving expenses, home sale assistance, customary real estate fees and commissions and home
purchase assistance, in each case in accordance with the relocation policies of the Company
at the time such relocation occurs. Employee acknowledges that such relocation assistance
does not include the purchase by the Company of Employee’s residence at the Point of Origin.

(c) Vacation. Employee shall be entitled to four weeks of vacation per year
without any loss of compensation or benefits. Employee shall be entitled to carry forward
any unused vacation time.

(d) Country Club Membership. The Company will pay, on behalf of Employee, one
country club membership initiation fee. Employee shall be responsible for monthly dues in
connection with such membership.

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

6. Confidentiality.

(a) Employee hereby acknowledges that the Company possesses certain Confidential Information
(defined below) that is peculiar to the businesses in which the Company is or may be engaged.
Employee hereby affirms that such Confidential Information is the exclusive property of the Company
and that the Company has proprietary interests in such Confidential Information. For the purposes
of this Agreement, the term “Confidential Information” shall mean any and all information
of any nature and in any form that at the time or times concerned is not generally known to Persons
(other than the Company) that are engaged in businesses similar to that conducted or contemplated
by the Company (other than by the act or acts of an employee not authorized by the Company to
disclose such information) which may include, without limitation, the Company’s existing and
contemplated products and services; the Company’s purchasing, accounting, marketing and
merchandising methods or practices; the Company’s development data, theories of application and/or
methodologies; the Company’s customer/client contact and/or supplier information files; the
Company’s existing and contemplated policies and/or business strategies; any and all samples and/or
materials submitted to Employee by the Company; and any and all directly and indirectly related
records, documents, specifications, data and other information with respect thereto. For the
purposes of this Agreement, “Confidential Information” shall not include (i) information, knowledge
or data that, through no fault of Employee, becomes publicly available or (ii) information,
knowledge or data acquired from, or published by, third parties that have no direct or indirect
confidentiality obligation to the Company. Employee further acknowledges by signing this Agreement
that the Company has expended much time, cost and difficulty in developing and maintaining the
Company’s customers.

(b) Employee shall (i) use the Confidential Information solely for the purpose of performing
Employee’s duties on behalf of the Company and for no other purpose whatsoever, (ii) not, directly
or indirectly, at any time during or after Employee’s employment by the Company, disclose
Confidential Information to any other Person (except to the Company’s officers in connection with
Employee’s duties on behalf of the Company) or use or otherwise exploit Confidential Information to
the detriment of the Company, and (iii) not lecture on or publish articles with respect to
Confidential Information without the prior written approval of the General Counsel of the Company.
In the event of a breach or threatened breach of the provisions of this Section 6(b), the Company
shall be entitled, in addition to any other remedies available to the Company, to an injunction
restraining Employee from disclosing such Confidential Information.

(c) Upon termination of employment of Employee for whatever reason, Employee shall surrender
to the Company any and all documents, manuals, correspondence, reports, records and similar items
that have or thereafter come into the possession of Employee that contain any Confidential
Information; provided, however, that the Company will provide Employee reasonable
access to such Confidential Information to the extent required by Employee in connection with the
defense of any cause of action, dispute, proceeding or investigation made or initiated against
Employee by any Person other than the Company related to the employment of Employee by the Company
or the performance by Employee of its duties in the course of such employment.

7. Termination.

(a) This Agreement may be terminated prior to the end of the Term as set forth below:

(i) Resignation (other than for Good Reason). Employee may resign Employee’s
position at any time, including by reason of retirement, by providing written notice of
resignation to the Company. In the event of such resignation (except in the case of
resignation for Good Reason (defined in Section 7(a)(iv) below)), this Agreement shall
terminate on the Date of Termination (defined in Section 7(c) below), and Employee shall not
be entitled to further compensation pursuant to this Agreement other than the payment of any
Base Compensation and General Benefits (e.g., vacation, unreimbursed business expenses,
Flexible Perquisites, etc.) accrued and unpaid as of the Date of Termination and the
retention of any and all option shares, restricted shares or units or other similar awards
granted to Employee by the Company under any long term incentive plan duly adopted by the
Board (collectively, “Long Term Incentives”) that have vested or become exercisable
on or before the Date of Termination in accordance with the plan(s) governing such Long Term
Incentives (which Long Term Incentives remain subject to, and must thereafter be exercised
in accordance with, the plan(s) governing such Long Term Incentives).

(ii) Death. If Employee’s employment is terminated due to Employee’s death,
the Company shall pay to Employee’s surviving spouse or estate, subject to tax and other
customary withholdings, not later than 30 days after Employee’s death, (A) any Base
Compensation and General Benefits accrued and unpaid as of the date of Employee’s death and
(B) a lump sum amount, in cash, equal to to the cost for Employee to obtain one year of paid
group health and dental insurance benefits covering Employee’s spouse and dependents that
are substantially similar to those that Employee’s surviving spouse and dependents were
receiving immediately prior to Employee’s death. Notwithstanding any provision to the
contrary in the plan(s) governing such Long Term Incentives, Employee, as of the date of his
death, shall also become immediately and totally vested in any and all Long Term Incentives
granted to Employee by the Company prior to the Date of Termination that have not previously
vested in full. After all payments, benefits and vesting of Long Term Incentives specified
under this Section 7(a)(ii) have been paid or performed, this Agreement shall terminate, and
the Company shall have no obligations to Employee, Employee’s spouse and dependents or
Employee’s legal representatives with respect to this Agreement.

(iii) Discharge.

(A) The Company may terminate Employee’s employment for any reason at any time
upon written notice delivered to Employee in accordance with Section 7(b).

(B) In the event that Employee’s employment is terminated by the Company prior
to expiration of the Term for any reason other than Employee’s Misconduct or
Disability (both as defined below), the following shall occur:

(1) the Company shall pay to Employee, subject to customary
withholdings, not later than 15 calendar days after the Date of Termination,
(x) a lump sum amount, in cash, equal to the product of (1) the sum of (a)
Employee’s Base Compensation as in effect immediately prior to the Date of
Termination, plus (b) the most recent annual bonus paid by the
Company to Employee (provided that, until December 31, 2009, the “most
recent annual bonus paid by the Company to Employee” shall be deemed, solely
for the purposes of this Section 7, to be an amount not less than Employee’s
signing bonus specified in Section 4(c) of the Original Agreement),
multiplied by (2) 2.0, and (y) a lump amount, in cash, equal to the
cost for Employee to obtain, for the period commencing on the Date of
Termination and ending on the earlier to occur of (1) the date that is 24
months following the Date of Termination and (2) the fixed term date (if
any), disability, accident, dental and health insurance benefits (“Welfare
Benefits”) covering Employee (and, as applicable, Employee’s spouse and
dependents) that are substantially similar to those that Employee (and
Employee’s spouse and dependents) were receiving immediately prior to the
Date of Termination; and

(3) Notwithstanding any provision to the contrary in the plan(s)
governing such Long Term Incentives, Employee shall become immediately and
totally vested in any and all Long Term Incentives granted to Employee by
Company prior to the Date of Termination.

(C) Notwithstanding anything to the contrary in this Agreement, in the event
that Employee is terminated because of Misconduct, the Company shall have no
obligations pursuant to this Agreement after the the Date of Termination other than
the payment of any Base Compensation and General Benefits accrued and unpaid through
the the Date of Termination. For the purposes of this Agreement, the term
“Misconduct” shall mean:

(1) (A) any willful breach or habitual neglect of duty by Employee or
(B) Employee’s material and continued failure to substantially perform
Employee’s duties with the Company (other than any such failure resulting
from Employee’s incapacity due to a Disability) (i) in a professional manner
and (ii) in a manner that is reasonably expected as appropriate for the
position, in the case of either (A) or (B), which breach, neglect or failure
is not cured by Employee within 30 days from receipt by Employee of written
notice from the Company that specifies the alleged breach, neglect or
failure;

(2) the intentional misappropriation or attempted misappropriation by
Employee of a material business opportunity of the Company, including
attempting to secure any personal profit in connection with entering into
any transaction on behalf of the Company;

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

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

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

(D) Disability. If Employee shall have been absent from the full-time
performance of Employee’s duties with the Company for 120 consecutive calendar days
as a result of Employee’s incapacity due to a Disability, Employee’s employment may
be terminated by the Company. For the purposes of this Agreement, a
“Disability” shall exist if:

(1) Employee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can
be reasonably expected to result in death or can be expected to last for a
continuous period of not less than 12 months; or

(2) Employee is, by reason of any medically determinable physical or
mental impairment that can be reasonably expected to result in death or can
be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than three
months under an accident and health plan covering employees of the Company.

If Employee is terminated pursuant to this Section 7(a)(iii)(D), Employee shall not
be entitled to further compensation pursuant to this Agreement, except that (a) the
Company shall (I) not later than 15 days after the Date of Termination, pay to
Employee any Base Compensation and General Benefits accrued and unpaid as of the
Date of Termination, (II) for the 24 month period beginning with the Date of
Termination, pay to Employee monthly the amount by which Employee’s monthly Base
Compensation exceeds the monthly benefit received by Employee pursuant to any
disability insurance covering Employee (provided that, if Employee dies
after his termination due to Disability under this Section 7(a)(iii)(D) but prior to
the expiration of the period referenced in this sentence, such payments shall be
made to Employee’s surviving spouse or estate, as applicable, until the last day of
such period) and (III) not later than 15 days after the Date of Termination, pay to
Employee a lump amount, in cash, equal to the cost for Employee to obtain, for the
period commencing on the Date of Termination and ending on the earlier to occur of
(a) the date that is 24 months following the Date of Termination and (b) the fixed
term date (if any), health and dental insurance benefits covering Employee (and
Employee’s spouse and dependents) that are substantially similar to those that
Employee (and Employee’s spouse and dependents) were receiving immediately prior to
the Date of Termination , and (b) notwithstanding any provision to the contrary in
the plan(s) governing such Long Term Incentives, Employee shall become immediately
and totally vested in any and all Long Term Incentives granted to Employee by
Company prior to the Date of Termination that have not previously vested in full.

(iv) Resignation for Good Reason. Employee shall be entitled to terminate
Employee’s employment for Good Reason (as defined herein). If Employee terminates
employment for Good Reason, Employee shall be entitled to the compensation and benefits
provided in Section 7(a)(iii)(B). For the purposes of this Agreement, the term “Good
Reason” shall mean the occurrence of any of the following circumstances without
Employee’s express written consent:

(A) any material diminution of Employee’s duties or responsibilities (other
than in connection with the termination of Employee for Misconduct or Disability in
accordance with the terms of this Agreement);

(B) any material diminution of Employee’s Base Compensation;

(C) the relocation of the Company’s principal executive offices outside Baton
Rouge, Louisiana or requiring Employee to be based other than at such principal
executive offices; or

(D) any other material breach by the Company of its obligations under this
Agreement;

provided, however, Employee shall provide written notice (a “Good Reason
Notice”) to the Company of the initial existence of the condition causing the change in
terms or status no more than 90 days after the change in terms or status occurs, and the
Company shall have 30 days after receipt of the Good Reason Notice to resolve the issue
causing the change in terms or status. If the Company resolves such issue, then Employee’s
employment shall not be subject to the Good Reason provisions of this Agreement as to such
issue.

(v) Resignation for Corporate Change. Employee shall be entitled to terminate
Employee’s employment for a Corporate Change (as defined herein), but only if Employee gives
notice of Employee’s intent to terminate employment within 90 days following the effective
date of such Corporate Change (provided that, notwithstanding the foregoing, the
Notice of Termination may not be given later than February 13th of the year following the
year in which the Corporate Change occurs). If Employee terminates employment for a
Corporate Change, Employee shall be entitled to the compensation and benefits provided in
Section 7(a)(iii)(B). For the purposes of this Agreement, the term “Corporate
Change” means a “change in ownership,” a “change in effective control,” or a “change in
the ownership of substantial assets” of the Company.

(A) A “change in ownership” of the Company occurs on the date that any one
person, or more than one person acting as a group, acquires ownership of stock of
the Company that, together with stock held by such person or group, constitutes more
than 50% of the total fair market value or total voting power of the stock of the
Company. However, if any one person, or more than one person acting as a group, is
considered to own more than 50% percent of the total fair market value or total
voting power of the stock of the Company, the acquisition of additional stock by the
same person or persons is not considered to cause a change in ownership of the
Company (or to cause a change in the effective control of the Company (within the
meaning of Section 7(v)(B)).

(B) Notwithstanding that the Company has not undergone a change in ownership
under Section 7(v)(A), a “change in effective control” of the Company occurs on the
date that a majority of members of the Board is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election. For purposes
of this Section 7(v)(B), the term “Company” refers solely to the relevant
corporation identified in the opening paragraph of this Agreement, for which no
other corporation is a majority shareholder.

(C) A “change in the ownership of substantial assets” of the Company occurs on
the date that any one person, or more than one person acting as a group, acquires
(or has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 75% percent of the total gross fair
market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions. For this purpose, “gross fair market value” means the
value of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

(b) Notice of Termination. Any purported termination of Employee’s employment
by the Company under Section 7(a)(iii), or by Employee under Section 7(a)(i), (iv) or (v),
shall be communicated by written Notice of Termination (defined below) to the other Party in
accordance with Section 10. For the purposes of this Agreement, the term “Notice of
Termination” shall mean a notice that (i) in the case of termination by the Company,
shall set forth in reasonable detail the reason for such termination of Employee’s
employment and the Date of Termination, or (ii) in the case of resignation by Employee,
shall specify in reasonable detail the basis for such resignation and the Date of
Termination. A Notice of Termination validly given by Employee pursuant to Section 7(a)(iv)
shall be effective even if given after the receipt by Employee of notice that the Board has
set a meeting to consider terminating Employee for Misconduct. A Notice of Termination
given by Employee pursuant to Section 7(a)(iv) shall be considered effective only after 30
days have elapsed since Employee delivered the applicable Good Reason Notice and the Company
has failed to resolve the issue causing the change in terms or status during such 30 day
period. Any purported termination for which a Notice of Termination is required that does
not materially comply with this Section 7(b) shall not be effective.

(c) Date of Termination, Etc. The “Date of Termination” shall mean the
date specified in the Notice of Termination, provided that the Date of Termination shall be
at least 15 calendar days, but not more than 45 calendar days, following the date the Notice
of Termination is given. Notwithstanding anything herein to the contrary, if a Notice of
Termination is given pursuant to Section 7(a)(v), then the Date of Termination may not be
later than February 28th of the year following the year in which the Change of Control
occurs. In the event Employee is terminated for Misconduct, the Company may refuse to allow
Employee access to the Company’s offices (other than to allow Employee to collect Employee’s
personal belongings under the Company’s supervision) prior to the Date of Termination.
Employee shall not be expected to provide further services after the Date of Termination.

(d) Mitigation. Employee shall not be required to mitigate the amount of any
payment provided for in this Section 7 by seeking other employment or otherwise, nor shall
the amount of any payment provided for in this Agreement be reduced by any compensation
earned by Employee as a result of employment by another employer, except as otherwise
expressly set forth herein and except that any severance amounts payable to Employee
pursuant to the Company’s severance plan or policy for employees in general shall reduce the
amount otherwise payable pursuant to Section 7(a)(iii)(B).

(e) Excess Parachute Payments. Notwithstanding anything in this Agreement to
the contrary, to the extent that any payment or benefit received or to be received by
Employee hereunder in connection with the termination of Employee’s employment would, as
determined by tax counsel selected by the Company, constitute an “Excess Parachute Payment”
(as defined in Section 280G of the Internal Revenue Code), the Company shall fully “gross
up” such payment so that Employee is in the same “net” after tax position he would have been
if such payment and gross up payments had not constituted Excess Parachute Payments. No
payment of a gross up shall occur until the first business day occurring after the date that
is six months after the Date of Termination. Payment of the gross up will be made no later
than the end of Employee’s taxable year next following Employee’s taxable year in which
Employee remits the related taxes.

8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Employee’s continuing or future participation in any benefit, bonus, incentive or other plan or
program provided by the Company and for which Employee may qualify, nor shall anything herein limit
or otherwise adversely affect such rights as Employee may have under any Long Term Incentives
granted by the Company.

9. Assignability. The obligations of Employee hereunder are personal and may not be
assigned or delegated by Employee or transferred in any manner whatsoever, nor are such obligations
subject to involuntary alienation, assignment or transfer. The Company shall have the right to
assign this Agreement and to delegate all rights, duties and obligations hereunder, either in whole
or in part, to any parent, affiliate, successor or subsidiary of the Company, so long as the
obligations of the Company under this Agreement remain the obligations of the Company.

10. Notice. For the purposes of this Agreement, all notices and other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered by Federal Express or similar courier addressed (a) to the Company, at its principal
office address, directed to the attention of the Board with a copy to the Corporate Secretary of
the Company, and (b) to Employee, at Employee’s residence address on the records of the Company, or
to such other address as either Party may have furnished to the other in writing in accordance
herewith except that notice of change of address shall be effective only upon receipt.

11. Severability. In the event that one or more of the provisions set forth in this
Agreement shall for any reason be held to be invalid, illegal, overly broad or unenforceable, the
same shall not affect the validity or enforceability of any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal, overly broad or unenforceable
provisions had never been contained therein; provided, however, that no provision
shall be severed if it is clearly apparent under the circumstances that the Parties would not have
entered into the Agreement without such provision.

12. Successors; Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of any such succession
shall constitute Good Reason under Section 7(a)(iv); provided that, for purposes of
implementing the foregoing, the date on which any such succession becomes effective shall be deemed
the Date of Termination. As used herein, the term “Company” shall include any successor to its
business and/or assets as aforesaid which executes and delivers the Agreement provided for in this
Section 12 or which otherwise becomes bound by all terms and provisions of this Agreement by
operation of law.

(b) This Agreement and all rights of Employee hereunder shall inure to the benefit of and be
enforceable by Employee’s personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.

13. Miscellaneous.

(a) No provision of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by Employee and such officer of the
Company as may be specifically authorized by the Board.

(b) No waiver by either Party at any time of any breach by the other Party of, or in
compliance with, any condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

(c) This Agreement is an integration of the Parties’ agreement; no agreement or
representations, oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either Party, except those which are set forth expressly in this Agreement.
Notwithstanding the foregoing, the Parties are party to an Employee Indemnity Agreement dated July
12, 2007, which remains in full force and effect.

(d) THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF LOUISIANA.

(e) Notwithstanding anything herein to the contrary, this Agreement is intended to comply with
Code Section 409A and the regulations and other guidance of general applicability thereunder and
shall at all times be interpreted in accordance with such intent such that amounts credited under
this Agreement shall not be taxable until such amounts are distributed in accordance with the terms
of this Agreement. In the event that Employee is a “specified employee” at the Date of
Termination, any amounts that are considered nonqualified deferred compensation for purposes of
Code Section 409A and that are distributable because of a separation from service shall be delayed
until the first business day occuring after the date that is six months after the Date of
Termination. Any provision of this Agreement to the contrary is without effect.

(f) Reimbursements provided for under this Agreement shall be provided in accordance with
policies of the Company established from time to time.

14. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.

15. Arbitration.

(a) Employee and the Company agree that any dispute regarding the covenants herein and/or the
validity of this Agreement and its addenda, if any, shall be resolved through arbitration.
Employee and the Company hereby expressly acknowledge that Employee’s position in the Company and
the Company’s business have a substantial impact on interstate commerce and that Employee’s
development and involvement with the Company and the Company’s business have a national and
international territorial scope commercially. Any arbitration-related matter or arbitration
proceeding of a dispute regarding the covenants herein and/or the validity of this Agreement and
its addenda, shall be governed, heard, and decided under the provisions and the authority of the
Federal Arbitration Act, 9 U.S.C.A. §1, et seq., and shall be submitted for arbitration to the
office of the American Arbitration Association (“AAA”) in New Orleans, Louisiana, on demand
of either Party.

(b) Such arbitration proceedings shall be conducted in New Orleans, Louisiana, and shall be
conducted in accordance with the then-current Employment Arbitration Rules and Mediation Procedures
of the AAA. Each Party shall have the right to be represented by counsel or other designated
representatives. The Parties shall negotiate in good faith to appoint a mutually acceptable
arbitrator; provided, however, that, in the event that the Parties are unable to
agree upon an arbitrator within 30 days after the commencement of the arbitration proceedings, the
AAA shall appoint the arbitrator. The arbitrator shall have the right to award or include in his
or her award any relief that he or she deems proper under the circumstances, including, without
limitation, all types of relief that could be awarded by a court of law, such as money damages
(with interest on unpaid amounts from the date due), specific performance and injunctive relief.
The arbitrator shall issue a written opinion explaining the reasons for his or her decision and
award. The award and decision of the arbitrator shall be conclusive and binding upon both Parties,
and judgment upon the award may be entered in any court of competent jurisdiction. The Parties
acknowledge and agree that any arbitration award may be enforced against either or both of them in
a court of competent jurisdiction, and each waives any right to contest the validity or
enforceability of such award. The Parties further agree to be bound by the provisions of any
statute of limitations that would be otherwise applicable to the controversy, dispute, or claim
that is the subject of any arbitration proceeding initiated hereunder. Without limiting the
foregoing, the Parties shall be entitled in any such arbitration proceeding to the entry of an
order by a court of competent jurisdiction pursuant to a decision of the arbitrator for specific
performance of any of the requirements of this Agreement. The provisions of this Section 15 shall
survive and continue in full force and effect subsequent to and notwithstanding expiration or
termination of this Agreement for any reason. Employee and the Company acknowledge and agree that
any and all rights they may have to resolve their claims by a jury trial are hereby expressly
waived. The provisions of this Section 15 do not preclude Employee from filing a complaint with
any federal, state or other governmental administrative agency, if applicable.

1

IN WITNESS WHEREOF, the Parties have executed this Agreement on December 31, 2008,
effective for all purposes as of the Effective Date.

THE SHAW GROUP INC.

By: /s/ Clifton S. Rankin

Clifton S. Rankin

General Counsel and Corporate Secretary

EMPLOYEE

/s/ Brian K. Ferraioli

Brian K. Ferraioli

2

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