AMENDED & RESTATED EMPLOYMENT AGREEMENT

Exhibit 10.12

AMENDED & RESTATED EMPLOYMENT AGREEMENT

     This Amended & 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 “ Company ”), and G. Patrick Thompson (“ 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 July 6, 2006 (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 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 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 and Chief Operating Officer of the Environmental & Infrastructure Group 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 Employee by the Chief Executive Officer, President or Chief Financial Officer or the Board of Directors of the Company (the “ Board ”), provided that such duties and responsibilities are comparable to the customary duties and responsibilities of such position.

          (b) Employee agrees to devote Employee’s full attention and time during normal business hours to the business and affairs of the Company and to use reasonable best efforts to perform faithfully and efficiently Employee’s

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

     4.  Compensation.

          (a)  Base Compensation . For services rendered by Employee under this Agreement, the Company shall pay to Employee Employee’s current base salary as of the Effective Date (“ Base Compensation ”), per annum, payable in accordance with the Company’s customary pay periods and subject to tax and other customary withholdings. Employee’s Base Compensation may be reviewed by the Board on an annual basis as of the close of each fiscal year of the Company and may be increased as the Board may deem appropriate. In the event the Board deems it appropriate to increase Employee’s Base

Compensation, that increased amount shall thereafter be the Base Compensation for the purposes of this Agreement. Employee’s Base Compensation, as increased from time to time, may not thereafter be decreased unless agreed to by Employee in writing. Nothing contained herein shall prevent the Board from paying additional compensation to Employee in the form of bonuses or otherwise during the Term.

          (b)  Annual Bonus . During the Term, Employee shall participate in the Company’s discretionary management incentive program as established by the Board (as the same may be amended from time to time), with an annual performance bonus range of 0-200% of Employee’s bonus target (the “Bonus Target”), which Bonus Target shall initially be an amount equal to 75% 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 Incentives .

          (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).

          (ii) All Long Term Incentive awards that are to be settled by the delivery of shares are subject to shareholder approval of shares to be allocated to the Company’s Long Term Incentive plan(s) and are

granted under the strict purview of the Compensation Committee of the Board.

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

          (iv) Notwithstanding any provision to the contrary in the plan(s) governing such Long Term Incentives, in the event that this Agreement is terminated by Employee pursuant to Section 7(a)(ii), (iv) or (v) or by the Company pursuant to Section 7(a)(iii)(A) (other than for Misconduct) or (iii)(D) of this Agreement, Employee shall have not less than one year from the Date of Termination in which to exercise all Long Term Incentives granted to Employee by the Company on or before the Date of Termination (including any Long Term Incentive awards that become vested pursuant to Section 7 of this Agreement); provided that in no event shall such one year period extend the 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)  Expenses . The Company shall, in accordance with any rules and policies that it may establish from time to time for executive officers, reimburse Employee for business expenses reasonably incurred in the performance of Employee’s duties. It is understood that Employee is

authorized to incur reasonable business expenses for promoting the business of the Company, including reasonable expenditures for travel, lodging, meals and client or business associate entertainment. Requests for reimbursement for all business expenses must be accompanied by appropriate documentation.

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

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

     6.  Confidential Information .

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

that have no direct or indirect confidentiality obligation to the Company. Employee further acknowledges by signing this Agreement that the Company has expended much time, cost and difficulty in developing and maintaining the Company’s customers.

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

          (c) Upon termination of employment of Employee, for whatever reason, Employee shall surrender to the Company any and all documents, manuals, correspondence, reports, records and similar items that have or thereafter come into the possession of Employee that contain any Confidential Information; provided , however , that the Company will provide Employee reasonable access to such Confidential Information to the extent required by

Employee in connection with the defense of any cause of action, dispute, proceeding or investigation made or initiated against Employee by any Person other than the Company related to the employment of Employee by the Company or the performance by Employee of its duties and responsibilities in the course of such employment.

          (d) Employee agrees that, as part of the consideration for this Agreement and as an integral part hereof, Employee has executed, delivered and agreed to be bound by the Nonsolicitation and Noncompete Agreement attached hereto as Exhibit A , as well as any subsequent addenda thereto executed by the Company and Employee.

     7.  Termination.

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

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

of any and all option shares, restricted shares or units or other similar awards granted to Employee by the Company under any long term incentive plan(s) duly adopted by the Board (“ Long Term Incentives ”) that have vested or become exercisable on or before the Date of Termination in accordance with the plans governing such Long Term Incentives (which Long Term Incentives remain subject to, and must thereafter be exercised in accordance with, the plan(s) governing such Long Term Incentives).

          (ii) Death . If Employee’s employment is terminated due to Employee’s death, the Company shall pay to Employee’s surviving spouse or estate, subject to 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, (B) a lump sum amount, in cash, equal to one year of Employee’s Base Compensation and (C) a lump sum amount, in cash, equal to to the cost for Employee to obtain one year of group health and dental insurance benefits covering Employee’s spouse and dependents that are substantially similar to those that Employee’s surviving spouse and dependents were receiving immediately prior to Employee’s death. Notwithstanding any provision to the contrary in the plan(s) governing such Long Term Incentives, Employee, as of the date of Employee’s death, shall also become immediately and totally vested in any and all Long Term Incentives granted to Employee by the Company prior to the

Date of Termination that have not previously vested in full. After all payments, benefits and vesting of Long Term Incentives specified under this Section 7(a)(ii) have been paid or performed, this Agreement shall terminate, and the Company shall have no obligations to Employee, Employee’s spouse and dependents or Employee’s legal representatives with respect to this Agreement. This provision shall not be exclusive and shall be in adddition to death benefits payable by the Company or any insurer under any insurance plan or program covering Employee.

          (iii) Discharge .

          (A) The Company may terminate Emp