WASHINGTON GROUP INTERNATIONAL, INC. SEVERANCE AGREEMENT
EXHIBIT
10.2
WASHINGTON
GROUP INTERNATIONAL, INC.
THIS
SEVERANCE AGREEMENT (this “Agreement”), dated as of September 8, 2006, is made
and entered into by and between Washington Group International, Inc., a Delaware
corporation (the “Company”), and (the “Executive”).
RECITALS:
1. The
Executive is a senior executive of the Company or one or more of its
Subsidiaries (as defined below) and has made and is expected to continue to
make
major contributions to the short- and long-term profitability, growth and
financial strength of the Company;
2. The
Company recognizes that the possibility of a Change in Control (as defined
below) exists and that such possibility, and the uncertainty it may create
among
management, may result in the distraction or departure of management personnel,
to the detriment of the Company and its stockholders;
3. The
Company desires to assure itself of both present and future continuity of
management and desires to establish certain minimum severance benefits for
certain of its senior executives, including the Executive, applicable in the
event of a Change in Control;
4. The
Company wishes to ensure that its senior executives are not unduly distracted
by
the circumstances attendant to the possibility of a Change in Control and to
encourage the continued attention and dedication of such executives, including
the Executive, to their assigned duties with the Company; and
5. The
Company desires to provide additional inducement for the Executive to continue
to remain in the employ of the Company.
NOW,
THEREFORE, the Company and the Executive agree as follows:
1. Certain
Defined Terms.
In
addition to terms defined elsewhere herein, the following terms have the
following meanings when used in this Agreement with initial capital
letters:
(a) “Base
Pay” means the Executive’s annual base salary rate as in effect from time to
time.
(b) “Board”
means the Board of Directors of the Company.
(c) “Cause”
means that, prior to any termination pursuant to Section 3(b), the
Executive shall have:
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(i) been
convicted of a criminal violation involving, in each case, fraud, embezzlement
or theft in connection with the Executive’s duties or in the course of the
Executive’s employment with the Company or any Subsidiary;
(ii) committed
intentional wrongful damage to property of the Company or any Subsidiary;
or
(iii) committed
intentional wrongful disclosure of secret processes or confidential information
of the Company or any Subsidiary;
and
any
such act shall have been demonstrably and materially harmful to the Company.
For
purposes of this Agreement, no act or failure to act on the part of the
Executive will be deemed “intentional” if it was due primarily to an error in
judgment or negligence, but will be deemed “intentional” only if done or omitted
to be done by the Executive not in good faith and without reasonable belief
that
the Executive’s action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Executive will not be deemed to have been
terminated for “Cause” hereunder unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the Board then in office
(excluding the Executive if the Executive is then a member of the Board) at
a
meeting of the Board called and held for such purpose, after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive’s counsel (if the Executive chooses to have counsel present at such
meeting), to be heard before the Board, finding that, in the good faith opinion
of the Board, the Executive had committed an act constituting “Cause” as herein
defined and specifying the particulars thereof in reasonable detail. Nothing
herein will limit the right of the Executive or the Executive’s beneficiaries to
contest the validity or propriety of any such determination.
(d) “Change
in Control” means the occurrence during the Term of any of the following
events:
(i) The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50%
or
more of either: (A) the then outstanding Common Shares or (B) the Voting Shares;
provided,
however,
that
the following acquisitions shall not constitute a Change in Control: (1) any
acquisition directly from the Company; (2) any acquisition by the Company;
(3)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary; or (4) any acquisition by any
Person pursuant to a transaction that complies with clauses (A), (B) and (C)
of
Section 1(d)(iii) below; or
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(ii) Individuals
who, as of the date of this Agreement, constitute the Board (the “Incumbent
Board”) cease for any reason (other than death or disability) to constitute at
least a majority of the Board; provided,
however,
that
any individual becoming a director subsequent to the date hereof, whose
election, or nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without
objection to such nomination) shall be considered as though such individual
was
a member of the Incumbent Board, but excluding for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual
or
threatened election contest (within the meaning of Rule 14a-11 of the Exchange
Act) with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other
than the Board; or
(iii) Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all
or substantially all of the assets of the Company (a “Business Combination”), in
each case, unless, following such Business Combination, (A) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Common Shares and Voting Shares immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50%
of,
respectively, the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, an
entity that as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions relative to each other
as
their ownership, immediately prior to such Business Combination, of the Common
Shares and Voting Shares, as the case may be, (B) no Person (excluding any
entity resulting from such Business Combination or any employee benefit plan
(or
related trust) sponsored or maintained by the Company or such entity resulting
from such Business Combination) beneficially owns, directly or indirectly,
15%
or more of, respectively, the then-outstanding shares of common stock of the
entity resulting from such Business Combination, or the combined voting power
of
the then-outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and (C) at least
a
majority of the members of the board of directors of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of
the
execution of the initial agreement, or the action of the Board providing for
such Business Combination; or
(iv) Approval
by the stockholders of the Company of a complete liquidation or dissolution
of
the Company.
(e) “Code”
means the Internal Revenue Code of 1986, as amended.
(f) “Common
Shares” means shares of common stock, par value $.01 per share, of the
Company.
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(g) “Employee
Benefits” means the benefits and service credit for benefits as provided under
any and all employee retirement income and welfare benefit policies, plans,
programs or arrangements in which the Executive is entitled to participate,
including without limitation any stock option, performance share, performance
unit, stock purchase, stock appreciation, savings, pension, supplemental
executive retirement, or other retirement income or welfare benefit, deferred
compensation, incentive compensation, group or other life, health,
medical/hospital or other insurance (whether funded by actual insurance or
self-insured by the Company or a Subsidiary), disability, salary continuation,
expense reimbursement and other employee benefit policies, plans, programs
or
arrangements that may now exist or any equivalent successor policies, plans,
programs or arrangements that may be adopted hereafter by the Company or a
Subsidiary, providing benefits and service credit for benefits at least as
great
in the aggregate as are payable thereunder immediately prior to a Change in
Control.
(h) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.
(i) “Good
Reason” means the occurrence of one or more of the following
events:
(i) Failure
to elect or reelect or otherwise to maintain the Executive in the office or
the
position, or a substantially equivalent or better office or position, of or
with
the Company and/or a Subsidiary (or any successor thereto by operation of law
or
otherwise), as the case may be, which the Executive held immediately prior
to a
Change in Control, or the removal of the Executive as a Director of the Company
and/or a Subsidiary (or any successor thereto) if the Executive shall have
been
a Director of the Company and/or a Subsidiary immediately prior to the Change
in
Control;
(ii) Failure
of the Company to remedy any of the following within 10 calendar days after
receipt by the Company of written notice thereof from the Executive: (A) A
significant adverse change in the nature or scope of the authorities, powers,
functions, responsibilities or duties attached to the position with the Company
and any Subsidiary which the Executive held immediately prior to the Change
in
Control, (B) a reduction in the Executive’s Base Pay received from the
Company and any Subsidiary, (C) a reduction in the Executive’s Incentive
Pay opportunity as compared with the Incentive Pay opportunity most recently
paid prior to the Change in Control, or (D) the termination or denial of
the Executive’s rights to Employee Benefits or a reduction in the scope or value
thereof;
(iii) The
liquidation, dissolution, merger, consolidation or reorganization of the Company
or the transfer of all or substantially all of its business and/or assets,
unless the successor or successors (by liquidation, merger, consolidation,
reorganization, transfer or otherwise) to which all or substantially all of
its
business and/or assets have been transferred (by operation of law or otherwise)
assumed all duties and obligations of the Company under this Agreement pursuant
to Section 10(a);
(iv) The
Company requires the Executive to have the Executive’s principal location of
work changed to any location that is in excess of 50 miles from the location
thereof immediately prior to the Change in Control, or requires the Executive
to
travel away from the Executive’s office in the course of discharging the
Executive’s responsibilities or duties hereunder at least 20% more (in terms of
aggregate days in any calendar year or in any calendar quarter when annualized
for purposes of comparison to any prior year) than was required of the Executive
in any of the three full years immediately prior to the Change in Control
without, in either case, the Executive’s prior written consent; or
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(v) Without
limiting the generality or effect of the foregoing, any material breach of
this
Agreement by the Company or any successor thereto which is not remedied by
the
Company within 10 calendar days after receipt by the Company of written notice
from the Executive of such breach.
(j) “Incentive
Pay” means an annual bonus, incentive or other payment of compensation, in
addition to Base Pay, made or to be made in regard to services rendered in
any
year pursuant to any bonus, incentive, profit-sharing, performance,
discretionary pay or similar agreement, policy, plan, program or arrangement
(whether or not funded) of the Company or a Subsidiary, or any successor
thereto. “Incentive Pay” does not include any stock option, stock appreciation,
stock purchase, restricted stock, private equity, long-term incentive or similar
plan, program, arrangement or grant, whether or not provided under a plan,
program or arrangement described in the preceding sentence.
(k) “Severance
Period” means the period of time commencing on the date of the first occurrence
of a Change in Control and continuing until the earlier of (i) the
second anniversary
of the occurrence of the Change in Control, or (ii) the Executive’s death;
provided,
however,
that
commencing on each anniversary of the Change in Control, the Severance Period
will automatically be extended for an additional year unless, not later than
90
calendar days prior to such anniversary date, either the Company or the
Executive shall have given
written notice to the other that the Severance Period is not to be so
extended.
(l) “Subsidiary”
means an entity in which the Company directly or indirectly beneficially owns
50% or more of the outstanding Voting Stock.
(m) “Term”
means the period commencing as of the date hereof and expiring on the close
of
business on December 31, 2008; provided,
however,
that
(i) commencing on January 1, 2008 and each January 1 thereafter,
the term of this Agreement will automatically be extended for an additional
year
unless, not later than September 30 of the immediately preceding year, the
Company or the Executive shall have given notice that it or the Executive,
as
the case may be, does not wish to have the Term extended; (ii) if a Change
in Control occurs during the Term, the Term will expire on the last day of
the
Severance Period; and (iii) subject to Section 3(c), if, prior to a
Change in Control, the Executive ceases for any reason to be an officer of
the
Company and any Subsidiary, thereupon without further action the Term shall
be
deemed to have expired and this Agreement will immediately terminate and be
of
no further effect. For purposes of this Section 1(m), the Executive shall
not be deemed to have ceased to be an employee of the Company and any Subsidiary
by reason of the transfer of the Executive’s employment between the Company and
any Subsidiary, or among any Subsidiaries.
(n) “Termination
Date” means the date on which the Executive’s employment is terminated (the
effective date of which will be the date of termination, or such other date
that
may be specified by the Executive if the termination is pursuant to
Section 3(b)).
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(o) “Voting
Shares” means at any time, the then-outstanding securities entitled to vote
generally in the election of directors of the Company.
2. Operation
of Agreement.
This
Agreement will be effective and binding immediately upon its execution, but,
anything in this Agreement to the contrary notwithstanding, except as provided
in Section 3(c), this Agreement will not be operative unless and until a
Change in Control occurs. Upon the occurrence of a Change in Control at any
time
during the Term, without further action, this Agreement will become immediately
operative.
3. Termination
Following a Change in Control.
(a)
In the
event of the occurrence of a Change in Control, the Executive’s employment may
be terminated by the Company or a Subsidiary during the Severance Period (or
pursuant to Section 3(c)) and the Executive will be entitled to the benefits
provided by Section 4 unless such termination is the result of the
occurrence of one or more of the following events:
(i) The
Executive’s death;
(ii) If
the
Executive becomes permanently disabled within the meaning of, and begins
actually to receive disability benefits pursuant to, the long-term disability
plan in effect for, or applicable to, the Executive immediately prior to the
Change in Control; or
(iii) Cause.
If,
during the Severance Period, the Executive’s employment is terminated by the
Company or any Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii)
or 3(a)(iii), the Executive will be entitled to the benefits provided by
Section 4.
(b) In
the
event of the occurrence of a Change in Control, the Executive may terminate
employment with the Company and any Subsidiary during the Severance Period
for
Good Reason with the right to severance compensation as provided in
Section 4 regardless of whether any other reason, other than Cause, for
such termination exists or has occurred, including without limitation other
employment.
(c) Anything
in this Agreement to the contrary notwithstanding, if a Change in Control occurs
and not more than 180 days
prior to the date on which the Change in Control occurs, the Executive’s
employment with the Company is terminated by the Company, such termination
of
employment will be deemed to be a termination of employment after a Change
in
Control for purposes of this Agreement if the Executive has reasonably
demonstrated that such termination of employment (i) was at the request of
a third party who has taken steps reasonably calculated to effect a Change
in
Control, or (ii) otherwise arose in connection with or in anticipation of a
Change in Control.
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(d) A
termination of employment pursuant to Section 3(a), 3(b) or 3(c) will not
affect any rights that the Executive may have pursuant to any agreement, policy,
plan, program or arrangement of the Company or Subsidiary providing Employee
Benefits, which rights will be governed by the terms thereof, except for any
rights to severance compensation or
benefits
to which
the Executive may be entitled upon termination of employment pursuant
to any employment or severance agreement or employee plan (“Other
Arrangements”),
which
rights will be deemed to have been satisfied to the extent and only to the
extent comparable benefits are provided under this Agreement. This
Section 3(d) is intended to avoid duplication of payments and benefits under
this Agreement and under the Other Arrangements and this Section should be
interpreted as being intended to insure that, in circumstances in which the
Executive is entitled to severance and other benefits under Section 4 of this
Agreement and under the Other Arrangements, the total severance amounts and
value of benefits received by the Executive will be equal to the amounts and
benefits provided under the agreement or arrangement that provides for the
greatest amounts and benefits, but the Executive shall not be entitled to
duplication of such amounts and benefits.
4. Severance
Compensation.
(a)
If,
following the occurrence of a Change in Control, the Company or Subsidiary
terminates the Executive’s employment during the Severance Period other than
pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive
terminates the Executive’s employment pursuant to Section 3(b), provided
that the Executive executes a release substantially in the form attached hereto
as Annex A, the Company will:
(i) pay
to
the Executive, within five business days after the expiration of any revocation
period relating to the release described above, a lump sum payment in an amount
equal to two (2) times the sum of (A) Base Pay (at the highest rate in
effect for any period within three years prior to the Termination Date), plus
(B) annual bonus (in an amount equal to target annual bonus for the year in
which the Termination Date occurs); and
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(ii) for
a
period of eighteen (18) months following the Termination Date (the “Continuation
Period”), arrange to provide the Executive, at no cost to the Executive, with
(A) medical and dental benefits substantially similar to those that the
Executive was receiving or entitled to receive immediately prior to the
Termination Date (or, if greater, immediately prior to the reduction,
termination, or denial described in Section 1(i)(ii)) or (B) coverage for
medical and dental benefits under the retiree medical program of the Company
if
the Executive is eligible for such coverage on the Termination Date. The
Continuation Period shall be considered to be the period during which the
Executive shall be eligible for continuation coverage under Section 4980B of
the
Code, and the Company shall reimburse the Executive for the amount of the
premiums for such continuation coverage; provided,
however
that
without otherwise limiting the purposes or effect of Section 6, the benefits
otherwise receivable by the Executive pursuant to this Section 4(a)(ii) will
be
reduced to the extent comparable welfare benefits are actually received by
the
Executive from another employer during the Continuation Period following the
Executive’s Termination Date, and any such benefits actually received by the
Executive shall be reported by the Executive to the Company. If any benefit
described in this Section 4(a)(ii) is subject to income or employment tax,
the
Company will pay to the Executive, at the earliest time permitted under Section
409A of the Code, an additional amount such that after payment by the Executive
or the Executive’s dependents or beneficiaries, as the case may be, of all
income and employment taxes imposed on such additional payment, the recipient
retains an amount equal to the income and employment taxes imposed on such
benefit. Notwithstanding the foregoing, if the Company determines that there
is
a substantial risk that the provision of benefits under this Section 4(a)(ii)
will result in adverse tax consequences to the Executive under Section 409A
of
the Code, the Company will use its reasonable best efforts to make other
arrangements to provide a substantially similar benefit to the Executive that
does not have such adverse tax consequences, including, without limitation,
making a lump sum payment at the earliest time permitted under Section 409A
of
the Code, in an amount equal to the Company’s reasonable determination of the
present value of any such benefits that, if provided, would result in adverse
tax consequences to the Executive and/or providing such benefit through
insurance coverage on the Executive’s behalf; and
(iii) pay
to
the Executive, within five business days after the expiration of any revocation
period relating to the release described above, a lump sum payment in an amount
equal to $50,000 in lieu of providing financial counseling benefits to the
Executive during the Continuation Period.
(b) Without
limiting the rights of the Executive at law or in equity, if the Company fails
to make any payment or provide any benefit required to be made or provided
hereunder on a timely basis, the Company will pay interest on the amount or
value thereof at an annualized rate of interest equal to the “prime rate” as set
forth from time to time during the relevant period in The
Wall Street Journal“Money
Rates” column. Such interest will be payable as it accrues on demand. Any change
in such prime rate will be effective on and as of the date of such
change.
(c) Unless
otherwise expressly provided by the applicable plan, program or agreement,
after
the occurrence of a Change in Control, the Company will pay in cash to the
Executive a lump sum amount equal to the sum of (i) any unpaid incentive
compensation that has been earned, accrued, allocated or awarded to the
Executive for any performance period ending prior to the Change in Control
(regardless of whether payment of such compensation is contingent on the
continuing performance of services by the Executive), plus (ii) the value
of any incentive-based annual cash bonus payable pursuant to any performance
period that is outstanding on the date of the Change in Control. Such payment
will be made at the earlier of (x) the date prescribed for payment pursuant
to the applicable plan, program or agreement, and (y) within five business
days after the Change in Control. In the case of clauses (i) and (ii), any
applicable vesting requirements will be disregarded. In the case of clause
(ii),
the amount will be calculated at the greater of (1) the plan target or payout
rate and (2) the amount determined based on the Company’s actual results
relative to the applicable performance criteria as if the performance period
had
ended on the date of the Change in Control, which amount will be prorated on
the
basis of the number of days of the Executive’s participation during the
applicable performance period to which the incentive pay related divided by
the
aggregate number of days in such performance period, taking into account service
rendered through the payment date.
(d) Notwithstanding
anything to the contrary contained in this Section 4, if any payment to the
Executive, the payment date of which is determined by reference to the
Executive’s termination of employment, would constitute a “deferral of
compensation” under Section 409A of the Code and the Executive is a “specified
employee” (as such phrase is defined in Section 409A of the Code), the Executive
(or the Executive’s beneficiary) will receive payment of the amounts described
in this Section 4 upon the earlier of (i) six (6) months following the
Executive’s “separation from service” with the Company (as such phrase is
defined in Section 409A of the Code) or (ii) the Executive’s death.
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5. Golden
Parachute Excise Tax - Modified Cap.
Notwithstanding any provision of this Agreement to the contrary, if any amount
or benefit to be paid or provided under this Agreement or
any
other agreement, contract or arrangement would
be
an “Excess Parachute Payment,” within the meaning of Section 280G of the
Code, or any successor provision thereto, but for the application of this
sentence, then the payments and benefits to be paid or provided under this
Agreement will be reduced to the minimum extent necessary (but in no event
to
less than zero) so that no portion of any such payment or benefit, as so
reduced, constitutes an Excess Parachute Payment; provided,
however,
that
the foregoing reduction shall be made only if and to the extent that such
reduction would result in an increase in the aggregate payments and benefits
to
be provided, determined on an after-tax basis (taking into account the excise
tax imposed pursuant to Section 4999 of the Code, or any successor provision
thereto, any tax imposed by any comparable provision of state law, and any
applicable federal, state and local income taxes). Whether requested by the
Executive or the Company, the determination of whether any reduction in such
payments or benefits to be provided under this Agreement or otherwise is
required pursuant to the preceding sentence will be made at the expense of
the
Company by the Company’s independent accountants or benefits consultant. The
fact that the Executive’s right to payments or benefits may be reduced by reason
of the limitations contained in this Section 5 will not of itself limit or
otherwise affect any other rights of the Executive other than pursuant to this
Agreement. In the event that any payment or benefit intended to be provided
under this Agreement or otherwise is required to be reduced pursuant to this
Section 5, the Executive will be entitled to designate the payments and/or
benefits to be so reduced in order to give effect to this Section 5. The
Company will provide the Executive with all information reasonably requested
by
the Executive to permit the Executive to make such designation. In the event
that the Executive fails to make such designation within 10 business days of
the
Termination Date, the Company may effect such reduction in any manner it deems
appropriate.
6. No
Mitigation Obligation.
The
Company hereby acknowledges that it will be difficult and may be impossible
for
the Executive to find reasonably comparable employment following the Termination
Date. Accordingly, the payment of the severance compensation by the Company
to
the Executive in accordance with the terms of this Agreement is hereby
acknowledged by the Company to be reasonable, and the Executive will not be
required to mitigate the amount of any payment provided for in this Agreement
by
seeking other employment or otherwise, nor will any profits, income, earnings
or
other benefits from any source whatsoever create any mitigation, offset,
reduction or any other obligation on the part of the Executive hereunder or
otherwise.
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7. Legal
Fees and Expenses.
(a)
It is
the intent of the Company that the Executive not be required to incur legal
fees
and the related expenses associated with the interpretation, enforcement or
defense of the Executive’s rights in connection with any dispute arising under
this Agreement because the cost and expense thereof would substantially detract
from the benefits intended to be extended to the Executive hereunder.
Accordingly, if it should appear to the Executive that the Company has failed
to
comply with any of its obligations under this Agreement or in the event that
the
Company or any other person takes or threatens to take any action to declare
this Agreement void or unenforceable, or institutes any proceeding designed
to
deny, or to recover from, the Executive the benefits provided or intended to
be
provided to the Executive hereunder, the Company irrevocably authorizes the
Executive from time to time to retain counsel of the Executive’s choice, at the
expense of the Company as hereafter provided, to advise and represent the
Executive in connection with any such dispute or proceeding. Notwithstanding
any
existing or prior attorney-client relationship between the Company and such
counsel, the Company irrevocably consents to the Executive’s entering into an
attorney-client relationship with such counsel, and in that connection the
Company and the Executive agree that a confidential relationship will exist
between the Executive and such counsel. Without respect to whether the Executive
prevails, in whole or in part, in connection with any of the foregoing, the
Company will pay and be solely financially responsible for any and all
attorneys’ and related fees and expenses incurred by the Executive in connection
with any of the foregoing. Such payments will be made within five business
days
after delivery of the Executive’s written requests for payment, accompanied by
such evidence of fees and expenses incurred as the Company may reasonably
require. Notwithstanding the foregoing, the Company’s obligation to pay to the
Executive the legal fees and expenses under this Section 7(a) is not intended
to
include any fees and expenses incurred in connection with the initial review
of
this Agreement or any related agreement by the Executive or the Executive’s
counsel or advisers.
(b) Without
limiting the obligations of the Company pursuant to Section 7(a), in the
event a Change in Control occurs, the performance of the Company’s obligations
under Section 4 and this Section 7 will be secured by amounts deposited or
to be deposited in trust pursuant to certain trust agreements to which the
Company will be a party providing that the benefits to be paid pursuant to
Section 4 and the fees and expenses of counsel selected from time to time by
the
Executive pursuant to Section 7(a) will be paid, or reimbursed to the
Executive if paid by the Executive, either in accordance with the terms of
such
trust agreements, or, if not so provided, on a regular, periodic basis upon
presentation by the Executive to the trustee of a statement or statements
prepared by such counsel in accordance with its customary practices. Any failure
by the Company to satisfy any of its obligations under this Section 7(b)
will not limit the rights of the Executive hereunder. Subject to the foregoing,
the Executive will have the status of a general unsecured creditor of the
Company and will have no right to, or security interest in, any assets of the
Company or any Subsidiary.
8. Employment
Rights.
Nothing
expressed or implied in this Agreement will create any right or duty on the
part
of the Company or the Executive to have the Executive remain in the employment
of the Company or any Subsidiary prior to or following any Change in
Control.
9. Withholding
of Taxes.
The
Company may withhold from any amounts payable under this Agreement all federal,
state, city or other taxes as the Company is required to withhold pursuant
to
any applicable law, regulation or ruling.
10. Successors
and Binding Agreement.
(a)
The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or substantially
all
of the business or assets of the Company, by agreement in form and substance
reasonably satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent the Company
would be required to perform if no such succession had taken place. This
Agreement will be binding upon and inure to the benefit of the Company and
any
successor to the Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business or assets of
the
Company whether by purchase, merger, consolidation, reorganization or otherwise
(and such successor will thereafter be deemed the “Company” for the purposes of
this Agreement), but will not otherwise be assignable, transferable or delegable
by the Company.
A-10
EXHIBIT
10.2
(b) This
Agreement will inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees and legatees.
(c) This
Agreement is personal in nature and neither of the parties hereto will, without
the consent of the other, assign, transfer or delegate this Agreement or any
rights or obligations hereunder except as expressly provided in
Sections 10(a) and 10(b). Without limiting the generality or effect of the
foregoing, the Executive’s right to receive payments hereunder will not be
assignable, transferable or delegable, whether by pledge, creation of a security
interest, or otherwise, other than by a transfer by the Executive’s will or by
the laws of descent and distribution and, in the event of any attempted
assignment or transfer contrary to this Section 10(c), the Company will
have no liability to pay any amount so attempted to be assigned, transferred
or
delegated.
11. Notices.
For all
purposes of this Agreement, all communications, including without limitation
notices, consents, requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly given when
hand delivered or dispatched by electronic facsimile transmission (with receipt
thereof orally confirmed), or five business days after having been mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, or three business days after having been sent by a nationally
recognized overnight courier service such as FedEx or UPS, addressed to the
Company (to the attention of the Secretary of the Company) at its principal
executive office and to the Executive at the Executive’s principal residence, or
to such other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of changes of address will
be
effective only upon receipt.
12. Governing
Law.
The
validity, interpretation, construction and performance of this Agreement will
be
governed by and construed in accordance with the substantive laws of the State
of Delaware and federal law, without giving effect to the principles of conflict
of laws of such State, except as expressly provided herein.
13. Validity.
If any
provision of this Agreement or the application of any provision hereof to any
person or circumstance is held invalid or otherwise unenforceable, the remainder
of this Agreement and the application of such provision to any other person
or
circumstance will not be affected, and the provision so held to be invalid
or
otherwise unenforceable will be reformed to the extent (and only to the extent)
necessary to make it enforceable or valid.
A-11
EXHIBIT
10.2
14. Miscellaneous.
No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by the
Executive and the Company. No waiver by either party hereto at any time of
any
breach by the other party hereto or compliance with any condition or provision
of this Agreement to be performed by such other party will be deemed a waiver
of
similar or dissimilar provisions or conditions at the same or at any prior
or
subsequent time. No agreements or representations, oral or otherwise, expressed
or implied with respect to the subject matter hereof have been made by either
party that are not set forth expressly in this Agreement. The headings used
in
this Agreement are intended for convenience or reference only and will not
in
any manner amplify, limit, modify or otherwise be used in the construction
or
interpretation of any provision of this Agreement. References to Sections are
to
Sections of this Agreement. Any reference in this Agreement to a provision
of a
statute, rule or regulation will also include any successor provision
thereto.
15. Survival.
Notwithstanding any provision of this Agreement to the contrary, the parties’
respective rights and obligations under Sections 3(c), 4, 5, 7, 8, 9,
10(b), 16, and 17 will survive any termination or expiration of this Agreement
or the termination of the Executive’s employment following a Change in Control
for any reason whatsoever.
16. Beneficiaries.
The
Executive will be entitled to select (and change, to the extent permitted under
any applicable law) a beneficiary or beneficiaries to receive any compensation
or benefit payable hereunder following the Executive’s death, and may change
such election, in either case by giving the Company written notice thereof
in
accordance with Section 11. In the event of the Executive’s death or a
judicial determination of the Executive’s incompetence, reference in this
Agreement to the “Executive” will be deemed, where appropriate, to the
Executive’s beneficiary, estate or other legal representative.
17. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together will constitute one and
the
same agreement.
18. Section
409A of the Code.
To
the
extent applicable, it is intended that the compensation arrangements under
this
Agreement be in full compliance with Section 409A of the Code. To the extent
any
provision in this Agreement is or will be in violation of Section 409A, the
Agreement shall be amended in such manner as the parties may agree such that
the
Agreement is or remains in compliance with Section 409A and the intent of the
parties is maintained to the maximum extent possible. In
particular, to the extent that the Executive becomes entitled to a payment
or
benefit under this Agreement that would constitute a “deferral of compensation”
under Section 409A of the Code and the date that the payment would be made
or
benefit provided would subject the Executive to income inclusion or penalties
under Section 409A of the Code, then notwithstanding anything to the contrary
in
this Agreement, such payment or benefit will be made or provided, to the extent
necessary to comply with the provisions of Section 409A of the Code, to the
Executive on the earlier of (a) the Executive’s “separation from service” with
the Company (determined in accordance with Section 409A); provided,
however,
that if
the Executive is a “specified employee” (within the meaning of Section 409A),
the Executive’s date of payment shall be the date that is six months after the
date of the Executive’s separation of service with the Company, or (b) the
Executive’s death. Reference to Section 409A of the Code is to Section 409A of
the Internal Revenue Code of 1986, as amended, and will also include any
proposed, temporary or final regulations, or any other guidance, promulgated
with respect to such Section by the U.S. Department of the Treasury or the
Internal Revenue Service.
A-12
EXHIBIT
10.2
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and
delivered as of the date first above written.
| WASHINGTON GROUP INTERNATIONAL, INC. |
|
/s/
Xxxxx X. Xxxxx
|
||
|
By:
|
||
|
Xxxxx
X. Xxxxx, SVP Human Resources
|
||
A-13
SCHEDULE
TO EXHIBIT 10.2
Severance
Agreements with Officers
|
Name
|
Date
of Agreement
|
|
|
Xxxxxxx
X. Xxxxxxx
|
September
8, 2006
|
|
|
Xxxxxx
X. Xxxxxxx
|
September
8, 2006
|
|
|
Xxxxx
X. Xxxxx
|
September
8, 2006
|
|
|
Xxxxx
X. Xxxxx
|
September
8, 2006
|
|
|
Xxxxxxx
X. Xxxxx
|
September
8, 2006
|
|
|
Xxxxxxx
X. Xxxxxxx
|
September
8, 2006
|
|
|
Xxxxx
X. Xxxxxx
|
September
8, 2006
|
|
|
Xxxx
X. Xxxx
|
September
8, 2006
|
|
|
Xxxxxx
X. Xxxxxx
|
September
8, 2006
|
A-14
