EXHIBIT 10.21
FORM OF RETENTION AGREEMENT
THIS RETENTION AGREEMENT (the "Agreement") is made as of this
_____ day of March 2001 between Washington Group International,
Inc., a Delaware Corporation (the "Company") and ____________
(the "Employee").
BACKGROUND
The Company has determined that it is in its best
interests to provide the payments described in this Agreement to
the Employee to assure that the Company will have the continued
dedication of the Employee over the ensuing several months,
notwithstanding the possibility or occurrence of a significant
restructuring or change of control of the Company. To accomplish
these objectives, the Board has authorized the Company to enter
into this Agreement.
In consideration of the mutual promises set forth below,
and for other good and valuable consideration, the sufficiency of
which is acknowledged, the Company and the Employee hereby agree
as follows:
AGREEMENT
1. EFFECTIVE DATE. This Agreement shall be effective as of the date first
noted above (the "Effective Date").
2. DEFINITIONS. The following capitalized terms used in this Agreement
shall have the meanings assigned to them below:
"BASE SALARY" means an amount equal to the annual base
salary rate in effect for the Employee from time to
time.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means the Company having "cause" to terminate
the Employee's employment or service upon (i) the
determination by the Company or the Board that the
Employee has ceased to perform his duties to the Company
(other than as a result of his incapacity due to
physical or mental illness or injury), which failure
amounts to an intentional or extended neglect of his
duties to the Company, (ii) the Company's or Board's
determination that the Employee has engaged in or is
about to engage in conduct materially injurious to the
Company, (iii) the Employee having been convicted of, or
plead guilty or no contest to, a felony or (iv) the
failure of the Employee to follow instruction of the
Board or his direct superiors.
"CHANGE OF CONTROL" means and includes the occurrence of any one of the
following events:
(i) individuals who, at the Effective Date, constitute the
Board (the "Incumbent Directors") cease for any reason
to constitute at least a majority of the Board, provided
that any person becoming a director after
(ii) the Effective Date and whose election or nomination for
Election was approved by a vote of at least a majority
of the Incumbent Directors then on the 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 written objection to such
nomination) shall be an Incumbent Director; PROVIDED,
HOWEVER, that no individual initially elected or
nominated as a director of the Company as a result of an
actual or threatened election contest (as described in
Rule 14a-11 under the 1934 Act ("Election Contest") or
other actual or threatened solicitation of proxies or
consents by or on behalf of any "person" (as such term
is defined in Section 3(a)(9) of the 1934 Act and as
used in Section 13(d)(3) and 14(d)(2) of the 0000 Xxx)
other than the Board ("Proxy Contest"), including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest, shall be deemed an
Incumbent Director;
(iii) any person becomes a "beneficial owner" (as defined in
Rule 13d-3 under the 1934 Act), directly or indirectly,
of securities of the Company representing 50% or more of
the combined voting power of the Company's then
outstanding securities eligible to vote for the election
of the Board (the "Corporation Voting Securities");
PROVIDED, HOWEVER, that the event described in this
paragraph (ii) shall not be deemed to be a Change in
Control of the Company by virtue of any of the following
acquisitions: (A) any acquisition by a person who is on
the Effective Date the beneficial owner of 25% or more
of the outstanding Corporation Voting Securities, (B) an
acquisition by the Company which reduces the number of
Corporation Voting Securities outstanding and thereby
results in any person acquiring beneficial ownership of
more than 25% of the outstanding Corporation Voting
Securities; (C) an acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the
Company or any Parent or Subsidiary, (D) an acquisition
by an underwriter temporarily holding securities
pursuant to an offering of such securities, or (E) an
acquisition pursuant to a Non-Qualifying Transaction (as
defined in paragraph (iii)); or
(iv) the consummation of a reorganization, merger,
consolidation, statutory share exchange or similar form
of corporate transaction involving the Company that
requires the approval of the Company's stockholders,
whether for such transaction or the issuance of
securities in the transaction (a "Reorganization"), or
the sale or other disposition of all or substantially
all of the Company's assets to an entity that is not an
affiliate of the Company (a "Sale"), unless immediately
following such Reorganization or Sale; (A) more than 50%
of the total voting power of (x) the company resulting
from such Reorganization or the company which has
acquired all or substantially all of the assets of the
Company (in either case, the "Surviving Corporation"),
or (y) if applicable, the ultimate parent corporation
that directly or indirectly has beneficial ownership of
100% of the voting securities eligible to elect
directors of the Surviving
Corporation (the "Parent Corporation"), is represented
by the Company Voting Securities that were outstanding
immediately prior to such Reorganization or Sale (or, if
applicable, is represented by shares into which such
Corporation Voting Securities were converted pursuant to
such Reorganization or Sale), (B) no person (other than
(x) the Company, (y) any employee benefit plan (or
related trust) sponsored or maintained by the Surviving
Corporation or the Parent Corporation, or (z) a person
who immediately prior to the Reorganization or Sale was
the beneficial owner of 25% or more of the outstanding
Corporation Voting Securities) is the beneficial owner,
directly or indirectly, of 50% or more of the total
voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation
(or, if there is no Parent Corporation, the Surviving
Corporation), and (C) at least a majority of the members
of the board of directors of the Parent Corporation (or,
if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the
Reorganization or Sale were Incumbent Directors at the
time of the Board's approval of the execution of the
initial agreement providing for such Reorganization or
Sale (any Reorganization or Sale which satisfies all of
the criteria specified in (A) (B) and (C) above shall be
deemed to be a "Non-Qualifying Transaction"); or
(v) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company unless such
transaction is a Non-Qualifying Transaction.
"DISABILITY" means the inability of the Employee to
perform the essential functions of his regular duties
and responsibilities, with or without reasonable
accommodation, due to a medically determinable physical
or mental illness that has lasted (or can reasonably be
expected to last) for a period of 6 consecutive months.
A Disability shall be deemed to have occurred if the
Employee makes application for disability benefits under
any Company-sponsored long-term disability program
(whether insured or self insured, basic or supplemental)
covering the Employee and qualifies for such benefits.
Alternatively, Disability may be determined by the Board
or may be established by certification of two physicians
mutually agreed upon by the Employee, or his personal
representative, and the Company.
"TARGET BONUS" means 100% of the Employee's Base Salary as in effect
on March 31, 2001.
3. RETENTION BONUS. The Company will pay to the Employee a total
retention bonus equal to 1.5 times the Employee's Target Bonus,
payable in cash in three equal installments on September 1, 2001,
March 1, 2002, and September 1, 2002; PROVIDED THAT the Employee must
be employed by the Company on the applicable payment date to receive
the payment due on that date. (Notwithstanding the foregoing, if the
Employee's employment with the Company terminates before a particular
payment date because of the Employee's death or Disability, the
Company will pay to the Employee (or the Employee's estate in the case
of death) a prorated portion of the retention bonus payment
otherwise due on such payment date, based upon the number of days the
Employee remained employed by the Company since the previous payment
date.) This retention bonus will take the place of all other incentive
compensation, whether annual or long-term, for the Company's 2001
fiscal year (except for any project bonus the Employee may be eligible
to receive). If the Employee is eligible for a project bonus for 2001,
the retention bonus payments payable on September 1, 2001, and March
1, 2002, under this Agreement shall be offset against the project
bonus for 2001. The retention bonus payment payable on September 1,
2002, shall be offset against any annual incentive or project
incentive compensation otherwise payable for the Company's 2002 fiscal
year.
4. SEVERANCE BENEFIT. If the Employee's employment with the Company or
its subsidiaries is terminated before December 31, 2002 (other than a
termination for Cause or by reason of the Employee's death, Disability
or voluntary resignation or retirement) or if, following a Change in
Control, the Employee's Base Salary is reduced or the Employee is
asked to relocate to a city more than 50 miles from the office or
location in which the Employee is based on the date of the Change in
Control and the Employee resigns employment before December 31, 2002,
rather than accepting such reduction in Base Salary or relocation, the
Employee shall be entitled to (1) a prorated portion of the next
retention bonus payment, if any, that otherwise would be payable to
the Employee if no termination had occurred, based upon the number of
days the Employee remained employed by the Company since the previous
payment date and (2) an amount equal to the sum of the Employee's Base
Salary as of the date of termination and the Employee's Target Bonus.
The Company shall pay these severance benefits to the Employee in a
single lump sum cash payment within fifteen (15) days after the
Employee's final regular salary payment. If the Employee's employment
with the Company or its subsidiaries is terminated for Cause or by
reason of the Employee's death, Disability or voluntary resignation or
retirement, the Employee is not entitled to any severance benefit
under this paragraph. Any amounts owed to the Employee under this
paragraph shall be subject to offset for amounts owed the Employee
under any other plan or agreement providing for continuation of
Compensation after termination of employment or for any other form of
severance benefits that duplicate the benefits provided hereunder.
Notwithstanding the foregoing, any compensation for services rendered
or consulting fees earned after the date of termination shall not
diminish the Employee's right to receive all severance benefits due
under this paragraph.
5. MITIGATION. The Employee shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking employment or
otherwise during the period he is entitled to such payment.
6. LIMITATION ON PAYMENTS AND BENEFITS. Notwithstanding any provision of
this Agreement to the contrary, if any amount or benefit to be paid or
provided under this Agreement would be an "Excess Parachute Payment,"
within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (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 will be made only if and to the extent that such reduction
would result in an increase in the aggregate payment 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 and employment taxes). Whether requested by the Employee 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, as
determined immediately prior to the Change of Control. The fact that
the Employee's right to payments or benefits may be reduced by reason
of the limitations contained in this paragraph 6 will not of itself
limit or otherwise affect any other rights of the Employee 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 paragraph 6, the Employee will be
entitled to designate the payments and/or benefits to be so reduced in
order to give effect to this paragraph 6. The Company will provide the
Employee with all information reasonably requested by the Employee to
permit the Employee to make such designation. In the event that the
Employee fails to make such designation within 10 business days prior
to the date of termination of Employee's employment, the Company may
effect such reduction in any manner it deems appropriate.
7. SUCCESSORS, BINDING AGREEMENT.
(a) The Company will cause 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.
(b) This Agreement shall inure to the benefit of and be enforceable
by the Company's successors and assigns and by the Employee's
personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees.
8. MISCELLANEOUS.
(a) WITHHOLDING. The Employee agrees to make appropriate arrangements
with the Company for satisfaction of any applicable federal,
state or local income and excise tax withholding requirements or
like requirements to satisfy all obligations for the payment of
such taxes.
(b) ASSIGNABILITY. Payments due under this Agreement may not, at any
time, be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by the Employee, and any such
purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against
the Company; PROVIDED THAT the designation of a beneficiary shall
not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance.
(c) DISCONTINUED BUSINESS. If the business conducted by the Company
shall be discontinued, any previously earned and unpaid payments
under this Agreement shall become immediately payable to the
Employee.
(d) AMENDMENTS. 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 the Employee and
such officer of the Company as may be specifically designated by
the Board.
(e) WAIVERS. No waiver by either party hereto at any time of any
breach by the other party hereto of, or 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.
(f) ENTIRE AGREEMENT. No agreement or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set
forth in this Agreement.
(g) GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of Idaho.
(h) SEVERABILITY. The invalidity or enforceability of any provision
of this Agreement shall not affect validity or enforceability of
any other provision of this Agreement, which shall remain in full
force and effect.
(i) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
(j) ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in Idaho in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered
on the arbitrator's award in any court having jurisdiction.
(k) COSTS OF ENFORCEMENT. Each party shall pay its own legal fees and
expenses incurred in connection with any arbitration (or other
proceeding whether or not instituted by the Company or the
Employee), relating to the interpretation or enforcement of any
provision of this Agreement (including any action seeking to
obtain or enforce any right or benefit provided by this
Agreement).
(l) NO RESTRICTION ON EMPLOYMENT RIGHTS. This contract is in relation
to certain benefits and compensation only and is not to be
construed as an employment contract for a definite term. Nothing
in this Agreement shall confer on the Employee any right to
continue in the employ of the Company or shall interfere with or
restrict the rights of the Company, which are expressly reserved,
to discharge the Employee at any time for any reason whatsoever,
with or without Cause. Nothing in this Agreement shall restrict
the
right of the Employee to terminate his employment with the
Company at any time for any reason whatsoever.
IN WITNESS WHEREOF, the parties hereto have duly executed
and delivered this Agreement as of the date first above written.
WASHINGTON GROUP INTERNATIONAL, INC.
By:
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EMPLOYEE
----------------------------------------
[name]
SCHEDULE TO EXHIBIT 10.21
WGI RETENTION AGREEMENTS
WITH NAMED EXECUTIVES
EACH DATED AS OF MARCH 14, 2001
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxx
