EXHIBIT 10.1

 

WASHINGTON GROUP INTERNATIONAL, INC.

2004 EQUITY INCENTIVE PLAN

 

OPTION RIGHTS AGREEMENT

 

THIS AGREEMENT (the “Agreement”), dated as of                     , is made by
and between Washington Group International, Inc., a Delaware corporation
hereinafter referred to as “Corporation”, and
                                    , an employee of the Corporation or
Subsidiary of the Corporation, hereinafter referred to as “Optionee.”

 

WHEREAS, the Corporation wishes to afford the Optionee the opportunity to
purchase shares of its $.01 par value common stock; and

 

WHEREAS, the Corporation wishes to carry out the Plan (as hereinafter defined),
the terms of which are hereby incorporated herein by reference and made a part
hereof; and

 

WHEREAS, the execution of an Option Rights Agreement in the form hereof has been
duly authorized by a resolution of the Board duly adopted on
                    , and incorporated herein by reference; and

 

WHEREAS, this Option Right is intended to be a nonqualified stock option and
shall not be treated as an “incentive stock option” within the meaning of that
term under Section 422 of the Code;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Wherever the following terms are used in this Agreement with initial capital
letters, they shall have the meanings specified in the Plan unless the context
clearly indicates otherwise.

 

Section 1.1 – Board

Section 1.2 – Change in Control

Section 1.3 - Code

Section 1.4 - Common Shares

Section 1.5 – Corporation

Section 1.6 - Date of Grant

Section 1.7 - Exchange Act

Section 1.8 – Securities Act

Section 1.9 - Subsidiary

Section 1.10 – Year of Service

 

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Wherever the following terms are used in this Agreement with initial capital
letters, they shall have the meanings specified below unless the context clearly
indicates otherwise.  The masculine pronoun shall include the feminine and
neuter, and the singular the plural, where the context so indicates.

 

Section 1.11 – Beneficiary

 

“Beneficiary” means the person or persons properly designated by the Optionee to
exercise the Optionee’s rights under the Plan and this Agreement in the event of
the Optionee’s death, or if the Optionee has not designated such person or
persons, or such person or persons shall all have pre-deceased the Optionee, the
executor, administrator or personal representative of the Optionee’s estate. 
Designation, revocation and redesignation of Beneficiaries must be made in
writing in accordance with rules established by the Corporation and shall be
effective upon delivery to the Corporation.

 

Section 1.12 – Employee

 

“Employee” means any officer or other employee of the Corporation or any
Subsidiary.

 

Section 1.13 – Fair Market Value

 

“Fair Market Value” means either (a) the closing price of the Common Shares on
the date in question (or if there was no sale on the date in question, the
closing price of the Common Shares on the most recent date on which there was a
sale) on the NASDAQ National Market (or other national stock exchange) as
published in The Wall Street Journal, or (b) if there is no trading of Common
Shares on the NASDAQ National Market (or other national stock exchange), the
fair market value of the Common Shares as determined by the Board from time to
time.

 

Section 1.14 - Optionee

 

“Optionee” means the Employee named above to whom Option Rights are awarded
under this Agreement and the Plan.

 

Section 1.15 – Option Right

 

“Option Right” means the right to purchase Common Shares evidenced by this
Agreement.

 

Section 1.16 - Plan

 

“Plan” means the Washington Group International, Inc. 2004 Equity Incentive
Plan, as the same may be amended or restated from time to time.

 

Section 1.17 - Secretary

 

“Secretary” means the Secretary of the Corporation.

 

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Section 1.18 – Termination of Employment

 

“Termination of Employment” means the time when the employer-employee
relationship between the Corporation or a Subsidiary and the Optionee is
terminated for any reason, including (without limitation) a termination by
resignation, discharge, death, permanent and total disability or retirement, but
excluding (a) terminations where there is a simultaneous reemployment or
continuing employment of the Optionee by the Corporation or a Subsidiary and (b)
in the discretion of the Board, terminations that result in a temporary
severance of the employer-employee relationship that does not exceed one year. 
The Board shall determine the effect of all matters and questions relating to
Termination of Employment, including (without limitation) the question of
whether a Termination of Employment resulted from a discharge for good cause,
and all questions of whether particular leaves of absence constitute Termination
of Employment.

 

ARTICLE II

AWARD OF OPTION RIGHT

 

Section 2.1 - Grant of Award

 

In consideration of the Optionee’s execution of this Agreement and for other
good and valuable consideration, on the date hereof the Corporation irrevocably
awards to the Optionee the option to purchase any part or all of an aggregate of
                     shares of its Common Shares upon the terms and subject to
the conditions set forth in the Plan and in this Agreement.

 

Section 2.2 - Purchase Price

 

The purchase price of the shares of stock covered by the Option Right shall be
$           per share without commission or other charge.

 

Section 2.3 - Adjustments in Option Right

 

The Board may make or provide for such adjustments in the (a) number of Common
Shares covered by outstanding Option Rights awarded hereunder, (b) prices per
share applicable to such Option Rights, and (c) kind of shares (including shares
of another issuer) covered thereby, as the Board in its sole discretion may in
good faith determine to be equitably required in order to prevent dilution or
enlargement of the rights of Optionees, that otherwise would result from (x) any
stock dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Corporation, (y) any merger,
consolidation, spin-off, split-off, split-up, reorganization, partial or
complete liquidation or other distribution of assets, issuance of rights or
warrants to purchase securities or (z) any other corporate transaction or event
having an effect similar to any of the foregoing.  In the event of any such
transaction or event, the Board may provide in substitution for any or all
outstanding awards under this Agreement such alternative consideration as it may
in good faith determine to be equitable under the circumstances and may require
in connection therewith the surrender of all awards so replaced.

 

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ARTICLE III

PERIOD OF EXERCISABILITY

 

Section 3.1 - Commencement of Exercisability

 

(a)                                  This Option Right shall become exercisable
in three (3) cumulative installments as follows:

 

(i)            The first installment shall consist of one-third (1/3) of the
shares covered by the Option Right and shall become exercisable on the first
anniversary of the Date of Grant.

 

(ii)           The second installment shall consist of one-third (1/3) of the
shares covered by the Option Right and shall become exercisable on the second
anniversary of the Date of Grant.

 

(iii)          The third installment shall consist of one-third (1/3) of the
shares covered by the Option Right and shall become exercisable on the third
anniversary of the Date of Grant.

 

(b)                                 Any portion of the Option Right that has not
yet become exercisable pursuant to 3.1(a) shall become exercisable in full
immediately in the event of a Change in Control.

 

(c)                                  No portion of the Option Right which is
unexercisable at Termination of Employment shall thereafter become exercisable.

 

Section 3.2 - Duration of Exercisability

 

The installments provided for in Section 3.1 are cumulative.  Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.

 

Section 3.3 - Expiration of Option Right

 

The Option Right may not be exercised to any extent by anyone after the first to
occur of the following events:

 

(a)           The expiration of ten (10) years from the date the Option Right
was awarded; or

 

(b)           Except as set forth in 3.3(c) and (d), the expiration of three (3)
months after the Optionee’s Termination of Employment; or

 

(c)           The expiration of twelve (12) months from the date of the
Optionee’s Termination of Employment by reason of permanent and total disability
(within the meaning of Section 22(e)(3) of the Code) or by reason of retirement
at or after the attainment of (a) age 65, (b) age 55 with at least 10 Years of
Service, or (c) 30 Years of Service; or

 

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(d)                                 If the Optionee dies while the Option Right
is exercisable, the expiration of twelve (12) months from the date of the
Optionee’s death.

 

ARTICLE IV

EXERCISE OF OPTION RIGHT

 

Section 4.1 - Person Eligible to Exercise

 

During the lifetime of the Optionee, only he or his guardian or legal
representative may exercise the Option Right or any portion thereof.  After the
death of the Optionee, any exercisable portion of the Option Right may, prior to
the time when the Option Right becomes unexercisable under Section 3.3, be
exercised by his personal representative or by any person empowered to do so
under the Optionee’s will or under the then applicable laws of descent and
distribution.

 

Section 4.2 - Partial Exercise

 

Any exercisable portion of the Option Right or the entire Option Right, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option Right or portion thereof becomes unexercisable under
Section 3.3; provided, however, that each partial exercise shall be for not less
than one hundred (100) shares and shall be for whole shares only.

 

Section 4.3 - Manner of Exercise

 

The Option Right or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option Right or such portion becomes unexercisable under
Section 3.3:

 

(a)                                  Notice in writing signed by the Optionee or
the other person then entitled to exercise the Option Right or portion, stating
that the Option Right or portion is thereby exercised, such notice complying
with all applicable rules established by the Board; and

 

(b)                                 Full payment for the shares with respect to
which such Option Right or portion is exercised, which payment shall be (i) in
cash or by check acceptable to the Corporation; (ii) through the delivery of
Common Shares owned by the Optionee for at least twelve months, duly endorsed
for transfer to the Corporation with a Fair Market Value on the date of delivery
equal to the aggregate exercise price of the Option Right or exercised portion
thereof; (iii) through an arrangement with a bank or broker for payment from the
proceeds of sale through the bank or broker of some or all of the Common Shares
to which the exercise relates; or (iv) through any combination of the
consideration provided in the foregoing subparagraphs (i), (ii) or (iii); and

 

(c)                                  Such representations and documents as the
Board deems necessary or advisable to effect compliance with all applicable
provisions of the Exchange Act, the Securities Act and any

 

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other federal or state securities laws or regulations.  The Board may also take
whatever additional actions it deems appropriate to effect such compliance
including (without limitation) placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;

 

(d)                                 Full payment to the Corporation (or other
employer corporation) of all amounts which under federal, state or local tax
law, it is required to withhold upon exercise of the Option Right; provided,
however, the Corporation may permit the Optionee, upon delivery of a written
election to the Secretary of the Corporation (or to such other person who may be
designated by the Board) to elect payment of this tax obligation from the
proceeds of sale through a bank or broker of some or all of the Common Shares to
which the exercise relates; and

 

(e)                                  In the event the Option Right or portion
shall be exercised pursuant to Section 4.1 by any person or persons other than
the Optionee, appropriate proof of the right of such person or persons to
exercise the Option Right.

 

Section 4.4 - Conditions to Issuance of Stock Certificates

 

The Common Shares deliverable upon the exercise of the Option Right, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been repurchased by the Corporation.  Such shares
shall be fully paid and non-assessable.  The Corporation shall not be required
to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of the Option Right or portion thereof prior to
fulfillment of all of the following conditions:

 

(a)           The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and

 

(b)           The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Board shall deem necessary or advisable; and

 

(c)           The obtaining of any approval or other clearance from any state or
federal governmental agency which the Board shall determine to be necessary or
advisable; and

 

(d)           The payment to the Corporation (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option Right; and

 

(e)           The lapse of such reasonable period of time following the exercise
of the Option Right as the Board may from time to time establish for reasons of
administrative convenience.

 

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Section 4.5 - Rights as Shareholder

 

The holder of the Option Right shall not be, nor have any of the rights or
privileges of, a shareholder of the Corporation in respect of any shares
purchasable upon the exercise of any part of the Option Right unless and until
certificates representing such shares shall have been issued by the Corporation
to such holder.

 

Section 4.6 – Limitations on Resale

 

Any Common Shares issuable upon the exercise of all or a portion of the Option
Right awarded under this Agreement, other than Common Shares sold to pay the
Option Price or to satisfy the Optionee’s tax obligation set forth in
section 4.3(d) of this Agreement, shall be held by the Company in a segregated
account for the benefit of the Optionee and shall not be sold, transferred,
pledged or hypothecated for a period of at least one year from the date on which
the Option Right or portion was exercised.  In addition, if the Optionee is
subject to the Corporation’s Stock Ownership Guidelines, no more than one-half
of any Common Shares issuable upon the exercise of all or a portion of the
Option Right awarded under this Agreement, after any reductions for Common
Shares sold to pay the Option Price or to satisfy the Optionee’s tax obligation
set forth in section 4.3(d) of this Agreement, may be sold, transferred, pledged
or hypothecated until the Optionee has satisfied the applicable stock ownership
guidelines.  These limitations shall lapse and be of no further effect
immediately upon the Optionee’s death or permanent and total disability (within
the meaning of Section 822(e)(3) of the Code).

 

ARTICLE V

OTHER PROVISIONS

 

Section 5.1 - Administration

 

The Board shall have the power to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation and application of the
Plan as are consistent therewith and to interpret, amend or revoke any such
rules.  All actions taken and all interpretations and determinations made by the
Board in good faith shall be final and binding upon the Optionee, the
Corporation and all other interested persons.  No member of the Board shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Option Right.

 

Section 5.2 - Option Right Not Transferable

 

Option Rights under the Plan may not be sold, pledged, assigned or transferred
in any manner other than by will or the laws of descent and distribution;
provided, however, an Optionee may designate a Beneficiary to exercise his
Option Right or other rights under the Plan after his death.  Neither the Option
Right nor any interest or right therein or part thereof shall be liable for the
debts, contracts or engagements of the Optionee or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy,

 

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attachment, garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted disposition thereof shall be null and void and of
no effect; provided, however, that this Section 5.2 shall not prevent transfers
by will or by the applicable laws of descent and distribution.  An Option Right
shall be exercised during the Optionee’s lifetime only by the Optionee or his
guardian or legal representative.

 

Section 5.3 - Shares to Be Reserved

 

The Corporation shall at all times during the term of the Option Right reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.

 

Section 5.4 – No Guarantee of Employment

 

Nothing in this Agreement or in the Plan shall confer upon the Optionee any
right to continue in the employ of the Corporation or any Subsidiary, or shall
interfere with or restrict in any way the rights of the Corporation and its
Subsidiaries, which are hereby expressly reserved, to discharge the Optionee at
any time for any reason whatsoever, with or without cause.

 

Section 5.5 - Notices

 

Any notice to be given under the terms of this Agreement to the Corporation
shall be addressed to the Corporation in care of its Secretary, and any notice
to be given to the Optionee shall be addressed to him at the address given
beneath his signature hereto.  By a notice given pursuant to this Section 5.5,
either party may hereafter designate a different address for notices to be given
to him.  Any notice which is required to be given to the Optionee shall, if the
Optionee is then deceased, be given to the Optionee’s personal representative if
such representative has previously informed the Corporation of his status and
address by written notice under this Section 5.5.  Any notice shall be deemed
duly given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.

 

Section 5.6 - Titles

 

Titles are provided herein for convenience only and are not to serve as a basis
for interpretation or construction of this Agreement.

 

Section 5.7 - Construction

 

This Agreement shall be administered, interpreted and enforced under the
internal substantive laws of the State of Delaware.

 

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Section 5.8 - Conformity to Securities Laws

 

The Optionee acknowledges that the Plan is intended to conform to the extent
necessary with all applicable federal and state laws, rules and regulations,
including provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation Rule 16b-3 under the Exchange Act.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Option Right is awarded and may be exercised, only in such a manner as
to conform to such laws, rules and regulations.  To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.

 

 

WASHINGTON GROUP INTERNATIONAL, INC.

 

 

By:

 

 

 

 

Larry L. Myers

 

 

Senior Vice President – Human Resources

 

 

 

 

 

 

 

 

OPTIONEE

 

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spousal Consent

 

The undersigned has read and is familiar with the preceding Agreement and the
Plan and hereby consents and agrees to be bound by all the terms of the
Agreement and the Plan.  Without limiting the foregoing, the undersigned
specifically agrees that the Corporation may rely on any authorization,
instruction or election made under the Agreement by the Optionee alone and that
all of his or her right, title or interest, if any, in the Common Shares
purchased by the Optionee under the Agreement, whether arising by operation of
community property law, by property settlement or otherwise, shall be subject to
all of such terms.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Printed Name

 

 

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Exhibit A:  Copy of the Plan

 

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