EXHIBIT 10.1


 


WASHINGTON GROUP INTERNATIONAL, INC.


EQUITY AND PERFORMANCE INCENTIVE PLAN


 


PERFORMANCE UNIT PARTICIPANT 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 “Participant.”


 


WHEREAS, the
Corporation wishes to afford the Participant an opportunity to earn incentive
compensation under the Corporation’s Long-Term Incentive Program (“LTIP”) by
achieving objectives that are in the long-term interest of the Corporation and
its shareholders; and


 


WHEREAS,
the Board may authorize the granting of Performance Units under the Plan (as
hereinafter defined), the terms of which are hereby incorporated herein by
reference and made a part hereof; and


 


WHEREAS,
the Board has authorized the grant of Performance Units to the Participant by a
resolution duly adopted on                                         ,
and incorporated herein by reference;


 


NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto do 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 – Management Objectives


Section 1.7 – Subsidiary


 


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 


 


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masculine pronoun shall
include the feminine and neuter, and the singular the plural, where the context
so indicates.


 


Section 1.8 -
Beneficiary


 


“Beneficiary”
means the person or persons properly designated by the Participant to receive
the Participant’s benefits under this Agreement in the event of the Participant’s
death, or if the Participant has not designated such person or persons, or such
person or persons shall all have pre-deceased the Participant, the executor,
administrator, or personal representative of the Participant’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 1.9 -
Compensation Committee


 


“Compensation
Committee” means the compensation committee of the Board, as constituted from
time to time.


 


Section 1.10
– Par Value


 


“Par Value” means the value assigned to each
Performance Unit at the time of grant and represents the amount that the
Corporation will pay for each Performance Unit if the Corporation achieves 100%
of its predetermined Management Objectives during the applicable Performance
Period.


 


Section 1.11
– Performance Period


 


“Performance Period” means the three-fiscal-year
period of the Corporation commencing January 1, 2005, and ending January 2,
2009; provided, however, that the Performance Period may be shortened in the
event of a Change in Control as set forth in Section 4.4.


 


Section 1.12 – Performance Unit


 


“Performance
Unit” means a bookkeeping entry that records a right to payment, the value of
which is contingent upon performance as measured against pre-determined
Management Objectives over the Performance Period.


 


Section 1.13
- Plan


 


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


 


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ARTICLE II


AWARD OF PERFORMANCE UNITS


 


Section 2.1 – Grant of Award


 


In
consideration of the Participant’s execution of this Agreement and for other
good and valuable consideration, on the date hereof, the Corporation
irrevocably awards to the Participant         
Performance Units with a Par Value of $10.00 per unit, upon the terms and
subject to the conditions set forth in the Plan and in this Agreement.


 


Section 2.2 – Performance Measures


 


The
Management Objectives that will be used to determine the actual value of the
Performance Units awarded under this Agreement will be the Corporation’s
average earnings per share (“EPS”) of Common Shares during the Performance
Period and the Corporation’s average return on invested capital (“ROIC”) during
the Performance Period.  A separate
target goal for each Management Objective (EPS and ROIC) has been established
for each year of the Performance Period. 
These target goals are set forth on Exhibit A to this Agreement.  The average EPS and the average ROIC will be
determined by calculating the percentage of the target goal achieved each year
(i.e., dividing each year’s actual results for EPS and ROIC by the respective
target goal for that year) and then calculating the average of the percentages
for all years in the Performance Period (i.e., adding the percentages and
dividing by the number of years in the Performance Period).


 


Example:  If Corporate ROIC equaled 100% of the
target goal in 2005 120% of the target goal in 2006 and 110% of the target goal
in 2007, then the three-year average ROIC would equal 110%.


 


EPS
for any year will be calculated by dividing after-tax profit (net income after
incentive compensation and taxes) by the number of Common Shares outstanding at
the end of the year.


 


ROIC
for any year will be calculated using the following formula:  (net income + tax effected interest) divided
by the average invested equity and debt (excluding cash in excess of $50
million).


 


All
amounts will be determined by the Corporation’s finance department and
certified by the Compensation Committee.


 


Section 2.3 – Performance Unit Values


 


At the
end of the Performance Period, the Compensation Committee shall value each
Performance Unit using the Performance Unit Value
Matrix set forth in Exhibit A and the Corporation’s actual results
during the Performance Period. 
Notwithstanding any other provision of this Agreement or the Plan, no
Performance Unit awarded under this Agreement may have a value greater than
$20.00.  For levels of actual performance
between any two amounts set forth on the Performance Unit Value Matrix, the
value of the Performance Units will


 


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be calculated by
prorating between the values assigned to the specified performance levels,
giving equal weighting to each Management Objective.


 


ARTICLE III


 


Section 3.1 – Payment in Ordinary Course


 


If the
Participant remains actively employed with the Corporation or a Subsidiary
through the date of payment, the value of the Performance Units shall be paid
to the Participant as soon as administratively practical after the February Board
meeting following the end of the Performance Period.  Payment shall be in cash except that the
Compensation Committee may determine in its discretion to permit payment in the
form of Common Shares or Deferred Shares or an election to receive Deferred
Shares of the Corporation, subject to availability under the Plan, to the
extent necessary for the Participant to satisfy any applicable stock ownership
guidelines.


 


Section 3.2 – Payment in the Event of Death or Disability


 


Notwithstanding
the foregoing, if the Participant’s employment with the Corporation or a
Subsidiary terminates solely because of the Participant’s death or permanent
and total disability (within the meaning of Section 822(e)(3) of the Code)
before payment is made, the Participant (or the Beneficiary in the case of the
Participant’s death) shall be entitled to receive a prorated portion of the
value of the Performance Units as soon as administratively practical after the February Board
Meeting following the end of the Performance Period.  The amount that the Participant (or Beneficiary)
shall be entitled to receive shall be determined by multiplying the value of
the Performance Units by a fraction, the numerator of which is the number of
days during the Performance Period that the Participant was employed by the
Corporation or a Subsidiary and the denominator of which is the total number of
days in the Performance Period.


 


Section 3.3 – Taxes


 


Any
taxes required by federal, state or local laws due on payment of the value of
Performance Units will be withheld by the Corporation.  The Participant hereby authorizes the
necessary withholding by the Corporation to satisfy such tax withholding
obligations prior to payment.


 


ARTICLE IV


OTHER
PROVISIONS


 


Section 4.1 – No Guarantee of Employment


 


Nothing
in this Agreement or in the Plan shall confer upon the Participant 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 or its Subsidiaries,
which are expressly reserved, to discharge the Participant at any time for any
reason whatsoever, with or without cause.


 


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Section 4.2 –
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 Participant, 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 a Performance
Unit.


 


Section 4.3 – Performance Units Not Transferable


 


Performance Units 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, the Participant may designate a
Beneficiary to receive payment after his death. 
No Performance Unit or any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Participant 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, 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 4.3
shall not prevent transfer by will or by the applicable laws of descent and
distribution.  During the Participant’s
lifetime, the value of Performance Units shall be paid only to the Participant
or his guardian or legal representative.


 


Section 4.4 – Change in Control


 


The
Performance Period shall end immediately upon the occurrence of a Change in
Control and the value of each Performance Unit shall be equal to the greater of
(a) the Par Value set forth in this Agreement and (b) the value determined
under Section 2.3 of this Agreement based upon the Corporation’s actual
results for the shortened Performance Period. 
The value of the Performance Units shall become payable immediately upon
the Change in Control.


 


Section 4.5 –
Amendment


 


This
Agreement is subject to the Plan. The Board may amend the Plan and the
Compensation Committee may amend this Agreement at any time and in any way, except
that any amendment of the Plan or this Agreement that would impair the
Participant’s rights under this Agreement may not be made without the
Participant’s written consent.


 


Section 4.6 – 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 Participant shall be addressed
to him or her at the address given beneath his or her signature hereto.  By a notice given pursuant to this Section 4.6,
either party may hereafter designate a different address for notices to be
given to him or her.  Any notice which is
required to be given to the Participant


 


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shall, if the Participant is then deceased, be given to the Participant’s
personal representative if such representative has previously informed the
Corporation of his status and address by written notice under this Section 4.6.  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 4.7 –
Titles


 


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


 


Section 4.8 –
Governing Law


 


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


 


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IN WITNESS
WHEREOF, the Corporation, by its duly authorized officer, and the Participant
have executed this Agreement.


 


	
   

  	
  WASHINGTON GROUP INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Larry L. Myers

  
	
   

  	
   

  	
  Senior Vice
  President – Human Resources

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant’s Social Security Number

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant’s
  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
Participant alone and that all of his or her right, title or interest, if any,
in the Performance Units, whether arising by operation of community property
law, by property settlement or otherwise, shall be subject to all such terms.


 


	
   

  	
   

  	
   

  
	
   

  	
  Spouse’s
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Printed Name

  	
   

  



 


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