**Exhibit 10.17**

 

STEPHEN G. HANKS

President and Chief Executive Officer

 

 

January 21, 2004

 

 

Dennis R. Washington47015 West EldoradoIndian Wells, CA 92210

 

Re:                               Terms and Conditions ofContinued Service toWashington Group International, Inc. and Consideration Therefor

 

Dear Dennis:

 

This letter sets forth Washington Group International, Inc.’s (the“Company”) understand­ing of the agreement between you and the Company,effective November 14, 2003, with respect to the terms and conditions of yourcontinued service to the Company and the consideration therefor.

 

You agree to serve as Chairman of the board of directors of the Company(the “Board”), without cash compensation, through January 25, 2007.

 

In addition, until at least January 25, 2007, you agree to usereasonable efforts to use your name, reputation, influence, connections andexpertise to assist the Company in (a) retaining existing business, (b)acquiring new business, (c) obtaining sufficient bonding capacity for projectsto be undertaken by the Company, and (d) establishing and/or maintainingstrategic and/or operating relationships with customers and joint venturepartners, and to respond to reasonable requests by the Board to participate inmeetings, negotiations or other events where the Board believes yourparticipation will be beneficial to the Company relating to the foregoing.  While you are Chairman, you shall not (i)usurp any corporate opportunity of the Company, (ii) work for or promote theinterests of any competitor of the Company, or (iii) disparage the Company’sname or operations.  The Company isaware of and acknowledges your ownership interest in Envirocon.  Currently, the Company is not aware of any activityof Envirocon that would constitute a violation of this paragraph.  Although you regularly will participate inmeetings and other activities of the Board, you are not required to maintain anoffice or a presence at the Company.

 

You also agree that, prior to January 25, 2007, (1) subject to theprovisions below, you will take no action to terminate the Non-ExclusiveLicense Agree­ment, dated August 1, 2000, between Washington Corporations andthe Company with respect to the “W” mark (the “Trademark”), and (2) you willtake no other action that is inconsistent with the continued use of theWashington name and Washington logo by the Company in connection with itsbusiness and services.

 

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In consideration for such services and agreements, the Company willextend the expiration date of the options previously granted to you on January25, 2002, pursuant to the Company’s 2001 Equity and Performance Incentive Plan(the “Option Plan”) - i.e., the Tranche A Washington Options, the Tranche BWashington Options and the Tranche C Washington Options (collectively, the“Options”) - to January 25, 2012.  Allsuch options become fully vested on January 25, 2004.

 

Upon a Change in Control (as defined in the Option Plan), or yourremoval from the Board other than for cause, death or disability, all Optionsshall vest and be exercisable immedi­ately (and shall be exercisable for theirfull term) and WGI’s license to use the Trademark shall terminate.  Upon your death or disability, theWashington Options vested before such event shall remain exercisable for aperiod of twelve months from the date of the event, and all Washington Optionsnot vested before such event shall immediately expire.  Upon your removal for cause, or if you leavethe Company voluntarily before January 25, 2007, the Washington Options vestedbefore such event shall remain exercisable for a period of three months, allWashington Options not vested before such event shall immediately expire, andyou may terminate WGI’s license to use the Trademark.  “Removal for cause” shall mean removal as a result of any of thefollowing: (1) your willful and continued failure to perform your duties underthis Agreement (except due to your incapacity due to physical or mentalillness) after a written demand is delivered to you by the Board specificallyidentifying the manner in which the Board believes that you have failed toperform your duties, (2) your willful engagement in conduct materiallyinjurious to the Company, (3) your taking any action prohibited in the thirdparagraph of this Agreement or (4) your conviction for any felony involving moralturpitude.  For purposes of clauses (1)and (2) of this definition, no act, or failure to act, on your part shall bedeemed “willful” unless done, or omitted, by you in lack of good faith andwithout reasonable belief that your act, or failure to act, was in the bestinterests of Company.

 

In addition, the Company agrees to continue other existing arrangementswith you, including reimbursement of private aircraft use and the right toacquire equity in the Company as set forth in the Company’s Certificate ofIncorporation and Bylaws.

 

If the foregoing correctly sets forth our agreement with respect to thesubject matter of this letter, please evidence your agreement hereto byexecuting a copy of this letter below and returning it to the Company.

 

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|                                                | Sincerely,                            |
|-----------------------------------------------------|---------------------------------------|
|                                                |                                  |
|                                                | WASHINGTON GROUP INTERNATIONAL, INC.  |
|                                                |                                  |
|                                                |    /s/ Stephen G. Hanks          |   |
|                                                | Stephen G. Hanks                      |
|                                                | Chief Executive Officer and President |
|                                                |                                  |
|                                                |                                  |
| ACCEPTED AND AGREED TO effective November 14, 2003. |                                  |
|                                                |                                  |
|   /s/  Dennis R. Washington                    |                                  |   |
| Dennis R. Washington                                |                                  |
|                                                |                                  |
|                                                |                                  |
| cc:                                                 | Richard D. Parry                      |   |
|                                                | Robert Dean Avery                     |   |
|                                                     |                                       |  |  |  |

 

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