**EXHIBIT 10.17.2**

 

**AMENDMENT TO RETENTION AGREEMENT**

 

THIS AMENDMENT(the “Amendment”) is made to the Retention Agreement between Washington GroupInternational, Inc., a Delaware Corporation (the “Company”) and **Stephen G. Hanks** (the “Employee”) datedMarch 20, 2001, (the “Agreement”).  ThisAmendment is made as of this 20th day of August, 2002.

 

The Companypreviously entered into the Agreement with the Employee to assure that theCompany would have the continued dedication of the Employee during a period inwhich there was a possibility of a significant restructuring or change ofcontrol of the Company.  The Company hasdetermined that it is in its best interests to extend the Agreement with theEmployee, as modified by this Amendment, to assure the continued dedication ofthe Employee for an additional period of time. To accomplish this objective, the Board has authorized the Company toenter into this Amendment.  Capitalizedterms in this Amendment have the definition used in the Agreement except whereotherwise specified.

 

Inconsideration of the mutual promises set forth below, and for other good andvaluable consideration, the sufficiency of which is acknowledged, the Companyand the Employee hereby agree to amend the Agreement as follows:

 

1.                                       The definitionof “Change of Control” is amended to read as follows:

 

“Change inControl” means and includes the occurrence of any one of the followingevents:

 

(i)                                     individuals who,as of May 31, 2002, constitute the Board (the “Incumbent Directors”) cease forany reason to constitute at least a majority of the Board, provided that anyperson becoming a director after May 31, 2002, and whose election or nominationfor Election was approved by a vote of at least a majority of the IncumbentDirectors then on the Board (either by a specific vote or by approval of theproxy statement of the Company in which such person is named as a nominee fordirector, without written objection to such nomination) shall be an IncumbentDirector; provided,however, that no individual initially electedor nominated as a  director of theCompany as a result of an actual or threatened election contest (as describedin Rule 14a-11 under the 1934 Act (“Election Contest”) or other actual orthreatened 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 inSection 13(d)(3) and 14(d)(2) of the 1934 Act) other than the Board (“ProxyContest”), including by reason of any agreement intended to avoid or settle anyElection Contest or Proxy Contest, shall be deemed an Incumbent Director;

 

(ii)                                  any person becomes a“beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly orindirectly, of securities of the Company

 

----

 

representing 33% or more of the combined voting power of the Company’sthen outstanding securities eligible to vote for the election of the Board (the“Corporation Voting Securities”); provided,however, that theevent described in this paragraph (ii) shall not be deemed to be a Change inControl of the Company by virtue of any of the following acquisitions: (A)  any acquisition by Mr. Dennis R. Washingtondirectly, or indirectly through his affiliates and associates, (B) anacquisition by the Company which reduces the number of Corporation VotingSecurities outstanding and thereby results in any person acquiring beneficialownership of more than 33% of the outstanding Corporation Voting Securities;(C) an acquisition by any employee benefit plan (or related trust) sponsored ormaintained by the Company or any Parent or Subsidiary, (D) an acquisition by anunderwriter temporarily holding securities pursuant to an offering of suchsecurities, or (E) an acquisition pursuant to a Non-Qualifying Transaction (asdefined in paragraph (iii)); or

 

(iii)                               the consummation of areorganization, merger, consolidation, statutory share exchange or similar formof corporate transaction involving the Company that requires the approval ofthe Company’s stockholders, whether for such transaction or the issuance ofsecurities in the transaction (a “Reorganization”), or the sale or otherdisposition of all or substantially all of the Company’s assets to an entitythat is not an affiliate of the Company (a “Sale”), unless immediatelyfollowing such Reorganization or Sale; (A) more than 50% of the total votingpower of (x) the company resulting from such Reorganization or the companywhich has acquired all or substantially all of the assets of the Company (ineither case, the “Surviving Corporation”), or (y) if applicable, the ultimateparent corporation that directly or indirectly has beneficial ownership of 100%of the voting securities eligible to elect directors of the SurvivingCorporation (the “Parent Corporation”), is represented by the Company VotingSecurities that were outstanding immediately prior to such Reorganization orSale (or, if applicable, is represented by shares into which such CorporationVoting Securities were converted pursuant to such Reorganization or Sale), (B)no person (other than (w) the Company, (x) Dennis R. Washington directly, orindirectly through his affiliates or associates, (y) any employee benefit plan(or related trust) sponsored or maintained by the Surviving Corporation or theParent Corporation, or (z) a person who immediately prior to the Reorganizationor Sale was the beneficial owner of 33% or more of the outstanding CorporationVoting Securities) is the beneficial owner, directly or indirectly, of 33% ormore of the total voting power of the outstanding voting securities eligible toelect directors of the Parent Corporation (or, if there is no ParentCorporation, the Surviving Corporation), and (C) at least a majority of themembers of the board of directors of the Parent Corporation (or, if there is noParent Corporation, the Surviving Corporation) following the consummation ofthe Reorganization or Sale were Incumbent Directors at the time of the Board’sapproval of the execution of the initial agreement

 

2

----

 

providing for such Reorganization or Sale (any Reorganization or Salewhich satisfies all of the criteria specified in (A) (B) and (C) above shall bedeemed to be a “Non-Qualifying Transaction”); or

 

(iv)                              approval by thestockholders of the Company of a complete liquidation or dissolution of theCompany unless such transaction is a Non-Qualifying Transaction.

 

2.                                       The definitionof “Target Bonus” is amended to read as follows:

 

“TargetBonus” means (a) 120% of the Employee’s Base Salary as in effect on March31, 2001, for purposes of calculating the retention bonus payable to theEmployee in 2001 and 2002 under paragraph 3; (b) 120% of the Employee’s BaseSalary as in effect on December 31, 2002, for purposes of calculating theretention bonus payable to the Employee in 2003 under paragraph 3; and (c) 120%of the Employee’s Base Salary as in effect on the Employee’s last day ofemployment with the Company for purposes of calculating the severance benefitpayable to the Employee under paragraph 4 and the payment for the Employee’scovenant not to compete under paragraph 6.

 

3.                                       Paragraph 3 ofthe Agreement is amended in its entirety to read as follows:

 

Retention Bonus.  The Company will pay to the Employee a retention bonus equal to1.5 times the Employee’s Target Bonus, payable in cash in three equalinstallments on, or as soon as reasonably practical after, September 1, 2001,March 1, 2002, and September 1, 2002. The Company will pay to the Employee a second retention bonus equal to theEmployee’s Target Bonus, payable in cash in two equal installments on, or assoon as reasonably practical after, March 1, 2003, and September 1, 2003.  However, the Employee must be employed bythe Company on the applicable payment date to receive the payment due on thatdate. (Notwithstanding the foregoing, if the Employee’s employment with theCompany terminates before a particular payment date because of the Employee’sdeath or Disability, the Company will pay to the Employee (or the Employee’sestate in the case of death) a prorated portion of the retention bonus paymentotherwise due on such payment date, based upon the number of days the Employeeremained employed by the Company since the previous payment date.)  These retention bonuses will take the placeof all other incentive compensation, whether annual or long-term, for theCompany’s 2001 and 2002 fiscal years (except for any project bonus the Employeemay be eligible to receive).  If theEmployee is eligible for a project bonus for 2001, the retention bonus paymentspayable on September 1, 2001, and March 1, 2002, under this Agreement shall beoffset against the project bonus for 2001. If the Employee is eligible for a project bonus for 2002, the retentionbonus payments payable on September 1, 2002, and March 1, 2003, under this Agreementshall be offset against the project bonus for 2002.  The retention bonus payment payable on September 1, 2003, shallbe offset against any annual incentive or project incentive compensationotherwise payable for the Company’s 2003 fiscal year.

 

4.                                       Paragraph 4 ofthe Agreement is amended in its entirety to read as follows:

 

3

----

 

Severance Benefit.               If, following a Change in Control, (i) the Employee’semployment with the Company or its subsidiaries is terminated before December31, 2003, (other than a termination for Cause or by reason of the Employee’sdeath, Disability or voluntary resignation or retirement) or (ii) theEmployee’s Base Salary is reduced or the Employee is asked to relocate to acity more than 50 miles from the office or location in which the Employee isbased on the date of the Change in Control and the Employee resigns employmentbefore December 31, 2003, rather than accepting such reduction in Base Salaryor relocation, the Employee shall be entitled to (1) a prorated portion of thenext retention bonus payment, if any, that otherwise would be payable to theEmployee if no termination had occurred, based upon the number of days theEmployee remained employed by the Company since the previous payment date and(2) an amount equal to two times the sum of (a) the Employee’s Base Salary asof the date of termination and (b) the Employee’s Target Bonus.  Absent a Change in Control, if theEmployee’s employment with the Company or its subsidiaries is terminated beforeDecember 31, 2003, (other than a termination for Cause or by reason of theEmployee’s death, Disability or voluntary resignation or retirement), theEmployee shall be entitled to (1) a prorated portion of the next retentionbonus payment, if any, that otherwise would be payable to the Employee if notermination had occurred, based upon the number of days the Employee remainedemployed by the Company since the previous payment date and (2) an amount equalto the sum of (a) the Employee’s Base Salary as of the date of termination and(b) the Employee’s Target Bonus.  TheCompany shall pay these severance benefits to the Employee in a single lump sumcash payment within fifteen (15) days after the Employee’s final regular salarypayment.  If the Employee’s employmentwith the Company or its subsidiaries is terminated for Cause or by reason ofthe Employee’s death, Disability or voluntary resignation or retirement, theEmployee is not entitled to any severance benefit under this paragraph.  Any amounts owed to the Employee under thisparagraph shall be subject to offset for amounts owed the Employee under anyother plan or agreement providing for continuation of Compensation aftertermination of employment or for any other form of severance benefits thatduplicate the benefits provided hereunder. Notwithstanding the foregoing, any compensation for services rendered orconsulting fees earned after the date of termination shall not diminish theEmployee’s right to receive all severance benefits due under this paragraph.

 

5.                                       Paragraph 6(a)of the Agreement is amended to read as follows:

 

(a)                                  If the Employee’semployment with the Company terminates before December 31, 2003 for any reasonthat would entitle the Employee to a severance payment under paragraph 4 above,the Employee agrees that for a period of one year following the termination ofemployment the Employee shall not compete, either directly or indirectly (as ashareholder, partner, employee, trustee or otherwise in any person, firm, corporation,association, partnership or other entity), with the Company or its subsidiariesby engaging, through operations or sales anywhere in the United States, inbusiness in which the Company or its subsidiaries are now engaged or such otherbusinesses as the Company or its subsidiaries may be engaged in at the time ofsuch termination; provided, however, that the Employee may ownsecurities of any publicly held corporation so long as such ownership does notexceed one percent (1%) of the outstanding voting securities of suchcorporation.  The Employee also agreesthat for a period of one year following the

 

4

----

 

termination ofemployment the Employee shall not, directly or indirectly, (1) solicit oraccept any business similar to business provided by the Company from customersof the Company, including prospective customers with which the Company has metwithin twelve (12) months, or request, induce or advise customers of theCompany to withdraw, curtail or cancel their business with the Company, or (2)solicit for employment any employee of the Company, or request, induce oradvise any employee to leave the employ of the Company.

 

IN WITNESSWHEREOF, the parties hereto have duly executed and delivered this Amendment asof the date first above written.

 
|   | **WASHINGTON GROUP INTERNATIONAL, INC.** |
|--------|------------------------------------------|
|   |                                     |
|   | By:                                      | /s/ David H. Batchelder |   |
|   |                                     | David H.  Batchelder |
|   |                                     | Chairman –  Compensation Committee  of the Board of Directors |
|   |                                     |
|   |                                     |
|   | **EMPLOYEE**                             |
|   |                                     |   |   |
|   |                                     | /s/ S. G. Hanks |   |
|   |                                     | Stephen G.  Hanks |
|        |                                          |  |  |  |

 

5

----