Exhibit
10.3


 


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


Section 1.8 — Years of Service


 


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 1.9 - 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 1.10 - Compensation
Committee


 


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


 


Section 1.11 — 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 1.12 — Performance
Period


 


                “Performance Period” means the
three-fiscal-year period of the Corporation commencing                                      ,
and ending                                      ;
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 1.13 — 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 1.14 - 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.


 


 

















 


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 [first year], 120% of the target goal in [second
year] and 110% of the target goal in [third year], then the three-year average
ROIC would equal 110%.


 


EPS for any year will be
calculated by dividing net income (as defined for the Short-Term Incentive
Plan) by the weighted average number of Common Shares outstanding during the
year.


 


ROIC for any year will be
calculated by dividing net income (as defined for the Short-Term Incentive
Plan) + tax-effected interest expense by the average equity and debt.


 


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 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 or Retirement, Death or Disability


 


                Notwithstanding
the foregoing, if, solely because of the Participant’s death, permanent and
total disability (within the meaning of Section 22(c)(3) of the Code) or
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, the Participant’s employment
with the Corporation or a Subsidiary terminates before payment is made but at least
180 days after the Performance Units were granted, 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.


 


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 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.


 

















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