Exhibit 10.21


 


RESTORATION
PLAN


 


At its August 7, 2002
meeting, the Compensation Committee of the Board reviewed and agreed to, in
principle, a recommendation regarding a nonqualified benefit restoration
plan.  The recommendation was as
follows:


 


“Establish
a restoration plan for the executives who are impacted by limits on
tax-qualified defined contribution plans to make up for benefits lost due to
statutory limitations.”


 


The recommended plan provisions are
summarized below:


 


	
  PROVISION

  	
   

  	
  DETAILS

  	
   

  	
  COMMENTS

  
	
  Effective Date

  	
   

  	
  First payroll following
  January 1, 2003

  	
   

  	
   

  
	
  Plan Objective

  	
   

  	
  To restore employer
  matching contributions that would be otherwise limited due to eligible
  participants reaching the compensation and deferral limit caps imposed on
  qualified plan contributions and benefits reductions occurring from
  nondiscrimination test

  	
   

  	
  For government business
  unit executives, this plan also restores benefits lost because bonuses are
  not included in compensation under the qualified plan

  
	
  Eligibility

  	
   

  	
  All approved Executives
  (approximately 120)

  	
   

  	
  Currently approximately 100
  would receive benefits

  
	
  Plan Year

  	
   

  	
  Calendar Year

  	
   

  	
   

  
	
  Eligible Compensation

  	
   

  	
  Annual Base Salary  

  Annual Cash Incentive Awards 

  Retention and Emergence Awards 
  

  

  (inclusive of any amounts that are voluntarily deferred)

  	
   

  	
  For non-government business
  unit executives, this is the same definition of compensation as the qualified
  plan.  For government
  business unit executives, compensation considered for qualified plan excludes
  bonuses

  
	
  Deferral Requirements

  	
   

  	
  Executive must defer at
  least the lesser of 5% (6% for “Government) of qualified plan “eligible
  compensation” or the 402(g) deferral limit ($12,000 in 2003)

  	
   

  	
   

  
	
  Allocation Frequency

  	
   

  	
  Participant accounts will
  be credited beginning with the first payroll period in which limits are
  triggered and each payroll period thereafter

  	
   

  	
  For “government” executives
  not on Washington Group payroll system, it will be necessary to credit
  accounts on an annual basis

  
	
  Years of Service/Vesting

  	
   

  	
  Participants will be
  immediately 100% vested in all amounts credited

  	
   

  	
   

  
	
  Account Crediting Rate

  	
   

  	
  Matching amounts are
  credited with an interest rate equal to Moody’s August long-term corporate
  bond yield average (Aaa, Aa, A, Baa) based on bonds with maturities 20 years
  and above, adjusted annually on a predetermined date

  	
   

  	
  Moody’s long-term corporate
  bond yield average for the month of August was 7.06%

  
	
  Additional Employer Contributions

  	
   

  	
  At the company’s discretion
  additional amounts may be contributed to meet special circumstances

  	
   

  	
  e.g. , an executive hired
  mid-year who has already hit contribution limits with a previous employer

  
	
  Forms of Payment

  	
   

  	
  Lump sum or  

  

  Five-, Ten- or
  Fifteen-year installments (for balances of at least $50,000).  

  

  Election made upon
  participation, may change any time but effective only if made at least 12
  months before retirement, termination, death or disability

  	
   

  	
  Valued at termination

  
	
  Funding

  	
   

  	
  Benefits will not be funded
  and no trust will be established  Individual, notional accounts established and maintained by the
  company (or third party administrator)

  	
   

  	
   

  



 

















 


Proposed
Restoration Plan – Estimated Cost


 


	
  Total number of executives*

  	
   

  	
  Approximately 120

  	
   

  
	
  Projected 2002 executive compensation

  	
   

  	
  $

  	
  33,640,000

  	
   

  
	
  Annual cost based on projected 2002
  executive compensation

  	
   

  	
  $

  	
  513,000

  	
   

  
	
  2003 Emergence Bonuses (1 year after
  emergence)

  	
   

  	
  $

  	
  5,533,000

  	
   

  
	
  Additional one-time cost in 2003 Emergence
  Bonuses

  	
   

  	
  $

  	
  268,000

  	
   

  



 


•                  Assumes all executives defer at least the
lesser of 5% (6% for Government)  of  qualified plan “eligible compensation” or the
402(g) deferral limit ($12,000 in 2003).


 


•                  Compensation = Base salary plus target bonus


 


•                  For non-government executives, this is the
same definition of pay as the qualified plan.


 


•                  For government executives, pay considered for
qualified plan does not include bonuses.


 


•                  Benefit Restoration plan restores benefits
lost due to the 401(a)(17) compensation limit ($200,000) and the 402(g)
deferral limit ($11,000).


 


•                  For the government executives, the Benefit
Restoration plan also restores benefits lost because bonuses are not included
in compensation for the qualified plan.


 


•                  We have not considered the potential effects
of limitations due to nondiscrimination testing.


 


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