Document:

Exhibit 10.2

 

2006 Compensation Arrangements
for Named Executive Officers

 

Set
forth is a summary of fiscal 2006 compensation arrangements between Fargo
Electronics, Inc. (the “Company”) and certain of its executive officers
who are expected to constitute the Company’s “named executive officers”
(defined in Regulation S-K Item 402(a)(3)) for the year.  Generally, the salaries of named executive
officers are set at industry averages and variable compensation is provided for
through cash bonuses. The form of compensation provided to members of the named
executive officers varies based on their position and their ability to
influence performance.  All of the
Company’s executive officers are at-will employees, whose compensation and
employment status may be changed at any time in the discretion of the Company’s
Board of Directors, subject only to the terms of the Amended and Restated
Employment Agreement between the Company and Mr. Holland, and the terms of
the Officers Agreements (concerning a change in control of the Company) between
the Company and the other executive officers (the forms of which have been
filed as exhibits to the Company’s annual report on Form 10-K).

 

The
Compensation and Human Resources Committee has discretion to set executive
compensation at levels warranted by external, internal and individual
circumstances. The Committee has solicited through Mr. Holland, and
reviewed periodically, compensation surveys for officer positions in the
electronics industry. Although such data provides a base for comparison, it is
not necessarily used as the basis for the compensation actually awarded.

 

The
Company’s executive officer compensation program can be separated into several
elements: base salary, annual cash incentive compensation, and various benefits,
including medical and retirement savings plans generally available to
employees.

 

Base Salary

 

The
Company’s policy is to set the base salaries of its executives at the industry
average.  Effective as of January 1,
2006, the named executive officers are scheduled to receive the following
annual base salaries in their current positions:

 

	
  Name and Current Position

  	
   

  	
  Base Salary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Gary R.
  Holland

  	
   

  	
  $

  	
  343,500

  	
   

  
	
  (Chairman of
  the Board of Directors, President and Chief Executive Officer)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Kathleen L.
  Phillips

  	
   

  	
  $

  	
  185,000

  	
   

  
	
  (Marketing
  and Distribution)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Thomas C.
  Platner

  	
   

  	
  $

  	
  185,000

  	
   

  
	
  (Engineering
  and Manufacturing)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Paul W.B.
  Stephenson

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  (Chief
  Financial Officer)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Jeffrey D.
  Upin

  	
   

  	
  $

  	
  185,000

  	
   

  
	
  (Business Development,
  General Counsel and Secretary)

  	
   

  	
   

  	
   

  

 

Annual Cash Incentive Compensation

 

The
Compensation and Human Resources Committee establishes a bonus plan annually
for the Chief Executive Officer and all other Company employees.  For 2006, the Company’s Compensation and
Human Resources Committee approved, and the Board of Directors ratified, an
incentive bonus plan for

 

1

 

all
of our employees, known as the “Success Sharing Bonus Plan” (the “SSB Plan”).  The SSB Plan is based on the Company’s
overall strategic, business and financial performance.

 

The
following table illustrates the calculation of the Bonus Potential (as defined
in the SSB Plan) for each named executive officer.  The Bonus Potential is multiplied by the
Success Sharing Payout Percentage (determined by the Board of Directors to be
between 0% and 250%) to determine the actual bonus payout for each employee.

 

	
  Name

  	
   

  	
  Annualized

  Salary

  	
   

  	
  Eligibility

  Percentage

  	
   

  	
  Bonus

  Potential

  	
   

  	
  Maximum Possible

  Bonus Payout

  (250% of Bonus Potential)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gary R.
  Holland

  	
   

  	
  $

  	
  343,500

  	
   

  	
  50%

  	
   

  	
  $

  	
  171,750

  	
   

  	
  $

  	
  429,375

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kathleen L.
  Phillips

  	
   

  	
  $

  	
  185,000

  	
   

  	
  35%

  	
   

  	
  $

  	
  64,750

  	
   

  	
  $

  	
  161,875

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thomas C.
  Platner

  	
   

  	
  $

  	
  185,000

  	
   

  	
  35%

  	
   

  	
  $

  	
  64,750

  	
   

  	
  $

  	
  161,875

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Paul W.B.
  Stephenson

  	
   

  	
  $

  	
  200,000

  	
   

  	
  35%

  	
   

  	
  $

  	
  70,000

  	
   

  	
  $

  	
  175,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jeffrey D.
  Upin

  	
   

  	
  $

  	
  185,000

  	
   

  	
  35%

  	
   

  	
  $

  	
  64,750

  	
   

  	
  $

  	
  161,875

  	
   

  

 

Further
information regarding the SSB Plan is contained in Exhibit 10.1 to this
Current Report on Form 8-K.

 

Benefits

 

The
Company provides medical, dental and life and disability insurance benefits as
well as a 401(k) retirement plan (including a Company match as determined by
the Board of Directors) to its executive officers.  The same benefits are available to all Company
employees.

 

Mr. Holland
receives an annual car allowance in the amount of $12,000 annually.

 

2Exhibit 10.3

 

Fargo
Electronics, Inc.

2006 Non-Employee Director Compensation Summary

 

The Board of Directors of Fargo Electronics, Inc.
approved the following fee schedule to be effective January 1, 2006
for non-employee directors:

 

	
  Annual Retainer

  	
   

  	
  $

  	
  20,000

  	
   

  
	
  Lead Director

  	
   

  	
  $

  	
  8,000

  	
   

  
	
  Audit Committee chair

  	
   

  	
  $

  	
  7,000

  	
   

  
	
  Audit Committee members

  	
   

  	
  $

  	
  3,000

  	
   

  
	
  Other Committee chairs

  	
   

  	
  $

  	
  3,000

  	
   

  
	
  Other Committee members

  	
   

  	
  $

  	
  2,000

  	
   

  

 

The Board also approved a grant of 2,100
shares of restricted stock to each non-employee director on the date of Fargo’s
2006 annual meeting.  These shares will
vest ratably on a cumulative basis on the first three anniversaries of the
grant date.

 

All cash compensation will
be paid quarterly.

 

1EXHIBIT 10.6

 

EXECUTION COPY

 

TERMINATION AGREEMENT

 

THIS TERMINATION
AGREEMENT (this “Agreement”),
dated as of December 31, 2005, is entered into by and among the following
parties:

 

•                                          WASHINGTON GROUP INTERNATIONAL, INC., an
Ohio corporation formerly known as Morrison Knudsen Corporation, (“Washington Group”);

 

•                                          BRITISH NUCLEAR FUELS plc (Company Number
5027024), a company organized and existing under the laws of England (“BNFL”); and

 

•                                          BNFL USA GROUP INC., a Delaware corporation
(“BNFL-USA”).

 

WITNESSETH

 

WHEREAS:

 

1.                                       Washington
Group and BNFL-USA entered into a Consortium Agreement, dated as of June 24,
1998 (the “Original Agreement”) pursuant to
which they formed a consortium for the purpose of acquiring the Energy Systems
business (the “ESBU Business”) and the Government
Operations business (the “GESCO Business”)
of CBS Corporation (“CBS”).

 

2.                                       The
Original Agreement set forth the agreement of Washington Group and BNFL-USA
concerning the basis on which the ESBU and GESCO Businesses would be owned and the
basis on which ownership, control and risk would be shared after the
acquisition.

 

3.                                       On
June 24, 1998 Washington Group and BNFL-USA organized WGNH Acquisition,
LLC, a Delaware limited liability company (“WGNH”),
for the purpose of entering into asset purchase agreements with CBS Corporation
for the acquisition of the ESBU and GESCO Businesses and acting as a holding
company for Washington Group’s and BNFL-USA’s interests in the ESBU and GESCO
Businesses.

 

4.                                       WGNH entered
into (i) an Asset Purchase Agreement, dated as of June 25, 1998 (the “ESBU Purchase Agreement”), with CBS covering the acquisition
by WGNH of the ESBU Business, and (ii) an Asset Purchase Agreement, dated
as of June 25, 1998 (the “GESCO Purchase Agreement”),
with CBS covering the acquisition by WGNH of the GESCO Business.  The ESBU Purchase Agreement and the GESCO
Purchase Agreement are sometimes referred to individually as an “Asset Purchase Agreement” or collectively as the “Asset Purchase Agreements.”

 

 

5.                                       Washington
Group and BNFL-USA amended and restated the Original Agreement in its entirety
as set forth in the Amended and Restated Consortium Agreement dated March 19,
1999 (“First Amended Agreement”) so as to
reflect their revised agreement concerning the basis on which the ESBU and
GESCO Businesses would be owned, and the basis on which ownership, control and
risk would be shared after the acquisition.

 

6.                                       Pursuant
to the terms of the First Amended Agreement, Washington Group and BNFL-USA
organized the following entities: (a) Westinghouse Government Services
Company LLC, a Delaware limited liability company (“WGS”);
(b) Westinghouse Government Environmental Services Company LLC, a Delaware
limited liability company (“WGES”); and (c) Westinghouse
Electric Company LLC, a Delaware limited liability company (“WELCO”).  Thereafter,
pursuant to agreements dated March 22, 1999: (a) WGNH assigned to WGS
and to WGES its rights under the GESCO Purchase Agreement, and WGS and WGES
assumed WGNH’s obligations under the GESCO Purchase Agreement; and (b) WGNH
assigned to WELCO its rights under the ESBU Purchase Agreement and WELCO
assumed WGNH’s liabilities under the ESBU Purchase Agreement.

 

7.                                       BNFL-USA
organized a wholly-owned subsidiary, BNFL Nuclear Services Inc., a Delaware
corporation (“BNSI”), for the purpose of holding
BNFL-USA’s interests in the GESCO and ESBU Businesses.

 

8.                                       The
acquisition by WGS and WGES of the GESCO Business closed on March 22,
1999.  The acquisition by WELCO of the
ESBU Business closed on March 22, 1999.

 

9.                                       Among
other agreements entered into by and between or among the parties hereto and/or
their affiliates related to this Agreement, Washington Group and BNFL-USA
entered into a Supplemental Agreement dated March 19, 1999 (“Supplemental Agreement”) and Washington Group, BNSI and WGS
entered into an Economic Rights Agreement dated March 19, 1999 (the “Economic Rights Agreement”).   Additionally, British Nuclear Fuels plc (“BNFL”) executed a BNFL Consortium Guarantee dated March 19,
1999 (“BNFL Consortium Guarantee”) and Washington
Group executed a MK Consortium Guarantee dated March 19, 1999 (“MK Consortium Guarantee”).

 

10.                                 By
memorandum dated April 2, 2003, BNFL communicated to, and asserted claims
against, Washington Group under the First Amended Agreement,
certain of the other agreements referred to in this Agreement, and specified
legal principles (the “BNFL Claims”).  By memorandum dated August 29, 2003,
Washington Group disputed the BNFL Claims and Washington Group asserted claims
against BNFL under the First Amended Agreement, certain of the other agreements
referred to herein and specified legal principles (the “WGI Claims”).  Washington Group disputed all of the BNFL
Claims and further disputed any liability whatsoever to BNFL or any of its
affiliates.  BNFL disputed all of the WGI
Claims and further disputed any liability therefore to Washington Group or any
of its affiliates.

 

 

11.                                 Washington
Group and BNFL-USA further amended and restated the First Amended Agreement in
its entirety, as set forth in the Second Amended and Restated Consortium
Agreement effective as of July 31, 2004. 
Pursuant to, and as a condition precedent to the effectiveness of such
Second Amended and Restated Consortium Agreement, BNFL-USA entered into a
Security Agreement dated July 31, 2004 (“Security
Agreement”) with Washington Group and the Debtors,
as such term is defined in the Security Agreement.  Pursuant to, and as a further condition
precedent to the effectiveness of such Second Amended and Restated Consortium
Agreement, BNFL-USA entered into an Intercreditor Agreement dated as of July 31,
2004 (“Intercreditor Agreement”) with
Credit Suisse First Boston, Washington Group, the affiliates of Washington
Group identified as Debtors under the Security Agreement, and certain other
persons identified as Bank Creditors in the Intercreditor Agreement (such Second Amended and Restated
Consortium Agreement, the Security Agreement, and the Intercreditor Agreement
are collectively referred to herein as the “Second
Amended Agreement”) so as: (i) to terminate the Economic Rights
Agreement and the Supplemental Agreement, (ii) to mutually release each
other from the BNFL Claims and the WGI Claims, and (iii) to modify the
limited liability company agreements of WGS and WGES, all as set forth in the
Second Amended Agreement so as to set forth their revised agreement concerning
the basis on which WGS, WGES and WELCO would be owned, and the basis on which
contract Fee, control and risk would be allocated.

 

12.                                 Washington
Group and BNFL-USA wish to (i) accelerate, in the form of a lump sum
payment at Closing, the payment of all amounts due or to become due under the
Second Amended Agreement, (ii) terminate all rights and responsibilities
that each party has under the Second Amended Agreement and to terminate or
confirm the prior termination of certain other agreements described herein, in
each case effective as of the Effective Time
(as defined below), and (iii) mutually release each other from all claims
on the terms, and subject to the conditions set forth in, this Agreement.

 

NOW THEREFORE, in
consideration of the premises and the mutual covenants and agreements contained
in this Agreement, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

1.0                                 Termination;
Payments; Release of Claims and Relinquishment of Rights

 

1.1                                 Termination.

 

Subject to the terms and conditions set forth
below (including, without limitation, the exceptions to termination in Section 1.4
below), effective as of the Effective Time, the following agreements shall be
terminated in their entirety and shall be of no further force or effect: (i) the
Second Amended Agreement; (ii) any agreements between the parties and/or
their respective affiliates (and, in certain instances, the parties and/or their
Affiliates along with one or more third parties) entered into in connection
with the Second Amended Agreement, including without limitation the Service
Agreement, effective July 31, 2004, implementing Section 4.1(c)(ii) of
the Second Amended Agreement (the “Service

 

 

Agreement”),
as well as any indemnification obligations contained in any of the agreements
described in this subsection (ii); (iii) the Washington Group
Guarantees and the BNFL Guarantees (each as defined below); and (iv) for
the avoidance of doubt, and to the extent not previously terminated in their
entirety by the First Amended Agreement or the Second Amended Agreement, as
applicable, (A) the Original Agreement, (B) the First Amended
Agreement, (C) the Supplemental Agreement, (D) the Economic Rights
Agreement, and (E) any of the agreements between the parties and/or their
respective affiliates (and, in certain instances, the parties and/or their
affiliates along with one or more third-parties) entered into in connection
with the agreements set forth in the foregoing clauses (A) through (D),
including in each case any indemnification obligations contained therein.  In furtherance of the parties’ intent to
terminate and/or confirm the termination of all responsibilities, rights, and
payments under the foregoing agreements, to avoid ongoing reviews, audits, and
related activities after the Effective Time, and to fully and finally release
any and all claims the parties hereto may have as of the date hereof or in the
future may have under such agreements, the parties further agree to the matters
set forth in Sections 1.2 through 1.5 below.

 

1.2                                 Settlement
of Amounts under Second Amended Agreement 

 

In order to fully and finally calculate and
pay any and all amounts payable, or that would otherwise become payable, to
BNFL, BNFL-USA or any of their respective Affiliates under the Second Amended
Agreement with respect to all periods ending prior to, on or after the
Effective Time, Washington Group shall, in full and complete satisfaction of
such amounts, at Closing, pay to BNFL-USA cash in the amount of US$36,200,000
(the “Final Payment”).  The Final Payment shall be due and payable at
the Closing and shall be made in cash via wire transfer to the following
account:

 

Bank:
Citizens Bank, Pittsburgh, PA

Account
Name: BNFL USA Group, Inc., Monroeville, PA

Account
No.: 6204964953

ABA code: 036076150

 

The parties hereto acknowledge and agree that
all prior payments made by Washington Group to BNFL-USA under the Second
Amended Agreement and the Final Payment, collectively, shall represent full,
complete and final payment and satisfaction of any and all amounts due under
the Second Amended Agreement with respect to all periods ending prior to, on or
after the Effective Time.

 

1.3                                 Release
of Claims and Relinquishment of Rights

 

(a)                                  As
used in this Agreement:  (i) the
term “Claim” or “Claims” shall mean any and all causes of
action, litigation, suits, controversies, exercise of warranties, proceedings,
offsets, claims, demands, and/or any and all other

 

 

actions, of any kind or nature whatsoever, in
law, in equity, under contract or otherwise, known or unknown, direct or
indirect, vested or contingent, reported or unreported, based on, arising from,
or for the recovery of, any actual, threatened or alleged liabilities,
responsibilities, obligations, costs, debts, sums of money, accounts,
covenants, representations, agreements, warranties, attorneys’ fees, promises,
contracts, trespasses, damages, judgments, executions, and/or any and all other
asserted basis, of any kind or nature, whatsoever; (ii) the term “Affiliates”, when referring to a party,
shall mean such party’s parents, subsidiaries, affiliates, predecessors,
successors, and assigns; and (iii) the term “Representatives”, when referring to a party or any of its
Affiliates, shall mean their respective officers, directors, employees, agents
and attorneys.

 

(b)                                 In
consideration of the premises, mutual covenants and other consideration set
forth in this Agreement, upon the occurrence of the Closing and effective as of
the Effective Time, BNFL-USA, on behalf of itself and its Affiliates, and to
the fullest extent legally permitted, unconditionally releases and forever
discharges Washington Group, its Affiliates, and their respective
Representatives (collectively, the “Washington
Group Parties”), from any and all Claims which BNFL-USA and/or any
of its Affiliates now has, ever had or may have by reason of, arising out of,
or relating in any way to the Original Agreement, the First Amended Agreement,
the Supplemental Agreement, the Economic Rights Agreement, the Second Amended
Agreement, the Service Agreement and any of the agreements entered into
pursuant to or in connection with the foregoing agreements, including without
limitation (i) any indemnification obligations contained therein and (ii) for
the avoidance of doubt, the Claims released under Section 3.5 of the
Second Amended Agreement; provided, however, that the foregoing release shall
not apply to any Claims arising as a result of a breach of this Agreement (and,
for the avoidance of doubt, nothing herein shall affect or limit Washington
Group’s obligations under Section 2.4 below) or arising under any other
agreement that has been or may in the future be entered into between the
parties and their Affiliates on or after the date of this Agreement, which
Claims shall be subject to the rights and remedies set forth herein or therein,
as applicable. BNFL-USA further agrees that in no event shall it or any of its
Affiliates, directly or indirectly, assert any Claim against any of the
Washington Group Parties based upon any matter purported to be released
hereby.  Without in any way limiting the
foregoing, the release set forth in this Section 1.3(b) shall apply
to any and all Claims that BNFL-USA and/or any of its Affiliates may have
relating to or arising in connection with:

 

(i)                                     any
and all of the Payment Rights and/or other rights of BNFL-USA or its Affiliates
under Articles 4.0, 5.0 and 7.0, and Sections 10.2, 10.3 and 10.4, of the
Second Amended Agreement; and

 

 

(ii)                                  all guarantees by Washington Group and its Affiliates under
the Second Amended Agreement (collectively, the “Washington Group Guarantees”).

 

(c)                                  In
consideration of the premises, mutual covenants and other consideration set
forth in this Agreement, upon the occurrence of the Closing, and effective as
of the Effective Time, Washington Group, on behalf of itself and its
Affiliates, and to the fullest extent legally permitted, unconditionally
releases and forever discharges BNFL, BNFL-USA, their respective Affiliates
(including, for the avoidance of doubt, BNSI and BNG America), and their
respective Representatives (collectively, the “BNFL
Parties”), from any and all Claims which Washington Group and/or any
of its Affiliates now has, ever had or may have by reason of, arising out of,
or relating in any way to the Original Agreement, the First Amended Agreement,
the Supplemental Agreement, the Economic Rights Agreement, the Second Amended
Agreement, the Service Agreement and any of the agreements entered into
pursuant to or in connection with the foregoing agreements, including but not
limited to (i) any indemnification obligations contained therein, (ii) for
the avoidance of doubt, the Claims released under Section 3.5 of the
Second Amended Agreement and (iii) any and all liabilities arising in
connection with or relating to WGS and WGES, whenever incurred or arising;
provided, however, that the foregoing release shall not apply to any Claims
arising as a result of a breach of this Agreement or arising under any other
agreement that has been or may in the future be entered into between the
parties and their Affiliates on or after the date of this Agreement, which
Claims shall be subject to the rights and remedies set forth herein or therein,
as applicable. Washington Group further agrees that, in no event shall it or
any of its Affiliates, directly or indirectly, assert any Claim against any of
the BNFL Parties based upon any matter purported to be released hereby.  Without in any way limiting the foregoing,
the release set forth in this Section 1.3(c) shall apply to any and
all Claims that Washington Group and/or its Affiliates may have relating to or
arising in connection with:

 

(i)                                     any
and all of the obligations of BNFL-USA or its Affiliates under Articles 4.0 and
6.0 of the Second Amended Agreement, and any and all pre-existing defined
benefit obligations as provided for at Section 10.3 of the Second Amended
Agreement;

 

(ii)                                  all liabilities associated with the sale of EMD; and

 

(iii)                               all guarantees by BNFL and all of its Affiliates arising out
of the Original Agreement, including the BNFL Consortium Guarantee, the WIPP
Contract Guarantee, the Corporate Guarantee of BNFL-USA dated March 22,
1999 in favor of the United States

 

 

Department of
Energy (the “Corporate Guarantee”), and the Performance Guarantee of BNFL in
favor of the United States Government relating to the Corporate Guarantee
(collectively, the “BNFL Guarantees”).

 

In addition, for the avoidance of doubt,
Washington Group, for itself and on behalf of all of its Affiliates,
unconditionally and irrevocably releases and holds harmless the BNFL Parties
from any Claim by Washington Group or its Affiliates or subcontractors related
in any way to work performed in connection with the Advanced Mixed Waste
Treatment Project including, without limitation, work related to the
preparation of any claim or request for equitable adjustment thereunder;
provided, however, that this release and hold harmless shall not (i) prohibit
Washington Group or any of its Affiliates or subcontractors from pursuing any
claims for indemnification that any of them had, has or may have against the
U.S. Government under any nuclear hazards indemnity agreement or Public Law 85-804
indemnification related in any way to work performed in connection with the
Advanced Mixed Waste Treatment Project or (ii) prohibit Washington Group
or any of its Affiliates from pursuing such claims against the U.S. Government.

 

1.4                                 Additional
Agreements.  In addition to the
matters set forth elsewhere herein, the parties hereby expressly agree as
follows:

 

(a)                                  Subcontract
Not Terminated.  Notwithstanding
anything to the contrary contained herein, the parties hereto acknowledge and
agree that the following two agreements relating
to the Savannah River Site shall in no way be affected by the transactions
contemplated by this Agreement and shall remain in full force and effect
following the Effective Time in accordance with their respective terms: (i) Agreement
Between Westinghouse Electric Corporation and BNFL Inc. with an effective date
of October 1, 1996, and (ii) WSRC — PS — BNFL – 96001, between BNFL
Savannah River Corp. and Westinghouse Savannah River Company, mod 4 (for the
avoidance of doubt, it is expressly understood by the parties hereto that such
two agreements shall be exclusively governed by their respective terms
(including, without limitation, any and all disputes thereunder being
exclusively resolved pursuant to the terms of such agreements) and, in no
manner, be governed (including disputes resolved) pursuant to the terms of this
Agreement).

 

(b)                                 Other
Agreements. In view of the general termination of agreements provided for
in Section 1.1 above, the parties hereto desire to expressly confirm
certain understandings that were previously reached in the agreements
terminated by Section 1.1 above and to provide for the continued
effectiveness of such understandings. 
Unless expressly set forth below, all other rights and obligations of
the parties reflected in the

 

 

agreements
terminated by Section 1.1 are superseded by the provisions of this
Agreement.  The parties agree that the
following confirmations and understandings shall be contractually binding upon
them and no party hereto shall take any action inconsistent with such
confirmations and understandings.

 

(i)                                     Rights and
Obligations With Respect to WGS. 
Notwithstanding anything in this Agreement to the contrary, the parties
acknowledge and agree that, effective as of July 31, 2004, BNFL-USA and
BNSI unconditionally and irrevocably assigned to Washington Group their passive
economic right to receive a portion of the gains, profits and losses of WGS and
the WGS Operations and forever renounced any and all ownership interest in and
to the contracts, employees, businesses and any and all other assets (together,
the “WGS Assets”) which were at
any time owned by, licensed to or otherwise held by WGS or its
subsidiaries.  Washington Group shall
continue to possess all right, title and interest in and to the WGS Assets and
shall at all times possess free and unfettered access to the WGS Assets for any
and all business opportunities and other uses. 
Washington Group continues to hold the sole and unfettered right to
modify the WGS Limited Liability Company Agreement including, without
limitation, the dissolution of WGS, in such manner as it deems appropriate
within its full discretion.

 

(ii)                                  Rights and
Obligations With Respect to WGES. 
Notwithstanding anything in this Agreement to the contrary, the parties
acknowledge and agree that, effective as of July 31, 2004, BNFL-USA and
BNSI unconditionally and irrevocably assigned to WGS their membership interest
in WGES, together with all rights and obligations incidental to that membership
interest and forever renounced any and all ownership interest in and to the
contracts, employees, businesses and any and all other assets (together, the “WGES Assets”) which were at any time owned
by, licensed to or otherwise held by WGES or its subsidiaries.  Washington Group shall possess all right,
title and interest in and to the WGES Assets and shall at all times possess
free and unfettered access to the WGES Assets for any and all business
opportunities and other uses.  Washington
Group continues to hold the sole and unfettered right to modify the WGES
Limited Liability Company Agreement including, without limitation, the
dissolution of WGES, in such manner as it deems appropriate within its full
discretion.

 

(iii)                               Ownership of WELCO
Unchanged. The parties acknowledge and agree that they previously reached
certain understandings regarding the ownership and management of WELCO and that
nothing in this Agreement shall in any way amend or otherwise affect the
ownership or management of WELCO as it exists immediately prior to the
Effective Time.

 

 

1.5                                 Effectiveness

 

The rights and obligations of the parties to
perform the pre-Effective Time actions under this Agreement (including without
limitation the obligations set forth in Section 2.0 below) shall become
effective upon the execution of this Agreement by the parties.  The termination of the Second Amended
Agreement, the releases of claims and relinquishment of rights provided for in
this Agreement, and any and all other matters that are to become effective as
of the Effective Time shall, following consummation of the Closing provided for
in Section 2.0, become effective as of the Effective Time.

 

2.0                                 The
Closing

 

2.1                                 Closing;
Effective Time.  The closing of the
transactions contemplated by this Agreement (the “Closing”) shall take place at 10:00 a.m. Eastern
Standard Time on December 28, 2005 (or such other time as the parties
hereto mutually agree).  None of the
actions set forth in Section 2.2 shall be effective unless and until all
of such actions shall have been taken or appropriately waived; but if all such
actions are taken or waived, then the Closing shall be effective as of 12:01 a.m.
on December 31, 2005 (the “Effective
Time”).

 

2.2                                 Washington
Group Closing Deliveries.  At the
Closing, Washington Group shall deliver to BNFL-USA the following;

 

(a)                                  the Final Payment, in cash via wire transfer as provided in Section 1.2;
and

 

(b)                                 such other documentation as may be reasonably necessary to
effect the intention of this Agreement and to consummate the transactions
contemplated hereby.

 

2.3                                 BNFL-USA
Closing Deliveries.  At the Closing,
BNFL-USA shall deliver to Washington Group the following;

 

(a)                                  a receipt, executed by BNFL-USA, acknowledging that it has
received the Final Payment; and

 

(b)                                 such other documentation as may be reasonably necessary to
effect the intention of this Agreement and to consummate the transactions
contemplated hereby.

 

2.4                                 Other
Agreements.  With respect to those
agreements which would otherwise be terminated by Section 1.1 above but
for the fact that they include as signatories, in addition to the parties
hereto, one or more unaffiliated third parties (such as, for example, the
Intercreditor Agreement) (the “Third Party
Agreements”), Washington Group shall, within thirty (30) calendar
days after the Closing,

 

 

provide BNFL-USA with an instrument terminating
such Third Party Agreements or otherwise releasing BNFL-USA and/or its relevant
Affiliates from any and all liabilities thereunder, signed by Washington Group,
its Affiliates and such third parties, which BNFL-USA shall then sign and/or
cause to be signed by any of its Affiliates that are parties thereto (and
return an original to Washington Group) within five (5) business days
following BNFL-USA’s receipt thereof.  In
the event Washington Group is unsuccessful in causing any Third Party Agreement
to be terminated and/or in causing any third party to such Third Party
Agreement to fully release BNFL-USA and its Affiliates from any and all
liability thereunder, Washington Group shall indemnify and hold harmless the
BNFL Parties from and against any and all Claims arising directly or indirectly
from or in connection with the assertion by or on behalf of any third party of
any Claim or other matter under or relating to any Third Party Agreement.  With respect to those agreements which would
otherwise be terminated by Section 1.1 above but for the fact that they
are for the benefit of an unaffiliated third party whose consent to termination
is required (the “Third Party Guarantees”),
Washington Group shall indemnify and hold harmless the BNFL Parties from and
against any and all Claims arising directly or indirectly from or in connection
with the assertion by or on behalf of any third party of any Claim or other
matter under or relating to any Third Party Guarantees.  With respect to those agreements which would
otherwise be terminated by Section 1.1 above but for the fact that they
include as signatories, in addition to the parties hereto, one or more of their
respective Affiliates, but no unaffiliated third parties (such as, for example,
the Security Agreement and the Service Agreement) (the “Affiliate Agreements”), each party shall
cause its respective Affiliates to execute a joinder to this Agreement
evidencing the consent to the termination of the relevant Affiliate Agreement,
effective as of the Effective Time.

 

2.5                                 Further
Assurances.  In furtherance of the
mutual releases set forth in Sections 1.3(b) and (c) above, and to
otherwise effect the intent of the parties regarding the transactions
contemplated hereby, the parties agree, at the Closing or as promptly
thereafter as is reasonably practicable, and thereafter from time to time upon
the reasonable request of the other party, to execute, acknowledge, deliver or
perform all such further documents, filings, acts and assurances as may be
required to effect the transactions contemplated by this Agreement.  Without in any way limiting the foregoing,
the parties shall execute and file such Uniform Commercial Code termination
statements as are necessary to reflect the termination of the Security
Agreement and the release of the collateral secured thereunder.

 

3.0                                 Confidential
Information

 

3.1                                 The
parties acknowledge that, in order to carry out the purpose of the Original
Agreement, the First Amended Agreement, Second Amended Agreement and the other
agreements entered into in connection therewith, it was necessary for them to
disclose to the other party, and to such other party’s Affiliates, Confidential

 

 

Information.  Therefore, this Section 3.0 shall apply
with respect to any and all disclosures of Confidential Information made under
this Agreement or the aforementioned predecessor agreements.

 

3.2                                 Each
party will treat the other party’s Confidential Information as confidential,
will not disclose it to any other person (other than those of its and its
Affiliates’ Representatives who need to know such information for the purpose
of carrying out the transactions contemplated by this Agreement) or use it for
any purpose other than carrying out the transactions contemplated by this
Agreement.

 

3.3                                 The restrictions
imposed under this Section 3.0 shall remain in effect

 

(a)                                  with
respect to any Confidential Information that constitutes a “trade secret” (as
defined under the laws of the State of Delaware) of the disclosing party, so
long as it remains a trade secret, or

 

(b)                                 with respect to other Confidential Information, for a period
of three (3) years following the date of this Agreement.

 

3.4                                 The
restrictions imposed under this Section 3.0 shall not apply to any
Confidential Information that

 

(a)                                  at
the time of disclosure is available in the public domain or is known to the
receiving party without breach of any obligation of confidentiality,

 

(b)                                 is subsequently disclosed by a third party to the receiving
party without any obligation of confidentiality, or

 

(c)                                  is independently developed by the receiving party without
breach of any obligation of confidentiality.

 

4.0                                 Miscellaneous

 

4.1                                 Definitions.  Capitalized terms used but not defined herein
shall have the respective meanings ascribed to them in the Second Amended Agreement,
with the cross-reference established hereby to survive the termination thereof.

 

4.2                                 Other
Actions. The parties will take all such other actions and will cause their
respective Affiliates to take all such other actions as necessary to fulfill the
intent of this Agreement.

 

4.3                                 Governing
Law. This Agreement is governed by and shall be construed in accordance
with the law of the State of Delaware, without regard to its conflicts or
choice of laws provisions. With respect to any dispute between the parties with
respect to this Agreement, to the fullest extent permitted by applicable law,
each party irrevocably submits to the exclusive jurisdiction of the state or
federal courts

 

 

located in the State of Delaware and further
waives any objection which it may have at any time to the laying of venue of
any proceeding brought in any such court, waives any claim that such proceeding
has been brought in an inconvenient forum and further waives the right to
object, with respect to such proceeding, that such court does not have
jurisdiction over such party.  Each party
further waives any right to trial by jury in any such proceeding.

 

4.4                                 Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered (including by facsimile) to the other party.

 

4.5                                 Binding
Nature of Agreement.  Each party
hereby represents and warrants that it has obtained any necessary internal (e.g., corporate governance or creditor)
and external (e.g., U.S.
Department of Energy) approvals to enter into this Agreement, and that it has
the requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder.  To
the extent that certain provisions of this Agreement apply to the Affiliates of
Washington Group and BNFL-USA, each party shall cause its relevant Affiliate to
take any action required of it hereunder or necessary for the relevant party to
satisfy its obligations hereunder.

 

4.6                                 Order
of Precedence.  This Agreement shall
take precedence over all other agreements between or among the parties and/or
their respective Affiliates including, without limitation, the Original
Agreement, the First Amended Agreement, the Economic Rights Agreement, the
Supplemental Agreement, the Amended and Restated WGES Limited Liability Company
Agreement, the Second Amended Agreement and the Services Agreement as to the
matters covered by those agreements.

 

4.7                                 Invalidity.  In the event that any provision of this
Agreement is held invalid, (i) the validity of the remaining provisions of
this Agreement shall not in any way be affected thereby and (ii) the
parties will promptly enter into good faith negotiations to modify this
Agreement to replace the invalid provision(s) with new provision(s) that will
as near as possible accomplish the purposes intended by such invalid
provision(s) in a manner such that the new provision(s) are jointly believed to
be such that they will survive any further validity challenge.

 

4.8                                 Waiver
of Consequential Damages.  Each
party, on behalf of itself and its Affiliates, releases the other party and its
Affiliates from any and all incidental, indirect, special, punitive and
consequential damages arising out of the matters covered by this Agreement.

 

4.9                                 Entire
Agreement.  This Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof and supersedes

 

 

all
other prior and contemporaneous agreements and understandings both written and
oral between the parties with respect to the subject matter hereof.

 

4.10                           Public
Statements.  Any and all press
releases or general public statements of a similar nature made or to be made by
any of the parties hereto concerning this Agreement shall be agreed to in
advance and by both parties prior to release to the general public.

 

4.11                           Notices.  Each party giving or making any notice,
request, demand or other communication (each, a “Notice”) pursuant to this Agreement shall give the Notice in
writing and use one of the following methods of delivery, each of which for
purposes of this Agreement is a writing: personal delivery, Registered or
Certified Mail (in each case, return receipt requested and postage prepaid),
nationally recognized overnight courier (with all fees prepaid), or facsimile.
Any Notice shall be addressed to the party to be notified as follows:

 

(a)          if
to Washington Group:

 

Washington Group International, Inc.

Energy & Environment

106 Newberry Street S.W.

Aiken, SC 
29801

Attention: 
President (presently E. Preston Rahe, Jr.)

Facsimile No.:  803-502-9795

 

with
a copy to:

 

Washington Group International, Inc.

720 Park Boulevard

Boise, ID 83871

Attention: General Counsel (presently Richard
D. Parry, Esq.)

Facsimile No.:  208-386-5220

 

(b)         if
to BNFL plc or BNFL-USA:

 

John F. Edwards

Group Finance Director

British Nuclear Fuels plc

1100 Daresbury Park

Daresbury, Warrington

Cheshire WA4 4GB

United Kingdom

 

with a copy to:

 

Alvin J. Shuttleworth, Esq.

 

 

Group Legal Director

British Nuclear Fuels plc

1100 Daresbury Park

Daresbury, Warrington

Cheshire WA4 4GB

United Kingdom

 

And:

 

BNG America

Crystal Gateway One

1235 South Clark Street

Suite 700

Arlington, VA 22202

Attention: Philip O. Strawbridge and Jonathan
P. Carter, Esq.

Facsimile No.: (703) 412-2567

 

4.12.                        Equitable Relief.  The obligations of the parties under Articles
1.0 and 3.0 above and Sections 2.2, 2.3, 2.4 and 2.5 above shall, in the event
of a breach thereof, be specifically enforceable.  Each party understands, acknowledges and
agrees that, in the event of any breach of any such obligations by any party,
its Affiliates and/or its Representatives (“Breaching
Party”): (i) the other
party, its Affiliates and/or its Representatives (“Harmed
Party”) will be irreparably
harmed by such breach; (ii) the performance of the Breaching Party’s
obligations under any such Article or Section is material and central
to this Agreement and reasonable for such purpose; (iii) it would be
difficult or inadequate to measure and calculate the Harmed Party’s damages as
a consequence of such breach; and (iv) money damages would not, alone, be
a sufficient remedy for any breach of this Agreement.  As a consequence, the Breaching Party agrees
that:  (x) in addition to other remedies
that may be available, the Harmed Party shall be entitled to an injunction,
specific performance or other appropriate equitable relief as a remedy for any
such breach; (y) the Breaching Party shall, should the Harmed Party prevail in
its pursuit of equitable relief, compensate the Harmed Party for any costs,
including but not limited to attorneys’ fees and disbursements, incurred by the
Harmed Party in enforcing its rights; and (z) such equitable relief shall not
be deemed to be an exclusive remedy for a breach of this Agreement but shall be
in addition to all other remedies available at law or equity.  This Section 4.12 shall apply
notwithstanding any other provision of this Agreement to the contrary.

 

[Signature
pages follow]

 

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed and delivered by
their duly authorized officers or agents, all as of the date first written
above.

 

 

WASHINGTON GROUP INTERNATIONAL, INC.

 

 

	
  By:

  	
   /s/ Frank Finlayson

  	
   

  
	
  Name:

  	
  Frank Finlayson

  
	
  Title:

  	
  Senior Vice President, Project Development

  
	
   

  	
   

  
	
   

  	
   

  
	
  BRITISH NUCLEAR FUELS plc

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/
  Alvin J. Shuttleworth

  	
   

  
	
  Name:

  	
  Alvin J. Shuttleworth

  
	
  Title:

  	
  Group Legal Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  BNFL USA GROUP INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/
  Alvin J. Shuttleworth

  	
   

  
	
  Name:

  	
  Alvin J. Shuttleworth

  
	
  Title:

  	
  Chairman

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