-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FDJ7fOCikZmTHg16WPIdWqY0AgriVTnutxquk3pVx2pYpDbyT+SPDtLUhV30C7tI TP/i19excap2ufer21JPUg== 0000950005-97-000022.txt : 19970115 0000950005-97-000022.hdr.sgml : 19970115 ACCESSION NUMBER: 0000950005-97-000022 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19970114 SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: URS CORP /NEW/ CENTRAL INDEX KEY: 0000102379 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 941381538 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07567 FILM NUMBER: 97505671 BUSINESS ADDRESS: STREET 1: 100 CALIFORNIA ST STE 500 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4157742700 FORMER COMPANY: FORMER CONFORMED NAME: THORTEC INTERNATIONAL INC DATE OF NAME CHANGE: 19900222 FORMER COMPANY: FORMER CONFORMED NAME: URS CORP /DE/ DATE OF NAME CHANGE: 19871214 10-K 1 FORM 10-K FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark one) [x] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended October 31, 1996 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ___ to ___ Commission file number 1-7567 URS CORPORATION (Exact name of registrant as specified in its charter) Delaware 94-1381538 (State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) 100 California Street, Suite 500, San Francisco, California 94111-4529 (Address of principal executive offices) (Zip Code) (415) 774-2700 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered: Common Shares, par value $.01 per share New York Stock Exchange Pacific Stock Exchange 8 5/8% Senior Subordinated Debentures New York Stock Exchange due 2004 Pacific Stock Exchange 6 1/2% Convertible Subordinated Debentures New York Stock Exchange due 2012 Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K, or any amendment to this Form 10-K. [X] On December 19, 1996, there were 8,640,266 Common Shares outstanding, and the aggregate market value of the shares of Common Stock of URS Corporation held by nonaffiliates was approximately $41.6 million based on the closing sales price as reported in the consolidated transaction reporting system. Documents Incorporated by Reference Items 10, 11, and 12 of Part III incorporate information by reference from the Registrant's definitive Proxy Statement for the Annual Meeting of Stockholders to be held on March 25, 1997. This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those discussed here. Factors that might cause such a difference include, but are not limited to, those discussed elsewhere in this Annual Report on Form 10-K and those incorporated by reference from the Company's Form S-8 Registration Statement filed with the Securities and Exchange Commission on May 7, 1993, as amended by that Post-Effective Amendment No. 1 to Form S-8 Registration Statement filed on March 31, 1995 (File No. 33-61230). PART I ITEM 1. BUSINESS URS Corporation (the "Company") offers a broad range of planning, design and program and construction management services. The Company serves public and private sector clients on infrastructure projects involving transportation systems, facilities and environmental programs. The Company conducts its business through offices located throughout the United States. The Company has approximately 3,000 employees, many of whom hold advanced or technical degrees and have extensive experience in sophisticated disciplines applicable to the Company's business. The Company believes that its geographic and technical diversity allow it to compete for local, regional and national projects, and enable it to apply to each project a variety of resources from its national network. Acquisitions In January 1995, the Company acquired privately-held E.C. Driver & Associates, Inc. ("ECD") of Tallahassee, Florida, an engineering firm specializing in bridge and highway design. In March, 1996 the Company acquired publicly-held Greiner Engineering, Inc., an Irving, Texas engineering and architectural design services firm ("Greiner"). Services The Company provides professional services in three major areas: planning, design and program and construction management through the Company's 35 principal offices. Each of these offices is responsible for obtaining local or regional contracts. This approach allows regional government agencies and private clients to view the Company's offices as local businesses with superior service delivery capabilities. Because the Company can draw from its large and diverse network of professional and technical resources, the Company has the capability to market and perform large multi-state projects. Planning Planning covers a broad range of assignments ranging from conceptual design and technical and economic feasibility studies to community involvement programs. Planning services also 1 involve developing alternative concepts for project implementation and analyzing the impacts of each alternative. In addition to traditional engineering and architectural planning services, the Company has extensive expertise in a number of highly specialized areas, including toll facilities, health care facility renovation, environmental site analysis, water quality planning for urban storm water management and site remediation assignments. Design The Company's professionals provide a broad range of design and design-related services, including computerized mapping, architectural and interior design, civil, sanitary and geotechnical engineering, process design and seismic (earthquake) analysis and design. For each project, the Company identifies the project requirements and then integrates and coordinates the various design elements. The result is a set of contract documents that may include plans, specifications and cost estimates that are used to build a project. These documents detail design characteristics and set forth for the contractor the materials which should be used and the schedule for construction. Other critical tasks in the design process may include value analysis and the assessment of construction and maintenance requirements. Program and Construction Management The Company's program and construction management services include master scheduling of both the design and construction phases, construction and life-cycle cost estimating, cash flow analysis, value engineering, constructability reviews and bid management. Once construction has begun, the Company supervises and coordinates the activities of the construction contractor. This frequently involves acting as the owner's representative for on-site supervision and inspection of the contractor's work. In this role, the Company's objective is to monitor a project's schedule, cost and quality. The Company generally does not take contractual responsibility for the contractor's risks and methods, nor for site safety conditions. Markets The Company's strategy is to focus on the infrastructure market which includes surface and air transportation systems, institutional and commercial facilities, and environmental programs involving pollution control, water resources and hazardous waste management. Surface and Air Transportation Systems. The Company's engineers, designers, planners and managers provide services for projects involving all types of transportation systems and networks, such as highways, roadways, streets, bridges, rapid and mass transit, airports and marine facilities. These services range from the design of interstate highways to harbor traffic simulation studies and may extend from conceptual planning through the preliminary and final design to construction management. Historically, the Company's emphasis in this market area has been on the design of new transportation systems, but in recent years the rehabilitation of existing systems has become a major focus. 2 Institutional and Commercial Facilities. The Company provides architectural, engineering design, space planning and construction supervision services to this market area. Demand for low-maintenance, energy efficient facilities drives today's market for commercial and industrial buildings. In addition, there is increased pressure to renovate facilities to meet changing needs and current building standards. Pollution Control. The Company's principal services in this market include the planning and design of new wastewater facilities, such as sewer systems and wastewater treatment plants, and the analysis and expansion of existing systems. The types of work performed by the Company include infiltration/inflow studies, combined sewer overflow studies, water quality facilities planning projects and design and construction management services for wastewater treatment plants. Water Resources. The Company's capabilities in this market area include the planning, design and program and construction management of water supply, storage, distribution and treatment systems, as well as work in basin plans, groundwater supply, customer rate studies, urban run-off, bond issues, flood control, water quality analysis and beach erosion control. Hazardous Waste Management. In this market segment, the Company conducts initial site investigations, designs remedial actions for site clean-up and provides construction management services during site clean-up. This market involves identifying and developing measures to effectively dispose of hazardous and toxic waste at contaminated sites. The Company also provides air quality monitoring and designs individual facility modifications required to meet local, state and Federal air quality standards. This work requires specialized knowledge of and compliance with complex Federal and state regulations, as well as the permitting and approval processes. Solid waste management services provided by the Company include facility siting, transfer station design and community-wide master planning. 3 Clients General The Company's clients include local, state and Federal government agencies and private sector businesses. The Company's revenues from local, state and Federal government agencies and private businesses for the last five fiscal years are as follows:
1996 1995 1994 1993 1992 ------ ------ ------ ------ ----- (In thousands) Local and state agencies $198,472 65% $ 99,871 56% $ 88,207 54% $ 80,350 55% $ 65,315 48% Federal agencies 64,226 21 58,751 33 59,611 36 48,713 33 52,530 38 Private businesses 42,772 14 21,147 11 16,270 10 16,698 12 18,948 14 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total $305,470 100% $179,769 100% $164,088 100% $145,761 100% $136,793 100% ======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Contract Pricing and Terms of Engagement Under its cost-plus contracts, the Company charges clients negotiated rates based on the Company's direct and indirect costs. Labor costs and subcontractor services are the principal components of the Company's direct costs. Federal Acquisition Regulations limit the recovery of certain specified indirect costs on contracts subject to such regulations. In negotiating a cost-plus contract, the Company estimates all recoverable direct and indirect costs and then adds a profit component, which is either a percentage of total recoverable costs or a fixed negotiated fee, to arrive at a total dollar estimate for the project. The Company receives payment based on the total actual number of labor hours expended. If the actual total number of labor hours is lower than estimated, the revenues from that project will be lower than estimated. If the actual labor hours expended exceed the initial negotiated amount, the Company must obtain a contract modification in order to receive payment for such overage. The Company's profit margin will increase to the extent the Company is able to reduce actual costs below the estimates used to produce the negotiated fixed prices on contracts not covered by Federal Acquisition Regulations; conversely, the Company's profit margin will decrease and the Company may realize a loss on the project if the Company does not control costs and exceeds the overall estimates used to produce the negotiated price. Cost-plus contracts covered by Federal Acquisition Regulations require an audit of actual costs and provide for upward or downward adjustments if actual recoverable costs differ from billed recoverable costs. The Defense Contract Audit Agency, auditors for the Department of Defense and other Federal agencies, has completed incurred cost audits of the Company's Federal contracts for fiscal years ended through October 31, 1988, resulting in immaterial adjustments. 4 Under its fixed-price contracts, the Company receives an agreed sum negotiated in advance for the specified scope of work. Under fixed-price contracts, no payment adjustments are made if the Company over-estimates or under-estimates the number of labor hours required to complete the project, unless there is a change of scope in the work to be performed. Accordingly, the Company's profit margin will increase to the extent the number of labor hours and other costs are below the contracted amounts. The profit margin will decrease and the Company may realize a loss on the project if the number of labor hours required and other costs exceed the estimates. Backlog, Project Designations and Indefinite Delivery Contracts The Company's contract backlog was $399.2 million at October 31, 1996, compared to $196.4 million at October 31, 1995. The Company's contract backlog consists of the amount billable at a particular point in time for future services under executed funded contracts. Indefinite delivery contracts, which are executed contracts requiring the issuance of task orders, are included in contract backlog only to the extent the task orders are actually issued and funded. Of the contract backlog of $399.2 million at October 31, 1996, approximately 30%, or $119.8 million, is not reasonably expected to be filled within the next fiscal year ending October 31, 1997. The Company has also been designated by customers as the recipient of certain future contracts. These "designations" are projects that have been awarded to the Company but for which contracts have not yet been executed. Task orders under executed indefinite delivery contracts which are expected to be issued in the immediate future are included in designations. Total contract designations were estimated to be $295.9 million at October 31, 1996, as compared to $194.1 million at October 31, 1995. Typically, a significant portion of designations are converted into signed contracts. However, there is no assurance this will continue to occur in the future. Indefinite delivery contracts are signed contracts pursuant to which work is performed only when specific task orders are issued by the client. Generally these contracts exceed one year and often indicate a maximum term and potential value. Certain indefinite delivery contracts are for a definite time period with renewal option periods at the client's discretion. While the Company believes that it will continue to get work under these contracts over their entire term, because of renewals and the necessity for issuance of individual task orders, continued work by the Company and the realization of their potential maximum values under these contracts are not assured. However, because of the increasing frequency with which the Company's government and private sector clients use this contracting method, the Company believes their potential value should be disclosed along with backlog and designations as an indicator of the Company's future business. When the client notifies the Company of the scope and pricing of task orders, the estimated value of such task orders is added to designations. When such task orders are signed and funded, their value goes into backlog. At October 31, 1996, the potential value of the Company's five largest indefinite delivery contracts was as follows: 5 At October 31, 1996 ----------------------------------- Total Revenues Estimated Potential Recognized thru Funded Estimated Remaining Contract Term Values October 31, 1996 Backlog Designations Values - -------- ---- ------------ ---------------- ------- ------------ --------- (In millions) EPA ARCS (9&10) 1989-1999 $182.5 $37.3 $13.4 $11.5 $120.3 Navy CLEAN 1989-1999 166.0 123.5 8.6 3.8 30.1 EPA ARCS (6,7&8) 1989-1999 119.7 69.4 2.2 3.5 44.6 Brooks AFB System 1994-1999 50.0 6.0 7.4 - 36.6 NY State Environmental Remediation 1990-1996 20.0 7.9 .2 - 11.9 ------ ----- ----- ------ ----- Total $538.2 $244.1 $31.8 $18.8 $243.5 ===== ===== ==== ==== =====
Competition The engineering and architectural services industry is highly fragmented and very competitive. As a result, in each specific market area the Company competes with many engineering and consulting firms, several of which are substantially larger than the Company and which possess greater financial resources. No firm currently dominates any significant portion of the Company's market areas. Competition is based on quality of service, expertise, price, reputation and local presence. The Company believes that it competes favorably with respect to each of these factors in the market areas it serves. Employees The Company has approximately 3,000 employees, many of whom hold advanced or technical degrees and have extensive experience in a variety of disciplines applicable to the Company's business. The Company also employs, at various times on a temporary basis, up to several hundred additional persons to meet contractual requirements. Thirteen of the Company's employees are covered by a collective bargaining agreement. The Company has never experienced a strike or work stoppage. The Company believes that employee relations are good. ITEM 2. PROPERTIES The Company leases office space in 35 principal locations throughout the United States. Most of the leases are written for a minimum term of three years with options for renewal, sublease rights and allowances for improvements. Significant lease agreements expire at various dates through the year 2005. The Company believes that its current facilities are sufficient for the operation of its business and that suitable additional space in various local markets is available to accommodate any needs that may arise. 6 ITEM 3. LEGAL PROCEEDINGS Item 8, Financial Statements and Supplementary Data, Note 8 -- Commitments and Contingencies -- is hereby incorporated by reference. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of the Company's security holders during the fourth quarter of the fiscal year ended October 31, 1996. 7 ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
Name Position Held Age - ---- ------------- --- Martin M. Koffel.............Chief Executive Officer, President 57 and Director of the Company from May 1989; Chairman of the Board from June 1989; Director, Regent Pacific Management Corporation since 1993. Kent P. Ainsworth............Executive Vice President and Chief 50 Financial Officer of the Company from January 1991; Secretary of the Company from May, 1994. Robert L. Costello ..........Executive Vice President, URS Greiner, 45 a wholly-owned subsidiary of the Company, since November 1996; Vice President and Director of the Company since April 1996; President of Greiner Engineering, Inc., a wholly-owned subsidiary of the Company, and Director of same since April 1995; President and Chief Operating Officer of same from August 1994 to August 1995; Executive Vice President and Chief Financial Officer of same from August 1988 to August 1994. 8 Name Position Held Age - ---- ------------- --- Joseph Masters...............Vice President, Legal 40 of the Company since July 1994; Vice President, Director of Legal Affairs of URS Consultants, Inc., a wholly-owned subsidiary of the Company, from April 1994 to July 1994; Vice President, Associate General Counsel of same from May 1992 to April 1994; outside counsel to the Company from January 1990 to May 1992. Irwin L. Rosenstein . . . President, URS Greiner, a wholly-owned 60 subsidiary of the Company, since November 1996; President of URS Consultants, Inc., a wholly-owned subsidiary of the Company and Director of the Company since February 1989; Vice President of the Company since 1987. 9
PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The shares of the Company's Common Stock are listed on the New York and Pacific Stock Exchanges (under the symbol "URS"). At December 19, 1996, the Company had approximately 2,593 stockholders of record. The following table sets forth the high and low closing sale prices of the URS Common Shares, as reported by The Wall Street Journal for the periods indicated. MARKET PRICE ------------ LOW HIGH --- ---- Fiscal Period: 1995: First Quarter $ 5.00 $ 6.00 Second Quarter $ 5.38 $ 6.00 Third Quarter $ 5.25 $ 5.88 Fourth Quarter $ 5.50 $ 6.63 1996: First Quarter $ 6.38 $ 7.25 Second Quarter $ 6.25 $ 7.25 Third Quarter $ 6.88 $ 8.25 Fourth Quarter $ 7.00 $ 8.88 1997: First Quarter $ 7.75 $ 9.88 (through December 19, 1996) The Company has not paid cash dividends since 1986. (See Item 8, Financial Statements and Supplementary Data, Note 7 -- Long-Term Debt). Further, the declaration of dividends could be precluded by existing Delaware law. ITEM 6. SUMMARY OF SELECTED FINANCIAL INFORMATION The following table sets forth selected financial data of the Company for the five years ended October 31, 1996. The data presented below should be read in conjunction with the Consolidated Financial Statements of the Company including the notes thereto. 10 SUMMARY OF SELECTED FINANCIAL INFORMATION (In thousands, except per share data)
Years Ended October 31, ---------------------------------------------------------------------------- 1996 1995 1994 1993 1992 ---------------------------------------------------------------------------- Income Statement Data: Revenues $305,470 $179,769 $164,088 $145,761 $136,793 -------- -------- -------- -------- -------- Operating expenses: Direct operating 187,129 108,845 102,500 91,501 85,384 Indirect, general and administrative 102,389 63,217 55,455 51,607 45,473 -------- -------- -------- -------- -------- Total operating expenses 289,518 172,062 157,955 143,108 130,857 -------- -------- -------- -------- -------- Operating income 15,952 7,707 6,133 2,653 5,936 Interest expense, net 3,897 1,351 1,244 1,220 1,208 -------- -------- -------- -------- -------- Income before income taxes 12,055 6,356 4,889 1,433 4,728 Income tax expense 4,700 1,300 450 140 460 -------- -------- -------- -------- -------- Net income $ 7,355 $ 5,056 $ 4,439 $ 1,293 $ 4,268 ======== ======== ======== ======== ======== Net income per share: Primary $ .82 $ .68 $ .60 $ .18 $ .55 ======== ======== ======== ======== ======== Fully diluted $ .80 $ .67 $ .60 $ .18 $ .55 ======== ======== ======== ======== ======== Weighted average shares: Primary 9,498 8,632 8,556 6,971 8,221 Fully diluted 9,498 8,632 8,556 6,971 8,221
As of October 31, -------------------------------------------------------------------------------- 1996 1995 1994 1993 1992 -------------------------------------------------------------------------------- (In thousands) Balance Sheet Data: Working capital $ 57,572 $ 36,307 $ 33,674 $ 27,684 $ 26,836 Total assets 185,607 75,935 65,214 58,074 54,892 Total debt 61,263 9,999 9,270 8,277 8,705 Stockholders' equity $ 56,696 $ 39,478 $ 33,973 $ 29,389 $ 27,878
11 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Fiscal 1996 Compared with Fiscal 1995 Revenues in fiscal 1996 were $305.5 million, or 70% over the amount reported in fiscal 1995. The growth in revenues is primarily attributable to the acquisition of Greiner, the results of which are included commencing April 1, 1996, and to a lesser extent, an increase in revenues derived from existing areas of the Company's business, particularly transportation and other infrastructure projects in the Northeast. Revenues generated from the Company's three largest contracts; Navy CLEAN, EPA ARCS 9&10 and EPA ARCS 6,7,&8, decreased in fiscal 1996 to $30.2 million as compared to $37.1 million in fiscal 1995. The decrease in revenues from these contracts is primarily due to a decrease in the number of task orders for hazardous waste services on all of the above EPA ARCS contracts. Direct operating expenses, which consist of direct labor and direct expenses including subcontractor costs, increased $78.3 million, or 72%, over the amount reported in fiscal 1995. The increase is due to the addition of the direct operating expenses of Greiner and to increases in subcontractor costs and direct labor costs as well. Indirect general and administrative expenses ("IG&A") increased to $102.4 million in fiscal 1996 from $63.2 million in fiscal 1995 which is the result of the addition of the Greiner overhead as well as an increase in business activity. Expressed as a percentage of revenues, IG&A expenses decreased from 35% in fiscal 1995 to 34% in fiscal 1996. The Company attributes this decrease to the cost controls exercised by the Company. Net interest expense increased to $3.9 million in fiscal 1996 from $1.4 million in fiscal 1995 as a result of increased borrowings incurred in connection with the acquisition of Greiner. With an effective income tax rate of 39% in 1996, the Company earned net income of $7.4 million while in 1995 net income was $5.1 million after an effective income tax rate of 20% when the Company had available net operating loss ("NOL") carryforwards which partially off-set otherwise taxable income for Federal income tax purposes. The Company earned $.80 per share on a fully-diluted basis in fiscal 1996 compared to $.67 per share in fiscal 1995. The Company's backlog of signed and funded contracts at October 31, 1996 was $399.2 million as compared to $196.4 million at October 31, 1995. The value of the Company's designations was $295.9 million at October 31, 1996, as compared to $194.1 million at October 31, 1995. 12 Fiscal 1995 Compared with Fiscal 1994 Revenues in fiscal 1995 grew to $179.8 million, or 10% over the amount reported in fiscal 1994. The growth in revenues was primarily attributable to increases in revenues generated from all areas of the Company's business, particularly transportation and other infrastructure projects in the Northeast. Revenues derived from the Company's three largest contracts: Navy CLEAN, EPA ARCS 9&10 and EPA ARCS 6,7&8, were $37.1 million in fiscal 1995 compared to $41.0 million in fiscal 1994. The decrease in revenues from these contracts was primarily due to a decrease in the number of task orders for hazardous waste clean-up services. Direct operating expenses, which consist of direct labor and direct expenses including subcontractor costs, increased $6.3 million, or 6%, over the amount reported in fiscal 1994. The increase was due to an overall increase in the Company's business in fiscal 1995 as compared to fiscal 1994. In fiscal 1995, IG&A expenses increased to $63.2 million from $55.5 million in fiscal 1994. However, expressed as a percentage of revenues, IG&A expenses increased from 34% in fiscal 1994 to 35% in fiscal 1995. The Company attributes this increase to the overall increase in the Company's business. Net interest expense remained relatively constant at $1.4 million in fiscal 1995. The Company earned $6.4 million before income taxes in fiscal 1995 compared to $4.9 million in fiscal 1994. While the Company had available NOL carryforwards which partially off-set otherwise taxable income for Federal income tax purposes, for state income tax purposes such amounts were not necessarily available to offset income subject to tax. Accordingly, the Company's effective tax rate for fiscal 1995 was approximately 20% compared to 9% in 1994. Net income increased 16% to $5.1 million compared to $4.4 million in fiscal 1994. The Company earned $.67 per share on a fully-diluted basis in fiscal 1995 compared to $.60 per share in fiscal 1994. The Company's backlog of signed and funded contracts at October 31, 1995 was $196.4 million as compared to $159.1 million at October 31, 1994. The value of the Company's designations, which are awarded projects for which contracts have not been signed, was $194.1 million at October 31, 1995 as compared to $172.0 million at October 31, 1994. Income Taxes The Company currently has a $6.0 million NOL carryforward which is limited to $750,000 per year, pursuant to Section 382 of the Internal Revenue Code, related to its October 1989 quasi-reorganization. 13 Liquidity and Capital Resources The Company's liquidity and capital measurements are set forth below:
October 31, --------------------------------------------- 1996 1995 1994 --------------------------------------------- Working capital $57,572,000 $36,307,000 $33,674,000 Working capital ratio 1.8 to 1 2.4 to 1 2.6 to 1 Average days to convert billed accounts receivable to cash 58 62 66 Percentage of debt to equity 108.1% 25.0% 27.3%
In March 1996, in connection with the acquisition of Greiner, the Company entered into a new $70.0 million credit facility of which $20.0 million is a revolving line of credit. At October 31, 1996, the Company had outstanding letters of credit totaling $600,000, which reduced the amount available to the Company under the line of credit to $19.4 million. See Note 7 - Long-Term Debt to the Company's consolidated financial statements. The Company is a professional services organization and, as such, is not capital intensive. Capital expenditures during fiscal years 1996, 1995, and 1994 were $3.0 million, $1.6 million, and $2.1 million, respectively. The expenditures were principally for computer-aided design and general purpose computer equipment to accommodate the Company's growth. The Company expects fiscal 1997 capital expenditures to be comparable to the expenditures in fiscal 1996. The Company believes that its existing financial resources, together with its planned cash flow from operations and its unused line of credit, will provide sufficient capital to fund its operations and its capital expenditure needs for the foreseeable future. Cash paid during the period for: Years Ended October 31, -------------------------------- 1996 1995 1994 ---- ---- ---- (In thousands) Interest $4,142 $ 891 $1,301 Income taxes $6,483 $ 1,358 $ 499 14 Acquisitions On January 4, 1995, the Company acquired ECD for an aggregate purchase price of $3.6 million, which was paid in cash. In conjunction with the acquisition, liabilities were assumed as follows: (In thousands) Fair value of assets acquired $4,952 Cash paid for the capital stock (3,596) ------ Liabilities assumed $1,356 ====== On March 29, 1996, the Company acquired all of the capital stock of Greiner for $78.8 million, comprised of cash of $69,361,000, and 1.4 million shares of the Company's stock. (In thousands) Purchase price of Greiner $77,184 (net of prepaid loan fees of $1.6 million) Fair value of assets acquired (42,510) ------- Excess purchase price over net assets acquired $34,674 ======= 15 ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT ACCOUNTANTS The Board of Directors and Stockholders of URS Corporation: We have audited the accompanying consolidated balance sheets of URS Corporation and its subsidiaries as of October 31, 1996 and 1995, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for each of the three years in the period ended October 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of URS Corporation and its subsidiaries as of October 31, 1996 and 1995, and the consolidated results of their operations and their cash flows for each of the three years in the period ended October 31, 1996, in conformity with generally accepted accounting principles. /s/ Coopers & Lybrand L.L.P. ----------------------------------- COOPERS & LYBRAND L.L.P. San Francisco, California December 17, 1996 16 URS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share data)
October 31, ------------------------ 1996 1995 ---- ---- ASSETS Current assets: Cash and cash equivalents $22,370 $ 8,836 Accounts receivable, including retainage amounts of $8,379 and $3,895, less allowance for doubtful accounts of $5,189 and $664 72,417 35,822 Costs and accrued earnings in excess of billings on contracts in process, less allowances for losses of $2,419 and $606 23,597 13,200 Deferred income taxes 7,077 1,860 Prepaid expenses and other assets 2,426 1,849 -------- ------- Total current assets 127,887 61,567 Property and equipment at cost, net 15,815 5,835 Goodwill, net 40,261 7,765 Other assets 1,644 768 -------- ------- $185,607 $75,935 ======== ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 21,684 $ 7,724 Accrued salaries and wages 12,131 6,588 Accrued expenses and other 20,063 9,088 Billings in excess of costs and accrued earnings 8,849 - Deferred income taxes 2,913 1,860 Long-term debt, current portion 4,675 - -------- ------- Total current liabilities 70,315 25,260 Long-term debt 52,390 7,204 Long-term debt to related parties 2,979 2,795 Deferred compensation and other 3,227 1,198 -------- ------- Total liabilities 128,911 36,457 -------- ------- Commitments and contingencies (Note 8) Stockholders' equity: Common shares, par value $.01; authorized 20,000 shares; issued 8,640 and 7,167 shares, respectively 88 73 Treasury stock (287) (287) Additional paid-in capital 41,894 31,791 Retained earnings since February 21, 1990, date of quasi-reorganization 15,001 7,901 -------- ------- Total stockholders' equity 56,696 39,478 -------- ------- $185,607 $75,935 ======== ======= See Notes to Consolidated Financial Statements
17 URS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Years Ended October 31, -------------------------------- 1996 1995 1994 ---- ---- ---- Revenues $305,470 $179,769 $164,088 -------- -------- -------- Expenses: Direct operating 187,129 108,845 102,500 Indirect, general and administrative 102,389 63,217 55,455 Interest expense, net 3,897 1,351 1,244 -------- -------- -------- 293,415 173,413 159,199 -------- -------- -------- Income before taxes 12,055 6,356 4,889 Income tax expense 4,700 1,300 450 -------- -------- -------- Net income $ 7,355 $ 5,056 $ 4,439 ======== ======== ======== Net income per share: Primary $ .82 $ .68 $ .60 ======== ======== ======== Fully diluted $ .80 $ .67 $ .60 ======== ======== ======== See Notes to Consolidated Financial Statements 18 URS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In thousands)
Common Shares Additional Total ------------------------ Treasury Paid-in Retained Stockholders' Number Amount Stock Capital Earnings Equity -------- -------- -------- -------- -------- -------- Balances, November 1, 1993 6,989 $ 70 $ 0 $ 28,365 $ 954 $ 29,389 Employee stock purchases 40 1 -- 203 -- 204 Purchase of treasury shares (10) -- (59) -- -- (59) Quasi-reorganization NOL carryforward -- -- -- 1,693 (1,693) -- Net income -- -- -- -- 4,439 4,439 -------- -------- -------- -------- -------- -------- Balances October 31, 1994 7,019 71 (59) 30,261 3,700 33,973 Employee stock purchases 190 2 -- 675 -- 677 Purchase of treasury shares (42) -- (228) -- -- (228) Quasi-reorganization NOL carryforward -- -- -- 855 (855) -- Net income -- -- -- -- 5,056 5,056 -------- -------- -------- -------- -------- -------- Balances, October 31, 1995 7,167 73 (287) 31,791 7,901 39,478 Employee stock purchases 72 1 -- 399 -- 400 Issuance of 1,401,983 shares in connection with the Greiner acquisition 1,401 14 -- 9,449 -- 9,463 Quasi-reorganization NOL carryforward -- -- -- 255 (255) -- Net income -- -- -- -- 7,355 7,355 -------- -------- -------- -------- -------- -------- Balances, October 31, 1996 8,640 $ 88 $ (287) $ 41,894 $ 15,001 $ 56,696 ======== ======== ======== ======== ======== ======== See Notes to Consolidated Financial Statements
19 URS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW (In thousands)
Years Ended October 31, -------------------------------------------- 1996 1995 1994 ---- ---- ---- Cash flows from operating activities: Net income $ 7,355 $ 5,056 $ 4,439 -------- -------- -------- Adjustments to reconcile net income to net cash provided (used) by operating activities: Deferred income taxes (1,880) (615) 70 Depreciation and amortization 5,295 3,124 2,596 Changes in current assets and liabilities: Accounts receivable and costs and accrued earnings in excess of billings on contracts in process (8,810) (4,067) (4,938) Prepaid expenses and other assets 1,411 (881) 26 Accounts payable, accrued salaries and wages and accrued expenses 6,777 1,252 1,682 Billings in excess of costs and accrued earnings 8,849 -- -- Other, net 5,517 224 (42) -------- -------- -------- Total adjustments 17,159 (963) (606) -------- -------- -------- Net cash provided by operating activities 24,514 4,093 3,833 -------- -------- -------- Cash flows from investing activities: Payment for business acquisition, net of cash acquired (56,354) (3,596) -- Capital expenditures (2,962) (1,610) (2,149) Other -- 43 -- -------- -------- -------- Net cash used by investing activities (59,316) (5,163) (2,149) -------- -------- -------- Cash flows from financing activities: Proceeds from issuance of debt 50,000 Repayment of debt (2,056) -- -- Repurchase of common shares -- (228) (59) Proceeds from sale of common shares 389 247 204 Proceeds from exercise of stock options 11 430 -- Other (8) -- 1,000 -------- -------- -------- Net cash provided by financing activities 48,336 449 1,145 -------- -------- -------- Net increase (decrease) in cash 13,534 (621) 2,829 Cash at beginning of year 8,836 9,457 6,628 -------- -------- -------- Cash at end of year $ 22,370 $ 8,836 $ 9,457 ======== ======== ======== See Notes to Consolidated Financial Statements
20 URS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of URS Corporation and its subsidiaries, all of which are wholly-owned. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements account for the acquisition of Greiner Engineering, Inc. ("Greiner") in March, 1996 as a purchase. (See Note 3 - Acquisitions.) Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition Revenue from contract services is recognized by the percentage-of-completion method and includes a proportion of the earnings expected to be realized on a contract in the ratio that costs incurred bear to estimated total costs. Revenue on cost reimbursable contracts is recorded as related contract costs are incurred and includes estimated earned fees in the proportion that costs incurred to date bear to total estimated costs. The fees under certain government contracts may be increased or decreased in accordance with cost or performance incentive provisions which measure actual performance against established targets or other criteria. Such incentive fee awards or penalties are included in revenue at the time the amounts can be reasonably determined. Revenue for additional contract compensation related to unpriced change orders is recorded when realization is probable. Revenue from claims by the Company for additional contract compensation is recorded when agreed to by the customer. If estimated total costs on any contract indicate a loss, the Company provides currently for the total loss anticipated on the contract. Costs under contracts with the U.S. Government are subject to government audit upon contract completion. Therefore, all contract costs, including direct and indirect, general and administrative expenses, are potentially subject to adjustment prior to final reimbursement. Management believes that adequate provision for such adjustments, if any, has been made in the accompanying consolidated financial statements. All overhead and general and administrative expense recovery rates for fiscal 1989 through fiscal 1996 are subject to review by the U.S. Government. 21 Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Fair Value of Financial Instruments Carrying amounts of certain of the Company's financial instruments including cash, accounts receivable, accounts payable and other liabilities approximate fair value due to their short maturities. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying values of long term debt approximates fair value. Income Taxes The Company uses an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change in deferred tax assets and liabilities during the period. Property and Equipment Property and equipment are stated at cost. In the year assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts and any gain or loss on disposal is included in income. Depreciation is provided on the straight-line method over the useful service lives of the assets. Leasehold improvements are amortized over the length of the lease or estimated useful life, whichever is less. Income Per Share The computation of earnings per common and common equivalent shares is based upon the weighted average number of common shares outstanding during the period plus (in periods in which they have a dilutive effect) the effect of common shares contingently issuable, primarily from stock options, exercise of warrants and the potential conversion of convertible debentures, less the number of shares assumed to be purchased from the proceeds using the average market price of the Company's common stock. The fully diluted per share computation reflects the effect of common shares contingently issuable upon the exercise of warrants in periods in which such exercise would cause dilution. Fully diluted earnings per share may also reflect additional dilution related to stock options due to the use of the market price at the end of the period when higher than the average price for the period. 22 Computation of Net Income Per Share
Years Ended October 31, ------------------------------------ 1996 1995 1994 ------ ------ ------ (In thousands, except per share data) Net income $7,355 $5,056 $4,439 Add: Interest on debentures and notes, net of applicable income taxes 209 696 715 ------- ------ ------ Net income for fully-diluted income per common share $7,564 $5,752 $5,154 ====== ====== ====== Weighted average number of common shares outstanding during the year 8,020 7,080 7,001 Add: Common equivalent shares (determined using the "treasury stock" method) representing shares issuable upon exercise of employee stock options and warrants 3,206 2,985 2,959 Less: Twenty percent limit on repurchase (1,728) (1,433) (1,404) ------ ------ ------ Weighted average number of shares used in calculation of fully-diluted income per share 9,498 8,632 8,556 ====== ====== ====== Fully-diluted income per common share $ .80 $ .67 $ .60 ====== ====== ====== Industry Segment Information The Company's single business segment, consulting, provides engineering and architectural services to local and state governments, the Federal government and the private sector. The Company's services are primarily utilized for planning, design and program and construction management of infrastructure projects. The Company's revenues from local, state and Federal government agencies and private businesses for the last three fiscal years are as follows: Years Ended October 31, --------------------------------------------------------------------------------- 1996 1995 1994 ---------------------- -------------------------- -------------------- (In thousands) Local and state agencies $198,472 65% $ 99,871 56% $ 88,207 54% Federal agencies 64,226 21 58,751 33 59,611 36 Private business 42,772 14 21,147 11 16,270 10 -------- --- ------- -- ------- --- Total $305,470 100% $179,769 100% $164,088 100% ======= === ======= === ======= ===
Adoption of Statements of Financial Accounting Standards In March 1995, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 121, "Accounting for Long- 23 Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121"). SFAS 121 requires that long-lived assets, certain identifiable intangibles, and goodwill be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment would be recorded if the expected future undiscounted cash flows were less than the carrying amount of the asset. SFAS 121 is effective for fiscal years beginning after December 15, 1995, with earlier adoption permitted. The Company will adopt SFAS 121 effective for its fiscal year ending October 31, 1996. The Company does not believe that adoption of SFAS 121 will have a material adverse effect on its financial position or results of operations. In October 1995, the FASB issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), which is effective for fiscal years beginning after December 15, 1995. SFAS 123 encourages entities to adopt a fair value based method of accounting for employee stock compensation plans; however, it also allows an entity to continue to measure compensation cost for those plans using the intrinsic value based method of accounting. Under the intrinsic value based method, companies do not recognize compensation cost for many of their stock compensation plans. Under the fair value based method, companies would recognize compensation costs for those same plans. The Company elects to continue to use the intrinsic value based method, and therefore does not expect the impact on its financial statements, if any, to be material. Reclassifications Certain reclassifications have been made to the 1995 and 1994 financial statements to conform to the 1996 presentation with no effect on net income as previously reported. NOTE 2. QUASI-REORGANIZATION In conjunction with a restructuring completed in fiscal year 1990, the Company, with the approval of its Board of Directors, implemented a quasi-reorganization effective February 21, 1990 and revalued certain assets and liabilities to fair value as of that date. The fair values of the Company's assets and liabilities at the date of the quasi-reorganization were determined by management to approximate their carrying value and no further adjustment of historical bases was required. No assets were written-up in conjunction with the revaluation. As part of the quasi-reorganization, the deficit in retained earnings of $92,523,000 was eliminated against additional paid-in capital. The balance in retained earnings at October 31, 1995 represents the accumulated net earnings arising subsequent to the date of the quasi-reorganization. NOTE 3. ACQUISITIONS During the year ended October 31, 1995, the Company acquired E.C. Driver & Associates, Inc. ("ECD") for an aggregate purchase price of $3.6 million, and the assumption of ECD's liabilities totaling $1.4 million. This acquisition was accounted for by the purchase method of accounting and the net assets of ECD are included in the Company's consolidated balance sheet as of October 31, 1995 based upon their estimated fair value at the transaction's effective date of January 4, 1995. Pro forma operating results for the years ended October 31, 24 1994 and 1995, as if the acquisition had been made on November 1, 1993, are not presented as they would not be materially different from the Company's reported results. The excess of the purchase price over the estimated fair value of the assets acquired has been allocated to goodwill. During the year ended October 31, 1996, the Company acquired Greiner Engineering, Inc. ("Greiner") for an aggregate purchase price of $78.8 million, comprised of cash of $69.3 million, and 1.4 million shares of the Company's Common Stock. The acquisition has been accounted for by the purchase method of accounting and the excess of the fair value of the net assets acquired over the purchase price has been allocated to goodwill. The operating results of Greiner are included in the Company's results of operations from the date of purchase. The purchase price consisted of: (In thousands) Cash paid $19,321 Term debt-current portion 4,675 Term debt-long-term portion 45,325 Common Stock 9,463 ------- $78,784 ======= The purchase price of Greiner (net of prepaid loan fees of $1.6 million) $77,184 Fair value of assets acquired 42,510 ------- Excess purchase price over net assets acquired (Goodwill) $34,674 ======= The following unaudited pro forma summary presents the consolidated results of operations as if the Greiner acquisition had occurred at the beginning of the periods presented and does not purport to indicate what would have occurred had the acquisition been made as of those dates or of results which may occur in the future. Fiscal Year Ended October 31, 1996: 1996 1995 ----- ---- (In thousands) Revenues $ 368,572 $334,904 ========== ======== Net income $ 4,691 $ 2,868 ========== ======== Net income per share $ .49 $ .33 ========== ======== 25 NOTE 4. PROPERTY AND EQUIPMENT Property and equipment consists of the following: October 31, 1996 1995 ------- ------ (In thousands) Equipment $17,789 $9,074 Furniture and fixtures 3,421 2,713 Leasehold improvements 2,213 887 ------- ------ 23,423 12,674 Less: accumulated depreciation and amortization (7,608) (6,839) ------- ------ Net property and equipment $15,815 $5,835 ======= ====== NOTE 5. GOODWILL Goodwill represents the excess of the purchase price over the fair value of the net tangible assets of various operations acquired by the Company. Accumulated amortization at October 31, 1996 and 1995 was $3.8 million and $3.1 million, respectively. Goodwill is amortized on the straight-line method over 30 years. 26 NOTE 6. INCOME TAXES The components of income tax expense applicable to the operations each year are as follows: Years Ended October 31, ----------------------------------------- 1996 1995 1994 ------ ------ ---- (In thousands) Current: Federal $5,020 $1,325 $150 State and local 1,560 590 230 ------ ------ ---- Subtotal 6,580 1,915 380 ------ ------ ---- Deferred: Federal (1,320) (385) - State and local (560) (230) 70 ------ ------ ---- Subtotal (1,880) (615) 70 ------ ------ ---- Total tax provision $4,700 $1,300 $450 ====== ====== ==== As of October 31, 1996, the Company has available net operating loss ("NOL") carryforwards for Federal income tax purposes and financial statement purposes of $6.0 million. The NOL utilization is limited to $750,000 per year. While the Company has available NOL carryforwards which partially off-set otherwise taxable income for Federal income tax purposes, for state tax purposes such amounts are not necessarily available to offset income subject to tax. The significant components of the Company's deferred tax assets and liabilities as of October 31, 1996 are as follows: Deferred tax assets/(liabilities) - due to:
1996 1995 ---- ---- (In thousands) Allowance for doubtful accounts $1,520 $ 200 Other accruals and reserves 6,630 3,270 Net operating loss 2,050 2,300 ------ ------- Total 10,200 5,770 Valuation allowance (3,123) (3,910) ------ ------- Deferred tax asset 7,077 1,860 ------ ------- Other deferred gain and unamortized bond premium (2,160) (1,820) Depreciation and amortization (753) (40) ------ ------- Deferred tax liability (2,913) (1,860) ------ ------- Net deferred tax asset $4,164 $ -0- ====== =======
27 The net change in the total valuation allowance for the year ended October 31, 1996 was a decrease of $788,000 due to the utilization of net operating losses, AMT credits and other changes in deferred tax assets. The difference between total tax expense and the amount computed by applying the statutory Federal income tax rate to income before taxes is as follows:
Years Ended October 31, ------------------------------------------ 1996 1995 1994 ------ ------ ------ (In thousands) Federal income tax expense based upon federal statutory tax rate of 40% $4,100 $2,160 $1,660 Nondeductible goodwill amortization 400 160 160 Nondeductible expenses 240 210 120 NOL carryforwards utilized (250) (1,140) (1,690) AMT credit utilized - (330) - State taxes, net of Federal benefit 660 240 200 Adjustment to state tax rate 80 - - Utilization of deferred tax benefits and other (530) - - ------ ------ ------ Total taxes provided $4,700 $1,300 $ 450 ====== ====== ======
NOTE 7. LONG-TERM DEBT Long-term debt consists of the following:
October 31, -------------------------- 1996 1995 ------- ------ (In thousands) Third party: Bank term loan, payable in quarterly installments $49,207 $ - 6 1/2% Convertible Subordinated Debentures due 2012 (net of bond issue costs of $39 and $41) 2,106 2,104 8 5/8% Senior Subordinated Debentures due 2004 (net of discount and bond issue costs of $3,657 and $3,830) (effective interest rate on date of restructuring was 25%) 2,798 2,625 Obligations under capital leases 4,173 3,406 ------- ------ 58,284 8,135 Less: Current maturities of long-term debt 4,675 - Current maturities of capital leases 1,219 931 ------- ------ $52,390 $7,204 ======= ====== Related parties: January Notes (net of discount of $1,021 and $1,205) $ 2,979 $2,795 ======= ======
28 At October 31, 1996, the Company's senior secured revolving credit facility with Wells Fargo Bank, N.A. (the "Bank") provides for advances up to $20.0 million and expires March 29, 1999. Borrowings on the revolving credit facility bear interest at the option of the Company based on rate indexes selected by the Company, with variable spreads over the selected index based on loan maturity and the Company's financial performance. At October 31, 1996, the interest rate was based on the London Interbank Offered Rate (LIBOR) of 5.53%, plus spreads of 2.625% to 3.00%. At October 31, 1996, the Company had outstanding letters of credit totaling $600,000 which reduced the amount available to the Company under its revolving credit facility to $19.4 million. Also at October 31, 1996, the Company had outstanding with the Bank $49.2 million of senior secured term loans payable over seven years beginning October 1996. The loans bear interest based on rate indexes selected by the Company, with variable spreads over the selected index based on loan maturity and the Company's financial performance. At October 31, 1996, the interest rate was based on the London Interbank Offered Rate (LIBOR) of 5.53%, plus spreads of 2.625% to 3.00%. Related Parties At October 31, 1996, the Company had fully-drawn $4.0 million under its line of credit with Richard C. Blum & Associates, Inc. ("RCBA"). The indebtedness is represented by the January Notes, which bear interest at 6 1/2% per annum, are subordinate only to the Bank line of credit and are due November 1, 2000. RCBA, through various partnerships, beneficially owns approximately 18% of the Company's common shares (approximately 33% assuming exercise of additional warrants) outstanding at October 31, 1996. Richard C. Blum, a director of the Company, is also Chairman of RCBA. Debentures The Company's 6 1/2% Convertible Subordinated Debentures due 2012 are convertible into the Company's common shares at the rate of $206.30 per share. Sinking fund payments are calculated to retire 70% of the debentures prior to maturity beginning in February 1998. Interest is payable semi-annually in February and August. Interest is payable semi-annually in January and July on the Company's 85/8% Senior Subordinated Debentures due 2004. Both the 6 1/2% Convertible Subordinated Debentures and the 85/8% Senior Subordinated Debentures are subordinate to all debt to RCBA and the Bank. Maturities The amounts of long-term debt outstanding at October 31, 1996 maturing in the next five years are as follows: (In thousands) 1997 $ 4,675 1998 3,581 1999 5,075 2000 5,475 2001 6,025 Thereafter 36,975 Amounts payable under capitalized lease agreements are excluded from the above table. 29 Obligations under Leases Total rental expense included in operations for operating leases for the fiscal years ended October 31, 1996, 1995 and 1994 amounted to $10.9 million, $5.7 million and $5.3 million, respectively. Certain of the lease rentals are subject to renewal options and escalation based upon property taxes and operating expenses. These operating lease agreements expire at varying dates through 2005. Obligations under non-cancelable lease agreements are as follows: Capital Operating Leases Leases ------ ------ (In thousands) 1997 $1,265 $12,593 1998 1,147 10,068 1999 1,069 7,803 2000 428 6,094 2001 241 5,195 Thereafter 23 13,512 ------ ------ Total minimum lease payments $4,173 $55,265 ======= Less amounts representing interest 963 ------ Present value of net minimum lease payments $3,210 ====== NOTE 8. COMMITMENTS AND CONTINGENCIES Currently, the Company has $51.0 million per occurrence and aggregate commercial general liability insurance coverage. The Company is also insured for professional errors and omissions ("E&O") and contractor pollution liability ("CPL") claims with an aggregate limit of $30.0 million after a self-insured retention of $.5 million. The E&O and CPL coverages are on a "claims made" basis, covering only claims actually made during the policy period currently in effect. Thus, if the Company does not continue to maintain this policy, it will have no coverage under the policy for claims made after its termination date even if the occurrence was during the term of coverage. It is the Company's intent to maintain this type of coverage, but there can be no assurance that the Company can maintain its existing coverage, that claims will not exceed the amount of insurance coverage or that there will not be claims relating to prior periods that were subject only to "claims made" coverage. Various legal proceedings are pending against the Company or its subsidiaries alleging breaches of contract or negligence in connection with the performance of professional services. In some actions punitive or treble damages are sought which substantially exceed the Company's insurance coverage. The Company's management does not believe that any of such proceedings will have a material adverse effect on the consolidated financial position and operations of the Company. 30 NOTE 9. CAPITAL STOCK Declaration of dividends, except Common Stock dividends, is restricted by the Bank line of credit agreement and the 8 5/8 Indenture. Further, declaration of dividends may be precluded by existing Delaware law. During fiscal year 1995, the Company repurchased a total of 42,000 shares of its Common Stock at an average repurchase price of $5.43, pursuant to a systematic repurchase plan approved by the Company's Board of Directors on September 13, 1994. The systematic repurchase plan expired on September 13, 1995. The Company, as of that date, had repurchased a total of 52,000 shares of its Common Stock at an average repurchase price of $5.49. The 1987 Restricted Stock Plan (the "Plan") provides for grants of up to 16,537 shares of Common Stock to key employees of the Company and its subsidiaries. An employee selected to receive shares under the Plan will not be required to pay any consideration for the shares. Shares issued to an employee are subject to forfeiture in the event that the employment of the employee terminates for any reason other than death. The forfeiture restrictions lapse with respect to portions of the grant over a five-year period subsequent to the grant date. As of October 31, 1996, 6,872 restricted shares have been granted. The 1979 Stock Option Plan (the "1979 Plan") provided for grants of options to purchase shares of Common Stock to directors, officers and key employees of the Company and its subsidiaries at prices and for periods (not to exceed ten years) as determined by the Board of Directors. The 1979 Plan also provided for the granting of Stock Appreciation Rights and incentive stock options. The 1979 Plan expired in February 1989, and no further options or rights may be granted under the 1979 Plan. On October 20, 1988, the stockholders approved a replacement option program pursuant to which non-management members of the Board of Directors granted replacement stock options to selected employees, exercisable at then current market prices. The selected employees then exchanged their outstanding options for new options covering two shares for each three shares covered by the options being replaced. Options to purchase 16,561 shares were exchanged for pre-existing options. On April 27, 1989, the stockholders approved the 1989 Stock Option and Rights Plan (the "1989 Plan"). The 1989 Plan provides for the grant of options to purchase 50,000 shares of Common Stock to directors, officers and key employees of the Company and its subsidiaries at prices and for periods (not to exceed ten years) as determined by the Board of Directors. The 1989 Plan also provides for the granting of Stock Appreciation Rights. No options have been granted under the 1989 Plan. On March 26, 1991, the stockholders approved the 1991 Stock Incentive Plan (the "1991 Plan"). The 1991 Plan provides for the grant not to exceed 1,500,000 Restricted Shares, Stock Units and Options, plus the number of shares of Common Stock remaining available for awards under the 1987 Plan (9,665) and the 1989 Plan (50,000) to key employees of the Company and its subsidiaries at prices and for periods as determined by the Board of Directors. The 1991 Plan prohibits granting new options under the 1987 Plan and the 1989 Plan. As of October 1996, the Company had issued 21,200 shares of Restricted Stock under 31 the 1991 Plan. Under the Employee Stock Purchase Plan (the "ESP Plan") implemented in September 1985, employees may purchase shares of Common Stock through payroll deductions of up to 10% of the employee's base pay. Contributions are credited to each participant's account on the last day of each six-month participation period of the ESP Plan (which commences on January 1 and July 1 of each year). The purchase price for each share of Common Stock shall be the lower of 85% of the fair market value of such share on the last trading day before the participation period commences or 85% of the fair market value of such share on the last trading day in the participation period. Employees purchased 69,692 shares under the ESP Plan in fiscal 1996 and 46,610 shares in fiscal 1995. On February 21, 1990, the Company issued warrants to purchase 1,819,148 shares of Common Stock at a purchase price of $4.34 per share which expire on February 14, 1997. A summary of the number of stock options granted under the 1979, 1989 and 1991 Plans is as follows:
October 31, 1996 ----------------------------- Shares Per Share (1) ------ ------------- Number of options: Outstanding at year end 1,386,469 $3.12 - $31.25 Exercisable at year end 1,029,733 $3.12 - $31.25 Exercised during the year 2,000 $5.50 - $5.75 Available for grant at year end 19,231 - October 31, 1995 ----------------------------- Shares Per Share (1) ------ ------------- Number of options: Outstanding at year end 1,166,324 $3.12 - 31.25 Exercisable at year end 768,166 $3.12 - 31.25 Exercised during the year 137,600 $3.12 - $3.12 Available for grant at year end 239,665 - October 31, 1994 ----------------------------- Shares Per Share (1) ------ ------------- Number of options: Outstanding at year end 1,139,964 $3.12 - 31.25 Exercisable at year end 790,967 $3.12 - 31.25 Exercised during the year - - Available for grant at year end 413,765 - (1) Reflects lowest and highest exercise price.
32 NOTE 10. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Years Ended October 31, ------------------------------- 1996 1995 1994 ---- ---- ---- (In thousands) Interest $4,142 $ 891 $1,301 Income taxes $6,483 $ 1,358 $ 499 On January 4, 1995 the Company purchased all of the capital stock of ECD for $3.6 million. In conjunction with the acquisition, liabilities were assumed as follows: Fair value of assets acquired $4,952 Cash paid for the capital stock (3,596) ------ Liabilities assumed $1,356 ====== On March 29,1996 the Company acquired all of the capital stock of Greiner for $78.8 million. Purchase price of Greiner $77,184 (net of prepaid loan fees of $1.6 million) Fair value of assets acquired (42,510) ------- Excess purchase price over net assets acquired $34,674 ======= There were no significant non-cash investing or financing activities in fiscal 1994. NOTE 11. DEFINED CONTRIBUTION PLAN The Company has a defined contribution retirement plan under Internal Revenue Code Section 401(k). The plan covers all full-time employees who are at least 18 years of age. Contributions by the Company are made at the discretion of the Board of Directors. Contributions in the amount of $1.6 million, $.8 million and $.6 million were made to the plan in fiscal 1996, 1995 and 1994, respectively. NOTE 12. VALUATION AND ALLOWANCE ACCOUNTS
Additions Charged to Deductions Beginning Costs and from Ending Balance Expenses Reserves Other Balance --------- ---------- ---------- ----- ------- (In thousands) October 31, 1996 Allowances for losses and doubtful collections $1,270 $2,600 ($1,083) $4,821 $7,608 October 31, 1995 Allowances for losses and doubtful collections $1,141 $442 $313 $ - $1,270 October 31, 1994 Allowances for losses and doubtful collections $1,081 $322 $262 $ - $1,141
33 NOTE 13. RELATED PARTY TRANSACTIONS Interest paid to related parties in connection with the January Notes was $260,712, $194,000 and $363,000 in fiscal 1996, 1995 and 1994, respectively. (See Note 7 - Long-Term Debt). The Company has agreements for business consulting services to be provided by RCBA and Richard C. Blum, a Director of the Company. Under these agreements, the Company paid $90,000 and $60,000 to RCBA and Richard C. Blum, respectively, during each of fiscal 1996, 1995 and 1994. Richard C. Blum also received an additional cash amount of $23,000, $25,000 and $24,000 for his services as a Director of the Company in fiscal 1996, 1995 and 1994, respectively. NOTE 14. CONCENTRATION OF CREDIT RISK The Company provides services primarily to local, state and Federal government agencies. The Company believes the credit risk associated with these types of revenues is minimal. However, the Company does perform ongoing credit evaluations of its customers and, generally, requires no collateral. The Company maintains reserves for potential credit losses and such losses have been within management's expectations. Substantially all cash balances are held in one financial institution and at times exceed federally insured limits. NOTE 15. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Selected quarterly financial data for fiscal 1996 and 1995 is summarized as follows: Fiscal 1996 Quarters Ended ------------------------------------------------- Jan. 31 Apr. 30 July 31 Oct. 31 -------- -------- -------- -------- (In thousands, except per share data) Revenues $ 48,503 $ 64,864 $ 89,734 $102,369 Gross profit 18,105 25,736 36,707 37,793 Operating income 1,637 3,270 4,863 6,182 Net income $ 812 $ 1,522 $ 2,072 $ 2,949 Income per share: Primary $ .11 $ .18 $ .22 $ .29 ======== ======== ======== ======== Fully diluted $ .11 $ .18 $ .22 $ .29 ======== ======== ======== ======== Weighted average number of shares 8,713 9,188 10,096 10,093 ======== ======== ======== ======== Fiscal 1995 Quarters Ended ------------------------------------------------- Jan. 31 Apr. 30 July 31 Oct. 31 ------- ------- ------- ------- (In thousands, except per share data) Revenues $ 40,307 $ 44,810 $ 44,456 $ 50,196 Gross profit 15,878 17,688 18,052 19,306 Operating income 1,356 1,625 2,060 2,666 Net income $ 800 $ 1,051 $ 1,336 $ 1,869 Income per share: Primary $ .11 $ .15 $ .18 $ .24 ======== ======== ======== ======== Fully diluted $ .11 $ .15 $ .18 $ .23 ======== ======== ======== ======== Weighted average number of shares 8,528 8,725 8,731 8,696 ======== ======== ======== ======== Operating income represents continuing operations before interest income and interest expense. 34 ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10. EXECUTIVE OFFICERS AND DIRECTORS Incorporated by reference from the information under the captions "Election of Directors" and "Compliance with Section 16(a) of Securities Exchange Act" in the Company's definitive proxy statement for the Annual Meeting of Stockholders to be held on March 25, 1997 and from Item 4a -- "Executive Officers of the Registrant" in Part I. ITEM 11. EXECUTIVE COMPENSATION Incorporated by reference from the information under the caption "Executive Compensation" in the Company's definitive proxy statement for the Annual Meeting of Stockholders to be held on March 25, 1997. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Incorporated by reference from the information under the caption "Stock Ownership" in the Company's definitive proxy statement for the Annual Meeting of Stockholders to be held on March 25, 1997. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Incorporated by reference from Item 8, Financial Statement and Supplementary Data, Note 7 -- Long-Term Debt and Note 13 -- Related Party Transactions. PART IV ITEM 14. EXHIBITS. FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1)Item 8. Consolidated Financial Statements and Supplementary Data Report of Independent Accountants Consolidated Balance Sheets October 31, 1996 and October 31, 1995 Consolidated Statements of Operations For the years ended October 31, 1996, 1995 and 1994 Consolidated Statements of Changes in Stockholders' Equity For the years ended October 31, 1996, 1995 and 1994 Consolidated Statements of Cash Flows For the years ended October 31, 1996, 1995 and 1994 Notes to Consolidated Financial Statements 35 (a)(2) Financial Statement Schedules Schedules are omitted because they are not applicable, not required or because the required information is included in the Consolidated Financial Statements or Notes thereto. (a)(3) Exhibits 3.1 Certificate of Incorporation of the Company, filed as Exhibit 3.1 to the Annual Report on Form 10-K for the fiscal year ended October 31, 1991 ("1991 Form 10-K"), and incorporated herein by reference. 3.2 By-laws of the Company as amended. FILED HEREWITH. 4.1 Indenture, dated as of February 15, 1987, between the Company and First Interstate Bank of California, Trustees, relating to $57.5 million of the Company's 6 1/2% Convertible Subordinated Debentures Due 2012, filed as Exhibit 4.10 to the Company's Registration Statement on Form S-2 (Commission File No. 33-11668) and incorporated herein by reference. 4.2 Amendment Number 1 to Indenture governing 6 1/2% Convertible Subordinated Debentures due 2012, dated February 21, 1990, between the Company and First Interstate Bank of California, Trustee, filed as Exhibit 4.9 to the Company's Registration Statement on Form S-1 (Commission File No. 33-56296) ("1990 Form S-1") and incorporated herein by reference. 4.3 Indenture, dated as of March 16, 1989, between the Company and MTrust Corp., National Association, Trustee relating to the Company's 85/8% Senior Subordinated Debentures due 2004, filed as Exhibit 13C to the Company's Form T-3 under the Trust Indenture Act of 1939 (Commission File No. 22-19189) and incorporated herein by reference. 4.4 Amendment Number 1 to Indenture governing 85/8% Senior Subordinated Debentures due 2004, dated as of April 7, 1989, filed as Exhibit 4.11 to the 1990 Form S-1 and incorporated herein by reference. 4.5 Amendment Number 2 to Indenture governing 85/8% Senior Subordinated Debentures due 2004, dated February 21, 1990, between the Company and MTrust Corp. National Association, Trustee, filed as Exhibit 4.12 to the 1990 Form S-1 and incorporated herein by reference. 10.1 1979 Stock Option Plan of the Company, filed as Exhibit 10.01 to the Company's Registration Statement on Form S-14 (Commission File No. 2-73909) and incorporated herein by reference. 10.2 1987 Restricted Stock Plan of the Company, filed as Appendix I to the Company's definitive proxy statement filed with the Commission on March 2, 1987 and incorporated herein by reference. 10.3 1985 Employee Stock Purchase Plan of the Company, adopted effective July 1, 1997 (subject to stockholder approval). FILED HEREWITH. 10.4 1991 Stock Incentive Plan of the Company, amended and restated effective December 17, 1996 (subject to stockholder approval). FILED HEREWITH. 36 10.5 Non-Executive Directors Stock Grant Plan of the Company, adopted December 17, 1996 (subject to stockholder approval). FILED HEREWITH. 10.6 Selected Executive Deferred Compensation Plan of the Company, filed as Exhibit 10.3 to the 1990 Form S-1 and incorporated herein by reference. 10.7 1996 Incentive Compensation Plan of the Company. FILED HEREWITH. 10.8 1996 Incentive Compensation Plan of URS Consultants, Inc. FILED HEREWITH. 10.9 1996 Incentive Compensation Plan of Greiner Engineering, Inc. FILED HEREWITH. 10.10 Stock Appreciation Rights Agreement, dated July 18, 1989, between the Company and Irwin L. Rosenstein, filed as Exhibit 10.13 to the 1990 Form S-1 and incorporated herein by reference. 10.11 Stock Appreciation Rights Agreement, dated October 9, 1989, between the Company and Martin M. Koffel, filed as Exhibit 10.15 to the 1990 Form S-1 and incorporated herein by reference. 10.12 Employment Agreement, dated August 1, 1991, between URS Consultants, Inc. and Irwin L. Rosenstein, filed as Exhibit 10.12 to the 1991 Form 10-K and incorporated herein by reference. 10.12a Amendment to Employment Agreement, dated October 11, 1994, between URS Consultants, Inc., and Irwin L. Rosenstein. 10.13 Employment Agreement, dated December 16, 1991, between the Company and Martin Koffel, filed as Exhibit 10.13 to the 1991 Form 10-K and incorporated herein by reference. 10.14 Employment Agreement, dated May 7, 1991, between the Company and Kent P. Ainsworth, filed as Exhibit 10.16 to the 1991 Form 10-K and incorporated herein by reference. 10.15 Agreement and Plan of Merger, dated as of January 10, 1996, between URS Corporation, URS Acquisition Corporation and Greiner Engineering, Inc., filed as Exhibit 2(a) to the Form 8-K filed on January 12, 1996 (the "January 12, 1996 Form 8-K"), and incorporated herein by reference. 10.16 Letter Agreement, dated May 31, 1990, among the Company and certain subsidiaries and certain affiliates of Richard C. Blum & Associates, Inc., amending the Thortec Entities Credit and Security Agreement, filed as Exhibit 10.21 to the 1990 Form S-1 and incorporated herein by reference. 10.17 Thortec Entities Credit and Security Agreement, dated January 30, 1989, between the Company and certain subsidiaries and certain affiliates of Richard C. Blum & Associates, Inc., filed as Exhibit 10.54 to the 1988 Form 10-K, and incorporated herein by reference. 10.18 First, Second, Third and Fourth Amendments to the Thortec Entities Credit and 37 Security Agreement, dated January 30, 1989, between the Company and certain entities managed or advised by Richard C. Blum & Associates, Inc., filed as Exhibit 10.23 to the 1990 Form S-1 and incorporated herein by reference. 10.19 Fifth, Sixth and Seventh Amendments to the Thortec Entities Credit and Security Agreement, dated January 30, 1989, between the Company and certain entities managed or advised by Richard C. Blum & Associates, Inc., filed as Exhibit 10.21 to the Annual Report on Form 10-K for the fiscal year ended October 31, 1992 ("1992 Form 10-K") and incorporated herein by reference. 10.20 Letter Agreement, dated February 14, 1990, between the Company and Richard C. Blum, filed as Exhibit 10.31 to the 1990 Form S-1 and incorporated herein by reference. 10.21 Letter Agreement, dated February 14, 1990, between the Company and Richard C. Blum & Associates, Inc., filed as Exhibit 10.32 to the 1990 Form S-1 and incorporated herein by reference. 10.22 Registration Rights Agreement, dated February 21, 1990, among the Company, Wells Fargo Bank, N.A. and the Purchaser Holders named therein, filed as Exhibit 10.33 to the 1990 Form S-1 and incorporated herein by reference. 10.23 Warrant Agreement, dated February 21, 1990, between the Company, Wells Fargo Bank, N.A. and the Purchasers named therein, filed as Exhibit 10.24 to the 1990 Form S-1 and incorporated herein by reference. 10.24 URS Corporation Warrant Agreement, dated February 21, 1990, issued to BK Capital Partners I, filed as Exhibit 10.25 to the 1990 Form S-1 and incorporated herein by reference. 10.25 URS Corporation Warrant Agreement, dated February 21, 1990, issued to BK Capital Partners II, filed as Exhibit 10.26 to the 1990 Form S-1 and incorporated herein by reference. 10.26 URS Corporation Warrant Agreement, dated February 21, 1990, issued to BK Capital Partners III, filed as Exhibit 10.27 to the 1990 Form S-1 and incorporated herein by reference. 10.27 URS Corporation Warrant Agreement, dated February 21, 1990, issued to Executive Life Insurance Company, filed as Exhibit 10.28 to the 1990 Form S-1 and incorporated herein by reference. 10.28 URS Corporation Warrant Agreement, dated February 21, 1990, issued to Wells Fargo Bank, N.A., filed as Exhibit 10.29 to the 1990 Form S-1 and incorporated herein by reference. 10.29 URS Corporation Warrant Agreement, dated February 21, 1990, issued to Wells Fargo Bank, N.A., filed as Exhibit 10.30 to the 1990 Form S-1 and incorporated herein by reference. 10.30 Post-Affiliation Agreement, dated July 19, 1989, between the Company and URS International, Inc., filed as Exhibit 10.42 to the 1989 Form 10-K and incorporated 38 herein by reference. 10.31 Contract between URS Consultants, Inc. and the U.S. Department of the Navy (No N62474-89-R-9295) dated June 6, 1989, filed as Exhibit 10.34 to the 1991 Form 10-K and incorporated herein by reference.* 10.32 Form of Indemnification Agreement dated as of May 1, 1992 between the Company and each of Messrs. Ainsworth, Blum, Cashin, Koffel, Madden, Praeger, Rosenstein, and Walsh, filed as Exhibit 10.34 to the 1992 Form 10-K and incorporated herein by reference. 10.33 Form of Indemnification Agreement dated as of March 22, 1994 between the Company and Admiral Foley and Mr. Der Marderosian, filed as Exhibits 10.35 and 10.36 to the 1994 Form 10-K and incorporated herein by reference. 10.34 Form of Indemnification Agreement dated as of March 29, 1996 between the Company and Mr. Robert L. Costello, filed as Exhibit 10.2 to the 1996 second quarter Form 10-Q and incorporated herein by reference. 10.35 Form of Indemnification Agreement dated as of November 6, 1996 between the Company and Mr. Robert D. Glynn Jr. FILED HEREWITH. 10.36 Credit Agreement, dated as of January 10, 1996, between URS Corporation, the Financial Institutions listed therein as Lenders and Wells Fargo Bank, National Association, as Administrative Agent for the Lenders, filed as Exhibit 99(a) to the January 12, 1996 Form 8-K, and incorporated herein by reference. 10.37 Severance Agreement, dated as of November 22, 1993, between the Company and Joseph Masters, filed as Exhibit 10.35 to the Annual Report on Form 10-K for the fiscal year ended October 31, 1995 and incorporated herein by reference. 10.38 Employment Agreement, dated March 29, 1996, between Greiner, Inc. and Robert L. Costello, filed as Exhibit 10.1 to the 1996 second quarter Form 10-Q and incorporated herein by reference. 21.1 Subsidiaries of the Company. FILED HEREWITH. 23.1 Consent of Coopers & Lybrand L.L.P. FILED HEREWITH. 24.1 Powers of Attorney of certain Directors and Officers. FILED HEREWITH. (b)(1) Reports on Form 8-K 27 Financial Data Schedule. FILED HEREWITH. No reports were filed on Form 8-K during the fourth quarter of the fiscal year ended October 31, 1996. * Note: Certain material contained in this exhibit and indicated by an asterisk has been omitted and filed separately with the Commission pursuant to an application for confidential treatment under Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended, which was granted by the Commission effective April 30, 1992. 39 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, URS Corporation, the Registrant, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. URS Corporation (Registrant) By /s/ Kent P. Ainsworth ---------------------------------- Kent P. Ainsworth Executive Vice President and Chief Financial Officer Dated: January 14, 1997 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the date indicated.
Signature Title Date - --------- ----- ---- /s/ MARTIN M. KOFFEL Chairman of the Board January 14, 1997 - ----------------------------------------------------- of Directors and Chief (Martin M. Koffel) Executive Officer /s/ KENT P. AINSWORTH - ----------------------------------------------------- Executive Vice President, January 14, 1997 (Kent P. Ainsworth) Chief Financial Officer Principal Accounting Officer and Secretary IRWIN L. ROSENSTEIN* Director January 14, 1997 - ----------------------------------------------------- (Irwin L. Rosenstein) RICHARD C. BLUM* Director January 14, 1997 - ----------------------------------------------------- (Richard C. Blum) EMMET J. CASHIN, JR.* Director January 14, 1997 - ----------------------------------------------------- (Emmet J. Cashin, Jr.) 40 RICHARD Q. PRAEGER* Director January 14, 1997 - ----------------------------------------------------- (Richard Q. Praeger) WILLIAM D. WALSH* Director January 14, 1997 - ----------------------------------------------------- (William D. Walsh) RICHARD B. MADDEN* Director January 14, 1997 - ----------------------------------------------------- (Richard B. Madden) ARMEN DER MARDEROSIAN* Director January 14, 1997 - ----------------------------------------------------- (Armen Der Marderosian) ADM. S. ROBERT FOLEY, JR., USN (RET.)* Director January 14, 1997 - ----------------------------------------------------- (Adm. S. Robert Foley, Jr., USN (Ret.)) ROBERT D. GLYNN, JR.* Director January 14, 1997 - ----------------------------------------------------- (Robert D. Glynn, Jr.) ROBERT L. COSTELLO* Director January 14, 1997 - ----------------------------------------------------- (Robert L. Costello) *By /s/ KENT AINSWORTH - ----------------------------------------------------- (Kent P. Ainsworth, Attorney-in-fact)
41 EX-3.2 2 BY-LAWS EXHIBIT 3.2 BY-LAWS OF URS CORPORATION (as amended through October 15, 1996) ARTICLE I OFFICES Section 1. The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. All meetings of the stockholders for the election of directors shall be held in the City of San Mateo, State of California, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Annual meetings of stockholders, commencing with the year 1977, shall be held on the first of March if not a legal holiday, and if a legal holiday, then on the next secular day following, at 11:00 am., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting. 1. URS Corporation By-laws Page 2 Section 3. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting. Section 4. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning twenty percent (20%) in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Section 6. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given to less than ten nor more than fifty days before the date of the meeting, to each stockholder entitled to vote at such meeting. Section 7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 8. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new 2. URS Corporation By-laws Page 3 record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Section 10. Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period. Section 11. Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III DIRECTORS Section 1. The number of directors which shall constitute the whole board shall be not less than five nor more than fifteen. The first board shall consist of ten directors. Thereafter, within the limits above specified, the number of directors shall be determined by resolution of the board of directors or by the stockholders at the annual meeting. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders. Section 2. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall 3. URS Corporation By-laws Page 4 qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. Section 3. The business of the corporation shall be managed by its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders. MEETINGS OF THE BOARD OF DIRECTORS Section 4. The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware. Section 5. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board. Section 6. Special meetings of the board may be called by the president on five days' notice to each director, either personally or by mail or by telegram. Special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors. Section 7. At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. 4. URS Corporation By-laws Page 5 Section 9. Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors, or any committee designated by the board, may participate in a meeting of the board, or committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting pursuant to this subsection shall constitute presence in person at such meeting. COMMITTEES OF DIRECTORS Section 10. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution or amending the by-laws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Section 11. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. COMPENSATION OF DIRECTORS Section 12. Unless otherwise restricted by the certificate of incorporation, the board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation 5. URS Corporation By-laws Page 6 in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. ARTICLE IV NOTICES Section 1. Whenever, under the provisions of the statutes or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram. Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE V OFFICERS Section 1. The officers of the corporation shall be chosen by the board of directors and shall be a president, a senior vice president, one or more additional vice presidents, a secretary and a treasurer. The board of directors may also choose one or more assistant secretaries and assistant treasurers, and a chairman of the board. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide. Section 2. The board of directors may appoint such other officers as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board. Section 3. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors. 6. URS Corporation By-laws Page 7 THE CHAIRMAN OF THE BOARD Section 4. The chairman of the board, if there shall be such an officer, shall, if present, preside at all meetings of the board of directors, and exercise and perform such other powers and duties as may from time to time be assigned to him by the board of directors or prescribed by the by-laws. THE PRESIDENT Section 5. The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors, if there is no Chairman; and shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of the directors are carried into effect. Section 6. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer of the corporation. THE VICE-PRESIDENTS Section 7. In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated (e.g., anyone designated "senior vice president" would be the first to so act), or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-presidents shall perform such other duties and have such other powers as the board of directors, the president, or the by-laws may from time to time prescribe. THE SECRETARY AND ASSISTANT SECRETARY Section 8. The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be. He shall have custody of the corporate seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant 7. URS Corporation By-laws Page 8 secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the fixing by his signature. Section 9. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. THE TREASURER AND ASSISTANT TREASURER Section 10. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors. Section 11. He shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation. Section 12. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES Section 1. The corporation shall indemnify any officer, director or employee who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer or employee of the corporation, or is or was serving at the request of the corporation as a director, officer or employee of another corporation or partnership, joint venture, trust or other 8. URS Corporation By-laws Page 9 enterprise; such indemnification shall cover expenses (including attorney's fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred by him in connection with such action, suit or proceeding, if he acted in good faith and in a manner he reasonable believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 2. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer or employee of the corporation, or is or was serving at the request of the corporation as a director, officer or employee of the corporation, or is or was serving at the request of the corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise; such indemnification shall cover expenses (including attorney's fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if he acted in good faith in any manner he reasonably believed to be in or not opposed to the best interests of the corporation, provided, however, that no indemnification shall be made in respect of any claim, issue or manner as to which such person shall have been adjudged to have been liable for negligence or misconduct in the performance of his duties to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 3. To the extent that a director, officer or employee of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (1) and (2) above, or in defense of any claim, issue or manner therein, he shall be indemnified against expenses, including attorney's fees, actually and reasonably incurred by him in connection therewith. Section 4. Any indemnification under subsections (1) and (2) above (unless ordered by a court) shall be made by the corporation only as authorized in a specific case by a determination that indemnification of the director, officer or employee is proper in circumstances because he had met the applicable standard of conduct set forth in subsections (1) and (2). Such determination shall be made (i) by the board of directors by a majority vote of a quorum consisting of directors who are not parties to such action, suit or proceeding, (ii) if such a 9. URS Corporation By-laws Page 10 quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (iii) by the stockholders. Section 5. Expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding, unless the board of directors, or the appropriate officer of the corporation acting pursuant to delegated authority of the board of directors, determines in the specific case that the applicable standard of conduct set forth in subsections (1) and (2) has not been met, but only upon receipt of an undertaking by or on behalf of the director, officer or employee to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this article. Section 6. The indemnification provided in this section shall not be deemed exclusive of any rights to which those seeking indemnification may be entitled under any other by-law, agreement, vote of stockholders or disinterested directors or otherwise both as to action in his official capacity and to action in another capacity while holding such office, and the indemnification shall continue as to a person who has ceased to be a director, officer or employee, and it shall inure to the benefit of the heirs, executors and administrators of such a person. ARTICLE VII CERTIFICATES OF STOCK Section 1. Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the chairman of the board, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation, certifying the number of shares owned by him in the corporation. Certificates may be issued for partly paid shares, but the total consideration to be paid and the amount already paid shall be specified in the face on back of any such certificate. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights 10. URS Corporation By-laws Page 11 of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Section 2. Where a certificate is countersigned (i) by a transfer agent other than the corporation or its employee, or, (ii) by a registrar other than the corporation or its employee, any other signature on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. LOST CERTIFICATES Section 3. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed. TRANSFERS OF STOCK Section 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. FIXING RECORD DATE Section 5. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than fifty days prior to 11. URS Corporation By-laws Page 12 any other action. A determination of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. REGISTERED STOCKHOLDERS Section 6. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. Section 7. The president or any vice-president and the secretary or assistant secretary of this corporation are authorized to vote, represent and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority herein granted to said officers to vote or represent on behalf of this corporation any and all shares held by this corporation in any other corporation or corporations may be exercised either by such officers in person or by any person authorized so to do by proxy or power of attorney duly executed by said officers. ARTICLE VIII GENERAL PROVISIONS DIVIDENDS Section 1. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Section 2. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interests of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. 12. URS Corporation By-laws Page 13 ANNUAL STATEMENT Section 3. The board of directors shall present an annual report of the affairs of the corporation to the stockholders of the corporation prior to each annual meeting of stockholders. CHECKS Section 4. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate. FISCAL YEAR Section 5. The fiscal year of the corporation shall be fixed by resolution of the board of directors. SEAL Section 6. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE IX AMENDMENTS Section 1. These by-laws may be altered, amended or repealed or new by-laws may be adopted by stockholders holding more than 50% of the stock of the corporation entitled to vote, or by the board of directors, when such power is conferred upon the board of directors by the certificate of incorporation, at any regular meeting of the stockholders or of the board of directors or at any special meeting of the stockholders or of the board of directors if notice of such alteration, amendment, repeal or adoption of new by-laws be contained in the notice of such special meeting. 13. EX-10.3 3 EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 10.3 URS CORPORATION EMPLOYEE STOCK PURCHASE PLAN Adopted Effective July 1, 1997 Approved By Stockholders _____________, 1997 1. PURPOSE. (a) The purpose of the Employee Stock Purchase Plan (the "Plan") is to provide a means by which employees of URS Corporation, a Delaware corporation (the "Company"), and its Affiliates, as defined in subparagraph 1(b), which are designated as provided in subparagraph 2(b), may be given an opportunity to purchase stock of the Company. (b) The word "Affiliate" as used in the Plan means any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended (the "Code"). (c) The Company, by means of the Plan, seeks to retain the services of its employees, to secure and retain the services of new employees, and to provide incentives for such persons to exert maximum efforts for the success of the Company. (d) The Company intends that the rights to purchase stock of the Company granted under the Plan be considered options issued under an "employee stock purchase plan" as that term is defined in Section 423(b) of the Code. 2. ADMINISTRATION. (a) The Plan shall be administered by the Board of Directors (the "Board") of the Company unless and until the Board delegates administration to a Committee, as provided in subparagraph 2(c). Whether or not the Board has delegated administration, the Board shall have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan. (b) The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan: (i) To determine when and how rights to purchase stock of the Company shall be granted and the provisions of each offering of such rights (which need not be identical). 1. (ii) To designate from time to time which Affiliates of the Company shall be eligible to participate in the Plan. (iii) To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. (iv) To amend the Plan as provided in paragraph 13. (v) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and its Affiliates and to carry out the intent that the Plan be treated as an "employee stock purchase plan" within the meaning of Section 423 of the Code. (c) The Board may delegate administration of the Plan to a Committee of one or more members of the Board. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. 3. SHARES SUBJECT TO THE PLAN. (a) Subject to the provisions of paragraph 12 relating to adjustments upon changes in stock, the stock that may be sold pursuant to rights granted under the Plan shall not exceed in the aggregate five hundred fifty thousand (550,000) shares (before giving effect to any stock split, stock dividend or the like) of the Company's common stock (the "Common Stock"). If any right granted under the Plan shall for any reason terminate without having been exercised, the Common Stock not purchased under such right shall again become available for the Plan. (b) The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise. 4. GRANT OF RIGHTS; OFFERING. The Board or the Committee may from time to time grant or provide for the grant of rights to purchase Common Stock of the Company under the Plan to eligible employees (an "Offering") on a date or dates (the "Offering Date(s)") selected by the Board or the Committee. Each Offering shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem appropriate, which shall comply with the requirements of Section 423(b)(5) of the Code that all employees granted rights to purchase stock under the Plan shall have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of 2. separate Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering shall be effective, which period shall not exceed twenty-seven (27) months beginning with the Offering Date, and the substance of the provisions contained in paragraphs 5 through 8, inclusive. 5. ELIGIBILITY. (a) Rights may be granted only to employees of the Company or, as the Board or the Committee may designate as provided in subparagraph 2(b), to employees of any Affiliate of the Company. Except as provided in subparagraph 5(b), an employee of the Company or any Affiliate shall not be eligible to be granted rights under the Plan, unless, on the Offering Date, such employee has been in the employ of the Company or any Affiliate for such continuous period preceding such grant as the Board or the Committee may require, but in no event shall the required period of continuous employment be equal to or greater than two (2) years. In addition, unless otherwise determined by the Board or the Committee and set forth in the terms of the applicable Offering, no employee of the Company or any Affiliate shall be eligible to be granted rights under the Plan, unless, on the Offering Date, such employee's customary employment with the Company or such Affiliate is for at least twenty (20) hours per week and at least five (5) months per calendar year. (b) The Board or the Committee may provide that, each person who, during the course of an Offering, first becomes an eligible employee of the Company or designated Affiliate will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an eligible employee or occurs thereafter, receive a right under that Offering, which right shall thereafter be deemed to be a part of that Offering. Such right shall have the same characteristics as any rights originally granted under that Offering, as described herein, except that: (i) the date on which such right is granted shall be the "Offering Date" of such right for all purposes, including determination of the exercise price of such right; (ii) the period of the Offering with respect to such right shall begin on its Offering Date and end coincident with the end of such Offering; and (iii) the Board or the Committee may provide that if such person first becomes an eligible employee within a specified period of time before the end of the Offering, he or she will not receive any right under that Offering. (c) No employee shall be eligible for the grant of any rights under the Plan if, immediately after any such rights are granted, such employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Affiliate. For purposes of this subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any employee, and stock 3. which such employee may purchase under all outstanding rights and options shall be treated as stock owned by such employee. (d) An eligible employee may be granted rights under the Plan only if such rights, together with any other rights granted under "employee stock purchase plans" of the Company and any Affiliates, as specified by Section 423(b)(8) of the Code, do not permit such employee's rights to purchase stock of the Company or any Affiliate to accrue at a rate which exceeds twenty-five thousand ($25,000) of fair market value of such stock (determined at the time such rights are granted) for each calendar year in which such rights are outstanding at any time. (e) Officers of the Company and any designated Affiliate shall be eligible to participate in Offerings under the Plan, provided, however, that the Board may provide in an Offering that certain employees who are highly compensated employees within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to participate. 6. RIGHTS; PURCHASE PRICE. (a) On each Offering Date, each eligible employee, pursuant to an Offering made under the Plan, shall be granted the right to purchase up to the number of shares of Common Stock of the Company purchasable with a percentage designated by the Board or the Committee not exceeding ten percent (10%) of such employee's Earnings (as defined by the Board or the Committee in each Offering) during the period which begins on the Offering Date (or such later date as the Board or the Committee determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offering. The Board or the Committee shall establish one or more dates during an Offering (the "Purchase Date(s)") on which rights granted under the Plan shall be exercised and purchases of Common Stock carried out in accordance with such Offering. (b) In connection with each Offering made under the Plan, the Board or the Committee may specify a maximum number of shares that may be purchased by any employee as well as a maximum aggregate number of shares that may be purchased by all eligible employees pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Board or the Committee may specify a maximum aggregate number of shares which may be purchased by all eligible employees on any given Purchase Date under the Offering. If the aggregate purchase of shares upon exercise of rights granted under the Offering would exceed any such maximum aggregate number, the Board or the Committee shall make a pro rata allocation of the shares available in as nearly a uniform manner as shall be practicable and as it shall deem to be equitable. (c) The purchase price of stock acquired pursuant to rights granted under the Plan shall be not less than the lesser of: 4. (i) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the Offering Date; or (ii) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the Purchase Date. 7. PARTICIPATION; WITHDRAWAL; TERMINATION. (a) An eligible employee may become a participant in the Plan pursuant to an Offering by delivering a participation agreement to the Company within the time specified in the Offering, in such form as the Company provides. Each such agreement shall authorize payroll deductions of up to the maximum percentage specified by the Board or the Committee of such employee's Earnings during the Offering (as defined by the Board or Committee in each Offering). The payroll deductions made for each participant shall be credited to an account for such participant under the Plan and shall be deposited with the general funds of the Company. A participant may reduce (including to zero) or increase such payroll deductions, and an eligible employee may begin such payroll deductions, after the beginning of any Offering only as provided for in the Offering. A participant may make additional payments into his or her account only if specifically provided for in the Offering and only if the participant has not had the maximum amount withheld during the Offering. (b) At any time during an Offering, a participant may terminate his or her payroll deductions under the Plan and withdraw from the Offering by delivering to the Company a notice of withdrawal in such form as the Company provides. Such withdrawal may be elected at any time prior to the end of the Offering except as provided by the Board or the Committee in the Offering. Upon such withdrawal from the Offering by a participant, the Company shall distribute to such participant all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the participant) under the Offering, without interest, and such participant's interest in that Offering shall be automatically terminated. A participant's withdrawal from an Offering will have no effect upon such participant's eligibility to participate in any other Offerings under the Plan but such participant will be required to deliver a new participation agreement in order to participate in subsequent Offerings under the Plan. (c) Rights granted pursuant to any Offering under the Plan shall terminate immediately upon cessation of any participating employee's employment with the Company and any designated Affiliate, for any reason, and the Company shall distribute to such terminated employee all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the terminated employee) under the Offering, without interest. 5. (d) Rights granted under the Plan shall not be transferable by a participant otherwise than by will or the laws of descent and distribution, or by a beneficiary designation as provided in paragraph 14 and, otherwise during his or her lifetime, shall be exercisable only by the person to whom such rights are granted. 8. EXERCISE. (a) On each Purchase Date specified therefor in the relevant Offering, each participant's accumulated payroll deductions and other additional payments specifically provided for in the Offering (without any increase for interest) will be applied to the purchase of whole shares of stock of the Company, up to the maximum number of shares permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares shall be issued upon the exercise of rights granted under the Plan. The amount, if any, of accumulated payroll deductions remaining in each participant's account after the purchase of shares which is less than the amount required to purchase one share of stock on the final Purchase Date of an Offering shall be held in each such participant's account for the purchase of shares under the next Offering under the Plan, unless such participant withdraws from such next Offering, as provided in subparagraph 7(b), or is no longer eligible to be granted rights under the Plan, as provided in paragraph 5, in which case such amount shall be distributed to the participant after such final Purchase Date, without interest. The amount, if any, of accumulated payroll deductions remaining in any participant's account after the purchase of shares which is equal to the amount required to purchase whole shares of stock on the final Purchase Date of an Offering shall be distributed in full to the participant after such Purchase Date, without interest. (b) No rights granted under the Plan may be exercised to any extent unless the shares to be issued upon such exercise under the Plan (including rights granted thereunder) are covered by an effective registration statement pursuant to the Securities Act of 1933, as amended (the "Securities Act") and the Plan is in material compliance with all applicable state, foreign and other securities and other laws applicable to the Plan. If on a Purchase Date in any Offering hereunder the Plan is not so registered or in such compliance, no rights granted under the Plan or any Offering shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until the Plan is subject to such an effective registration statement and such compliance, except that the Purchase Date shall not be delayed more than twelve (12) months and the Purchase Date shall in no event be more than twenty-seven (27) months from the Offering Date. If on the Purchase Date of any Offering hereunder, as delayed to the maximum extent permissible, the Plan is not registered and in such compliance, no rights granted under the Plan or any Offering shall be exercised and all payroll deductions accumulated during the Offering (reduced to the extent, if any, such deductions have been used to acquire stock) shall be distributed to the participants, without interest. (c) Shares of stock of the Company that are purchased may be registered in the name of the participant or jointly in the name of the participant and his or her spouse as joint tenants with right of survivorship or community property. 6. 9. COVENANTS OF THE COMPANY. (a) During the terms of the rights granted under the Plan, the Company shall keep available at all times the number of shares of stock required to satisfy such rights. (b) The Company shall seek to obtain from each federal, state, foreign or other regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares of stock upon exercise of the rights granted under the Plan. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such rights unless and until such authority is obtained. 10. USE OF PROCEEDS FROM STOCK. Proceeds from the sale of stock pursuant to rights granted under the Plan shall constitute general funds of the Company. 11. RIGHTS AS A STOCKHOLDER. A participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to rights granted under the Plan unless and until the participant's shareholdings acquired upon exercise of rights under the Plan are recorded in the books of the Company. 12. ADJUSTMENTS UPON CHANGES IN STOCK. (a) If any change is made in the stock subject to the Plan, or subject to any rights granted under the Plan (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan and outstanding rights will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan and the class(es) and number of shares and price per share of stock subject to outstanding rights. Such adjustments shall be made by the Board or the Committee, the determination of which shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a "transaction not involving the receipt of consideration by the Company.") (b) In the event of: (1) a dissolution or liquidation of the Company; (2) a merger or consolidation in which the Company is not the surviving corporation; (3) a reverse merger in which the Company is the surviving corporation but the shares of the Company's Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other 7. property, whether in the form of securities, cash or otherwise; or (4) the acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Exchange Act or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or any Affiliate of the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of directors, then, as determined by the Board in its sole discretion (i) any surviving or acquiring corporation may assume outstanding rights or substitute similar rights for those under the Plan, (ii) such rights may continue in full force and effect, or (iii) participants' accumulated payroll deductions may be used to purchase Common Stock immediately prior to the transaction described above and the participants' rights under the ongoing Offering terminated. 13. AMENDMENT OF THE PLAN. (a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in paragraph 12 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company within twelve (12) months before or after the adoption of the amendment, where the amendment will: (i) Increase the number of shares reserved for rights under the Plan; (ii) Modify the provisions as to eligibility for participation in the Plan (to the extent such modification requires stockholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3); or (iii) Modify the Plan in any other way if such modification requires stockholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to employee stock purchase plans and/or to bring the Plan and/or rights granted under it into compliance therewith. (b) Subject to paragraph 12, rights granted before amendment of the Plan shall not be impaired by any amendment of the Plan, except with the consent of the person to whom such rights were granted, or except as necessary to comply with any laws or governmental regulations, or except as necessary to ensure that the Plan and/or rights granted under the Plan comply with the requirements of Section 423 of the Code. 8. 14. DESIGNATION OF BENEFICIARY. (a) A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant's account under the Plan in the event of such participant's death subsequent to the end of an Offering but prior to delivery to the participant of such shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death during an Offering. (b) Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 15. TERMINATION OR SUSPENSION OF THE PLAN. (a) The Board in its discretion, may suspend or terminate the Plan at any time. No rights may be granted under the Plan while the Plan is suspended or after it is terminated. (b) Rights and obligations under any rights granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except as expressly provided in the Plan or with the consent of the person to whom such rights were granted, or except as necessary to comply with any laws or governmental regulation, or except as necessary to ensure that the Plan and/or rights granted under the Plan comply with the requirements of Section 423 of the Code. 16. EFFECTIVE DATE OF PLAN. The Plan shall become effective on the date specified by the Board, but no rights granted under the Plan shall be exercised unless and until the Plan has been approved by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted by the Board or the Committee. 9. URS CORPORATION EMPLOYEE STOCK PURCHASE PLAN OFFERING Adopted Effective July 1, 1997 1. Grant; Offering Date. (a) The Board of Directors of URS Corporation, a Delaware corporation (the "Company"), pursuant to the Company's Employee Stock Purchase Plan (the "Plan"), hereby authorizes the grant of rights to purchase shares of the common stock of the Company ("Common Stock") to all Eligible Employees (an "Offering"). The first Offering shall begin on July 1, 1997 and end December 31, 1997. Subsequent six month Offerings shall begin each January 1 and July 1 thereafter. The first day of an Offering is that Offering's "Offering Date." (b) Prior to the commencement of any Offering, the Board of Directors (or the Committee described in subparagraph 2(c) of the Plan, if any) may change any or all terms of such Offering and any subsequent Offerings. The granting of rights pursuant to each Offering hereunder shall occur on each respective Offering Date unless, prior to such date (a) the Board of Directors (or such Committee) determines that such Offering shall not occur, or (b) no shares remain available for issuance under the Plan in connection with the Offering. 2. Eligible Employees. All employees of the Company and each of its Affiliates (as defined in the Plan) incorporated in the United States shall be granted rights to purchase Common Stock under each Offering on the Offering Date of such Offering, provided that each such employee otherwise meets the employment requirements of subparagraph 5(a) of the Plan (an "Eligible Employee") on the day before the Offering Date. Notwithstanding the foregoing, the following employees shall not be Eligible Employees or be granted rights under an Offering: (i) part-time or seasonal employees whose customary employment is 20 hours or less per week or not more than 5 months per calendar year or (ii) 5% stockholders (including ownership through unexercised options) described in subparagraph 5(c) of the Plan. 3. Rights. (a) Subject to the limitations contained herein and in the Plan, on each Offering Date each Eligible Employee shall be granted the right to purchase the number of shares of Common Stock purchasable with up to ten percent (10%) of such employee's Earnings paid during the period of such Offering beginning after such Eligible Employee first commences participation; provided, however, that no employee may purchase Common Stock on a particular Purchase Date that would result in more than ten percent (10%) of such employee's Earnings in the period 1. from the Offering Date to such Purchase Date having been applied to purchase shares under all ongoing Offerings under the Plan and all other Company plans intended to qualify as "employee stock purchase plans" under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). For this Offering, "Earnings" means the total compensation paid to an employee, including all salary, wages (including amounts elected to be deferred by the employee, that would otherwise have been paid, under any cash or deferred arrangement established by the Company), overtime pay, commissions, bonuses, and other remuneration paid directly to the employee, but excluding profit sharing, the cost of employee benefits paid for by the Company, education or tuition reimbursements, imputed income arising under any Company group insurance or benefit program, traveling expenses, business and moving expense reimbursements, income received in connection with stock options, contributions made by the Company under any employee benefit plan, and similar items of compensation. (b) Notwithstanding the foregoing, the maximum number of shares of Common Stock an Eligible Employee may purchase on any Purchase Date in an Offering shall be such number of shares as has a fair market value (determined as of the Offering Date for such Offering) equal to (x) $25,000 multiplied by the number of calendar years in which the right under such Offering has been outstanding at any time, minus (y) the fair market value of any other shares of Common Stock (determined as of the relevant Offering Date with respect to such shares) which, for purposes of the limitaiton of Section 423(b)(8) of the Code, are attributed to any of such calendar years in which the right is outstanding. The amount in clause (y) of the previous sentence shall be determined in accordance with regulations applicable under Section 423(b)(8) of the Code based on (i) the number of shares previously purchased with respect to such calendar years pursuant to such Offering or any other Offering under the Plan, or pursuant to any other Company plans intended to qualify as "employee stock purchase plans" under Section 423 of the Code, and (ii) the number of shares subject to other rights outstanding on the Offering Date for such Offering pursuant to the Plan or any other such Company plan. (c) The maximum aggregate number of shares available to be purchased by all Eligible Employees under an Offering shall be the number of shares remaining available under the Plan on the Offering Date. If the aggregate purchase of shares of Common Stock upon exercise of rights granted under the Offering would exceed the maximum aggregate number of shares available, the Board shall make a pro rata allocation of the shares available in a uniform and equitable manner. In addition, no Eligible Employee may purchase more than a maximum of 2,000 shares of Common Stock per Offering. 4. Purchase Price. The purchase price of the Common Stock under the Offering shall be the lesser of eighty-five percent (85%) of the fair market value of the Common Stock on the Offering Date or eighty-five percent (85%) of the fair market value of the Common Stock on the Purchase Date, in each case rounded up to the nearest whole cent per share. 2. 5. Participation. (a) An Eligible Employee may elect to participate in an Offering only at the beginning of the Offering. An Eligible Employee shall become a participant in an Offering by delivering an agreement authorizing payroll deductions. Such deductions must be in whole percentages, with a minimum percentage of one percent (1%) and a maximum percentage of ten percent (10%). A participant may not make additional payments into his or her account. The agreement shall be made on such enrollment form as the Company provides, and must be delivered to the Company in advance of the date participation is to be effective. (b) A participant may not increase or decrease his or her participation level during the course of an Offering, provided that participant may withdraw from an Offering and receive his or her accumulated payroll deductions from the Offering, without interest, at any time prior to the end of the Offering, by delivering a withdrawal notice to the Company in such from as the Company prescribes. 6. Purchases. Subject to the limitations contained herein, on each Purchase Date, each participant's accumulated payroll deductions (without any increase for interest) shall be applied to the purchase of whole shares of Common Stock, up to the maximum number of shares permitted under the Plan and the Offering. "Purchase Date" shall be defined as the last day of each Offering (June 30 or December 31), or the last business day immediately prior thereto. 7. Escrow of Shares. During a period of three months following the last day of an Offering, all shares purchased under the Plan on such day shall be held in escrow by the Company or its designee as agent for the participants and spouse who own such shares and shall not be transferable or assignable. 8. Notices and Agreements. Any notices or agreements provided for in an Offering or the Plan shall be given in writing, in a form prescribed by the Company, and unless specifically provided for in the Plan or this Offering shall be deemed effectively given upon receipt or, in the case of notices and agreements delivered by the Company, five (5) days after deposit in the United States mail, postage prepaid. 9. Purchases Contingent on Stockholder Approval. The rights granted under an Offering are subject to the approval of the Plan by the stockholders as required for the Plan to obtain treatment as a tax-qualified employee stock purchase plan under Section 423 of the Code and to comply with the requirements of exemption 3. from potential liability under Section 16(b) of the Securities and Exchange Act of 1934, as amended, set forth in Rule 16b-3 thereunder. 10. Offering Subject to Plan. Each Offering is subject to all the provisions of the Plan, and its provisions are hereby made a part of the Offering, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of an Offering and those of the Plan (including interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan), the provisions of the Plan shall control. 4. EX-10.4 4 1991 STOCK INCENTIVE PLAN EXHIBIT 10.4 URS CORPORATION 1991 STOCK INCENTIVE PLAN (AMENDED AND RESTATED EFFECTIVE DECEMBER 17, 1996) TABLE OF CONTENTS Page Article 1. Introduction............................................... 1 Article 2. Administration............................................. 1 2.1 The Committee.............................................. 1 2.2 Non-Employee Directors..................................... 1 2.3 Committee Responsibilities................................. 1 Article 3. Limitation on Awards....................................... 2 Article 4. Eligibility................................................ 2 4.1 General Rules.............................................. 2 4.2 Ten-Percent Stockholders................................... 2 4.3 Attribution Rules.......................................... 2 4.4 Outstanding Stock.......................................... 2 Article 5. Options.................................................... 3 5.1 Stock Option Agreement..................................... 3 5.2 Number of Shares........................................... 3 5.3 Exercise Price............................................. 3 5.4 Exercisability and Term.................................... 3 5.5 Effect Of Change in Control................................ 3 5.6 Modification, Extension and Assumption of Award............ 4 Article 6. Payment for Option Shares.................................. 4 6.1 General Rule............................................... 4 6.2 Surrender of Stock......................................... 4 6.3 Exercise/Sale.............................................. 4 6.4 Exercise/Pledge............................................ 4 6.5 Promissory Note............................................ 5 6.6 Other Forms of Payment..................................... 5 Article 7. Restricted Shares.......................................... 5 7.1 Time, Amount and Form of Awards............................ 5 7.2 Payment for Awards......................................... 5 7.3 Vesting Conditions......................................... 5 Article 8. Protection Against Dilution................................ 6 8.1 General.................................................... 6 8.2 Reorganizations............................................ 6 8.3 Reservation of Rights...................................... 6 i. TABLE OF CONTENTS (continued) Page Article 9. Limitation of Rights....................................... 6 9.1 Retention Rights........................................... 6 9.2 Stockholders' Rights....................................... 7 9.3 Government Regulations..................................... 7 Article 10. Limitation on Payments..................................... 7 10.1 Basic Rule................................................. 7 10.2 Reduction of Payments...................................... 7 10.3 Overpayments and Underpayments............................. 8 10.4 Related Corporations....................................... 8 Article 11. Withholding Taxes.......................................... 8 11.1 General.................................................... 8 11.2 Share Withholding.......................................... 8 Article 12. Assignment or Transfer of Award............................ 9 Article 13. Future of the Plan......................................... 10 13.1 Term of the Plan........................................... 10 13.2 Amendment or Termination................................... 10 13.3 Effect of Amendment or Termination......................... 10 Article 14. Definitions................................................ 10 14.1 "Award".................................................... 10 14.2 "Board".................................................... 10 14.3 "Change in Control"........................................ 10 14.4 "Code"..................................................... 11 14.5 "Committee"................................................ 11 14.6 "Common Share"............................................. 11 14.7 "Company".................................................. 11 14.8 "Exchange Act"............................................. 11 14.9 "Exercise Price"........................................... 11 14.10 "Fair Market Value"........................................ 11 14.11 "ISO"...................................................... 11 14.12 "Key Employee"............................................. 11 14.13 "NSO"...................................................... 11 14.14 "Option"................................................... 12 14.15 "Optionee"................................................. 12 14.16 "Outside Director"......................................... 12 ii. TABLE OF CONTENTS (continued) Page 14.17 "Participant".............................................. 12 14.18 "Plan"..................................................... 12 14.19 "Restricted Share"......................................... 12 14.20 "Stock Award Agreement".................................... 12 14.21 "Stock Option Agreement"................................... 12 14.22 "Subsidiary"............................................... 12 Article 15. Execution.................................................. 12 iii. URS CORPORATION 1991 STOCK INCENTIVE PLAN Amended and restated effective December 17, 1996 ARTICLE 1 INTRODUCTION The Plan was amended and restated by the Board on December 17, 1996, subject to approval by the Company's stockholders at the 1997 annual meeting of stockholders. The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Key Employees to focus on critical long-range objectives, (b) encouraging the attraction and retention of Key Employees with exceptional qualifications and (c) linking Key Employees directly to stockholder interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of Restricted Shares or Options, which may constitute incentive stock options or nonstatutory stock options. The Plan shall be governed by, and construed in accordance with, the laws of the State of California. ARTICLE 2 ADMINISTRATION 2.1 The Committee. The Plan shall be administered by the Compensation/Option Committee of the Board. Such Committee shall consist solely of two or more non-employee directors of the Company, within the meaning of Rule 16b-3 under the Exchange Act, who shall be appointed by the Board (a "Non-Employee Director"). The members of such Committee may also be "outside directors" within the meaning of Section 162(m) of the Code, if the Board so chooses. 2.2 Non-Employee Directors. A member of the Board shall be deemed to be a NonEmployee Director only if he or she satisfies such requirements as the Securities and Exchange Commission may establish for Non-Employee Directors under Rule 16b-3 (or its successor) under the Exchange Act. 2.3 Committee Responsibilities. The Committee shall select the Key Employees who are to receive Awards under the Plan, determine the number, vesting requirements and other conditions of such Awards, interpret the Plan, and make all other decisions relating to the operation of the Plan. The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee's determinations under the Plan shall be final and binding on all persons. 1. ARTICLE 3 LIMITATION ON AWARDS Any Common Shares issued pursuant to the Plan may be authorized but unissued shares or treasury shares. The aggregate number of Restricted Shares and Options reserved for awards under the Plan is 2,250,000, plus the number of Common Shares remaining available for awards under the Company's 1989 Stock Option and Rights Plan and the Company's 1987 Restricted Stock Plan (collectively, the "Prior Plans") at the time of the original adoption of this Plan on January 15, 1991. If any Restricted Shares or Options are forfeited or if any Options terminate for any other reason before being exercised, then such Restricted Shares or Options shall again become available for Awards under the Plan. If any options or restricted shares under the Prior Plans are forfeited or if any options under the Prior Plans terminate for any other reason before being exercised, then such options or restricted shares also shall become available for additional Awards under this Plan. (No additional grants shall be made under the Prior Plans after January 15, 1991.) In addition, no person shall be eligible to be granted Options covering more than 400,000 Common Shares in any fiscal year of the Company. The limitations of this Article 3 shall be subject to adjustment pursuant to Article 8. ARTICLE 4 ELIGIBILITY 4.1 General Rules. Only Key Employees (including, without limitation, independent contractors who are not members of the Board) shall be eligible for designation as Participants by the Committee. In addition, only Key Employees who are common-law employees of the Company or a Subsidiary shall be eligible for the grant of ISOs. 4.2 Ten-Percent Stockholders. A Key Employee who owns more than 10 percent of the total combined voting power of all classes of outstanding stock of the Company or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (a) the Exercise Price under such ISO is at least 110 percent of the Fair Market Value of a Common Share on the date of grant and (b) such ISO by its terms is not exercisable after the expiration of five years from the date of grant. 4.3 Attribution Rules. For purposes of Section 4.2, in determining stock ownership, a Key Employee shall be deemed to own the stock owned, directly or indirectly, by or for his or her brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be deemed to be owned proportionately by or for its stockholders, partners or beneficiaries. Stock with respect to which the Key Employee holds an option shall not be counted. 2. 4.4 Outstanding Stock. For purposes of Section 4.2, "outstanding stock" shall include all stock actually issued and outstanding immediately after the grant of the ISO to the Key Employee. "Outstanding stock" shall not include treasury shares or shares authorized for issuance under outstanding options held by the Key Employee or by any other person. ARTICLE 5 OPTIONS 5.1 Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. If the Optionee is a common law employee of the Company or a Subsidiary, the Committee may designate all or any part of the Option as an ISO. 5.2 Number of Shares. Each Stock Option Agreement shall specify the number of Shares subject to the Option and shall provide for the adjustment of such number in accordance with Article 8. The Stock Option Agreement shall also specify whether the Option is an ISO or an NSO. 5.3 Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price under an ISO shall not be less than 100 percent of the Fair Market Value of a Common Share on the date of grant, except as otherwise provided in Section 4.2. The Exercise Price under an NSO shall not be less than 50 percent of the Fair Market Value of a Common Share on the date of grant. Subject to the preceding two sentences, the Exercise Price under any Option shall be determined by the Committee. The Exercise Price shall be payable in accordance with Article 6. Notwithstanding the foregoing, an Option may be granted with an Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code. 5.4 Exercisability and Term. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable, and such date may be made dependent upon the achievement of specified performance goals. The Stock Option Agreement shall also specify the term of the Option. The term of an ISO shall in no event exceed 10 years from the date of grant, and Section 4.2 may require a shorter term. Subject to the preceding sentence, the Committee shall determine when all or any part of an Option is to become exercisable and when such Option is to expire. A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee's death, disability, retirement or attainment of performance goals, and may provide for expiration prior to the end of its term in the event of the termination of the Optionee's service. NSOs may also be awarded in combination with 3. Restricted Shares, and such an Award may provide that the NSOs will not be exercisable unless the related Restricted Shares are forfeited. 5.5 Effect Of Change in Control. The Committee (at its sole discretion) may determine, at the time of granting an Option or thereafter, that such Option shall become fully exercisable as to all Common Shares subject to such Option in the event that a Change in Control occurs with respect to the Company. If the Committee finds that there is a reasonable possibility that, within the succeeding six months, a Change in Control will occur with respect to the Company, then the Committee may determine that all outstanding Options shall become fully exercisable as to all Common Shares subject to such Options. 5.6 Modification, Extension and Assumption of Award. Within the limitations of the Plan, the Committee may modify, extend or assume outstanding options or may accept the cancelation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new options for the same or a different number of shares and at the same or a different exercise price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair his or her rights under such Option. ARTICLE 6 PAYMENT FOR OPTION SHARES 6.1 General Rule. The entire Exercise Price of Common Shares issued upon exercise of Awards shall be payable in cash or by check at the time when such Common Shares are purchased, except as follows: (a) In the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. However, the Committee may specify in the Stock Option Agreement that payment may be made pursuant to Section 6.2, 6.3, 6.4, 6.5 or 6.6. (b) In the case of an NSO, the Committee may at any time accept payment pursuant to Section 6.2, 6.3, 6.4, 6.5 or 6.6. 6.2 Surrender of Stock. To the extent that this Section 6.2 is applicable, payment for all or any part of the Exercise Price may be made with Common Shares which have already been owned by the Optionee for more than six months and which are surrendered to the Company. Such Common Shares shall be valued at their Fair Market Value on the date when the new Common Shares are purchased under the Plan. In the event that the Common Shares being surrendered are Restricted Shares that have not yet become vested, the same restrictions shall be imposed upon the new Common Shares being purchased. 6.3 Exercise/Sale. To the extent that this Section 6.3 is applicable, payment may be made by the delivery (on a form prescribed by the Company) of an irrevocable direction to a 4. securities broker approved by the Company to sell Common Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 6.4 Exercise/Pledge. To the extent that this Section 6.4 is applicable, payment may be made by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Common Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 6.5 Promissory Note. To the extent that this Section 6.5 is applicable, payment for all or any part of the Exercise Price may be made with a full-recourse promissory note; provided that (a) the par value of the Common Shares must be paid in lawful money of the United States of America at the time when such Common Shares are purchased, (b) the Common Shares are security for payment of the principal amount of the promissory note and interest thereon and (c) the interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Committee (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note. 6.6 Other Forms of Payment. To the extent that this Section 6.6 is applicable, payment may be made in any other form approved by the Committee, consistent with applicable laws, regulations and rules. ARTICLE 7 RESTRICTED SHARES 7.1 Time, Amount and Form of Awards. The Committee may grant Restricted Shares in an amount determined by the Committee. Restricted Shares may be awarded in combination with NSOs, and such an Award may provide that the Restricted Shares will be forfeited in the event that the related NSOs are exercised. 7.2 Payment for Awards. The recipient of an Award of Restricted Shares, as a condition to the grant of such Award, shall be required to pay the Company in cash an amount equal to the par value of such Restricted Shares, which payment may be in the form of services rendered. 7.3 Vesting Conditions. Each Award of Restricted Shares shall become vested, in full or in installments, upon satisfaction of the conditions specified in the Stock Award Agreement. The Committee shall select the vesting conditions, which may be based upon the Participant's service, the Participant's performance, the Company's performance or such other criteria as the Committee may adopt. A Stock Award Agreement may also provide for accelerated vesting in the event of the Participant's death, disability, retirement or attainment 5. of performance goals. The Committee (at its sole discretion) may determine, at the time of making an Award or thereafter, that such Award shall become fully vested in the event that a Change in Control occurs with respect to the Company. ARTICLE 8 PROTECTION AGAINST DILUTION 8.1 General. In the event of a subdivision of the outstanding Common Shares, a declaration of a dividend payable in Common Shares, a declaration of a dividend payable in a form other than Common Shares in an amount that has a material effect on the price of Common Shares, a combination or consolidation of the outstanding Common Shares (by reclassification or otherwise) into a lesser number of Common Shares, a recapitalization, a spinoff or a similar occurrence, the Committee shall make appropriate adjustments in one or more of (a) the number of Options and Restricted Shares available for future Awards under Article 3, (b) the number of Common Shares covered by each outstanding Option or Restricted Shares Award or (c) the Exercise Price under each outstanding Option or purchase price of each Restricted Shares Award. 8.2 Reorganizations. In the event that the Company is a party to a merger or other reorganization, outstanding Options and Restricted Shares shall be subject to the agreement of merger or reorganization. Such agreement may provide, without limitation, for the assumption of outstanding Awards by the surviving corporation or its parent, for their continuation by the Company (if the Company is a surviving corporation), for accelerated vesting or for settlement in cash. 8.3 Reservation of Rights. Except as provided in this Article 8, a Participant shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Common Shares subject to an Option. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. ARTICLE 9 LIMITATION OF RIGHTS 9.1 Retention Rights. Neither the Plan nor any Option granted under the Plan shall be deemed to give any individual a right to remain an employee, consultant or director of the 6. Company or a Subsidiary. The Company and its Subsidiaries reserve the right to terminate the service of any employee, consultant or director at any time, with or without cause, subject to applicable laws, the Company's certificate of incorporation and by-laws and a written employment agreement (if any). 9.2 Stockholders' Rights. A Participant shall have no dividend rights, voting rights or other rights as a stockholder with respect to any Common Shares covered by his or her Award prior to the issuance of a stock certificate for such Common Shares. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date when such certificate is issued, except as expressly provided in Article 8. 9.3 Government Regulations. Any other provision of the Plan notwithstanding, the obligations of the Company with respect to Common Shares to be issued pursuant to the Plan shall be subject to all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of Common Shares pursuant to any Award until such time as any legal requirements or regulations have been met relating to the issuance of such Common Shares or to their registration, qualification or exemption from registration or qualification under the Securities Act of 1933, as amended, or any applicable state securities laws. ARTICLE 10 LIMITATION ON PAYMENTS 10.1 Basic Rule. Any provision of the Plan to the contrary notwithstanding, in the event that the independent auditors most recently selected by the Board (the "Auditors") determine that any payment or transfer by the Company to or for the benefit of a Key Employee, whether paid or payable (or transferred or transferable) pursuant to the terms of this Plan or otherwise (a "Payment"), would be nondeductible by the Company for federal income tax purposes because of the provisions concerning "excess parachute payments" in section 280G of the Code, then the aggregate present value of all Payments shall be reduced (but not below zero) to the Reduced Amount; provided that the Committee, at the time of making an Award under this Plan or at any time thereafter, may specify in writing that such Award shall not be so reduced and shall not be subject to this Article 10. For purposes of this Article 10, the "Reduced Amount" shall be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by the Company because of section 280G of the Code. 10.2 Reduction of Payments. If the Auditors determine that any Payment would be nondeductible by the Company because of section 280G of the Code, then the Company shall promptly give the Key Employee notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount, and the Key Employee may then elect, in his or her sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall 7. advise the Company in writing of his or her election within 10 days of receipt of notice. If no such election is made by the Key Employee within such 10-day period, then the Company may elect which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall notify the Key Employee promptly of such election. For purposes of this Article 10, present value shall be determined in accordance with section 280G(d)(4) of the Code. All determinations made by the Auditors under this Article 10 shall be binding upon the Company and the Key Employee and shall be made within 60 days of the date when a payment becomes payable or transferable. As promptly as practicable following such determination and the elections hereunder, the Company shall pay or transfer to or for the benefit of the Key Employee such amounts as are then due to him or her under the Plan and shall promptly pay or transfer to or for the benefit of the Key Employee in the future such amounts as become due to him or her under the Plan. 10.3 Overpayments and Underpayments. As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors hereunder, it is possible that Payments will have been made by the Company which should not have been made (an "Overpayment") or that additional Payments which will not have been made by the Company could have been made (an "Underpayment"), consistent in each case with the calculation of the Reduced Amount hereunder. In the event that the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or the Key Employee which the Auditors believe has a high probability of success, determine that an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to the Key Employee which he or she shall repay to the Company, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by the Key Employee to the Company if and to the extent that such payment would not reduce the amount which is subject to taxation under section 4999 of the Code. In the event that the Auditors determine that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by the Company to or for the benefit of the Key Employee, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code. 10.4 Related Corporations. For purposes of this Article 10, the term "Company" shall include affiliated corporations to the extent determined by the Auditors in accordance with section 280G(d)(5) of the Code. ARTICLE 11 WITHHOLDING TAXES 11.1 General. To the extent required by applicable federal, state, local or foreign law, the recipient of any payment or distribution under the Plan shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise by reason of the receipt or vesting of such payment or distribution. The Company shall not be required to issue 8. any Common Shares or make any cash payment under the Plan until such obligations are satisfied. 11.2 Share Withholding. The Committee may permit the recipient of any payment or distribution under the Plan to satisfy all or part of his or her withholding tax obligations by having the Company withhold a portion of any Common Shares that otherwise would be issued to him or her or by surrendering a portion of any Common Shares that previously were issued to him or her. Such Common Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. The payment of withholding taxes by assigning Common Shares to the Company, if permitted by the Committee, shall be subject to such restrictions as the Committee may impose, including any restrictions required by rules of the Securities and Exchange Commission. ARTICLE 12 ASSIGNMENT OR TRANSFER OF AWARD Except as provided in Article 11 and as set forth below, any Award granted under the Plan shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor's process, whether voluntarily, involuntarily or by operation of law. Any act in violation of this Article 12 shall be void. This Article 12 shall not preclude a Participant from: (a) designating a beneficiary who will receive any undistributed Awards in the event of the Participant's death, nor shall it preclude a transfer by will or by the laws of descent and distribution; (b) transferring an NSO upon such terms and conditions as are set forth in the Stock Option Agreement for such NSO, as the Board or the Committee shall determine in its discretion; or (c) transferring or assigning Restricted Shares to (i) the trustee of a trust that is revocable by such Participant alone, both at the time of the transfer or assignment and at all times thereafter prior to such Participant's death, or (ii) the trustee of any other trust to the extent approved in advance by the Committee in writing. A transfer or assignment of Restricted Shares from such trustee to any person other than such Participant shall be permitted only to the extent approved in advance by the Committee in writing, and Restricted Shares held by such trustee shall be subject to all of the conditions and restrictions set forth in the Plan and in the applicable Stock Award Agreement, as if such trustee were a party to such Agreement. 9. ARTICLE 13 FUTURE OF THE PLAN 13.1 Term of the Plan. The amended and restated Plan, as set forth herein, shall become effective on December 17, 1996, subject to the approval of the Company's stockholders. In the event that the stockholders fail to approve the amendments to the Plan at the 1997 annual meeting or any adjournment thereof, the Plan shall revert to the provisions in effect immediately before December 17, 1996. The Plan shall remain in effect until it is terminated under Section 13.2, except that no ISOs shall be granted after December 16, 2006. 13.2 Amendment or Termination. The Board may, at any time and for any reason, amend or terminate the Plan. An amendment of the Plan shall be subject to the approval of the Company's stockholders only to the extent required by applicable laws, regulations or rules. 13.3 Effect of Amendment or Termination. No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan, or any amendment thereof, shall not affect any Option previously granted under the Plan. ARTICLE 14 DEFINITIONS 14.1 "Award" means any award of an Option or a Restricted Share under the Plan. 14.2 "Board" means the Company's Board of Directors, as constituted from time to time. 14.3 "Change in Control" means the occurrence of any of the following events after the date of the adoption of this Plan: (a) A change in control required to be reported pursuant to Item 6(e) of Schedule 14A of Regulation 14A under the Exchange Act; (b) A change in the composition of the Board, as a result of which fewer than two-thirds of the incumbent directors are directors who either (i) had been directors of the Company 24 months prior to such change or (ii) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the directors who had been directors of the Company 24 months prior to such change and who were still in office at the time of the election or nomination; or (c) Any "person" (as such term is used in sections 13(d) and 14(d) of the Exchange Act) by the acquisition or aggregation of securities is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 20 percent or more of the 10. combined voting power of the Company's then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the "Base Capital Stock"); except that: (i) Any change in the relative beneficial ownership of the Company's securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person's ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person's beneficial ownership of any securities of the Company; and (ii) Any increase in the aggregate beneficial ownership of the Company's securities by entities whose investments are managed on a discretionary basis by Richard C. Blum & Associates, Inc., resulting from a payment in the Company's securities of interest in lieu of cash on debt obligations of the Company outstanding as of the date of adoption of this Plan, shall be disregarded. 14.4 "Code" means the Internal Revenue Code of 1986, as amended. 14.5 "Committee" means the Compensation/Option Committee of the Board, as described in Article 2. 14.6 "Common Share" means one share of the common stock of the Company. 14.7 "Company" means URS Corporation, a Delaware corporation. 14.8 "Exchange Act" means the Securities Exchange Act of 1934, as amended. 14.9 "Exercise Price" means the amount for which one Common Share may be purchased upon exercise of an Option, as specified by the Committee in the applicable Stock Option Agreement. 14.10 "Fair Market Value" shall mean the closing price of a Common Share on the trading day immediately preceding the day in question. 14.11 "ISO" means an incentive stock option described in section 422(b) of the Code. 14.12 "Key Employee" means (a) a key common-law employee of the Company or of a Subsidiary, as determined by the Committee, (b) an Outside Director and (c) a consultant who provides services to the Company or a Subsidiary as an independent contractor. Service as an independent contractor shall be considered employment for all purposes of the Plan. 14.13 "NSO" means an employee stock option not described in sections 422 and 423 of the Code. 11. 14.14 "Option" means an ISO or NSO granted under the Plan and entitling the holder to purchase Common Shares. 14.15 "Optionee" means a person who holds an Option. 14.16 "Outside Director" shall mean a member of the Board who is not a common-law employee of the Company or of a Subsidiary. 14.17 "Participant" means a person who holds an Award. 14.18 "Plan" means this URS Corporation 1991 Stock Incentive Plan, as amended from time to time. 14.19 "Restricted Share" means a Common Share awarded to a Participant under the Plan. 14.20 "Stock Award Agreement" means the agreement between the Company and the recipient of a Restricted Share which contains the terms, conditions and restrictions pertaining to such Restricted Share. 14.21 "Stock Option Agreement" means the agreement between the Company and an Optionee which contains the terms, conditions and restrictions pertaining to his or her Option. 14.22 "Subsidiary" means any corporation, if the Company and/or one or more other Subsidiaries own not less than 50 percent of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. ARTICLE 15 EXECUTION To record the amendment and restatement of the Plan by the Board, the Company has caused its duly authorized officer to affix the corporate name and seal hereto. URS CORPORATION By_________________________________ 12. EX-10.5 5 NON-EXECUTIVE DIRECTORS STOCK GRANT PLAN EXHIBIT 10.5 URS CORPORATION Non-Executive Directors Stock Grant Plan Adopted December 17, 1996 Approved By Stockholders ____________________, 1997 1. PURPOSES. The purpose of the Plan is to compensate Non-Executive Directors in the form of grants of Common Stock. 2. DEFINITIONS. (a) "Annual Meeting" means the annual meeting of the Company's stockholders. (b) "Board" means the Board of Directors of the Company. (c) "Company" means URS Corporation, a Delaware corporation. (d) "Common Stock" means the common stock of the Company. (e) "Employee" means any person, including any officer or director, who is a common law employee of the Company, but shall not mean a person who performs services for the Company as a consultant. (f) "Non-Executive Director" means a member of the Board who is not an Employee. (g) "Plan" means this URS Corporation Non-Executive Directors Stock Grant Plan. (h) "Stock Grant" means any grant of Common Stock under the Plan. 3. ADMINISTRATION. The Plan shall be administered by the Board. 1. 4. SHARES SUBJECT TO THE PLAN. (a) Subject to the provisions of Section 6 below relating to adjustments upon changes in the Common Stock, the Common Stock that may be issued pursuant to Stock Grants shall not exceed in the aggregate Fifty-Five Thousand (55,000) shares of Common Stock. (b) The Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise. 5. STOCK GRANTS. (a) After each Annual Meeting, each Non-Executive Director who continues to serve as a Director effective upon and following such Annual Meeting shall receive a Stock Grant equal to that number of shares of Common Stock determined by dividing Fifteen Thousand Dollars and No Cents ($15,000.00) by the closing price of the Common Stock on the date of such Annual Meeting, rounded down to the nearest whole share. (b) Common Stock awarded under any Stock Grant shall be fully vested as of the date of such Stock Grant. The Company shall direct its transfer agent to deliver a certificate representing such Common Stock (or electronically transfer such Common Stock) to each NonExecutive Director promptly following such Annual Meeting. 6. ADJUSTMENTS UPON CHANGES IN STOCK. If any change is made in the Common Stock subject to the Plan without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted as to the number of shares subject to the Plan and the number of shares subject to each Stock Grant. Such adjustments shall be made by the Board, the determination of which shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a "transaction not involving the receipt of consideration by the Company".) 7. AMENDMENT OF THE PLAN. (a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 6 above relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary for the Plan to satisfy the requirements of Rule 16b-3 under the Securities Exchange Act of 1933, as amended, or any securities exchange listing requirements. 2. (b) The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder approval. 8. TERMINATION OR SUSPENSION OF THE PLAN. The Board may suspend or terminate the Plan at any time. 9. EFFECTIVE DATE OF PLAN. The Plan shall become effective on the date the Plan is adopted by the Board and approved by the stockholders of the Company. 3. EX-10.7 6 1996 INCENTIVE COMPENSATION PLAN EXHIBIT 10.7 URS CORPORATION 1996 INCENTIVE COMPENSATION PLAN 1. TABLE OF CONTENTS I. PURPOSE OF THE PLAN II. HOW AWARDS ARE EARNED UNDER THE PLAN III. OTHER PLAN PROVISIONS IV. DEFINITIONS V. EXAMPLES OF PLAN OPERATION 2. I. PURPOSE OF THE PLAN 3. I.1 PURPOSE The URS Corporation ("URS") 1996 Incentive Compensation Plan (the "Plan") is intended to provide incentive compensation to individuals who make an important contribution to URS's financial performance. Specific Plan objectives are to: o Focus key Employees on achieving specific financial targets; o Reinforce a team orientation; o Provide significant award potential for achieving outstanding performance; and o Enhance the ability of URS to attract and retain highly talented and competent individuals. 1. II. HOW AWARDS ARE EARNED UNDER THE PLAN 2. II.1 GENERAL PLAN DESCRIPTION The Plan provides the opportunity for key Employees of URS to receive cash Awards based on a combination of URS's and individual performance. Here is an overview of how the Plan works. In general, certain Employees will be selected to participate in the Plan at the beginning of or during the Plan Year. These individuals are referred to as "Designated Participants." Upon selection to participate in the Plan, each Designated Participant will be assigned a Target Award Percentage. This Target Award Percentage, multiplied by the Participant's Base Salary earned during the Plan Year, will equal the Participant's Target Award. This Target Award represents the amount that is expected to be paid to a Designated Participant if certain financial Performance Objectives for URS have been fully met. In addition, funds will be set aside for discretionary Awards to selected other Employees (referred to as "Non-designated Participants"), who have demonstrated outstanding individual performance during the Plan Year. It is expected that the amount available to Non-designated Participants for the 1996 Plan Year will be $25,000, assuming that URS meets its financial objectives. The sum of all Target Awards for Designated Participants and expected payouts to Nondesignated Participants will equal the Target Bonus Pool. The Actual Bonus Pool will vary from the Target Pool upward or downward based on URS's actual performance in relationship to its Performance Objectives. Actual Awards to Designated Participants and actual funds available for distribution to Nondesignated Participants will vary from target amounts based on the relationship between the Actual Bonus Pool and the Target Bonus Pool. A detailed description of how the Plan works is presented in the following sections of this document. II.2 DESIGNATED AND NON-DESIGNATED PARTICIPANTS Plan participation is extended to selected Employees who, in the opinion of the Chief Executive Officer ("CEO") of URS, have the opportunity to significantly impact the annual operating success of the Company. These Employees are the Designated Participants and will be notified in writing of their selection to participate in the Plan. This notification letter, for all Participants except the CEO of URS, will be signed by the CEO of URS. The letter of participation for the CEO will be signed by the Chairman of the Compensation/Option Committee ("Committee") of URS's Board of Directors. In addition to the Designated Participants, there may be a group of other Employees who are selected to receive Awards based on their outstanding individual performance during the Plan Year. These other Employees are the Non-designated Participants and will not be selected until 1. the completion of the Plan Year. The selection of Non-designated Participants will be determined by the CEO of URS at his sole discretion. II.3 TARGET AWARD PERCENTAGES FOR DESIGNATED PARTICIPANTS Each Designated Participant will be assigned a Target Award Percentage. This Target Award Percentage, when multiplied by the individual's Base Salary earned during the Plan Year, represents the anticipated payout to a Designated Participant if URS's Performance Objectives are met. Each Designated Participant's Target Award Percentage will be included in the letter of notification mentioned in Section II.2. II.4 TARGET BONUS POOL The Target Bonus Pool ("Target Pool") will equal the sum of all Target Awards for Designated Participants plus an amount set aside for possible distribution to Non-designated Participants. For 1996, the Target Bonus Pool equals $394,000. II.5 URS PERFORMANCE OBJECTIVES For 1996, URS's Performance Objectives are focused on the need to reach the Company's Target for Net Income. The Performance Objectives and weightings for the 1996 Plan Year are as follows: URS Corporation Performance Objectives and Weightings Performance Measure Weighting Performance Objective ------------------- --------- --------------------- Net Income ($000s) 100% $4,600 Net Income will be calculated after all URS and URS Consultants ("URSC") bonuses are accrued and assumed to have been paid. II.6 RELATIONSHIP BETWEEN PERFORMANCE AND THE ACTUAL BONUS POOL The Actual Bonus Pool ("Actual Pool") will vary from the Target Pool based on the relationship between the actual performance of URS and the Performance Objectives. The Actual Pool will vary in relationship to the Target Pool based on the following table: 2. Relationship Between URS Performance and the Actual Bonus Pool as a % of the Target Bonus Pool(1) Actual Performance as a Net Income Actual Pool % of Performance Actual as a % of Objective Performance Target Pool ---------------- ----------- ----------- (%) ($000's) (%) greater than greater than or equal to 125% or equal to $ 5,750 200% 100% $ 4,600 100% 75% $ 3,450 30% less than 75% less than $ 3,450 0% - ---------- (1) The calculation of the Actual Award as a percent of Target will be interpolated for performance between discrete points on a straight-line basis. Based on the table above, the Actual Award will vary depending upon actual performance in relation to Target Net Income. II.7 ACTUAL AWARDS TO DESIGNATED AND NON-DESIGNATED PARTICIPANTS Actual Awards to Designated Participants will vary from Target levels based on the relationship between the Actual Bonus Pool and the Target Pool. After allocating Actual Awards to Designated Participants, the remaining funds in the Actual Pool will be available for allocation to Non-designated Participants. Actual Awards distributed to Non-designated Participants will be determined on a discretionary basis by the CEO. URS is under no obligation to distribute any or all of the Actual Pool. The sum of all Awards to Non-designated Participants may not exceed the amount available in the Actual Pool after Actual Awards have been allocated to Designated Participants. EXAMPLE OF INTERPOLATION CALCULATION To interpolate the Actual Award based on performance, apply the appropriate formula for actual performance above or below the Performance Objective. In all cases, solve for "X". o For performance above Objective: (Act. Perf. - Perf. Obj.) X -------------------------------- = ---------------------------------- (Max. Perf. - Perf. Obj.) (Max. Award % - Target Award %) o For performance below Objective: 3. (Act. Perf. - Perf. Obj.) X -------------------------------- = ---------------------------------- (Min. Perf. - Perf. Obj.) (Min. Award % - Target Award %) o Once you have solved for "X", add X to 100%. Below is a hypothetical example: EXAMPLE OF ACTUAL BONUS POOL CALCULATION The following example illustrates the weighting of the Performance Objectives, and calculates the Actual Bonus Pool: Hypothetical Assumptions: o Target Bonus Pool = $ 394,000 o Net Income Objective (after bonus accrual) = $4,600,000 o Actual Net Income (after bonus accrual) = $4,400,000 Interpolation: o Net Income Performance = 88.0% Actual Bonus Pool = $ 347,000 4. III. OTHER PLAN PROVISIONS 5. III.1 AWARD PAYMENT Assessment of actual performance and payout of Awards will be subject to the completion of the 1996 Year-end independent audit. The Actual Award earned, up to and in excess of the Target Award level, will be paid to the Participant (or the Participant's heirs in the case of death) in cash within 30 days of the completion of the independent audit. Payroll and other taxes will be withheld as required by law. III.2 EMPLOYMENT In order to receive an Award under the Plan, a Participant must be employed by URS or an Affiliate at the end of the Plan Year, except as otherwise noted below. Selection for participation in the Plan does not convey any employment rights. Terms and conditions of Participants' employment agreements with URS, if any, supersede the terms and conditions of the Plan. III.3 TERMINATION If Termination of a Designated Participant's employment occurs during the Plan Year by reason of death, permanent disability, or retirement, the Designated Participant (or the Participant's heirs in the case of death) will be eligible to receive a pro-rata Award based on the time employed as a Participant and the Objectives achieved for the Plan Year. Participants who have earned an Award on this basis will receive payment on the same schedule as other Plan Participants. A Participant whose employment with URS or its Affiliates is terminated prior to the end of the Plan Year for any other reason (whether voluntarily or involuntarily) will forfeit the opportunity to earn an Award under the Plan, except as otherwise provided for. III.4 OTHER PRO-RATA AWARDS Individuals who have been selected during the Year for Plan participation and who have a minimum of three months as a Designated Participant will be eligible to receive a pro-rata Award based on the time employed as a Participant and the Objectives achieved for the Plan Year, provided that the Participant is employed by URS or an Affiliate at Year-end. 1. III.5 PLAN FUNDING Estimated payouts for the Plan will be accrued monthly and charged as an expense against the income statement of URS. At the end of each fiscal quarter, the estimated Actual Awards under the Plan will be evaluated based on actual performance to date. The monthly accrual rate will then be adjusted so that the cost of the Plan is fully accrued at Year-end. Accrual of Awards will not imply vesting of any individual Awards to Participants. III.6 PLAN ADMINISTRATION Responsibility for decisions and/or recommendations regarding Plan administration are divided among the URS CEO and the Committee. Section III.7 outlines the levels of responsibility and authority assigned to each. Notwithstanding the above, the Committee retains final authority regarding all aspects of Plan administration, and the resolution of any disputes. The Committee may, without notice, amend, suspend or revoke the Plan. 2. III.7 INCENTIVE PLAN GOVERNANCE URS Area of Administration CEO Committee - ---------------------- --- --------- Overall Plan Design R A Determination of Performance Objectives R A Designated Participants R A - -------------------------------------------------------------------------------- Individual Target Awards R A Target funding for Non- Designated Participants R A Target Award for CEO R/A - -------------------------------------------------------------------------------- Certification of actual performance against Objectives R A Awards to Designated Participants R A Award to CEO R/A - -------------------------------------------------------------------------------- Amendment, suspension, or termination of the Plan R A Adjustments due to extraordinary events R A ----------------------------------------------------------------- KEY: R = Authority A = Authority to Recommend to Approve ----------------------------------------------------------------- III.8 ASSIGNMENT OF EMPLOYEE RIGHTS No employee has a claim or right to be a Participant in the Plan, to continue as a Participant, or to be granted an Award under the Plan. URS is not obligated to give uniform treatment (e.g., Target Award Percentages, discretionary Awards, etc.) to Employees or Participants under the Plan. Participation in the Plan does not give an Employee the right to be retained in the employment of URS, nor does it imply or confer any other employment rights. Nothing contained in the Plan will be construed to create a contract of employment with any Participant. URS reserves the right to elect any person to its offices and to remove Employees in any manner and upon any basis permitted by law. Nothing contained in the Plan will be deemed to require URS to deposit, invest or set aside amounts for the payment of any Awards. Participation in the Plan does not give a Participant any ownership, security, or other rights in any assets of URS or any of its Affiliates. 3. III.9 WITHHOLDING TAX URS will deduct from all Awards paid under the Plan any taxes required by law to be withheld. III.10 EFFECTIVE DATE The Plan is effective as of November 1, 1995, and will remain in effect for the Fiscal Year ending October 31, 1996 unless otherwise terminated or extended by the Committee. III.11 VALIDITY In the event any provision of the Plan is held invalid, void, or unenforceable, the same will not affect, in any respect whatsoever, the validity of any other provision of the Plan. III.12 APPLICABLE LAW The Plan will be governed by and construed in accordance with the laws of the State of California. 4. IV. DEFINITIONS 5. IV.1 DEFINITIONS "Affiliates" refers to any entity owned partially or totally by URS Corporation including URS Corporation. "Actual Award" or "Award" refers to the incentive amount earned under the Plan by a Designated or Non-designated Participant. "Actual Bonus Pool" or "Actual Pool" refers to the calculated amount available for distribution to all Designated and Non-designated Participants under the terms and provisions of the Plan. "Base Salary" refers to the actual base earnings of a Designated Participant for the Plan Year exclusive of any bonus payments under this Plan or any other prior or present commitment, including contractual arrangements, any salary advance, any allowance or reimbursement, and the value of any basic or supplemental Employee benefits or perquisites. Base Salary refers only to amounts earned while a Designated Participant during the Plan Year. "Compensation/Option Committee" or "Committee" refers to the Compensation/Option Committee of the Board of Directors of URS Corporation. "Designated Participant" refers to an Employee of URS Corporation designated by the CEO of URS to participate in the Plan. Designation will be established only in writing. "Employee" refers to an Employee of URS Corporation. "Fiscal Year" refers to the twelve months beginning November 1, 1995 and ending October 31, 1996. "Net Income" refers to the consolidated revenue less all expenses (including tax and interest charges) of URS Corporation. "Non-designated Participant" refers to an Employee of URS Corporation selected to receive an Award under the Plan on the basis of outstanding individual performance. Employee selection will be made at the end of the Plan Year, at the recommendation of the CEO of URS. Unlike Designated Participants, Non-designated Participants will not be assigned Target Award Percentages or individual Performance Objectives. "Performance Objectives" or "Objectives" refers to the pre-established financial goals upon which URS Corporation performance will be assessed. "Plan" refers to the URS Corporation 1996 Incentive Compensation Plan, as described in this document. Any incentives for future years will be covered by subsequent plan documents. "Plan Year" or "Year" refers to the twelve months beginning November 1, 1995, and ending October 31, 1996, over which performance is measured under this Plan. 1. "Target Award" refers to a Designated Participant's Target Award Percentage, multiplied by the Participant's Base Salary earned during the Plan Year. This amount represents the anticipated payout to the Designated Participant if all URS Corporation's Performance Objectives are met. "Target Award Percentage" refers to a percentage of Base Salary assigned to a Designated Participant in accordance with the terms and provisions of the Plan. "Target Bonus Pool" or "Target Pool" refers to the amount anticipated to be distributed to all Designated and Non-designated Participants if all URS Corporation's Performance Objectives are met. "Termination" means the Participant's ceasing his/her service with the Company or any of its Affiliates for any reason whatsoever, whether voluntarily or involuntarily, including by reason of death or permanent disability. "URS" refers to URS Corporation. "Year-end" refers to the end of the Fiscal Year, October 31, 1996. 2. V. EXAMPLES OF PLAN OPERATION 3. URS CORPORATION PERFORMANCE TABLE Actual Net Income Actual vs. (100% weighting) Target Pool ------------------------------------------------------------ greater than or equal to = $5,750 MM 200% $4,600 MM 100% $3,450 MM 30% less than = $3,450 MM 0% ------------------------------------------------------------ Scenario 1 - URS net income performance exceeds objectives Net income Objective ($MMs) $4.6 ($5.45 - $4.6)/($5.75 - $4.6) = 74.0% URS Actual Net Income ($Mms) $5.45 + 100% = 174.0% TARGET BONUS POOL ($000s) $394.0 ACTUAL BONUS POOL ($000s) $686.0 ($394.0 *174%)= $686.0 Scenario 2 - URS net income performance less than objectives Net income Objective ($MMs) $4.6 ($4.4 - $4.6)/($3.45 - $4.6) * (.7) = URS Actual Net Income ($MMs) $4.4 -12.0% + 100% = 88.0% TARGET BONUS POOL ($000s) $394.0 ACTUAL BONUS POOL ($000s) $347.0 ($394.0 * 88.0%) = $347.0
1. EX-10.8 7 1996 INCENTIVE COMPENSATION PLAN EXHIBIT 10.8 URS CONSULTANTS, INC. 1996 INCENTIVE COMPENSATION PLAN 1. TABLE OF CONTENTS I. PURPOSE OF THE PLAN II. HOW AWARDS ARE EARNED UNDER THE PLAN III. OTHER PLAN PROVISIONS IV. DEFINITIONS V. EXAMPLES OF PLAN OPERATION 2. I. PURPOSE OF THE PLAN 3. I.1 PURPOSE The URS Consultants, Inc. 1996 Incentive Compensation Plan (the "Plan") is intended to provide incentive compensation to individuals who make an important contribution to URS Consultants, Inc.'s financial performance. Specific Plan objectives are to: o Focus key Employees on achieving specific financial targets; o Reinforce a team orientation; o Provide significant award potential for achieving outstanding performance; and o Enhance the ability of URS Consultants, Inc. to attract and retain highly talented and competent individuals. 1. II. HOW AWARDS ARE EARNED UNDER THE PLAN 2. II.1 GENERAL PLAN DESCRIPTION The Plan provides the opportunity for key Employees of URS Consultants, Inc. ("URSC") to receive cash Awards based on a combination of URSC and individual performance. Here is an overview of how the Plan works. In general, a Target Bonus Pool is established. This amount represents the total Awards that are expected to be paid to selected URSC Employees if certain financial Performance Objectives for URSC have been fully met. The Actual Bonus Pool will vary from the Target Bonus Pool upward or downward based on URSC actual performance in relationship to its Performance Objectives. This adjusted bonus pool is the Actual Bonus Pool, from which Actual Award payouts will be made. At the beginning of or during the Plan Year, certain Employees will be selected to participate in the Plan. These individuals are referred to as "Designated Participants." Upon selection to participate in the Plan, each Designated Participant will be assigned a Target Award Percentage. This Target Award Percentage, multiplied by the Participant's Base Salary earned during the Plan Year, will equal the Participant's Target Award. This Target Award will be earned for meeting both pre-determined URSC and individual Performance Objectives. Individual Performance Objectives will vary based on the Participant's role within the organization. Each Designated Participant's Actual Award could vary from the Target Award, based on the individual's actual performance measured against his/her Performance Objectives, subject to the amount available for distribution from the Actual Bonus Pool. Another key feature of the Plan is that a portion of the Actual Bonus Pool will be set aside for discretionary Awards to selected other Employees (referred to in the Plan as "Non-Designated Participants"), who have demonstrated outstanding individual performance during the Plan Year. A detailed description of how the Plan works is presented in the following sections of this document. 1. II.2 DESIGNATED AND NON-DESIGNATED PARTICIPANTS Plan participation is extended to selected Employees who, in the opinion of the President of URSC and the Chief Executive Officer ("CEO") of URS Corporation (the "Parent Company"), have the opportunity to significantly impact the annual operating success of URSC. These Employees are the Designated Participants and will be notified in writing of their selection to participate in the Plan. This notification letter will be signed by both the President of URSC and the CEO of the Parent Company. In addition to the Designated Participants, there may be a group of other Employees who are selected to receive Awards based on their outstanding individual performance during the Plan Year. These other Employees are the Non-designated Participants and will not be selected until the completion of the Plan Year. The selection of Non-designated Participants will be determined by the President of URSC, subject to the approval of the CEO of the Parent Company, at their sole discretion. II.3 TARGET BONUS POOL A Target Bonus Pool is established, equal to the sum of all target awards for Designated Participants plus an amount set aside for possible distribution to Non-designated Participants. (The Awards to Non-designated Participants are estimated at approximately 25% of the total Designated Participants' Bonus Pool.) This Target Bonus Pool is determined based on the current group of Designated Participants and the anticipated group of Non-designated Participants. The Target Pool is subject to change if the group of Designated Participants, the group of Non-Designated Participants, or the Base Salaries of Designated Participants change. Subject to these potential changes, the Target Bonus Pool for the 1996 Plan Year is established at $1,600,000. II.4 URSC PERFORMANCE OBJECTIVES URSC Performance Objectives are focused on the need to achieve strong operating results (i.e., contribution), generate cash through the management of accounts receivables (DSOs) throughout the Year and develop new business opportunities. Accordingly, performance will be evaluated based on a combination of URSC Contribution, Average Receivables Days Sales Outstanding (DSO) and New Sales. 2. The URSC Performance Objectives for the 1996 Plan Year are as follows: URSC Performance Objectives Performance Measures Performance Objectives -------------------- ---------------------- Contribution ($000s) $14,000 Average DSO (Days) 94 New Sales ($000s) $225,789 URSC Contribution is defined as total 1995 Fiscal Year URSC revenues less: o Direct cost of sales; o Indirect expenses; and o Accrual of expected Awards for both Designated and Non-designated Participants under the Plan (i.e., the Plan must pay for itself) The subtraction of expected Awards from revenues in calculating contribution under the Plan means that the Contribution Objective, for purposes of the Plan, is calculated after all bonuses have been accrued, or assumed to have been paid. URSC Days Sales Outstanding (DSO) is defined by the following formula: BAR + UAR - BEC --------------- X 90 REVENUES where BAR is billed accounts receivable, UAR is unbilled accounts receivable, BEC is billings in excess of cost, and REVENUES is the sum of the last three months revenues. DSOs will be calculated monthly, and the average of the twelve months' DSOs will equal Average DSOs. URSC New Sales is defined as gross additions to backlog. II.5 WEIGHTING OF URSC PERFORMANCE OBJECTIVES The Target Bonus Pool will be weighted based on the aggregate weightings of the individual Participants' Performance Objectives in the Plan. Contribution will be the most heavily weighted component followed by DSO performance and New Sales. An example of the weighting calculation is shown below. EXAMPLE OF WEIGHTING CALCULATION (1) The Target Bonus Pool will be weighted based on the aggregate weightings of the individual Performance Objectives for the Designated Participants in the Plan. The following example illustrates the weighting calculation: 3. Target Bonus Pool = $1,600,000 Portion of Target Pool determined by: Contribution (65%) $1,045,000 DSO Performance (16%) $250,000 New Sales (19%) $305,000 (1) Weightings may be subject to change based on the Plan measures of the Designated Participants at the end of the Plan Year. 4. II.6 RELATIONSHIP BETWEEN PERFORMANCE AND THE ACTUAL BONUS POOL The Actual Bonus Pool will vary from the Target Bonus Pool based on the relationship between the actual performance of URSC and the Performance Objectives. The Actual Bonus Pool will vary in relationship to the Target Bonus Pool based on the following table: Relationship Between URSC Performance And The Actual Bonus Pool As A % Of The Target Bonus Pool
URSC Contribution URSC DSO Actual ------------------------ --------------------- Performance Actual As A % Of Bonus Pool Bonus Pool Performance Actual As A % Of Actual As A % Of Objective Performance Target Pool Performance Target Pool ----------- ----------- ------------ ----------- ----------- (%) ($000s) (%) (Days) (%) greater than greater than or equal to 25% or equal to $17,500 200%(1) less than 89 200%(1) 100% $14,000 100% 94 100% 75% $10,500 30% 99 30% less than 75% less than $10,500 0% greater than 99 0%
URSC New Sales ----------------------------------------------------------- Actual Performance Actual As A % Of Bonus Pool Performance Actual As A % Of Objective Performance Target Pool ------------ ------------- ------------ (%) ($000s) (%) greater than greater than or equal to 125% or equal to $282,236 200% 100% $225,789 100% 75% $169,342 30% less than 75% less than $169,342 0% - ------------ (1) Maximum upside opportunity of 200% of the Target Bonus Pool may be raised at the discretion of the Compensation/Option Committee ("Committee") of the Parent Company Board of Directors. The calculation of the Actual Bonus Pool As A % Of Target will be interpolated for performance between discrete points shown in the table above. 5. Based on the table above, the Actual Bonus Pool could vary between 0% and 200% of the Target Bonus Pool, depending upon actual performance in relation to Performance Objectives and the weighting of the Performance Objectives. Accrual of any Actual Pool tied to DSO and New Sales is contingent upon Contribution performance being at or above 75% of the Performance Objective. Here is an example of the calculation of an Actual Bonus pool: EXAMPLE OF INTERPOLATION CALCULATION To interpolate the Actual Award based on performance, apply the appropriate formula for actual performance above or below the Performance Objective. In all cases, solve for "X". o For performance above objective: (Act. Perf. - Perf. Obj.) X - --------------------------------------- = --------------------------------- (Max. Perf. - Perf. Obj.) (Max. Award% - Target Award%) o For performance below objective: (Act. Perf. - Perf. Obj.) X - --------------------------------------- = --------------------------------- (Min. Perf. - Perf. Obj.) (Min. Award% - Target Award%) o Once you have solved for "X", add X to 100%. Below is a hypothetical example: EXAMPLE OF ACTUAL BONUS POOL CALCULATION The following example illustrates the weighting of the Performance Objectives and calculates the Actual Bonus Pool: Hypothetical assumptions: o Target Bonus Pool = $1,600,000 URSC 1996 Performance Objective Actual --------------------- --------- ------ o Contribution $14,000 $14,400 o DSO Performance 94 Days 93 Days o New Sales $225,789 $210,000 6. Weighting: o Contribution portion of Target Pool = $1,045,000 o DSO portion of Target Pool = $250,000 o New Sales portion of Target Pool = $305,000 Interpolation: o Contribution Performance = 112.0% o DSO Performance = 120.0% o New Sales Performance = 72.0% Actual Bonus Pool = $1,690,000 ($1,045,000 * 112.0%) + ($250,000 * 120.0%) + ($305,000 * 72.0%) 7. II.7 DISCRETIONARY BONUS POOL It is the intent of the Plan that if the Actual Bonus Pool, as calculated in Section II.6, should fall below 30% of the Target Bonus Pool, then a Discretionary Bonus Pool will be created instead. Awards from the Discretionary Pool may be made to selected Employees (both Designated and Non-designated Participants). Awards to Designated Participants will be calculated based on actual performance, reduced pro rata based on the amount of the Discretionary Pool. Awards to Non-designaged Participants will be made on a totally discretionary basis by the President of URSC, subject to the approval of the CEO of the Parent Company. The formation of the Discretionary Pool will not guarantee any Award payments. Rather, the Discretionary Pool will be used to recognize selected outstanding Employees in the event that URSC does not meet or exceed 75% of its Contribution Performance Objective. The total sum of Awards made from the Discretionary Pool may not exceed 30% of the total Target Bonus Pool. II.8 ACTUAL BONUS POOL ALLOCATION Awards will be paid from the funds available in the Actual Bonus Pool. The portion of the pool actually allocated to Non-Designated Participants will be determined after the end of the Plan Year at the discretion of the CEO of the Parent Company, subject to the approval of the Committee, and may vary from the estimated 20% of the total Actual Bonus Pool. The sum of the Actual Awards paid, including Awards made to Non-designated Participants, may not exceed the available Actual Bonus Pool. II.9 TARGET AWARD PERCENTAGES Each Designated Participant will be assigned a Target Award Percentage. This Target Award Percentage, when multiplied by the individual's Base Salary earned during the Plan Year, represents the anticipated payout to a Designated Participant if all of the URSC and the individual's Performance Objectives are met. Each Designated Participant's Target Award Percentage and individual Performance Objectives will be included in the letter of notification mentioned in Section II.2. II.10 ACTUAL AWARDS FOR DESIGNATED PARTICIPANTS Individual Performance Objectives will be assigned based on the economic unit (i.e., URSC, a region of URSC, or an office of URSC) on which the Participant's performance has the greatest financial impact. Each Designated Participant will be notified of his/her economic unit, the individual Performance Objectives associated with that unit, the weighting of those Performance Objectives, and the relationship between individual unit performance and Award levels in the letter of notification mentioned in Section II.2. 8. II.11 ADJUSTMENT TO ACTUAL AWARDS It is possible that the sum of the Actual Awards for Designated Participants could exceed the Actual Bonus Pool available for Designated Participants. This result could happen for either one of two reasons. First, the CEO of the Parent Company could allocate more for Awards to Non-designated Participants than was accrued. Second, larger economic units could perform worse relative to the smaller economic units, creating an insufficient Actual Bonus Pool. In these cases, all Actual Awards will be reduced pro-rata by a factor determined by dividing the Actual Bonus Pool for Designated Participants by the sum of the individual Actual Awards for Designated Participants. If the sum of Actual Awards is less than the Actual Bonus Pool available for Designated Participants, there will be no upward pro-ration of Awards paid. 9. III. OTHER PLAN PROVISIONS 10. III.1 AWARD PAYMENT Assessment of actual performance and payout of Awards will be subject to the completion of the 1996 Year-end independent audit. The Actual Award earned, up to and in excess of the Target Award level, will be paid to the Participant (or the Participant's heirs in the case of death) in cash within 30 days of the completion of the independent audit. Payroll and other taxes will be withheld as required by law. III.2 EMPLOYMENT To receive an Award under the Plan, a Participant must be employed by URSC or an Affiliate at the end of the Plan Year, except as otherwise noted below. A Participant must also have performed his/her duties satisfactorily during the Year, as determined by the URSC President. The Parent Company CEO will assess the performance of the President and Executive Vice President. III.3 TERMINATION If Termination of a Designated Participant's employment occurs during the Plan Year by reason of death, permanent disability, or retirement, the Designated Participant (or the Participant's heirs in the case of death) will be eligible to receive a pro-rata Award based on the time employed as a Participant and the Objectives achieved for the Plan Year. Participants who have earned an Award on this basis will receive payment on the same schedule as other Plan Participants. A Participant whose employment with URSC or its Affiliates is terminated prior to the end of the Plan Year for any other reason (whether voluntarily or involuntarily) will forfeit the opportunity to earn an Award under the Plan. III.4 OTHER PRO-RATA AWARDS Individuals who have been selected during the Year for Plan participation and who have a minimum of three months as a Designated Participant will be eligible to receive a pro-rata Award based on the time employed as a Participant and the Objectives achieved for the Plan Year, provided that the Participant is employed by URSC or an Affiliate at Year-end. 1. III.5 PLAN FUNDING Estimated payouts for the Plan will be accrued monthly and charged as an expense against the income statement of URSC and its economic units. At the end of each fiscal quarter, the estimated Actual Bonus Pool under the Plan will be evaluated based on actual performance to date. The monthly accrual rate will then be adjusted so that the cost of the Plan is fully accrued at Year-end. Accrual of Awards will not imply vesting of any individual Awards to Participants. III.6 PLAN ADMINISTRATION Responsibility for decisions and/or recommendations regarding Plan administration are divided among the URSC President, the Parent Company CEO, and the Committee. Section III.7 outlines the levels of responsibility and authority assigned to each. Notwithstanding the above, the Committee retains final authority regarding all aspects of Plan administration, and the resolution of any disputes. The Committee may, without notice, amend, suspend or revoke the Plan. 2. III.7 INCENTIVE PLAN GOVERNANCE Parent Company Area of Administration CEO Committee ---------------------- ------- --------- Overall Plan Design R A Determination of Performance Objectives R A Designated Participants R A - -------------------------------------------------------------------------------- Individual Target Awards R A Target funding for Non- Designated Participants R A - -------------------------------------------------------------------------------- Certification of actual performance against Objectives R A Awards to Designated Participants R A Awards to Non-designated Participants R - -------------------------------------------------------------------------------- Amendment, suspension, or termination of the Plan R A Adjustments due to extraordinary events R A - -------------------------------------------------------------------------------- KEY R = Authority A = Authority : to Recommend to Approve - -------------------------------------------------------------------------------- 3. III.8 ASSIGNMENT OF EMPLOYEE RIGHTS No employee has a claim or right to be a Participant in the Plan, to continue as a Participant, or to be granted an Award under the Plan. URSC is not obligated to give uniform treatment (e.g., Target Award Percentages, discretionary Awards, etc.) to Employees or Participants under the Plan. Participation in the Plan does not give an Employee the right to be retained in the employment of URSC, nor does it imply or confer any other employment rights. Nothing contained in the Plan will be construed to create a contract of employment with any Participant. URSC reserves the right to elect any person to its offices and to remove Employees in any manner and upon any basis permitted by law. Nothing contained in the Plan will be deemed to require URSC to deposit, invest or set aside amounts for the payment of any Awards. Participation in the Plan does not give a Participant any ownership, security, or other rights in any assets of URSC or any of its Affiliates. III.9 WITHHOLDING TAX URSC will deduct from all Awards paid under the Plan any taxes required by law to be withheld. III.10 EFFECTIVE DATE The Plan is effective as of November 1, 1995, and shall remain in effect for the Fiscal Year ending October 31, 1996 unless otherwise terminated or extended by the Committee. III.11 VALIDITY In the event any provision of the Plan is held invalid, void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of the Plan. III.12 APPLICABLE LAW The Plan shall be governed by and construed in accordance with the laws of the State of California. 4. IV. DEFINITIONS 5. IV.1 DEFINITIONS "Actual Bonus Pool" or "Actual Pool" refers to the calculated amount available to be distributed to all Participants under the terms and provisions of the Plan. "Affiliate" refers to any entity owned partially or totally by URS Corporation including URS Corporation. "Award" refers to any incentive amount earned under the Plan by a Designated or Nondesignated Participant. "Actual Award" refers to the calculated incentive amount earned by a Participant under the terms and provisions of the Plan, before any adjustments caused by the size of the Actual Bonus Pool. "Base Salary" refers to the actual base earnings of a Designated Participant for the Plan Year exclusive of any bonus payments under this Plan or any other prior or present commitment, including contractual arrangements, any salary advance, any allowance or reimbursement, and the value of any basic or supplemental Employee benefits or perquisites. Base Salary refers only to amounts earned while a Designated Participant during the Plan Year. "Compensation/Option Committee" or "Committee" refers to the Compensation/Option Committee of the Board of Directors of the Parent Company. "Designated Participant" refers to an Employee of URS Consultants designated by the CEO of URS Corporation to participate in the Plan. Designation will be established only in writing. "Discretionary Bonus Pool" or "Discretionary Pool" is the total amount available to be distributed if URS Consultants contribution does not reach or exceed $10,500,000 (75% of the Performance Objective). "Employee" refers to an Employee of URS Consultants, Inc. "Fiscal Year" refers to the twelve months beginning November 1, 1995 and ending October 31, 1996. "Non-designated Participant" refers to an Employee of URS Consultants selected to receive an Award under the Plan on the basis of outstanding individual performance. Employee selection will be made at the end of the Plan Year, at the recommendation of the President of URS Consultants, Inc. within guidelines agreed with and subject to the approval of the CEO of URS Corporation. Unlike Designated Participants, Non-designated Participants will not be assigned Target Award Percentages or individual Performance Objectives. "Parent Company" refers to URS Corporation. 1. "Performance Objectives" or "Objectives" refers to the pre-established financial goals upon which overall URS Consultants and economic unit (i.e., URS Consultants, a region of URS Consultants, or an office of URS Consultants) performance will be assessed. "Plan" refers to the URS Consultants, Inc. 1996 Incentive Compensation Plan, as described in this document. Any incentives for future years will be covered by subsequent plan documents. "Plan Year" or "Year" refers to the twelve months beginning November 1, 1995, and ending October 31, 1996, over which performance is measured under this Plan. "Target Award" refers to a Designated Participant's Target Award Percentage, multiplied by the Participant's Base Salary earned during the Plan Year. This amount represents the anticipated payout to the Designated Participant if all URS Consultants and the individual's Performance Objectives are met. "Target Award Percentage" refers to a percentage of Base Salary assigned to a Designated Participant in accordance with the terms and provisions of the Plan. Non-designated Participants are not assigned Target Award Percentages. "Target Bonus Pool" or "Target Pool" refers to the sum of the Target Awards for Designated Participants plus an estimated amount for Awards to Non-designated Participants. "Termination" means the Participant's ceasing his/her service with the Company or any of its Affiliates for any reason whatsoever, whether voluntarily or involuntarily, including by reason of death or permanent disability. "URSC" refers to URS Consultants, Inc. "Year-end" refers to the end of the Fiscal Year, October 31, 1996. 2. V. EXAMPLES OF PLAN OPERATION 3. EXAMPLE OF WEIGHTING CALCULATION (1) The Target Bonus Pool will be weighted based on the aggregate weightings of the individual Performance Objectives for the Designated Participants in the Plan. The following example illustrates the weighting calculation: Target Bonus Pool = $1,600,000 Portion of Target Pool determined by: Contribution (65%) $1,045,000 DSO Performance (16%) $250,000 New Sales (19%) $305,000 (1) Weightings may be subject to change based on the Plan measures of the Designated Participants at the end of the Plan Year. 4. EXAMPLE OF ACTUAL BONUS POOL CALCULATION The following example illustrates the weighting of the Performance Objectives and calculates the Actual Bonus Pool: Hypothetical assumptions: o Target Bonus Pool = $1,600,000
URSC 1996 Performance Objective Actual --------------------- --------- ------ o Contribution $14,000 $14,400 o DSO Performance 94 Days 93 Days o New Sales $225,789 $210,000 Weighting: o Contribution portion of Target Pool = $1,045,000 o DSO portion of Target Pool = $250,000 o New Sales portion of Target Pool = $305,000 Interpolation: o Contribution Performance = 112.0% o DSO Performance = 120.0% o New Sales Performance = 72.0% Actual Bonus Pool = $1,690,000 ($1,045,000 * 112.0%) + ($250,000 * 120.0%) + ($305,000 * 72.0%) 5.
EXAMPLE OF ACTUAL AWARD ADJUSTMENT The following example illustrates the Actual Award adjustment that occurs if the sum of the individual Actual Awards is greater than the Actual Bonus Pool: Hypothetical assumptions: o Target Bonus Pool = $1,600,000 o Actual Bonus Pool = $1,690,000 o Sum of individual Actual Awards (as calculated) = $2,400,000 o Actual Awards (as calculated) - Participant A = $15,750 - Participant B = $30,000 Pro-rata reduction factor = ($1,690,000 / $2,400,000) = .70 Individual Awards (after reduction) o Participant A = ($15,750 * .70) = $11,025 o Participant B = ($30,000 * .70) = $21,000 6. EX-10.9 8 1996 INCENTIVE COMPENSATION PLAN EXHIBIT 10.9 GREINER ENGINEERING, INC. 1996 INCENTIVE COMPENSATION PLAN 1. TABLE OF CONTENTS I. PURPOSE OF THE PLAN II. HOW AWARDS ARE EARNED UNDER THE PLAN III. OTHER PLAN PROVISIONS IV. DEFINITIONS V. EXAMPLES OF PLAN OPERATION 2. I. PURPOSE OF THE PLAN 3. I.1 PURPOSE The Greiner Engineering, Inc. ("GEI") 1996 Incentive Compensation Plan (the "Plan") is intended to provide incentive compensation to individuals who make an important contribution to GEI's financial performance. Specific Plan objectives are to: o Focus key Employees on achieving specific financial targets; o Reinforce a team orientation; o Provide significant award potential for achieving outstanding performance; and o Enhance the ability of GEI to attract and retain highly talented and competent individuals. 1. II. HOW AWARDS ARE EARNED UNDER THE PLAN 2. II.1 GENERAL PLAN DESCRIPTION The Plan provides the opportunity for key Employees of GEI to receive cash Awards based on a combination of GEI and individual performance. Here is an overview of how the Plan works. In general, a Target Bonus Pool is established. This amount represents the total Awards that are expected to be paid to selected GEI Employees if certain financial Performance Objectives for GEI have been fully met. The Actual Bonus Pool will vary from the Target Bonus Pool upward or downward based on GEI actual performance in relationship to its Performance Objectives. This adjusted bonus pool is the Actual Bonus Pool, from which Actual Award payouts will be made. Certain Employees will be selected to participate in the Plan. These individuals are referred to as "Designated Participants." Upon selection to participate in the Plan, each Designated Participant will be assigned a Target Award Percentage. This Target Award Percentage, multiplied by the Participant's Base Salary earned during the Plan Period, will equal the Participant's Target Award. This Target Award will be earned for meeting both pre-determined GEI and individual Performance Objectives and satisfying all conditions of the Plan. Individual Performance Objectives will vary based on the Participant's role within the organization. Each Designated Participant's Actual Award could vary from the Target Award, based on the individual's actual performance measured against his/her Performance Objectives, subject to the amount available for distribution from the Actual Bonus Pool. Another key feature of the Plan is that a portion of the Actual Bonus Pool will be set aside for discretionary Awards to selected other Employees (referred to in the Plan as "Non-Designated Participants"), who have demonstrated outstanding individual performance during the Plan Period. A detailed description of how the Plan works is presented in the following sections of this document. 1. II.2 DESIGNATED AND NON-DESIGNATED PARTICIPANTS Plan participation is extended to selected Employees who, in the opinion of the President of GEI and the Chief Executive Officer ("CEO") of URS Corporation (the "Parent Company"), have the opportunity to significantly impact the operating success of GEI. These Employees are the Designated Participants and will be notified in writing of their selection to participate in the Plan. This notification letter will be signed by both the President of GEI and the CEO of the Parent Company. In addition to the Designated Participants, there may be a group of other Employees who are selected to receive Awards based on their outstanding individual performance during the Plan Period. These other Employees are the Non-Designated Participants and will not be selected until the completion of the Plan Period. The selection of Non-Designated Participants will be determined by the President of GEI, subject to the approval of the CEO of the Parent Company, at their sole discretion. II.3 TARGET BONUS POOL A Target Bonus Pool is established, equal to the sum of all target awards for Designated Participants plus an amount set aside for possible distribution to Non-Designated Participants. This Target Bonus Pool is determined based on the current group of Designated Participants and the anticipated group of Non-Designated Participants. The Target Pool is subject to change if the group of Designated Participants, the group of Non-Designated Participants, or the Base Salaries of Designated Participants change. Subject to these potential changes, the Target Bonus Pool for the 1996 Plan Period is established at approximately $1,000,000. II.4 GEI PERFORMANCE OBJECTIVES GEI Performance Objectives are focused on the need to achieve strong operating results (i.e., profit), generate cash through the management of accounts receivables (DSOs) throughout the Period and develop new business opportunities. Accordingly, performance will be evaluated based on a combination of GEI Profit, Average Receivables Days Sales Outstanding (DSO) and New Sales. 2. The GEI Performance Objectives for the 1996 Plan Period are as follows: GEI Performance Objectives Performance Measures Performance Objectives -------------------- ---------------------- Profit ($000s) $14,000 Average DSO (Days) 88 New Sales ($000s) $109,000 GEI Profit is defined as total 1996 GEI gross revenues less: o Direct cost of sales; o Indirect expenses; o Accrual of expected Awards for both Designated and Non-Designated Participants under the Plan (i.e., the Plan must pay for itself) and before; o Corporate overhead, non-operating expenses and California Discontinued operations. The subtraction of expected Awards from revenues in calculating profit under the Plan means that the Profit Objective, for purposes of the Plan, is calculated after all bonuses have been accrued, or assumed to have been paid. GEI Days Sales Outstanding (DSO) is defined by the following formula: BAR + UAR - BEC --------------- X 90 REVENUES where BAR is billed accounts receivable, UAR is unbilled accounts receivable, BEC is billings in excess of cost, and REVENUES is the sum of the last three months revenues. DSOs will be calculated monthly, and the average of the ten months' DSOs will equal Average DSOs. GEI New Sales is defined as net revenue additions to backlog, excluding pass-through and other direct costs. II.5 WEIGHTING OF GEI PERFORMANCE OBJECTIVES The Target Bonus Pool will be weighted based on the aggregate weightings of the individual Participants' Performance Objectives in the Plan. Profit will be the most heavily weighted component followed by DSO performance and New Sales. An example of the weighting calculation is shown below. EXAMPLE OF WEIGHTING CALCULATION (1) 3. The Target Bonus Pool will be weighted based on the aggregate weightings of the individual Performance Objectives for the Designated Participants in the Plan. The following example illustrates the weighting calculation: Target Bonus Pool = $1,000,000 Portion of Target Pool determined by: Profit (75%) $ 750,000 DSO Performance (18%) $ 175,000 New Sales (7%) $ 75,000 (1) Weightings may be subject to change based on the Plan measures of the Designated Participants at the end of the Plan Period. 4. II.6 RELATIONSHIP BETWEEN PERFORMANCE AND THE ACTUAL BONUS POOL The Actual Bonus Pool will vary from the Target Bonus Pool based on the relationship between the actual performance of GEI and the Performance Objectives. The Actual Bonus Pool will vary in relationship to the Target Bonus Pool based on the following table:
Relationship Between GEI Performance And The Actual Bonus Pool As A % Of The Target Bonus Pool GEI Profit GEI DSO Actual --------------------------------- ------------------------------ Performance Actual As A % Of Bonus Pool Bonus Pool Performance Actual As A % Of Actual As A % Of Objective Performance Target Pool Performance Target Pool ------------ ----------- ----------- ----------- ------------ (%) ($000s) (%) (Days) (%) greater than greater than or equal to 125% or equal to $17,500 200%(1) less than 83 200%(1) 100% $14,000 100% 88 100% 75% $10,500 30% 93 30% less than 75% less than $10,500 0% less than 93 0%
GEI New Sales - --------------------------------------------------------- Actual Performance Actual As A % Of Bonus Pool Performance Actual As A % Of Objective Performance Target Pool ------------- ------------- ------------ (%) ($000s) (%) greater than greater than or equal to 125% or equal to $136,000 200% 100% $109,000 100% 75% $ 82,000 30% less than 75% less than $82,000 0% (1) The calculation of the Actual Bonus Pool As A % Of Target will be interpolated for performance between discrete points shown in the table above. Based on the table above, the Actual Bonus Pool could vary between 0% and 200% of the Target Bonus Pool, depending upon actual performance in relation to Performance Objectives and the weighting of the Performance Objectives. Accrual of any Actual Pool tied to DSO and New Sales is contingent upon Profit performance being at or above 75% of the Performance Objective. Here is an example of the calculation of an Actual Bonus pool: EXAMPLE OF INTERPOLATION CALCULATION 5. To interpolate the Actual Award based on performance, apply the appropriate formula for actual performance above or below the Performance Objective. In all cases, solve for "X". o For performance above objective: (Act. Perf. - Perf. Obj.) X ---------------------------------- = --------------------------------- (Max. Perf. - Perf. Obj.) (Max. Award% - Target Award%) o For performance below objective: (Act. Perf. - Perf. Obj.) X ---------------------------------- = --------------------------------- (Min. Perf. - Perf. Obj.) (Min. Award% - Target Award%) o Once you have solved for "X", add X to 100%. Below is a hypothetical example: EXAMPLE OF ACTUAL BONUS POOL CALCULATION The following example illustrates the weighting of the Performance Objectives and calculates the Actual Bonus Pool: Hypothetical assumptions: o Target Bonus Pool = $1,000,000 GEI 1996 Performance Objective Actual -------------------- --------- ------ ($000) ($000) o Profit $14,000 $14,400 o DSO Performance 88 Days 90 Days o New Sales $109,000 $120,000 Weighting: o Profit portion of Target Pool = $750,000 o DSO portion of Target Pool = $175,000 o New Sales portion of Target Pool = $ 75,000 Interpolation: o Profit Performance = 111.0% o DSO Performance = 60.0% o New Sales Performance = 140.0% Actual Bonus Pool = $1,043,000 ($750,000 * 111.0%) + ($175,000 * 60.0%) + ($75,000 * 140.0%) 6. II.7 DISCRETIONARY BONUS POOL It is the intent of the Plan that if the Actual Bonus Pool, as calculated in Section II.6, should fall below 30% of the Target Bonus Pool, then a Discretionary Bonus Pool will be created instead. Awards from the Discretionary Pool may be made to selected Employees (both Designated and Non-Designated Participants). Awards to Designated Participants will be calculated based on actual performance, reduced pro rata based on the amount of the Discretionary Pool. Awards to Non-Designated Participants will be made on the recommendation of the President of GEI, subject to the approval of the CEO of the Parent Company. The formation of the Discretionary Pool will not guarantee any Award payments. Rather, the Discretionary Pool will be used to recognize selected outstanding Employees in the event that GEI does not meet or exceed 75% of its Profit Performance Objective. The total sum of Awards made from the Discretionary Pool may not exceed 30% of the total Target Bonus Pool. II.8 ACTUAL BONUS POOL ALLOCATION Awards will be paid from the funds available in the Actual Bonus Pool. The portion of the pool actually allocated to Non-Designated Participants will be determined after the end of the Plan Period at the discretion of the CEO of the Parent Company, subject to the approval of the Compensation/Option Committee of the Parent Company Board of Directors ("Committee"), and may vary from the estimated 30% of the total Actual Bonus Pool. However, the sum of the Actual Awards paid, including Awards made to Non-Designated Participants, may not exceed the available Actual Bonus Pool. II.9 TARGET AWARD PERCENTAGES Each Designated Participant will be assigned a Target Award Percentage. This Target Award Percentage, when multiplied by the individual's Base Salary earned during the Plan Period, represents the anticipated payout to a Designated Participant if all of the GEI and the individual's Performance Objectives are met and all conditions of the Plan for receiving an Award are satisfied. Each Designated Participant's Target Award Percentage and individual Performance Objectives will be included in the letter of notification mentioned in Section II.2. II.10 ACTUAL AWARDS FOR DESIGNATED PARTICIPANTS Individual Performance Objectives will be assigned based on the economic unit (i.e., GEI, a combination of offices of GEI, or a single office of GEI) on which the Participant's performance has the greatest financial impact. Each Designated Participant will be notified of his/her economic unit, the individual Performance Objectives associated with that unit, the weighting of those Performance Objectives, and the relationship between individual unit performance and Award levels in the letter of notification mentioned in Section II.2. 7. II.11 ADJUSTMENT TO ACTUAL AWARDS It is possible that the sum of the Actual Awards for Designated Participants could exceed the Actual Bonus Pool available for Designated Participants. This result could happen for at least either one of two reasons. First, the CEO of the Parent Company could allocate more for Awards to Non-Designated Participants than was accrued. Second, larger economic units could perform worse relative to the smaller economic units, creating an insufficient Actual Bonus Pool. In these cases, all Actual Awards will be reduced pro-rata by a factor determined by dividing the Actual Bonus Pool for Designated Participants by the sum of the individual Actual Awards for Designated Participants. If the sum of Actual Awards is less than the Actual Bonus Pool available for Designated Participants, there will be no upward pro-ration of Awards paid. 8. III. OTHER PLAN PROVISIONS 9. III.1 AWARD PAYMENT Assessment of actual performance and payout of Awards will be subject to the completion of the 1996 Year-end independent audit. The Actual Award earned, up to and in excess of the Target Award level, will be paid to the Participant (or the Participant's heirs in the case of death) in cash within 30 days of the completion of the independent audit. Payroll and other taxes will be withheld as required by law. III.2 EMPLOYMENT To receive an Award under the Plan, a Participant must be employed by GEI or an Affiliate at the end of the Plan Period, except as otherwise noted below. A Participant must also have performed his/her duties satisfactorily during the Period, as determined by the GEI President. The Parent Company CEO will assess the performance of the President. III.3 TERMINATION If Termination of a Designated Participant's employment occurs during the Plan Period by reason of death, permanent disability, or retirement, the Designated Participant (or the Participant's heirs in the case of death) will be eligible to receive a pro-rata Award based on the time employed as a Participant and the Objectives achieved for the Plan Period. Participants who have earned an Award on this basis will receive payment on the same schedule as other Plan Participants. A Participant whose employment with GEI or its Affiliates is terminated prior to the end of the Plan Period for any other reason (whether voluntarily or involuntarily) is not eligible to earn an Award under the Plan. An Actual Award is not vested, earned or payable unless a Participant is (with limited exceptions described above) actually employed by GEI at the end of the Plan Period and all other conditions of the plan for earning an Award have been satisfied. III.4 OTHER PRO-RATA AWARDS Individuals who have been selected for Plan participation and who have a minimum of three months as a Designated Participant will be eligible to receive a pro-rata Award based on the time employed as a Participant and the Objectives achieved for the Plan Period, provided that the Participant is employed by GEI or an Affiliate at the end of the Plan Period. 1. III.5 PLAN FUNDING Estimated payouts for the Plan will be accrued monthly and charged as an expense against the income statement of GEI and its economic units. At the end of each fiscal quarter, the estimated Actual Bonus Pool under the Plan will be evaluated based on actual performance to date. The monthly accrual rate will then be adjusted so that the cost of the Plan is fully accrued at Period-end. Accrual of Awards will not imply vesting of any individual Awards to Participants. III.6 PLAN ADMINISTRATION Responsibility for decisions and/or recommendations regarding Plan administration are divided among the GEI President, the Parent Company CEO, and the Committee. Section III.7 outlines the levels of responsibility and authority assigned to each. Notwithstanding the above, the Committee retains final authority regarding all aspects of Plan administration, and the resolution of any disputes. The Committee may, without notice, amend, suspend, terminate or revoke the Plan. Until an Award has been fully earned and become fully payable upon the expiration of the Plan Period and satisfaction of all conditions of the Plan for an Award to be earned and become payable, the Award may be reduced or eliminated by any such amendment, suspension, termination or revocation of the Plan. All determinations of the President of GEI, the CEO, the Committee and any other person administering the Plan may be made in their subjective good faith discretion. 2. III.7 INCENTIVE PLAN GOVERNANCE Parent Company Area of Administration CEO Committee ---------------------- ------- --------- Overall Plan Design R A Determination of Performance Objectives R A Designated Participants R A - -------------------------------------------------------------------------------- Individual Target Awards R A Target funding for Non- Designated Participants R A - -------------------------------------------------------------------------------- Certification of actual performance against Objectives R A Awards to Designated Participants R A Awards to Non-Designated Participants A - -------------------------------------------------------------------------------- Amendment, suspension, or termination of the Plan R A Adjustments due to extraordinary events R A ----------------------------------------------------------------------- KEY R = Authority A = Authority : to Recommend to Approve ----------------------------------------------------------------------- 3. III.8 ASSIGNMENT OF EMPLOYEE RIGHTS No employee has a claim or right to be a Participant in the Plan, to continue as a Participant, or to be granted an Award under the Plan. GEI is not obligated to give uniform treatment (e.g., Target Award Percentages, discretionary Awards, etc.) to Employees or Participants under the Plan. Participation in the Plan does not give an Employee the right to be retained in the employment of GEI, nor does it imply or confer any other employment rights. Nothing contained in the Plan will be construed to create a contract of employment with any Participant. GEI reserves the right to elect any person to its offices and to remove Employees in any manner and upon any basis permitted by law. Nothing contained in the Plan will be deemed to require GEI to deposit, invest or set aside amounts for the payment of any Awards. Participation in the Plan does not give a Participant any ownership, security, or other rights in any assets of GEI or any of its Affiliates. III.9 WITHHOLDING TAX GEI will deduct from all Awards paid under the Plan any taxes and other amounts required or permitted by law to be withheld. III.10 EFFECTIVE DATE The Plan is effective as of January 1, 1996, and shall remain in effect for the Plan Period ending October 25, 1996 unless otherwise terminated, amended, suspended, revoked or extended by the Committee. III.11 VALIDITY In the event any provision of the Plan is held invalid, void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of the Plan. III.12 APPLICABLE LAW The Plan shall be governed by and construed in accordance with the laws of the State of California. IV. DEFINITIONS 5. IV.1 DEFINITIONS "Actual Bonus Pool" or "Actual Pool" refers to the calculated amount available to be distributed to all Participants under the terms and provisions of the Plan. "Affiliate" refers to any entity owned partially or totally by URS Corporation, including GEI and any entity owned partially or totally by GEI. "Award" refers to any incentive amount earned under the Plan by a Designated or NonDesignated Participant. "Actual Award" refers to the calculated incentive amount earned by a Participant under the terms and provisions of the Plan, before any adjustments caused by the size of the Actual Bonus Pool. "Base Salary" refers to the actual base earnings of a Designated Participant for the Plan Period exclusive of any bonus payments under this Plan or any other prior or present commitment, including contractual arrangements, any salary advance, any allowance or reimbursement, and the value of any basic or supplemental Employee benefits or perquisites. Base Salary refers only to amounts earned while a Designated Participant during the Plan Period. "Compensation/Option Committee" or "Committee" refers to the Compensation/Option Committee of the Board of Directors of the Parent Company. "Designated Participant" refers to an Employee of GEI designated by the President of GEI and the CEO of the Parent Company to participate in the Plan. Designation will be established only in writing. "Discretionary Bonus Pool" or "Discretionary Pool" is the total amount available to be distributed if GEI profit does not reach or exceed $10,500,000 (75% of the Performance Objective). "Employee" refers to an Employee of GEI. "GEI" refers to Greiner Engineering, Inc.. 1. "Non-designated Participant" refers to an Employee of GEI selected to receive an Award under the Plan on the basis of outstanding individual performance. Employee selection will be at the recommendation of the President of GEI within guidelines agreed with and subject to the approval of the CEO of the Parent Company. Unlike Designated Participants, NonDesignated Participants will not be assigned Target Award Percentages or individual Performance Objectives. "Parent Company" refers to URS Corporation. "Performance Objectives" or "Objectives" refers to the pre-established financial goals upon which overall GEI and the economic unit (i.e., GEI, a combination of offices of GEI, or a single office of GEI) performance will be assessed. "Plan" refers to the GEI 1996 Incentive Compensation Plan, as described in this document. Incentives for future years, if any, will be covered by subsequent plan documents. "Plan Period" or "Period" refers to the approximately ten month period beginning January 1, 1996, and ending October 25, 1996, over which performance is measured under this Plan. "Target Award" refers to a Designated Participant's Target Award Percentage, multiplied by the Participant's Base Salary earned during the Plan Period. This amount represents the anticipated payout to the Designated Participant if all GEI and the individual's Performance Objectives are met and all conditions of the Plan for receiving an Award are satisfied. "Target Award Percentage" refers to a percentage of Base Salary assigned to a Designated Participant in accordance with the terms and provisions of the Plan. Non-Designated Participants are not assigned Target Award Percentages. "Target Bonus Pool" or "Target Pool" refers to the sum of the Target Awards for Designated Participants plus an estimated amount for Awards to Non-Designated Participants. "Termination" means the Participant's ceasing his/her service with the Company or any of its Affiliates for any reason whatsoever, whether voluntarily or involuntarily, including by reason of death or permanent disability. 2. V. EXAMPLES OF PLAN OPERATION 3. EXAMPLE OF WEIGHTING CALCULATION (1) The Target Bonus Pool will be weighted based on the aggregate weightings of the individual Performance Objectives for the Designated Participants in the Plan. The following example illustrates the weighting calculation: Target Bonus Pool = $1,000,000 Portion of Target Pool determined by: Profit (75%) $750,000 DSO Performance (18%) $175,000 New Sales (7%) $ 75,000 (1) Weightings may be subject to change based on the Plan measures of the Designated Participants at the end of the Plan Period. 4. EXAMPLE OF ACTUAL BONUS POOL CALCULATION The following example illustrates the weighting of the Performance Objectives and calculates the Actual Bonus Pool: Hypothetical assumptions: o Target Bonus Pool = $1,000,000 GEI 1996 Performance Objective Actual -------------------- --------- ------ ($000) ($000) o Profit $14,000 $14,400 o DSO Performance 88 Days 90 Days o New Sales $109,000 $120,000 Weighting: o Profit portion of Target Pool = $750,000 o DSO portion of Target Pool = $175,000 o New Sales portion of Target Pool = $ 75,000 Interpolation: o Profit Performance = 111.0% o DSO Performance = 60.0% o New Sales Performance = 140.0% Actual Bonus Pool = $1,043,000 ($750,000 * 111.0%) + ($175,000 * 60.0%) + ($75,000 * 140.0%) 5. EXAMPLE OF ACTUAL AWARD ADJUSTMENT The following example illustrates the Actual Award adjustment that occurs if the sum of the individual Actual Awards is greater than the Actual Bonus Pool: Hypothetical assumptions: o Target Bonus Pool = $1,000,000 o Actual Bonus Pool = $1,063,000 o Sum of individual Actual Awards (as calculated) = $1,775,000 o Actual Awards (as calculated) - Participant A = $15,750 - Participant B = $30,000 Pro-rata reduction factor = ($1,063,000 / $1,775,000) = .60 Individual Awards (after reduction) o Participant A = ($15,750 * .60) = $ 9,450 o Participant B = ($30,000 * .60) = $18,000 6. EX-10.35 9 INDEMNIFICATION AGREEMENT EXHIBIT 10.35 INDEMNIFICATION AGREEMENT This Indemnification Agreement (the "Agreement") is made and entered into as of November 6, 1996, between URS Corporation, a Delaware corporation (the "Company"), and Robert D. Glynn, Jr. (the "Indemnitee"). WHEREAS, it is essential that the Company retain and attract as directors and executive officers the most capable persons available; WHEREAS, Indemnitee is an executive officer of the Company; WHEREAS, both the Company and Indemnitee recognize the significant risk of litigation and other claims being asserted against directors and executive officers of public companies in today's environment; WHEREAS, basic protection against undue risk of personal liability of directors and executive officers heretofore has been provided through insurance coverage providing reasonable protection at reasonable costs, and Indemnitee has relied on the availability of such coverage; but there are no assurances that the Company will be able to continue to obtain such insurance on terms providing reasonable protection at reasonable cost; WHEREAS, the By-Laws of the Company (the "By-Laws") require the Company to indemnify directors, officers and certain other persons to the full extent permitted by law and the Indemnitee has been serving and continues to serve as a director and executive officer of the Company in part in reliance on the By-Laws; and WHEREAS, in recognition of Indemnitee's need for substantial protection against personal liability in order to enhance Indemnitee's continued service to the Company in an effective manner, the uncertainty of maintaining satisfactory director and officer liability insurance coverage, and Indemnitee's reliance on the By-Laws, and in part to provide Indemnitee with specific contractual assurance that the protection promised by the By-Laws will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of the ByLaws or any change in the composition of the Company's Board of Directors or acquisition transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement, and, to the extent insurance is maintained, for the continued coverage of Indemnitee under the Company's directors' and officers' liability insurance policies; NOW, THEREFORE, in consideration of the premises and of Indemnitee continuing to serve the Company directly or, at its request, another enterprise, and intending to be legally bound hereby, the parties hereto agree as follows: 1. 1. Certain Definitions. (a) Change in Control: shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Act")), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 20% or more of the total voting power represented by the Company's then outstanding Voting Securities; or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all of the Company's assets. (b) Claim: any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether instituted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other. (c) Expenses: include attorneys' fees and all other costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any Claim relating to any Indemnifiable Event. (d) Indemnifiable Event: any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the Company as a director, officer, employee, trustee, agent, partnership committee member or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or by reason of anything done or not done by Indemnitee in any such capacity. (e) Independent Legal Counsel: an attorney or firm of attorneys, selected in accordance with the provisions of Section 3 hereof, who shall not have otherwise 2. performed services for the Company or Indemnitee within the last five years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements). (f) Potential Change in Control: shall be deemed to have occurred if (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (ii) any person (including the Company) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; (iii) any person, other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, who is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 9.5% or more of the combined voting power of the Company's then outstanding Voting Securities, increases his beneficial ownership of such securities by five percentage points (5%) or more over the percentage so owned by such person; or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. (g) Reviewing Party: any appropriate person or body consisting of a member or members of the Company's Board of Directors or any other person or body appointed by the Board who is not a party to the particular Claim for which Indemnitee is seeking indemnification, or Independent Legal Counsel. (h) Voting Securities: any securities of the Company which vote generally in the election of directors. 2. Basic Indemnification Arrangement. (a) In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest extent permitted by law as soon as practicable but in any event no later than thirty (30) days after written demand is presented to the Company, against any and all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim. If so requested by Indemnitee, the Company shall advance (within ten (10) business days of such request) any and all Expenses to Indemnitee (an "Expense Advance"). Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with (i) liability under Section 16(b) of the Act or under federal or state securities laws for "insider trading", (ii) conduct finally adjudged as constituting active or deliberate dishonesty or willful fraud or illegality, or (iii) conduct finally adjudged as producing an unlawful personal benefit. Notwithstanding anything in this Agreement to the contrary, prior to a Change in Control, Indemnitee shall not be entitled to indemnification 3. pursuant to this Agreement in connection with any Claim initiated by Indemnitee unless the Board of Directors has authorized or consented to the initiation of such Claim. (b) Notwithstanding the foregoing, (i) the obligations of the Company under Section 2(a) hereof shall be subject to the condition that the Reviewing Party shall not have determined (in a written opinion, in any case in which the Independent Legal Counsel referred to in Section 3 hereof is involved) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii) the obligation of the Company to make an Expense Advance pursuant to Section 2(a) hereof shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). If there has not been a Change in Control, the Reviewing Party shall be selected by the Board of Directors, and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of the Company's Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the Independent Legal Counsel referred to in Section 3 hereof. If there has been no determination by the Reviewing Party within thirty days (30) after written demand for indemnification has been made under Section 2(a) hereof or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation in any court in the State of California or the State of Delaware having subject matter jurisdiction thereof and in which venue is proper seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including the legal or factual bases therefor, and the Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Company and Indemnitee. 3. Change in Control. If there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Company's Board of Directors who were directors immediately prior to such Change in Control) then with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity payments and Expense Advances under the By-Laws, this Agreement or any other agreement or Company By-Law now or hereafter in effect relating to Claims for Indemnifiable Events, the Company shall seek legal advice only from Independent Legal Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent the 4. Indemnitee would be permitted to be indemnified under applicable law. The Company shall pay the reasonable fees of the Independent Legal Counsel referred to above and fully indemnify such counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. 4. Establishment of Trust. In the event of a Potential Change in Control, the Company shall, upon written request by Indemnitee, create a trust for the benefit of Indemnitee and from time to time upon written request of Indemnitee shall fund such trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for and defending any Claim relating to an Indemnifiable Event, and any and all judgments, fines, penalties and settlement amounts of any and all Claims relating to an Indemnifiable Event from time to time actually paid or claimed, reasonably anticipated or proposed to be paid; provided that in no event shall more than $100,000 be required to be deposited in any trust created hereunder in excess of amounts deposited in respect of reasonably anticipated Expenses. The amount or amounts to be deposited in the trust pursuant to the foregoing funding obligation shall be determined by the Reviewing Party. The terms of the trust shall provide that (i) the trust shall be irrevocable, (ii) the trustee shall advance, within two (2) business days of a request by the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the trust under the circumstances under which the Indemnitee would be required to reimburse the Company under Section 2(b) hereof, (iii) the trust shall continue to be funded by the Company in accordance with the funding obligation set forth above, (iv) the trustee shall promptly pay to Indemnitee all amounts for which Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) upon a final determination by the Reviewing Party or a court of competent jurisdiction, as the case may be, that Indemnitee has been fully indemnified under the terms of this Agreement, all unexpended funds in such trust shall be returned to the Company. The trustee shall be chosen by Indemnitee. Notwithstanding anything in this Agreement to the contrary, other than to the extent of the amount of funds in the trust corpus, the Company shall have no obligation to indemnify Indemnitee under this Agreement. 5. Indemnification for Additional Expenses. The Company shall indemnify Indemnitee against any and all expenses (including attorneys' fees) and, if requested by Indemnitee, shall (within five (5) business days of such request) advance such expenses to Indemnitee which are incurred by Indemnitee in connection with any action brought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement, the By-Laws or any other agreement or Company By-Law now or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any directors' and officers' liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be. 5. 6. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith. 7. Burden of Proof. In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled. 8. No Presumptions. For purposes of this Agreement, the termination of any claim, action, suit or proceeding by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law shall be a defense to Indemnitee's claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. 9. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the By-Laws or the Delaware General Corporation Law (the "Law") or otherwise. To the extent that a change in the Law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the By-Laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. 6. 10. Liability Insurance. To the extent the Company maintains an insurance policy or policies providing directors' and officers' liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company director or officer. 11. Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal representatives after the expiration of two (2) years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action such shorter period shall govern. 12. Amendments, Etc. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 13. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights. 14. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, the Company By-Laws or otherwise) of the amounts otherwise indemnifiable hereunder. 15. Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, executors and personal and legal 7. representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an executive officer or director of the Company or of any other enterprise at the Company's request. 16. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable in any respect, and the validity and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired and shall remain enforceable to the fullest extent permitted by law. 17. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws. In Witness Whereof, the parties hereto have executed this Agreement as of the day and year first above written. URS CORPORATION By: /s/ Kent P. Ainsworth ------------------------------------- Kent P. Ainsworth Executive Vice President, Chief Financial Officer and Secretary INDEMNITEE /s/ Robert D. Glynn, Jr. ------------------------------------- Robert D. Glynn, Jr. 8. EX-21.1 10 URS CORPORATION AND SUBSIDIARY COMPANIES URS CORPORATION AND SUBSIDIARY COMPANIES The Company and its subsidiaries, excluding spun-off companies, as of January 9, 1997 are, as follows:
State of Percent of Stock Parent and Subsidiaries Incorporation Owned by URS - ----------------------- ------------- ---------------------- URS Corporation (Parent) Delaware ---- URS Greiner Consultants, Inc. Delaware 100 URS Greiner Operating Services, Inc. Delaware 100 URS Acquisition Corporation Nevada 100 URS Greiner Engineering, Inc. Nevada 100 URS Telecommunications, Inc. Delaware 100 (12) URS Consultants, Inc. - Florida Florida 100 (4) (12) URS Greiner, Inc. - California California 100 (1) URS Greiner Consultants, Inc. New York 100 (1) URS Greiner, Inc. - Washington Washington 100 (1) URS Greiner Consultants, Inc. - Colorado Colorado 100 (1) URS Greiner, Inc. - Ohio Ohio 100 (1) Coverdale & Colpitts, Inc. New York 100 (4) (12) Thortec Environmental Systems, Inc. California 100 (12) URS Consultants, Inc. - Texas Texas 100 (1) (12) URS Consultants, Inc. - Ingenieria Delaware 100 (12) Forrest & Cotton International Texas 100 (12) URS Company - Kansas City Missouri 100 (12) Hospital Development Corp. Missouri 100 (3) (12) Thortec Environmental Systems, Inc. Delaware 100 (12) Mitchell Management Systems, Inc. Delaware 100 (12) URS de Mexico Mexico 100 (2)(12) E.C. Driver & Associates, Inc. Florida 100 (5) GEL, Inc. Nevada 100(6) GIC Services, Inc. Nevada 100(6) GIE, Inc. Nevada 100(6) GM Services LLC Nevada 100(7) GPI, Inc. Nevada 100(7) URS Greiner, Inc. Delaware 100(6) Greiner Limited Hong Kong 100(8) Greiner Engineering Limited Hong Kong 100(8) Greiner FSC, Inc. Barbados 100(6) Greiner Licensing Corp. Delaware 100(6) Greiner (Malaysia) Sdn Bhd Malaysia 100(9) M & M Aerial Surveys, Inc. California 100(6)(12) SP Group/Southwest, Inc. Texas 100(6)(12) URS Greiner, Inc. Colorado 100(6) URS Greiner, Inc. Connecticut 100(6) URS Greiner, Inc. Maryland 100(6) URS Greiner, Inc. New York 100(10) URS Greiner, Inc. Great Lakes Michigan 100(6) URS Greiner, Inc. Pacific Nevada 100(6) URS Greiner, Inc. Puerto Rico Puerto Rico 100(11) URS Greiner, Inc. Southern California 100(6) URS Greiner, Inc. Southwest Arizona 100(6) URS Greiner, Inc. West Coast California 100(6) (1) Owned by URS Greiner Consultants, Inc. (Delaware) (2) Owned equally by URS Greiner, Inc. - California and URS Consultants, Inc. - Ingenieria (3) Owned by URS Company - Kansas City (4) Owned by URS Greiner Consultants, Inc. (New York) (5) Owned by URS Consultants, Inc. - Florida (6) Owned by URS Greiner Engineering, Inc. (7) Owned equally by GIC Services, Inc. And Greiner (Malaysia) Sdn Bhd (8) Owned equally by URS Greiner Engineering, Inc. and Greiner International Limited (9) Owned by GIE, Inc. (10) Owned by URS Greiner, Inc. (Connecticut) (11) Owned by URS Greiner, Inc. (Delaware) (12) Inactive
EX-23.1 11 CONSENT OF COOPERS & LYBRAND Coopers Coopers & Lybrand L.L.P. & Lybrand a professional services firm CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the following registration statements of URS Corporation on: Form S-8 (File No. 2-63576) for 41,825 common shares related to the 1979 Stock Option Plan filed February 8, 1980. Form S-8 (File No. 2-99410) for 50,000 common shares related to the 1985 Employee Stock Purchase Plan filed August 1, 1985. Form S-8 (File No. 33-42192) for 261,177 common shares related to the 1985 Employee Stock Purchase Plan filed August 31, 1991. Form S-8 (File No. 33-41047) for 1,000,000 common shares related to the 1979 Stock Incentive Plan filed June 7, 1991 Form S-8 (File No. 33-61230) for 500,000 common shares related to the 1991 Stock Incentive Plan filed April 1, 1993 of our report dated December 17, 1996, on our audits of the consolidated financial statements of URS Corporation and its subsidiaries as of October 31, 1996 and 1995, and for the years ended October 31, 1996, 1995 and 1994, which report is included in this Annual Report on Form 10-K. /s/ COOPERS & LYBRAND L.L.P. ----------------------------------- Coopers & Lybrand L.L.P. San Francisco, California January 6, 1997 Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand International, a limited liability association incorporated in Switzerland. EX-24.1 12 POWER OF ATTORNEY POWER OF ATTORNEY Each person whose signature appears below hereby constitutes and appoints any one of MARTIN M. KOFFEL and KENT P. AINSWORTH, each with full power to act without the other, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign the Annual Report on SEC Form 10-K for fiscal year 1996 of URS Corporation, and any or all amendments thereto, and to file the same with all the exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all extents and purposes as he might or could do in person, thereby ratifying and confirming all that such attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. This Power of Attorney may be executed in separate counterparts. Dated: December 17, 1996. /s/ Richard C. Blum /s/ S. Robert Foley - -------------------------- -------------------------- Richard C. Blum S. Robert Foley Director Director /s/ Emmet J. Cashin, Jr. /s/ Robert D. Glynn, Jr. - -------------------------- -------------------------- Emmet J. Cashin, Jr. Robert D. Glynn, Jr. Director Director /s/ Robert L. Costello /s/ Martin M. Koffel - -------------------------- -------------------------- Robert L. Costello Martin M. Koffel Director Director /s/ Armen Der Marderosian /s/ Richard B. Madden - -------------------------- -------------------------- Armen Der Marderosian Richard B. Madden Director Director /s/ Richard Q. Praeger /s/ William D. Walsh - -------------------------- -------------------------- Richard Q. Praeger William D. Walsh Director Director /s/ Irwin L. Rosenstein - -------------------------- Irwin L. Rosenstein Director EX-27 13 FDS
5 12-MOS OCT-31-1996 NOV-01-1995 OCT-31-1996 22,370 0 80,796 (8,379) 0 127,887 23,423 (7,608) 185,607 70,315 55,369 88 0 0 56,608 185,607 0 305,470 0 187,129 106,286 1,517 3,897 12,055 4,700 7,355 0 0 0 7,355 0.82 0.80
-----END PRIVACY-ENHANCED MESSAGE-----