As filed with the Securities and Exchange
Commission on February 20, 1996
Registration No. 33-_____
---------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
URS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 8711/8712 94-1381538
--------------------------------------------------------------------
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
100 California Street, Suite 500
San Francisco, California 94111-4529
(415) 774-2700
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Kent P. Ainsworth
Vice President and Chief Financial Officer
URS Corporation
100 California Street, Suite 500
San Francisco, California 94111-4529
(415) 774-2700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copies to:
Samuel M. Livermore, Esq.
Sheppard, Mullin, Richter & Hampton LLP
Four Embarcadero Center, 17th Floor
San Francisco, California 94111
Michael W. Tankersley, Esq.
Hughes & Luce, L.L.P.
1717 Main Street, Suite 2800
Dallas, Texas 75201
Exhibit Index on Page 245
Page 1 of 256 <PAGE>
Approximate date of commencement of proposed sale to the public:
March 29, 1996
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. [ ]
--------------------
CALCULATION OF REGISTRATION FEE
Proposed
maximum Proposed
offering maximum
Title of each class Amount price aggregate Amount of
of securities to be per share offering registra-
to be registered registered <F1> price<F1> tion fee
-----------------------------------------------------------------------
Common Shares,
par value $.01 per share 1,401,984 $6-9/16 $9,197,015 $3,172.97
[FN]
<F1> Estimated solely for the purpose of determining the registration fee.
The above calculation is based on the average of the reported high
and low prices of the Common Shares on the New York Stock Exchange
on February 15, 1996.
Page 2 of 256 <PAGE>
URS CORPORATION
FORM S-4 REGISTRATION STATEMENT
CROSS REFERENCE SHEET REQUIRED BY ITEM 501 OF REGULATION S-K
FOR THE PROXY STATEMENT/PROSPECTUS CONSTITUTING PART I HEREIN
Item Number and Description Caption in Proxy
in Part I of Form S-4 Statement/Prospectus
---------------------------- --------------------
A. Information About the Transaction
1. Forepart of Registration Outside Front Cover Page
Statement and Outside Front
Cover Page of Proxy
Statement/Prospectus
2. Inside Front and Outside Available Information; Documents
Back Cover Pages of Proxy Incorporated by Reference; Table
Statement/Prospectus of Contents
3. Risk Factors, Ratio of Summary; Risk Factors; The
Earnings to Fixed Charges, Merger - Interests of Certain
and Other Information Persons in the Transaction; The
Merger - Regulatory Approvals;
Comparison of Rights of
Stockholders of URS and
Greiner - Rights of Dissenting
Stockholders; The Merger -
Certain Federal Income Tax
Consequences
4. Terms of the Transaction The Merger; Comparison of Rights
of Stockholders of URS and
Greiner
5. Pro Forma Financial Summary - Selected Pro Forma
Information Combined Financial Data
6. Material Contacts With the The Merger
Company Being Acquired
7. Additional Information Not Applicable
Required for Reoffering by
Persons and Parties Deemed
to be Underwriters
8. Interests of Named Experts The Merger - Interests of
and Counsel Certain Persons in the
Transaction
Page 3 of 256 <PAGE>
Item Number and Description Caption in Proxy
in Part I of Form S-4 Statement/Prospectus
--------------------------- ---------------------
9. Disclosure of Commission Comparison of Rights of
Position on Indemnification Stockholders of URS and
for Securities Act Greiner - Limitation of
Liabilities. Liability and Indemnification of
Directors
B. Information About the Registrant
10. Information With Respect to Not Applicable
S-3 Registrants
11. Incorporation of Certain Not Applicable
Information by Reference
12. Information With Respect to Selected Financial Information;
S-2 or S-3 Registrants Summary
13. Incorporation of Certain Documents Incorporated by
Information by Reference Reference
14. Information With Respect to Not Applicable
Registrants Other Than S-3
or S-2 Registrants
C. Information About the Company Being Acquired
15. Information With Respect to Not Applicable
S-3 Companies
16. Information With Respect to Selected Financial Information;
S-2 or S-3 Companies Summary
17. Information With Respect to Not Applicable
Companies Other Than S-3 or
S-2 Companies
D. Voting and Management Information
18. Information if Proxies, General Information; The Greiner
Consents or Authori- Stockholders' Meeting; The
zations Are to be Solicited Merger - Interests of Certain
Persons in the Transaction; URS
Management; Greiner Management
19. Information if Proxies, Not Applicable
Consents or Authori-
zations Are Not to be
Solicited, or in an
Exchange Offer
Page 4 of 256 <PAGE>
PART I.
INFORMATION REQUIRED IN THE PROSPECTUS
GREINER ENGINEERING, INC.
909 East Las Colinas Boulevard
Suite 1900
Irving, Texas 75039
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
GREINER ENGINEERING, INC.
To Be Held March 26, 1996
To the Stockholders of Greiner Engineering, Inc.:
NOTICE is hereby given that the Annual Meeting of the
Stockholders of Greiner Engineering, Inc., a Nevada corporation
("Greiner"), will be held at the Doubletree Hotel at Park West,
1590 LBJ Freeway, Dallas, Texas 75234, at 11:00 a.m. local time on
Tuesday, March 26, 1996, for the following purposes:
(1) To consider and vote on a proposal to approve and adopt a
merger pursuant to which, among other things, (a) a wholly-owned
subsidiary of URS Corporation will be merged with and into Greiner
(the "Merger"), which will result in Greiner becoming a wholly-
owned subsidiary of URS Corporation ("URS"), and (b) each
stockholder of Greiner will receive for each share of Greiner Common
Stock owned as of the Effective Time of the Merger $13.50 in cash
plus 0.298 shares of URS Common Stock. Details of the Merger are
set forth in the accompanying Proxy Statement/Prospectus, which you
should read carefully;
(2) To elect a Board of Directors to hold office until the
next annual meeting and until their successors are elected, if for
any reason the Merger is not consummated; and
(3) To transact such other business as may be properly brought
before the meeting.
The record date for the determination of stockholders entitled
to notice of and to vote at the meeting is February 22, 1996.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT
THE MEETING.
By Order of the Board of Directors
MELISSA K. HOLDER
Corporate Secretary
February 20, 1996
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON,
PLEASE SIGN AND RETURN THE ACCOMPANYING PROXY WITHOUT DELAY IN THE
ENCLOSED POSTAGE PREPAID ENVELOPE. THE PROXY IS REVOCABLE AND WILL
NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU ATTEND THE
MEETING.
Page 5 of 256 <PAGE>
PROXY STATEMENT/PROSPECTUS
GENERAL INFORMATION
This Proxy Statement/Prospectus is furnished (1) in connection
with the solicitation by Greiner of proxies to be voted at the
Annual Meeting of Stockholders of Greiner (the "Greiner Meeting") to
be held on Tuesday, March 26, 1996 at the Doubletree Hotel at Park
West, 1590 LBJ Freeway, Dallas, Texas 75234, at 11:00 a.m., local
time, with respect to (a) the Merger of URS Acquisition Corporation,
a Nevada corporation and wholly-owned subsidiary of URS, with and
into Greiner pursuant to the terms and conditions of that certain
Agreement and Plan of Merger among Greiner, URS and URS Acquisition
Corporation (the "Merger Agreement"), dated January 10, 1996, and
(b) the election of directors of Greiner to serve if the Merger is
not consummated for any reason, and (2) as the Prospectus of URS
covering the issuance of shares of URS common stock, par value
$.01 per share ("URS Common Stock"), to the stockholders of Greiner
pursuant to the Merger. All information herein with respect to URS
has been furnished by URS, and all information herein with respect
to Greiner has been furnished by Greiner. Capitalized terms not
otherwise defined herein have the meanings assigned to such terms in
the Merger Agreement.
As a result of the Merger, Greiner will become a wholly-owned
subsidiary of URS. Each share of Greiner common stock, par value
$.50 per share ("Greiner Common Stock"), issued and outstanding
immediately prior to the Effective Time of the Merger (as defined in
the Merger Agreement) will be converted into the right to receive
$13.50 in cash plus 0.298 shares of URS Common Stock, representing
an aggregate amount of approximately $64,000,000 and approximately
1,400,000 shares of URS Common Stock. The consideration to be
delivered in the Merger is referred to herein as the "Merger
Consideration." The closing of the Merger will occur promptly after
the satisfaction of the conditions precedent contained in the Merger
Agreement. All options outstanding at the Effective Time of the
Merger that were issued under the 1981 Stock Option Plan of Greiner
or under the 1991 Stock Option Plan of Greiner (collectively, the
"Greiner Options") will be cancelled; provided, however, that the
holders of Greiner Options will be entitled to receive a cash
payment equal to the excess, if any, between the value of the per
share Merger Consideration, based on the closing price per share of
URS Common Stock as quoted in The Wall Street Journal on the trading
-----------------------
day immediately preceding the Closing Date, over the exercise price
of the option. See "The Merger - The Merger Agreement"; "The
Merger - Merger Consideration;" "The Merger - Effective Time of the
Merger."
As a result of the Merger, former stockholders of Greiner will
hold approximately 16% of the issued and outstanding shares of URS
Common Stock.
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Page 6 of 256 <PAGE>
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN MATTERS WHICH
SHOULD BE CONSIDERED BY THE STOCKHOLDERS OF GREINER WITH RESPECT TO
THE MERGER.
This Proxy Statement/Prospectus and the accompanying form of
proxy are first being mailed to stockholders of Greiner on or about
February 23, 1996.
____________________
NEITHER THE MERGER NOR THE SECURITIES OF URS TO BE ISSUED IN
CONNECTION WITH THE MERGER HAVE BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
____________________
The date of this Proxy Statement/Prospectus is February 20, 1996.
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Page 7 of 256 <PAGE>
AVAILABLE INFORMATION
URS and Greiner are subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, file reports, proxy statements
and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information filed by URS and Greiner with the Commission can be
inspected and copied at the public reference facilities maintained
by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Regional Offices of the
Commission located at Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such
material can also be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. URS Common Stock and Greiner Common Stock are
quoted on the New York Stock Exchange and the Pacific Stock
Exchange. Reports and other information concerning URS and Greiner
can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
URS has filed with the Commission a Registration Statement
covering the shares of URS Common Stock to be issued as a result of
the Merger. This Proxy Statement/Prospectus, which constitutes a
part of the Registration Statement on Form S-4 (the "Registration
Statement"), does not contain all of the information set forth in
the Registration Statement, certain items of which are contained in
schedules and exhibits to the Registration Statement as permitted by
the rules and regulations of the Commission. For further informa-
tion, reference is made to the Registration Statement, including the
schedules and exhibits filed as a part thereof or incorporated by
reference therein. Statements contained herein concerning the
provisions of documents are necessarily summaries of such documents,
and each such statement is qualified in its entirety by reference to
the copy of the applicable document filed as an exhibit hereto or as
otherwise filed with the Commission. The Registration Statement and
the exhibits and schedules thereto may be inspected, without charge,
and copies thereof may be obtained at prescribed rates, at the
offices of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549.
URS hereby undertakes to supply by means of a post-effective
amendment all information concerning the Merger and URS that were
not the subject of and included in the Registration Statement when
it became effective.
____________________
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement/Prospectus,
and, if given or made, such information or representation must not
be relied upon as having been authorized by URS or Greiner. This
Proxy Statement/Prospectus does not constitute an offer to sell, or
-iv-
Page 8 of 256 <PAGE>
a solicitation of an offer to purchase, the securities offered by
this Proxy Statement/Prospectus, or a solicitation of a proxy from
any person, in any jurisdiction in which it is unlawful to make such
an offer, solicitation of an offer or proxy solicitation. Neither
the delivery of this Proxy Statement/Prospectus nor any distribution
of the securities made under this Proxy Statement/Prospectus shall,
under any circumstances, create an implication that there has been
no change in the affairs of URS or Greiner at any time subsequent to
the date of this Proxy Statement/Prospectus.
____________________
URS was incorporated in California in 1951 and reincorporated
in Delaware in 1976. The term "URS" as used herein, includes all
subsidiaries and predecessors of URS, except as the context may
otherwise require. Greiner was incorporated in California in 1954
and reincorporated in Nevada in 1986. The term "Greiner" as used
herein, includes all subsidiaries and predecessors of Greiner,
except as the context may otherwise require.
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Page 9 of 256 <PAGE>
TABLE OF CONTENTS
Page
----
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . ii
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . iv
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Companies . . . . . . . . . . . . . . . . . . . . . 1
Greiner Meeting . . . . . . . . . . . . . . . . . . . . 2
The Merger . . . . . . . . . . . . . . . . . . . . . . . 3
Recommendation of the Board of Directors of Greiner . . 8
Selected URS Historical Financial Data . . . . . . . . . 9
Selected Greiner Historical Financial Data . . . . . . . 10
Selected Pro Forma Combined Financial Data . . . . . . . 11
Per Share Data - Historical and Pro Forma . . . . . . . 12
Market Price Data of Common Stock . . . . . . . . . . . 14
Dividend Policy . . . . . . . . . . . . . . . . . . . . 16
THE GREINER STOCKHOLDERS' MEETING . . . . . . . . . . . . . . 17
Place, Time, and Date of Greiner Meeting . . . . . . . . 17
Purpose of the Greiner Meeting . . . . . . . . . . . . . 17
Vote Required . . . . . . . . . . . . . . . . . . . . . 17
Revocability of Proxies . . . . . . . . . . . . . . . . 18
Cost of Soliciting Proxies . . . . . . . . . . . . . . . 19
Record Date . . . . . . . . . . . . . . . . . . . . . . 19
Dissenters' Rights . . . . . . . . . . . . . . . . . . . 19
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . 20
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . 24
General . . . . . . . . . . . . . . . . . . . . . . . . 24
Effective Time of the Merger . . . . . . . . . . . . . . 24
Merger Consideration . . . . . . . . . . . . . . . . . . 25
Conversion and Exchange of Greiner Common Stock
Certificates . . . . . . . . . . . . . . . . . . . . . . 26
Background of the Merger . . . . . . . . . . . . . . . . 27
Greiner Financial Advisor . . . . . . . . . . . . . . . 28
Reasons for the Merger; Recommendation of the Board of
Directors of Greiner . . . . . . . . . . . . . . . . . . 29
Directors and Executive Officers after the Merger . . . 30
Registration and Listing . . . . . . . . . . . . . . . . 30
The Merger Agreement . . . . . . . . . . . . . . . . . . 31
Accounting Treatment . . . . . . . . . . . . . . . . . . 42
Certain Federal Income Tax Consequences . . . . . . . . 42
Regulatory Approvals . . . . . . . . . . . . . . . . . . 44
Rights of Dissenting Stockholders . . . . . . . . . . . 44
Financing of the Merger . . . . . . . . . . . . . . . . 44
Pro Forma Financial Information . . . . . . . . . . . . 47
Interests of Certain Persons in the Transaction . . . . 53
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Page 10 of 256 <PAGE>
Page
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ANNUAL ELECTION OF GREINER BOARD OF DIRECTORS . . . . . . . . 54
Nominees for the Greiner Board of Directors . . . . . . 54
1995 Meetings of the Greiner Board of Directors . . . . 56
Committees of the Greiner Board of Directors . . . . . . 56
Director Compensation . . . . . . . . . . . . . . . . . 57
Compensation Committee Report on Executive Compensation 57
Performance Graph . . . . . . . . . . . . . . . . . . . 60
Independent Accountants . . . . . . . . . . . . . . . . 61
Other Matters . . . . . . . . . . . . . . . . . . . . . 61
SELECTED FINANCIAL INFORMATION . . . . . . . . . . . . . . . 62
Selected URS Historical Financial Data . . . . . . . . . 62
URS Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . 63
Selected Greiner Historical Financial Data . . . . . . . 67
Greiner Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . 68
INFORMATION CONCERNING URS . . . . . . . . . . . . . . . . . 73
Overview . . . . . . . . . . . . . . . . . . . . . . . . 73
Markets . . . . . . . . . . . . . . . . . . . . . . . . 74
Competition . . . . . . . . . . . . . . . . . . . . . . 76
Clients . . . . . . . . . . . . . . . . . . . . . . . . 76
Contract Pricing and Terms of Engagement . . . . . . . . 76
Backlog, Project Designations and Indefinite Delivery
Contracts . . . . . . . . . . . . . . . . . . . . . . . 77
Employees . . . . . . . . . . . . . . . . . . . . . . . 79
Acquisitions . . . . . . . . . . . . . . . . . . . . . . 79
Properties . . . . . . . . . . . . . . . . . . . . . . . 79
Legal Proceedings . . . . . . . . . . . . . . . . . . . 79
Description of URS Capital Stock . . . . . . . . . . . . 80
INFORMATION CONCERNING GREINER . . . . . . . . . . . . . . . 81
Overview . . . . . . . . . . . . . . . . . . . . . . . . 81
Competition . . . . . . . . . . . . . . . . . . . . . . 82
Sales and Backlog . . . . . . . . . . . . . . . . . . . 82
Compliance with Environmental Laws . . . . . . . . . . . 83
Employees . . . . . . . . . . . . . . . . . . . . . . . 84
Properties . . . . . . . . . . . . . . . . . . . . . . . 84
Legal Proceedings . . . . . . . . . . . . . . . . . . . 84
URS MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . 85
Executive Officers of URS . . . . . . . . . . . . . . . 85
Directors of URS . . . . . . . . . . . . . . . . . . . . 86
Executive Compensation . . . . . . . . . . . . . . . . . 89
Directors' Compensation . . . . . . . . . . . . . . . . 93
Employment Agreements . . . . . . . . . . . . . . . . . 93
Principal URS Stockholders . . . . . . . . . . . . . . . 96
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Page 11 of 256 <PAGE>
Page
----
GREINER MANAGEMENT . . . . . . . . . . . . . . . . . . . . . 99
Identification of Executive Officers and Other Key
Employees . . . . . . . . . . . . . . . . . . . . . . . 99
Executive Compensation and Other Information . . . . . . 102
Beneficial Ownership of Greiner Common Stock . . . . . . 107
Principal Stockholders of Greiner . . . . . . . . . . . 108
COMPARISON OF RIGHTS OF STOCKHOLDERS OF URS AND GREINER . . . 110
Cumulative Voting . . . . . . . . . . . . . . . . . . . 110
Stockholder Power to Call Special Stockholders Meetings 110
Size of Board of Directors . . . . . . . . . . . . . . . 111
Classified Board of Directors . . . . . . . . . . . . . 111
Removal of Directors . . . . . . . . . . . . . . . . . . 111
Voting Requirements . . . . . . . . . . . . . . . . . . 112
Business Combinations/Reorganizations . . . . . . . . . 113
Rights of Dissenting Stockholders . . . . . . . . . . . 115
Inspection of Books and Records . . . . . . . . . . . . 115
Dividends . . . . . . . . . . . . . . . . . . . . . . . 116
Limitation of Liability and Indemnification of
Directors . . . . . . . . . . . . . . . . . . . . . . . 116
AFFILIATES' RESTRICTION ON SALE OF URS COMMON STOCK . . . . . 119
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 120
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . F-1
Consolidated Financial Statements of URS . . . . . . . . F-2
Consolidated Financial Statements of Greiner . . . . . . F-23
APPENDICES
Appendix A - Fairness Opinion of Houlihan Lokey
Howard & Zukin . . . . . . . . . . . . . . . . . . . A-1
Appendix B - Agreement and Plan of Merger among
Greiner Engineering, Inc., URS Corporation and
URS Acquisition Corporation . . . . . . . . . . . . . B-1
-viii-
Page 12 of 256 <PAGE>
SUMMARY
The following summary of certain information contained
elsewhere in this Proxy Statement/Prospectus does not purport to be
complete and is qualified in its entirety by, and should be read in
conjunction with, the more detailed information appearing elsewhere
in this Proxy Statement/Prospectus and the documents incorporated
herein by reference and the Appendices attached hereto. The
information contained in the Proxy Statement/Prospectus with respect
to URS and its affiliates has been supplied by URS, and the
information with respect to Greiner and its affiliates has been
supplied by Greiner. Certain capitalized terms which are used but
not defined in this summary are defined elsewhere in this Proxy
Statement/Prospectus or in the Merger Agreement.
The Companies
-------------
URS . . . . . . . . . . URS Corporation, a Delaware corporation,
is a professional services firm special-
izing in three major areas: planning;
design; and program and construction
management services for engineering,
architectural and environmental projects.
URS serves public and private sector
clients throughout the United States in
two principal markets: infrastructure
projects involving transportation
systems, institutional and commercial
facilities and water resources; and
environmental projects involving
hazardous waste management and pollution
control. The principal executive offices
of URS are located at 100 California
Street, Suite 500, San Francisco,
California 94111-4529, and its telephone
number is (415) 774-2700. See
"Information Concerning URS."
URS Acquisition Corporation ("Acquisition
Corp.") is a newly formed Nevada
corporation and a wholly-owned subsidiary
of URS. The principal executive offices
of Acquisition Corp. are located at
100 California Street, Suite 500,
San Francisco, California 94111-4529, and
its telephone number is (415) 774-2700.
Greiner . . . . . . . . Greiner Engineering, Inc., a Nevada
corporation, is a professional services
firm operating in the engineering and
architectural design services industry,
which provides a broad range of
engineering, planning, architectural,
environmental analysis, design,
-1-
Page 13 of 256 <PAGE>
surveying, program management and other
services to public and private sector
clients throughout the United States and
abroad. The principal executive offices
of Greiner are located at 909 East Las
Colinas Blvd., Suite 1900, Irving, Texas
75039, and its telephone number is
(214) 869-1001. See "Information
Concerning Greiner."
Greiner Meeting
---------------
Time and Location . . . The Annual Meeting of Stockholders of
Greiner will be held on Tuesday,
March 26, 1996 at the Doubletree Hotel at
Park West, 1590 LBJ Freeway, Dallas,
Texas 75234 at 11:00 a.m., local time,
for the purpose of considering and voting
on a proposal to approve and adopt the
Merger, and to elect directors of Greiner
to serve if the Merger is not consummated
for any reason. Only holders of record
of shares of Greiner Common Stock at the
close of business on February 22, 1996
will be entitled to vote at the Greiner
Meeting. See "The Greiner Stockholders'
Meeting - Place, Time and Date of Greiner
Meeting;" "The Greiner Stockholders'
Meeting - Purpose of the Greiner
Meeting."
Voting . . . . . . . . The affirmative vote of the holders of a
majority of the outstanding shares of
Greiner Common Stock is required to
approve the Merger. All of Greiner's
directors have indicated that they will
vote their shares of Greiner Common Stock
for the approval of the Merger at the
Greiner Meeting. The directors and
executive officers of Greiner as a group
hold 14.13% of the outstanding Greiner
Common Stock. Delivery of the proxy
solicited hereby or attendance and voting
at the Greiner Meeting will revoke and
supersede any prior proxy. Participants
in the Greiner Performance Plan will be
asked to direct the Trustees as to how to
vote the Greiner Common Stock allocated
to their accounts. Shares as to which no
direction is received from a plan
participant will be voted in accordance
with the recommendation of an advisor
retained by the Trustees. See "The
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Page 14 of 256 <PAGE>
Greiner Stockholders' Meeting - Vote
Required."
The Merger
----------
General Terms . . . . . On January 10, 1996, URS, Greiner and
Acquisition Corp. entered into the Merger
Agreement, in which the parties set forth
the terms and conditions of the merger of
Acquisition Corp. with and into Greiner.
A copy of the Merger Agreement is
included in this Proxy Statement/
Prospectus as Appendix B. See "The
Merger - The Merger Agreement."
By virtue of the Merger, each of the
shares of Greiner Common Stock issued and
outstanding immediately prior to the
Effective Time of the Merger will
automatically be converted into and
exchanged for the right to receive, in
the aggregate, the Merger Consideration,
consisting of the cash and shares of URS
Common Stock described below. See "The
Merger."
Merger Consideration . Each holder of Greiner Common Stock will
be entitled to receive, for each
outstanding share of Greiner Common
Stock, $13.50 in cash plus 0.298 shares
of URS Common Stock, for an aggregate
amount of approximately $64,000,000 and
approximately 1,400,000 shares of URS
Common Stock (the "Merger Considera-
tion"). No interest will accrue or be
payable with respect to the cash portion
of the Merger Consideration. See "The
Merger - Merger Consideration."
Fractional Shares . . . No fractional shares of URS Common Stock
will be issued in connection with the
Merger. Fractional shares otherwise
issuable will be settled for cash,
without interest, based on the closing
price per share of URS Common Stock as
quoted in The Wall Street Journal on the
-----------------------
trading day immediately preceding the
Closing Date.
Options . . . . . . . . All Greiner Options outstanding at the
Effective Time of the Merger will be
cancelled; provided, however, that the
holders of Greiner Options will be
-3-
Page 15 of 256 <PAGE>
entitled to receive a cash payment equal
to the excess, if any, of the per share
Merger Consideration, based on the
closing price per share of URS Common
Stock as quoted in The Wall Street
---------------
Journal on the trading day immediately
-------
preceding the Closing Date, over the
exercise price of the option. See "The
Merger - Merger Consideration."
Issuance and Exchange
of Share Certificates . At the Effective Time of the Merger, each
holder of a certificate that represented
Greiner Common Stock prior to consumma-
tion of the Merger, will be entitled,
upon surrender of the certificate, to
receive a certificate or certificates
representing the number of whole shares
of URS Common Stock to which such holder
is entitled pursuant to the Merger
Agreement, plus $13.50 for each share of
Greiner Common Stock surrendered. The
Merger Consideration will not be
delivered until a stockholder's
certificates evidencing Greiner Common
Stock have been surrendered by the
stockholder or his or her nominee.
Greiner stockholders will be furnished
separately a Letter of Transmittal to
facilitate the delivery of Greiner Common
Stock certificates to the Exchange Agent
designated to disburse the Merger
Consideration. PLEASE DO NOT DELIVER
YOUR STOCK CERTIFICATES TO GREINER OR THE
EXCHANGE AGENT UNTIL YOU RECEIVE THE
LETTER OF TRANSMITTAL AND INSTRUCTIONS
FROM THE EXCHANGE AGENT. See "The
Merger - Conversion and Exchange of
Greiner Common Stock Certificates."
Comparison of Rights of
Stockholders of URS
and Greiner . . . . . . The rights of Greiner's stockholders are
currently governed by Nevada law and by
Greiner's Restated Articles of
Incorporation and Bylaws. Upon the
effectiveness of the Merger, Greiner's
stockholders will become stockholders of
URS, a Delaware corporation, and their
rights as URS stockholders will be
governed by Delaware law and by URS's
Amended and Restated Certificate of
-4-
Page 16 of 256 <PAGE>
Incorporation and Bylaws. See
"Comparison of Rights of Stockholders of
URS and Greiner."
Conditions to Merger . The obligations of URS and Greiner to
consummate the Merger are subject to the
satisfaction of certain conditions set
forth in the Merger Agreement, including
(i) that the conditions to the receipt by
URS of funds from its lenders to finance
the Merger have been satisfied, (ii) the
registration under the Securities Act of
the URS Common Stock to be issued in the
Merger has become effective, (iii) the
Merger has been approved by the requisite
vote of Greiner Stockholders, (iv) there
has been no material adverse change
affecting Greiner or URS and (v) there is
no litigation challenging the Merger.
The waiting period under the Hart-Scott-
Rodino Antitrust Improvement Act of 1976
("HSR Act") was terminated on January 4,
1996. URS has entered into a Secured
Credit Agreement with certain Lenders to
obtain the funds for the cash portion of
the Merger Consideration. The obligation
of the Lenders to provide such funds is
subject to satisfaction of a number of
conditions precedent by each of URS and
Greiner, including that URS and Greiner
meet specified financial tests, that
there have been no material adverse
change in the respective businesses of
URS and Greiner, and that all conditions
precedent to the Merger have been
satisfied. See "The Merger - The Merger
Agreement;" and "The Merger - Financing
of the Merger."
Termination, Waiver and
Amendment . . . . . . . The Merger Agreement may be terminated at
any time prior to the Effective Time by
the written mutual consent of URS and
Greiner or by either party if (i) Greiner
stockholder approval is not obtained,
(ii) a condition precedent to the
terminating party's obligation to
consummate the Merger is not fulfilled or
(iii) the other party breaches a material
representation, warranty, covenant or
other agreement contained in the Merger
Agreement. In the event that either
party terminates the Merger Agreement
because of a breach of any of the
-5-
Page 17 of 256 <PAGE>
foregoing by the other party, and in the
event such breach is the result of
negligence, the damages recoverable by
the non-breaching party shall not exceed
the sum of $500,000; but, provided,
further, that in the event that such
breach is the result of recklessness or
willful conduct, the amount of damages
shall not be limited. See "The Merger -
The Merger Agreement."
The Merger Agreement may be amended by
the parties' Boards of Directors prior to
approval of the Merger Agreement by
Greiner stockholders; after Greiner
stockholder approval has been obtained,
no amendment that by law requires the
approval of the Greiner stockholders may
be made without first obtaining such
approval. See "The Merger - The Merger
Agreement."
In the event that Greiner or any of its
officers or directors enter into any
negotiations or discussions for any
reason which shall constitute a breach of
the no-shop provision of the Merger
Agreement, Greiner has agreed to
immediately reimburse URS for all
expenses and costs incurred by URS in
connection with the Merger. In the event
that Greiner or any of its officers or
directors enters into any letter of
intent, agreement or understanding with
any party other than URS relating to the
sale of all or a substantial part of the
assets, business or stock of Greiner
during the period prior to the Closing or
within nine months after termination of
the Merger Agreement for any reason,
Greiner has agreed to pay URS a
termination fee of $5,000,000. See "The
Merger - The Merger Agreement."
Accounting Treatment . The Merger is expected to be treated as a
"purchase" under generally accepted
accounting principles. See "The Merger -
Accounting Treatment."
Tax Consequences of
The Merger . . . . . . A Greiner stockholder who exchanges
Greiner Common Stock for URS Common Stock
and cash generally will recognize income
or gain to the extent the cash and the
-6-
Page 18 of 256 <PAGE>
fair market value of the URS Common Stock
received as Merger Consideration exceeds
the Greiner stockholder's adjusted tax
basis in the Greiner Common Stock
surrendered in the exchange. The Merger
is not intended to constitute a tax-free
"reorganization" within the meaning of
Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code"). See
"The Merger - Certain Federal Income Tax
Consequences."
Effect of Merger for
Performance Plan
Participants . . . . . At the Effective Time of the Merger,
shares of Greiner Common Stock held in
participant accounts by the Greiner
Performance Plan will be converted into
shares of URS Common Stock and cash on
the same basis as other shares of Greiner
Common Stock. No federal or state income
tax will be currently due from Greiner
Performance Plan participants with
respect to any gain realized from receipt
of the Merger Consideration. Any
subsequent distribution of the Merger
Consideration by the Plan will result in
the receipt of taxable income by the
recipient unless the distributed funds
are reinvested in a tax qualified plan or
other investment vehicle in accordance
with the requirements of the Code.
Dissenters' Rights . . Based on the structure of the Merger and
Nevada corporate law, the holders of
Greiner Common Stock do not have any
rights to dissent to the Merger and seek
a judicial determination of the value of
the shares of Greiner Common Stock. See
"The Merger - Rights of Dissenting
Stockholders."
Management of URS
Following the Merger . The management of URS after the Merger
will not change, except that after the
Effective Time of the Merger,
Mr. Robert L. Costello will become a
director and executive officer of URS.
See "The Merger - Directors and
Executive Officers After the Merger."
-7-
Page 19 of 256 <PAGE>
Recommendation of the Board of Directors of Greiner
---------------------------------------------------
Approval by the Board . The Greiner Board has unanimously
approved the Merger Agreement and the
Merger and determined that the Merger is
in the best interests of Greiner and its
stockholders. THE GREINER BOARD
RECOMMENDS THAT GREINER STOCKHOLDERS VOTE
FOR APPROVAL OF THE MERGER. For a
---
discussion of the factors considered by
the Greiner Board in reaching its
decision, see "The Merger - Reasons for
the Merger; Recommendations of the Board
of Directors of Greiner."
Fairness Opinion . . . Among the factors considered by the
Greiner Board in approving the Merger was
the receipt of the opinion of Houlihan
Lokey Howard & Zukin ("Houlihan Lokey")
that the consideration to be received by
the public stockholders of Greiner in
connection with the Merger is fair to
them from a financial point of view. See
"The Merger Agreement - Greiner Financial
Advisor" and Appendix A -- Fairness
Opinion of Houlihan Lokey Howard & Zukin.
Annual Meeting . . . . The Greiner Meeting will also include the
annual election of directors to serve if
the Merger is not consummated for any
reason. THE GREINER BOARD RECOMMENDS
THAT YOU VOTE FOR EACH NOMINEE FOR THE
---
GREINER BOARD OF DIRECTORS.
-8-
Page 20 of 256 <PAGE>
Selected URS Historical Financial Data
--------------------------------------
The selected historical consolidated financial information of
URS shown below for the five years ended October 31, 1995 has been
derived from URS's audited consolidated financial statements. This
information should be read in conjunction with URS's consolidated
financial statements and related notes included in this Proxy
Statement/Prospectus. Historical operating results are not
necessarily indicative of the results that may be expected in any
future period.
<TABLE>
<CAPTION>
Years Ended October 31,
------------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue $179,769,000 $164,088,000 $145,761,000 $136,793,000 $122,838,000
Net income $ 5,056,000 $ 4,439,000 $ 1,293,000 $ 4,268,000 $ 2,292,000
Earnings per share:
Primary $ .68 $ .60 $ .18 $ .55 $ .40
Fully diluted $ .67 $ .60 $ .18 $ .55 $ .38
Balance Sheet Data
(end of period):
Total assets $ 74,075,000 $ 65,214,000 $ 58,074,000 $ 54,892,000 $ 49,831,000
Working capital $ 36,307,000 $ 33,674,000 $ 27,684,000 $ 26,836,000 $ 21,891,000
Long-term liabilities $ 11,197,000 $ 10,650,000 $ 9,846,000 $ 10,038,000 $ 10,621,000
Stockholders' equity $ 39,478,000 $ 33,973,000 $ 29,389,000 $ 27,878,000 $ 23,264,000
</TABLE>
-9-
Page 21 of 256 <PAGE>
Selected Greiner Historical Financial Data
------------------------------------------
The selected historical consolidated financial information of
Greiner shown below for the five years ended December 31, 1995 has
been derived from Greiner's audited consolidated financial state-
ments and should be read in conjunction therewith. Historical
operating results are not necessarily indicative of the results that
may be expected in any future period.
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------------------------------------
1995<F1> 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue $154,175,000 $151,856,000 $140,555,000 $131,803,000 $127,012,000
Net income (loss) $ (5,482,000) $ 3,979,000 $ 4,226,000 $ 4,040,000 $ 3,415,000
Earnings (loss) per share $ (1.15) $ .82 $ .88 $ .86 $ .75
Cash dividends per share $ .30 $ .28 $ .24 $ .24 $ .20
Balance Sheet Data
(end of period):
Total assets $ 72,146,000 $ 76,189,000 $ 73,398,000 $ 67,813,000 $ 61,941,000
Working capital $ 34,415,000 $ 41,232,000 $ 37,824,000 $ 34,669,000 $ 32,599,000
Long-term liabilities $ 1,297,000 $ 1,388,000 $ 1,367,000 $ 1,344,000 $ 1,663,000
Stockholders' equity $ 46,954,000 $ 55,226,000 $ 52,098,000 $ 48,424,000 $ 42,888,000
</TABLE>
[FN]
<F1> During 1995, Greiner initiated various activities to
restructure certain of its operations in order to reduce its
cost structure and improve future profitability, resulting in
$3,700,000 of restructuring charges. Also in 1995, Greiner
reduced the carrying value of its investment in a partnership
by $2,300,000.
-10-
Page 22 of 256 <PAGE>
Selected Pro Forma Combined Financial Data
------------------------------------------
The following unaudited selected pro forma financial
information is based on the historical consolidated balance sheets
and related consolidated statements of operations of URS and Greiner
adjusted to give effect to the Merger using the purchase method of
accounting for business combinations.
The unaudited pro forma combined condensed balance sheets as of
October 31, 1995 assume that the Merger occurred as of that date.
The unaudited pro forma combined condensed statement of operations
for the twelve months ended October 31, 1995 assumes that the Merger
occurred as of November 1, 1994. In order to present comparable
data for the combining companies, the pro forma statement of
operations includes the historical data for Greiner for the twelve
month period ended December 31, 1995.
This pro forma financial information should be read in
conjunction with the unaudited pro forma combined condensed
financial information and notes thereto included elsewhere in this
Proxy Statement/Prospectus. The unaudited pro forma financial
information is not necessarily indicative of the operating results
or financial position that would have occurred had the Merger been
consummated on the dates indicated in the preceding paragraph nor is
it necessarily indicative of future operating results or financial
position of the combined companies.
Twelve Months
Ended
October 31, 1995
----------------
Pro Forma Income Statement Data:
Revenue $333,944,000
Net income (loss) ($4,276,000)
Earnings (loss) per share ($0.50)
Cash dividends per share -
Pro Forma Balance Sheet Data:
Total assets $159,242,000
Working capital $50,528,000
Long-term liabilities $57,819,000
Stockholders' equity $49,453,000
-11-
Page 23 of 256 <PAGE>
Per Share Data - Historical and Pro Forma
-----------------------------------------
Set forth below is certain common share data of URS and Greiner
on an historical basis, a pro forma basis for URS and an equivalent
pro forma basis for Greiner. The URS pro forma data was derived by
combining historical consolidated financial information of URS and
Greiner, giving effect to the Merger under the purchase method of
accounting for business combinations. The equivalent pro forma per
common share data for Greiner was calculated by multiplying the URS
pro forma per common share data by the exchange ratio of .298.
This information should be read in conjunction with the
historical financial statements of URS and Greiner included
elsewhere in this Proxy Statement/Prospectus and the unaudited pro
forma combined condensed financial information included elsewhere in
the Proxy Statement/Prospectus.
Fiscal Year
Ended
October 31, 1995
----------------
URS
---
Historical Per Common Share Data:
Net income $0.67
Dividends -
Book value $5.51
Pro Forma Per Common Share Data:
Net income (loss) ($0.50)
Dividends -
Book value $5.77
Year Ended
December 31, 1995
-----------------
Greiner
-------
Historical Per Common Share Data:
Net income (loss) ($1.15)
Dividends $0.30
Book value $9.98
Equivalent Pro Forma Per Common
Share Data:
Net income (loss) ($0.15)
Dividends $ -
Book value $1.72
-12-
Page 24 of 256 <PAGE>
Per share amounts for net income (loss) were computed based on
the number of average shares outstanding during the period and the
dilutive effect of the common share equivalents. Per share amounts
for book value were computed based on the number of shares
outstanding at the end of the period presented. URS's pro forma
dividends per common share assume no dividend payments in accordance
with URS's historical dividend policy.
-13-
Page 25 of 256 <PAGE>
Market Price Data of Common Stock
---------------------------------
URS Common Stock is quoted under the trading symbol "URS" on
the New York Stock Exchange ("NYSE") and the Pacific Stock Exchange
("PSE"). The following table sets forth for the periods indicated
the high and low sales prices per share of URS Common Stock, as
reported on the NYSE.
Fiscal Year Ended
October 31, 1994 High Low
----------------- ---- ---
First Quarter . . . . . . . . . $7.38 $4.75
Second Quarter . . . . . . . . . 7.75 6.75
Third Quarter . . . . . . . . . 7.13 4.88
Fourth Quarter . . . . . . . . . 6.75 5.13
Fiscal Year Ended
October 31, 1995
-----------------
First Quarter . . . . . . . . . $6.00 $5.00
Second Quarter . . . . . . . . . 6.00 5.38
Third Quarter . . . . . . . . . 5.88 5.25
Fourth Quarter . . . . . . . . . 6.63 5.50
Greiner Common Stock is quoted under the trading symbol "GII"
on the NYSE and the PSE. The following table sets forth for the
periods indicated the high and low sales prices per share of Greiner
Common Stock, as reported on the NYSE.
Fiscal Year Ended
December 31, 1994 High Low
----------------- ---- ---
First Quarter . . . . . . . . . $17.38 $13.50
Second Quarter . . . . . . . . . 14.25 12.00
Third Quarter . . . . . . . . . 15.13 12.00
Fourth Quarter . . . . . . . . . 13.75 9.75
Fiscal Year Ended
December 31, 1995
-----------------
First Quarter . . . . . . . . . $12.75 $10.13
Second Quarter . . . . . . . . . 12.63 11.00
Third Quarter . . . . . . . . . 11.63 10.63
Fourth Quarter . . . . . . . . . 14.00 8.13
On December 1, 1995, the last trading day prior to the
announcement by URS and Greiner that they had executed the letter of
intent, the closing prices of URS Common Stock and Greiner Common
Stock, as reported on the NYSE, were $6.88 and $9.25, respectively.
On February 15, 1996, the closing prices of URS Common Stock and
-14-
Page 26 of 256 <PAGE>
Greiner Common Stock, as reported on the NYSE, were $6.63 and
$15.00, respectively.
Following the Merger, URS Common Stock will continue to be
traded on the NYSE and the PSE. Following the Merger, Greiner
Common Stock will cease to be traded, and there will be no further
market for such stock.
-15-
Page 27 of 256 <PAGE>
Dividend Policy
---------------
URS has not paid cash dividends since 1986 and intends to
continue to retain its earnings for investment in its business for
the foreseeable future. Pursuant to the 8-5/8% Indenture, the
Unsecured Credit Agreement and the Secured Credit Agreement, the
declaration of dividends, except stock dividends by URS, is
restricted.
Greiner commenced paying a cash dividend on its Common Stock in
the fourth quarter of 1988. Annual cash dividends of $.30 and $.28
per share of Greiner Common Stock were declared and paid in 1995 and
1994, respectively.
-16-
Page 28 of 256 <PAGE>
THE GREINER STOCKHOLDERS' MEETING
Place, Time, and Date of Greiner Meeting
----------------------------------------
The Annual Meeting of the Stockholders of Greiner (the "Greiner
Meeting") will be held on Tuesday, March 26, 1996, at 11:00 a.m.,
local time, at the Doubletree Hotel at Park West, 1590 LBJ Freeway,
Dallas, Texas 75234.
Purpose of the Greiner Meeting
------------------------------
APPROVAL OF THE MERGER. At the Greiner Meeting stockholders
will be asked to consider and vote upon a proposal by the Board of
Directors of Greiner to approve the Merger of Acquisition Corp. with
and into Greiner, pursuant to which each of the outstanding shares
of Greiner Common Stock will be converted into the right to receive
0.298 shares of URS Common Stock and $13.50 in cash. As a result of
the Merger, Greiner will become a wholly-owned subsidiary of URS and
holders of Greiner Common Stock will become stockholders of URS.
THE BOARD OF DIRECTORS OF GREINER RECOMMENDS A VOTE BY THE
GREINER STOCKHOLDERS FOR APPROVAL OF THE MERGER.
---
ELECTION OF DIRECTORS. The Greiner Meeting will also include
the annual election of directors to serve if the Merger does not
close or is delayed for any reason. Pursuant to the authority
granted in Greiner's Restated Articles of Incorporation and Bylaws,
the Board has determined that five directors be elected at the
Greiner Meeting to serve until the next annual meeting and until
their successors are elected and have nominated for election as
directors the persons identified at "Annual Election of Greiner
Board of Directors - Nominees for the Greiner Board of Directors."
If, by reason of death or other unexpected occurrence, any one or
more of the nominees should for any reason become unavailable for
election, the persons named as proxies in the accompanying form of
proxy may vote for the election of such substitute nominees, and for
such term or terms, as the Board of Directors may propose. All of
the nominees were elected to the Board of Directors at the last
Annual Meeting, except for Robert L. Costello, who was elected by
action of the Board in July 1995.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH
---
NOMINEE FOR THE BOARD OF DIRECTORS.
Vote Required
-------------
The affirmative vote of the holders of a majority of the
outstanding shares of Greiner Common Stock entitled to vote thereon
is required for the approval of the Merger. The favorable vote of
the holders of a majority of the outstanding Greiner Common Stock
present at the Greiner Meeting in person or by proxy is required for
-17-
Page 29 of 256 <PAGE>
election of each director. Participants in the Greiner Performance
Plan will be asked to direct the Trustees as to how to vote the
Greiner Common Stock allocated to their accounts. Shares as to
which no direction is received will be voted in accordance with the
recommendation of an adviser retained by the Trustees. The
executive officers and directors of Greiner own or have the power to
vote 14.13% of the 4,704,642 issued and outstanding shares entitled
to vote on the Merger.
Abstentions and broker nonvotes will be counted for purposes of
determining the presence or absence of a quorum for the transaction
of business at the meeting. Abstentions are counted to determine
the total number of votes cast and will be counted as a vote against
the election of directors, but will not count as votes for or
against approval of the Merger. Broker nonvotes are not counted as
votes cast for purposes of determining whether a proposal has been
approved and will have no effect on the outcome of the election of
directors. Because a majority vote of all issued and outstanding
shares of Greiner Common Stock which are eligible to be voted is
required to approve the Merger, a broker nonvote will have the
same effect as a vote against approval of the Merger.
As of the date of this Proxy Statement/Prospectus, 4,704,642
shares of Greiner Common Stock were outstanding. In the
Merger Agreement, Greiner has agreed not to issue any additional
shares of Greiner Common Stock or other ownership interests in
Greiner prior to the Effective Date, other than pursuant to the
exercise of vested stock options.
Each holder of Greiner Common Stock will be entitled to one
vote, in person or by proxy, for each share standing in his or her
name on the books of Greiner on the Record Date on any matter
submitted to a vote of the Greiner stockholders.
Revocability of Proxies
-----------------------
A Proxy for use at the Greiner Meeting is enclosed with the
definitive Proxy Statement/Prospectus mailed to Greiner
stockholders. A Greiner stockholder executing and returning a proxy
may revoke it at any time before the vote is taken by filing with
the Secretary of Greiner a written revocation of the Proxy or a duly
executed Proxy bearing a later date than the Proxy being revoked, or
such stockholder may revoke the Proxy in person at the Greiner
Meeting, at any time before the vote is taken, by electing to vote
at such meeting. All shares represented by a properly executed
Proxy, unless such Proxy previously has been revoked, will be voted
in accordance with the directions on such Proxy. IF NO DIRECTIONS
ARE GIVEN TO THE CONTRARY ON SUCH PROXY, THE SHARES REPRESENTED BY
SUCH PROXY WILL BE VOTED FOR THE MERGER AND FOR EACH NOMINEE FOR THE
--- ---
GREINER BOARD OF DIRECTORS. It is anticipated that no matters will
be presented at the Greiner Meeting other than as set forth in the
notice of the Greiner Meeting.
-18-
Page 30 of 256 <PAGE>
Cost of Soliciting Proxies
--------------------------
The expense of preparing, printing and mailing this Proxy
Statement/Prospectus and the material used in this solicitation of
Proxies from Greiner stockholders will be borne by Greiner. It is
contemplated that Greiner Proxies will be solicited through the
mail, but officers, directors and employees of Greiner may solicit
Proxies personally for the Greiner Meeting. Greiner has retained
D. F. King, Inc. to assist in the solicitation of proxies and has
agreed to pay D. F. King, Inc. $5,000, plus out of pocket expenses,
for such services. Greiner has agreed that under certain
circumstances it will be liable for URS's transaction costs if the
Merger is not consummated due to Greiner's breach of the Merger
Agreement. See "The Merger - The Merger Agreement."
Record Date
-----------
The close of business on February 22, 1996 has been fixed as
the record date ("Record Date") for the purpose of determining the
Greiner stockholders entitled to notice of and to vote at the
Greiner Meeting.
Dissenters' Rights
------------------
Under Nevada law, holders of Greiner Common Stock will not have
the right to seek a judicial appraisal of the fair value of their
shares of Greiner Common Stock in connection with the proposed
Merger. See "The Merger - Rights of Dissenting Stockholders."
-19-
Page 31 of 256 <PAGE>
RISK FACTORS
------------
The following risk factors should be considered carefully by
the stockholders of Greiner in evaluating the Merger. These risk
factors should be considered in conjunction with the other
information included in this Proxy Statement/Prospectus.
Impact of Merger Financing
--------------------------
To finance the Merger, and to provide for working capital
needs, URS has obtained a secured credit facility consisting of
$50 million in term loans maturing in 2002 and 2003 and a
$20 million revolving line of credit to terminate in 1999. As a
result, following the Merger, URS will be a more highly leveraged
company with substantial future debt service requirements. To meet
these debt service requirements, URS and Greiner must generate
sufficient cash flow from operations or other sources. There is no
assurance that the future operations of URS and Greiner will provide
sufficient funds to meet these debt service needs and other
operational requirements of URS and Greiner necessary for continued
success.
Greiner's Reported Losses During 1995
-------------------------------------
Greiner's 1995 consolidated financial statements reflect
significant pre-tax charges related to the following items. First,
Greiner incurred substantial operating losses in 1995 from its
California residential land development operations. In 1995,
Greiner management decided to discontinue these operations and
recorded restructuring charges of $1,700,000 in addition to
operating losses of approximately $1,400,000 during 1995. Second,
during 1995, Greiner recorded a one-time write-off of goodwill of
$1,500,000 associated with the discontinued California residential
land development operations. Third, Greiner recorded $500,000 in
restructuring charges during 1995 in connection with the downsizing
of its Hong Kong operations resulting from Greiner's shift of its
center of operations in Asia from Hong Kong to Malaysia. Fourth, in
1995, Greiner took a non-cash write down of $2,300,000 on its
investment in NTA, a general partnership in which Greiner holds a
50% general partnership interest. While there is no assurance of
the future financial performance of Greiner, management believes
that the majority of losses experienced during 1995 result primarily
from non-recurring situations and such losses will not have a
significant impact on an ongoing basis; however, Greiner's reported
losses may negatively impact the value of URS Common Stock after the
Merger.
Legal Proceedings/Liability Insurance Coverage
----------------------------------------------
Certain subsidiaries of each of Greiner and URS have been named
as defendants in legal proceedings wherein substantial damages are
claimed. Such proceedings are not uncommon in their businesses and
usually involve claims against multiple defendants who were involved
-20-
Page 32 of 256 <PAGE>
in the project which is the subject of the proceeding.
Historically, each company has been successful in defending such
actions or has settled them within insured limits. In the opinion
of management of each company, based upon their present knowledge,
the ultimate liability, if any, in these proceedings is not expected
to exceed amounts previously provided for in the consolidated
financial statements. Because of the nature of the professional
services provided and the size and nature of many of the projects
upon which such services are performed, the potential for claims in
excess of insurance limits always exists. Should that occur, and if
the resulting liability is material, then the operations and
financial condition of URS and Greiner after the Merger would be
adversely affected. It is also possible that a large number of
claims in any given year could cause the total amount paid with
respect to the deductible amounts relating to such claims to be
material, in which event Greiner's and URS's operations and
financial condition could be adversely affected.
GREINER. In 1995, Greiner was notified by the staff (the
"Staff") of the Central Regional Office of the Securities and
Exchange Commission (the "SEC") that it planned to recommend that a
subsidiary of Greiner be named as a respondent in an administrative
action relating to the issuance of certain revenue bonds used to
finance the construction of the new Denver International Airport.
Greiner was a member of a joint venture formed for the sole purpose
of acting as the program management consultant for the City and
County of Denver on the new Denver International Airport project.
The joint venture was dissolved at the completion of the project.
The Staff recommendation relates to certain information about the
airport project provided by Greiner to the City and County of Denver
in connection with the related bond offerings. Greiner has disputed
the Staff's recommendations. Management does not anticipate that
the resolution of this matter will have a material effect on
Greiner's operations or financial condition.
Greiner presently carries professional liability insurance
against claims resulting from its alleged negligent performance of
professional services, with an aggregate limit of $30,000,000 per
year in excess of an aggregate $1,000,000 annual self-insured
retention and a deductible of $250,000 per occurrence. This
insurance, consistent with industry practice, is on a "claims made"
basis, which means coverage must be in place when a claim is made.
In addition, such insurance is subject to standard exclusions,
including exclusions for claims arising out of actual, alleged or
threatened discharge, dispersal, seepage, migration, release or
escape of pollutants and the performance of or failure to perform
professional services rendered in the abatement, replacement or
removal of any product, material or process containing asbestos.
The continued availability and cost of professional liability
insurance will depend upon market conditions, the claims record of
Greiner and the claims experience of the insurers providing such
coverage.
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URS. URS has $31,000,000 per occurrence and aggregate
commercial general liability insurance coverage. URS is also
insured for professional errors and omissions ("E&O"), environmental
impairment liability ("EIL") and contractor pollution liability
("CPL") claims with an aggregate limit of $25,000,000 after a self-
insured per-claim deductible of $500,000. The E&O, EIL and CPL
coverages are on a "claims made" basis, covering only claims
actually made during the policy period currently in effect. Thus,
if URS 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 URS
management's intent to maintain this type of coverage for its and
Greiner's businesses after the Merger, but there can be no assurance
that URS can maintain its insurance coverage or that claims will not
exceed the amount of insurance coverage.
Dependence upon Government Programs and Contracts
-------------------------------------------------
Both Greiner and URS derive more than 80% of their revenues
from local, state and Federal government agencies. The demand for
engineering services is directly related to the level of funding of
government programs that are created in response to public concern
with rebuilding and expanding the nation's infrastructure and
addressing various environmental problems. The success and further
development of URS and Greiner is dependent, in significant part,
upon the continued existence and funding of such programs and upon
URS and Greiner's ability to participate in such programs. There
can be no assurance that public pressure for such programs will
continue, that governments will have the available resources to fund
such programs (especially in light of the budget constraints
currently existing at all levels of government), that such programs
will continue to be funded even if governments have available
financial resources, or that URS and Greiner will continue to be
awarded contracts under such programs. In addition, contracts with
government agencies are subject to termination for convenience of
the agency and contracts with government agencies that have adopted
Federal Acquisition Regulations, to which both URS and Greiner are a
party, are subject to audit of actual costs incurred and provide for
upward or downward adjustment of payments if audited costs differ
from billed costs.
Pricing Risks
-------------
A substantial amount of Greiner's and URS's services are billed
on either a "cost-plus" or a "fixed-price" basis. Under cost-plus
contracts, the rates for direct and indirect costs are negotiated
and fixed before work commences. Under fixed-price contracts, the
entire contract price is often fixed before work commences.
Frequently, proposals are submitted on extremely complex projects
that will be performed over the course of several years, making the
accurate forecasting of costs very difficult. In the recent past,
URS and Greiner have experienced low profit margins or losses on a
portion of both of their cost-plus and fixed-price contracts because
overhead and general and administrative costs exceeded government
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limits and could not be fully recovered or the scope of work could
not be completed within the original budget and a supplemental work
order could not be obtained.
Attraction and Retention of Qualified Professionals
---------------------------------------------------
The ability to retain and expand the staff of qualified
technical professionals will be an important factor in determining
the future success of URS and Greiner. There is from time to time a
shortage of qualified technical professionals in various fields.
The market for engineering and environmental professionals is
competitive and there can be no assurance that URS and Greiner will
continue to be successful in their efforts to attract and retain
such professionals. In addition, both companies rely heavily upon
the experience and ability of their senior management staff and the
loss of a significant portion of such individuals could have a
material adverse effect upon the companies.
Control of URS by Principal Stockholders
----------------------------------------
Richard C. Blum is a director of URS and the majority
stockholder of Richard C. Blum & Associates, Inc., a California
corporation ("RCBA, Inc."). RCBA, Inc. is the sole general partner
of Richard C. Blum & Associates, L.P., a California limited
partnership ("RCBA, L.P."), which, in turn, is the sole general
partner of BK Capital Partners, a California limited partnership
("BK"), BK Capital Partners II, a California limited partnership
("BK II"), and BK Capital Partners III, a California limited
partnership ("BK III"). RCBA, L.P. is an investment adviser to The
Common Fund, an investment fund. BK, BK II, BK III and The Common
Fund collectively hold 2,472,693 shares (assuming the exercise of
certain warrants by only these entities), or approximately 34
percent, of the URS Common Stock outstanding prior to the
effectiveness of the Merger and approximately 28 percent of the URS
Common Stock which would be outstanding after the effectiveness of
the Merger. RCBA, L.P. exercises voting and investment discretion
as to all such shares.
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THE MERGER
----------
This section of the Proxy Statement/Prospectus contains
information furnished by the Board of Directors of URS and by the
Board of Directors of Greiner in connection with the Greiner Meeting
for the purpose of obtaining stockholder approval of the Merger.
A copy of the Merger Agreement is attached as Appendix B and
incorporated herein by reference. The Merger Agreement contains
certain representations and covenants of URS, Acquisition Corp. and
Greiner, certain conditions to the consummation of the Merger, and
other terms and provisions respecting the Merger and related
transactions. Capitalized terms which are used but not defined in
this section shall have the meanings assigned in the Merger
Agreement.
SUMMARIES OF CERTAIN PROVISIONS OF THE MERGER AGREEMENT SET
FORTH HEREIN DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN
THEIR ENTIRETY BY REFERENCE TO THE PROVISIONS OF THE MERGER
AGREEMENT. ALL GREINER STOCKHOLDERS ARE URGED TO READ THE MERGER
AGREEMENT IN ITS ENTIRETY.
General
-------
The Merger Agreement provides for the merger of Acquisition
Corp. into Greiner, with Greiner as the surviving corporation. Upon
consummation of the Merger, each outstanding share of Greiner Common
Stock will be converted into the right to receive (i) 0.298 shares
of URS Common Stock, and (ii) $13.50 in cash, with additional cash
to be paid in lieu of fractional shares. If the Merger is
completed, Greiner stockholders will no longer hold any interest in
Greiner other than indirectly through their interest in the shares
of URS Common Stock. Each outstanding share of URS Common Stock
will remain outstanding and unchanged following the Merger. Holders
of Greiner Common Stock will receive an aggregate of approximately
1,400,000 shares of URS Common Stock upon consummation of the Merger
and will hold in the aggregate approximately 16% of the URS Common
Stock outstanding immediately after consummation of the Merger.
All Greiner Options outstanding at the Effective Time of the
Merger will be cancelled; provided, however, that the holders of
Greiner Options will be entitled to receive a cash payment equal to
the excess, if any, of the value of the per share Merger
Consideration, based on the closing price per share of URS Common
Stock as quoted in The Wall Street Journal on the trading day
-----------------------
immediately preceding the Closing Date, over the exercise price of
the option. See "The Merger - Merger Consideration."
Effective Time of the Merger
----------------------------
The Merger will become effective (the "Effective Time of the
Merger") upon the filing of articles of merger or other appropriate
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documents (in any such case, the "Merger Documents") with the Nevada
Secretary of State. The Merger Agreement provides that the parties
will cause the Merger Documents to be filed as soon as practicable
after the Closing Date, which will be the first date after approval
of the Merger by the Greiner stockholders on which all conditions to
the parties' obligations to close the Merger have been satisfied or
waived. The parties have agreed to use their best efforts to do all
things necessary to permit the closing of the Merger, but there can
be no assurance as to whether or when the Merger will become
effective. The Merger Agreement may be terminated by either URS or
Greiner if the Merger has not become effective on or before
September 30, 1996 (unless the failure to consummate the Merger by
such date is due to the action or failure to act of the party
seeking to terminate the Merger Agreement in breach of such party's
obligations thereunder).
Merger Consideration
--------------------
CONVERSION OF GREINER COMMON STOCK. At the Effective Time of
the Merger, Acquisition Corp. will merge with and into Greiner, with
Greiner as the surviving corporation. The Articles of Incorporation
and Bylaws of Greiner as in effect immediately prior to the
Effective Time of the Merger will be the Articles of Incorporation
and Bylaws of the surviving corporation until further amended as
provided therein and in accordance with law. At the Effective Time
of the Merger, each outstanding share of Greiner Common Stock will
be converted into the right to receive (i) 0.298 shares of URS
Common Stock and (ii) $13.50 in cash, with additional cash to be
paid in lieu of fractional shares. At the Effective Time of the
Merger, Greiner stockholders will no longer hold any interest in
Greiner other than indirectly through their interest in the shares
of URS Common Stock. Each outstanding share of URS Common Stock
will remain outstanding and unchanged following the Merger. Holders
of Greiner Common Stock will receive an aggregate of approximately
1,400,000 shares of URS Common Stock upon consummation of the Merger
and will hold in the aggregate approximately 16% of the URS Common
Stock outstanding immediately after consummation of the Merger,
based on the number of shares of URS Common Stock outstanding at
February 14, 1996. Each share of Acquisition Corp. common stock
outstanding immediately prior to the Effective Time of the Merger
will be converted into one share of a newly-created class of $1.00
par value common stock of Greiner (the surviving corporation), and
Greiner will become a wholly-owned subsidiary of URS.
GREINER STOCK OPTIONS. All Greiner Options outstanding at the
Effective Time of the Merger will be cancelled; provided, however,
that the holders of Greiner Options will be entitled to receive a
cash payment in an amount per share of Greiner Common Stock subject
to his or her Greiner Option equal to the excess, if any, of the
value of the per share Merger Consideration, based on the closing
price per share of URS Common Stock as quoted in The Wall Street
---------------
Journal on the trading day immediately preceding the Closing Date,
-------
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over the exercise price per share with respect to the option. In
addition, instead of receiving the cash payment described above,
each holder of a Greiner Option has the right to exercise vested
options prior to the Effective Time of the Merger and purchase
Greiner Common Stock, in which case each share of Greiner
Common Stock received pursuant to the option will be exchanged
pursuant to the Merger for the Merger Consideration.
GREINER PERFORMANCE PLAN AND EMPLOYEE STOCK OWNERSHIP PLAN. At
the Effective Time of the Merger, The Performance Plan and Stock
Ownership Plan of Greiner (the "Greiner Performance Plan") will be
amended to cease to be an employee stock ownership plan ("ESOP")
within the meaning of Section 4975(e)(7) of the Code, but will be
continued as a profit sharing plan, subject to the terms of the
Greiner Performance Plan document regarding amendment and/or
termination. Cash proceeds received by the Greiner Performance Plan
in connection with the Merger will not be reinvested in URS Common
Stock or Greiner Common Stock, but will be reinvested in the various
investment options available under the non-ESOP portion of the
Greiner Performance Plan, as directed by plan participants, and
employer stock will no longer be one of the investment options
offered under the Greiner Performance Plan. URS Common Stock
received by Greiner Performance Plan accounts in connection with the
Merger will continue to be held by the Greiner Performance Plan, but
no additional investments in URS Common Stock will be permitted. In
addition, in the event that as of the Effective Time of the Merger
the aggregate value of the unvested ESOP portion of the Greiner
Performance Plan accounts is less than $1,000,000 (valuing such
unvested shares of Greiner Common Stock at an amount equal to the
closing price of the Greiner Common Stock as reported on the NYSE on
the trading day immediately preceding the Closing Date, as quoted in
The Wall Street Journal), all plan participants will be fully vested
-----------------------
in their ESOP accounts as of the Effective Time of the Merger.
Conversion and Exchange of Greiner Common Stock Certificates
------------------------------------------------------------
As soon as practicable after the Effective Time of the Merger,
First Interstate Bank, the Exchange Agent (the "Exchange Agent"),
will send a notice and transmittal form to each holder of Greiner
Common Stock of record at the Effective Time of the Merger advising
such holder of the effectiveness of the Merger and the procedure for
surrendering to the Exchange Agent their certificates formerly
evidencing Greiner Common Stock. GREINER STOCKHOLDERS SHOULD NOT
SEND THEIR STOCK CERTIFICATES TO THE EXCHANGE AGENT OR GREINER UNTIL
THEY RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS FROM
THE EXCHANGE AGENT.
Upon the surrender to the Exchange Agent of one or more
certificates formerly evidencing Greiner Common Stock, together with
a properly completed and signed letter of transmittal, there will be
issued and mailed to the holder thereof a new certificate or
certificates representing the number of whole shares of URS Common
Stock to which such holder is entitled under the Merger Agreement, a
check for the amount of cash payable for each share of Greiner
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Common Stock, and, where applicable, a check for the amount of cash
payable in lieu of a fractional share of URS Common Stock. A
certificate representing URS Common Stock or a check in lieu of a
fractional share will be issued in a name other than the name in
which the surrendered Greiner Common Stock certificate was
registered only if (i) the Greiner Common Stock certificate
surrendered is properly endorsed or accompanied by appropriate stock
powers and is otherwise in proper form for transfer, and (ii) the
person requesting the issuance of such stock certificate or check
either pays to the Exchange Agent any transfer or other taxes
required or establishes to the satisfaction of the Exchange Agent
that such tax has been paid or is not applicable.
Background of the Merger
------------------------
From time to time beginning in March of 1993, URS and Greiner
management held informal discussions about the possibility of a
transaction between the two companies. Until November of 1995,
these informal discussions did not result in any agreement regarding
a transaction between the parties.
In early November of 1995, senior management of URS met with
its financial advisors regarding the advisability of developing an
offer to acquire Greiner. On November 20, 1995, a special meeting
of the URS Board of Directors was held to discuss the possibility of
authorizing URS management to present an acquisition proposal to
Greiner management. The URS Board of Directors authorized URS
management to proceed with the presentation of an acquisition
proposal to Greiner management. The Board of Directors also
authorized URS management to contact Wells Fargo Bank, National
Association ("Wells Fargo") to initiate discussions about providing
financing for the transaction.
On November 30, 1995, Martin Koffel, the Chief Executive
Officer, President and Chairman of URS, met with Robert Costello,
the Chief Executive Officer of Greiner. Mr. Koffel presented an
outline to Mr. Costello describing proposed terms by which URS would
offer to acquire Greiner. On December 1, 1995, Mr. Costello and
Messrs. William Bowen and Russell Cleveland, both directors of
Greiner, placed a call to Mr. Koffel to discuss the proposed terms
of the offer (Messrs. Costello, Bowen and Cleveland comprise the
Executive Committee of the Board of Directors). After discussion, a
revised proposal was sent to Mr. Costello.
On December 2, 1995, a proposed letter of intent and draft
joint press release with respect to the proposed transaction were
prepared and reviewed by URS and its advisors, and then transmitted
to Greiner. Further discussions regarding these documents and the
terms of the transaction continued throughout the day between URS
and its advisors and Greiner.
On December 3, 1995, a letter of intent was signed and the
wording of a joint press release was prepared. The joint press
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release was issued prior to the opening of trading on the NYSE on
December 4, 1995.
On January 9, 1996, the Merger Agreement was approved by the
Boards of Directors of Greiner, URS and Acquisition Corp. The
Merger Agreement was executed by all parties thereto on January 10,
1996. In addition, on January 10, 1996, URS entered into a
$70 million secured credit facility with Wells Fargo, which consists
of $50 million in term loans maturing in 2002 and 2003, and a
$20 million revolving line of credit. See "The Merger - Financing
of the Merger."
Greiner Financial Advisor
-------------------------
Greiner has engaged Houlihan Lokey to render an opinion to the
Greiner Board of Directors as to the fairness of the terms of the
Merger to the Greiner public stockholders, from a financial point of
view. Houlihan Lokey is a diversified financial advisory and
specialty investment banking firm with offices in Los Angeles,
New York, Chicago, San Francisco, Minneapolis, Washington, D.C.,
Dallas and Toronto. Houlihan Lokey offers business and securities
valuations, fairness and solvency opinions, financial restructuring
advice, dispute analysis and liquidation support, merchant banking
services and investment banking services, including merger and
acquisition representation and private placement of capital.
On January 10, 1996, Houlihan Lokey delivered to the Greiner
Board of Directors its written opinion dated January 10, 1996 (the
"Houlihan Lokey Opinion") that, based upon and subject to the
matters set forth in the opinion, the consideration to be received
by the public stockholders of Greiner in connection with the Merger
is fair to them from a financial point of view.
The summary of the Houlihan Lokey Opinion set forth in this
Proxy Statement/Prospectus is qualified in its entirety by reference
to the full text of such opinion. The form of the Houlihan Lokey
Opinion is attached hereto as Appendix A. HOLDERS OF GREINER COMMON
STOCK ARE URGED TO READ THE HOULIHAN LOKEY OPINION IN ITS ENTIRETY
FOR FURTHER INFORMATION AS TO THE ASSUMPTIONS MADE, MATTERS
CONSIDERED AND OTHER ASPECTS OF THE REVIEW BY HOULIHAN LOKEY.
Houlihan Lokey did not, and was not requested by the Greiner
Board of Directors to, make any recommendations as to the form or
amount of consideration to be paid to the Greiner stockholders in
the Merger, which issues were resolved in arm's length negotiations
between Greiner and URS. Houlihan Lokey did not participate in
these negotiations. Furthermore, Houlihan Lokey was not requested
to, and did not, solicit third party indications of interest in
acquiring all or any part of Greiner.
In advising Greiner, Houlihan Lokey reviewed and analyzed:
(1) the Merger Agreement; (2) financial and operating information
with respect to the business, operations and prospects of Greiner
furnished to it by Greiner; (3) such publicly available information
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concerning URS which it deemed to be relevant to its inquiry,
including a recent trading history of URS's Common Stock; (4) a
comparison of the historical financial results and present financial
condition of Greiner with those of other companies which it deemed
relevant; and (5) a comparison of the financial terms of the Merger
with the terms of certain other recent transactions which it deemed
relevant.
In addition, Houlihan Lokey had discussions with certain
members of the senior management of Greiner and URS to discuss the
business, operations, assets, financial conditions and prospects and
the potential strategic benefit to Greiner from a consolidation of
the business of Greiner with URS.
In connection with its review, Houlihan Lokey assumed and
relied upon the accuracy and completeness of the financial and other
information used by it in advising Greiner without independent
verification and further relied upon the assurances of management of
Greiner that they were not aware of any facts that would make such
information inaccurate or misleading.
Greiner decided to retain Houlihan Lokey based on its
experience as a financial advisor in mergers and acquisitions in the
engineering industry. For Houlihan Lokey's services as financial
advisor to Greiner in connection with the Merger, Greiner has agreed
to pay Houlihan Lokey a fee of approximately $100,000, plus out of
pocket expenses. Greiner also has agreed to indemnify Houlihan
Lokey against certain liabilities under the Federal securities laws
relating to or arising out of services performed by Houlihan Lokey
as financial advisor to Greiner.
Houlihan Lokey has had two prior formal engagements with
Greiner, and has provided consulting services on one other occasion.
Specifically, Houlihan Lokey was engaged by Greiner (on behalf of
its Employee Stock Ownership Plan) in August of 1986 in connection
with the Greiner ESOP's purchase of Greiner Common Stock. In March
1993, Houlihan Lokey provided Greiner with preliminary consulting
services (not under a formal retention agreement), consisting of a
meeting at Greiner's headquarters, regarding a potential acquisition
of another company. Houlihan Lokey was next retained by Greiner in
July 1995 to provide Greiner with a preliminary analysis of the fair
market value of a firm which Greiner was considering acquiring at
that time. Aggregate fees paid to Houlihan Lokey for these
engagements did not exceed $50,000.
Reasons for the Merger; Recommendation of the Board of Directors of
Greiner
-------------------------------------------------------------------
The Greiner Board of Directors believes that the combination of
URS and Greiner will benefit Greiner's stockholders by providing a
cash payment substantially in excess of prior trading prices for
Greiner Common Stock and a continuing interest in a larger company.
The reasons for the Greiner Board authorizing the Merger include,
but are not limited to, the following:
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1. The significant premium that URS is paying to Greiner
stockholders, as substantiated by the Houlihan Lokey Opinion.
In evaluating the offer, the Board also considered Greiner's
stock performance in recent years and the stock prices of other
publicly traded engineering companies.
2. Consolidation that is occurring within the industry with other
public and private companies. The increased size of the
combined organization after the Merger has been consummated
will help URS and Greiner maintain a competitive advantage in
the marketplace and pursue larger, more comprehensive projects
and client relationships. The combined revenue of the two
companies will place URS and Greiner in the top echelon of
their industry.
3. The Merger helps both URS and Greiner achieve strategic
objectives previously established independently by the two
companies. These objectives include: increased revenues,
broader geographic coverage both domestically and inter-
nationally and expansion into markets that the companies on
their own would find difficult to accomplish without the
Merger.
4. The combination will result in administrative efficiencies and
cost savings by eliminating certain overlapping expenses.
The Greiner Board of Directors considered the above factors in light
of its knowledge of the business, the industry in general and
information provided by Greiner management and its financial
advisor, Houlihan Lokey. In view of the number and complexity of
factors considered, the Greiner Board did not assign a relative
weight to any of the factors considered.
THE GREINER BOARD OF DIRECTORS BELIEVES THAT THE MERGER IS FAIR
TO AND IN THE BEST INTERESTS OF GREINER AND ITS STOCKHOLDERS.
ACCORDINGLY, THE BOARD OF DIRECTORS OF GREINER HAS APPROVED THE
MERGER AGREEMENT AND RECOMMENDS THAT THE HOLDERS OF GREINER COMMON
STOCK VOTE FOR THE APPROVAL OF THE MERGER.
---
Directors and Executive Officers after the Merger
-------------------------------------------------
After the Effective Time of the Merger, the URS Board of
Directors and URS executive officers will be the same as the current
URS Board of Directors and URS executive officers, except that
Mr. Robert L. Costello will become a director and executive officer
of URS. See "URS Management - Executive Officers of URS - Directors
of URS."
Registration and Listing
------------------------
The URS Common Stock to be issued in the Merger will be
registered under the Securities Act of 1933 (the "1933 Act"). URS
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has agreed to prepare and file with the SEC the Registration
Statement and any other documents required by the 1933 Act in
connection with the Merger. URS has also agreed to take any action
required to be taken under any applicable state securities or "blue
sky" laws in connection with the issuance of the URS Common Stock in
connection with the Merger.
URS has agreed to file a listing application with each of the
NYSE and the PSE covering the shares of URS Common Stock which are
issuable upon consummation of the Merger. URS has agreed to use its
best efforts to obtain, prior to the Effective Time of the Merger,
approval for the listing of such URS Common Stock, subject to
official notice of issuance.
The Merger Agreement
--------------------
THE FOLLOWING IS INTENDED MERELY AS A SUMMARY OF CERTAIN TERMS
AND PROVISIONS OF THE MERGER AGREEMENT. REFERENCE IS MADE TO THE
MERGER AGREEMENT ATTACHED AS APPENDIX B FOR A COMPLETE STATEMENT OF
SUCH TERMS AND PROVISIONS.
COVENANTS. The Merger Agreement provides that from the date of
the Merger Agreement until the earlier of the Effective Time of the
Merger or the termination of the Merger Agreement, Greiner, URS and
Acquisition Corp. will perform the following pre-closing covenants:
Pre-Closing Covenants of All Parties.
------------------------------------
1. ADVICE OF CHANGES. Each party has agreed to promptly
advise the other parties of any event occurring subsequent to
the date of the Merger Agreement that would render any
representation or warranty of such party contained in the
Merger Agreement untrue or inaccurate in any material respect.
2. REGULATORY APPROVALS. Each party has agreed to
execute and file, or join in the execution and filing, of any
application or other document that may be necessary in order to
obtain the authorization, approval or consent of any
governmental body, Federal, state or local or foreign, which
may be reasonably required, or which the other party may
reasonably request, in connection with the consummation of the
transactions contemplated by the Merger Agreement. Each party
has agreed to use its best efforts to obtain all such
authorizations, approvals and consents.
3. CONFIDENTIALITY. Each party has agreed to hold in
confidence all nonpublic information until such time as such
information is otherwise publicly available, and, if the Merger
Agreement is terminated, each party has agreed to deliver to
the other all documents, work papers and other materials
(including copies) obtained by such party or on its behalf from
the other party as a result of the Merger Agreement or in
connection therewith. Each party has agreed to continue to
abide by the terms of existing confidentiality agreements.
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4. BEST EFFORTS. Each party has agreed to use its best
efforts to take or cause to be taken all actions, to do or
cause to be done, and to assist and cooperate with the other
parties to the Merger Agreement in doing, all things necessary,
proper or advisable under applicable laws and regulations, to
consummate and make effective the Merger.
5. SECURED CREDIT AGREEMENT. The parties have agreed to
take all actions as may be reasonably necessary to fulfill the
covenants and conditions set forth in the Secured Credit
Agreement (as defined below). See "The Merger - Financing of
Merger."
Pre-Closing Covenants of Greiner.
--------------------------------
1. CONDUCT OF BUSINESS IN ORDINARY COURSE. Greiner and
its subsidiaries have agreed to carry on their respective
businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, and, to
the extent consistent with such businesses, Greiner and its
subsidiaries have agreed to use all reasonable efforts to
preserve intact their present business organizations, keep
available the services of their present officers and employees,
and preserve their relationships with customers, suppliers and
others having business dealings with Greiner and its
subsidiaries. In particular, without limitation, Greiner and
its subsidiaries have agreed that neither Greiner nor any of
its subsidiaries shall (except with the prior written consent
of URS):
(i) accelerate, amend or change the period of
exercisability of vesting of options granted
under any stock option plans or restricted
stock, stock bonus or other awards, or authorize
cash payments in exchange for any options,
restricted stock, stock bonus or other awards
granted under any of such plans;
(ii) grant any severance or termination pay to any
officer or director or, except in the ordinary
course of business consistent with past
practices, to any employee;
(iii) transfer any intellectual property rights owned
by Greiner;
(iv) commence a lawsuit other than for routine
collection of bills, except in cases where
Greiner in good faith determines that failure to
commence such suit would result in a material
impairment of a valuable aspect of Greiner's
business, or for breach of the Merger Agreement;
or
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(v) enter into one or more leases which extend for a
period of two years beyond the date of the
Merger Agreement and which obligate Greiner or
its subsidiary to pay aggregate gross rent in
excess of $500,000.
2. DIVIDENDS; CHANGE IN STOCK. Greiner has agreed that
it will not, and it will not permit any of its subsidiaries to,
(i) declare or pay any dividends on or make other capital
distributions in respect to any of its capital stock, except
for intercompany dividends or regular quarterly cash dividends
to holders of Greiner Common Stock in an amount which shall not
exceed $0.075 per share and at times consistent with prior
practice, (ii) split, combine or reclassify any of its capital
stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (iii) repurchase, redeem or
otherwise acquire, any shares of its capital stock.
3. ISSUANCES OF SECURITIES. Greiner has agreed that it
will not, and it will not permit any of its subsidiaries to,
issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any shares of its capital stock or any
securities convertible into such shares, or any rights,
warrants, calls, subscriptions or options to acquire, any such
shares or convertible securities, or any other ownership
interests in such capital stock other than the issuance of
Greiner Common Stock pursuant to the exercise of vested
options.
4. GOVERNING DOCUMENTS. Greiner has agreed that it will
not, and it will not cause or permit any of its subsidiaries
to, amend its Restated Articles of Incorporation or Bylaws.
5. NO ACQUISITIONS. Greiner has agreed that it will
not, and it will not permit any of its subsidiaries to,
acquire, or agree to acquire by merging or consolidating with,
or by purchasing a substantial equity interest in all or any
substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or
other business organization or division thereof.
6. NO DISPOSITIONS. Greiner has agreed that other than
sales or licenses of products or technology in the ordinary
course of business consistent with prior practice, Greiner will
not, and it will not permit any of its subsidiaries to, sell,
lease, license, encumber or otherwise dispose of, any of its
assets, except for such dispositions in the ordinary course of
business or in amounts which are not material, in the
aggregate, to the business of Greiner.
7. INDEBTEDNESS. Greiner has agreed that it will not,
and will not permit any of its subsidiaries to, incur any
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indebtedness for borrowed money or guarantee any such
indebtedness or sell any debt securities or warrants or rights
to acquire any debt securities of Greiner or any of its
subsidiaries or guarantee any debt securities of others, except
in the ordinary course of business consistent with past
practices.
8. PLANS; COMPENSATION. Greiner has agreed that it will
not, and it will not permit any of its subsidiaries to, adopt
or amend in any material respect any employee benefit plans (a
"Greiner Plan" as defined in the Merger Agreement) or pay any
pension or retirement allowance not required by any existing
Greiner Plan. Greiner will not, and will not permit any
Greiner subsidiary to, enter into any employment contracts, pay
any special bonuses or special remuneration to officers,
directors or employees, or increase the salaries, wage rates or
fringe benefits of (i) any of its officers or employees whose
compensation exceeded $150,000 during the fiscal year ending
December 31, 1995, or (ii) any of its other officers and
employees other than pursuant to scheduled reviews under
Greiner's or the Greiner subsidiary's normal compensation
review cycle, in all cases consistent with existing policies
and past practice.
9. TAX MATTERS. Greiner has agreed that it will not
make any tax election that would have a Greiner Material
Adverse Effect (as defined in the Merger Agreement) or settle
or compromise any income tax liability of Greiner or any of its
subsidiaries that would have a Greiner Material Adverse Effect.
10. DISCHARGE OF LIABILITIES. Greiner has agreed that it
will not, and it will not permit any of its subsidiaries to,
pay, discharge, settle or satisfy any claims, liabilities or
obligations, except in the ordinary course of business or in
amounts which are not material, individually or in the
aggregate, to the business of Greiner.
11. MATERIAL AGREEMENTS. Greiner has agreed that except
in the ordinary course of business, neither Greiner nor any of
its subsidiaries will modify, amend, or terminate any Material
Agreement (as defined in the Merger Agreement) or waive,
release or assign any material rights or claims under such
Material Agreement.
12. STOCKHOLDERS' MEETING; PROXY STATEMENT. Greiner has
agreed to hold a meeting of its stockholders at the earliest
practicable date to submit the Merger Agreement and related
matters for their consideration and approval, and that approval
would be recommended by Greiner's Board of Directors, subject
to their fiduciary duties. Greiner has agreed to send to its
stockholders, for the purpose of considering and voting upon
the Merger, this Proxy Statement/Prospectus, which is required
to satisfy all requirements of applicable state and Federal
laws.
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13. ACQUISITION PROPOSALS; TERMINATION FEE. From the
date of the Merger Agreement until the earlier of the
termination of the Merger Agreement or the consummation of the
Merger, Greiner has agreed that Greiner and its subsidiaries
will not, and will cause their respective officers, directors,
employees, agents and representatives not to, directly or
indirectly, encourage, solicit, accept, initiate or conduct
discussions or negotiations with, provide any information to,
or enter into any agreement with, any corporation, partnership,
limited liability company, person or other entity or group
concerning the acquisition of all or a substantial part of the
assets, business or capital stock of Greiner, whether through
purchase, merger, consolidation, exchange or any other business
combination. In the event that Greiner or any of its officers
or directors enter into negotiations or discussions which
constitute a breach of the no shop provisions, the Merger
Agreement provides that Greiner will be obligated to reimburse
URS for expenses incurred in connection with the transactions
contemplated by the Merger Agreement and, in certain circum-
stances, Greiner will be liable to pay to URS a termination fee
of $5,000,000. See "The Merger Agreement - Acquisition
Proposals; Limitation on Negotiations; Termination Fee."
In the event that either party terminates the Merger
Agreement because of a breach of any of the foregoing by the
other party, and in the event such breach is the result of
negligence, the damages recoverable by the non-breaching party
shall not exceed the sum of $500,000; but, provided, further,
that in the event that such breach is the result of reck-
lessness or willful conduct, the amount of damages shall not
be limited hereby. See "The Merger - The Merger Agreement."
14. MAINTENANCE OF BUSINESS. Greiner has agreed to use
its best efforts to carry on and preserve its business and its
relationships with clients, customers, suppliers, employees and
others in substantially the same manner as it has prior to the
date of the Merger Agreement. Greiner has agreed that if
Greiner becomes aware of a deterioration in the relationship
with any client, customer, supplier or key employee, it will
promptly bring such information to the attention of URS in
writing and, if requested by URS, will use its best efforts to
restore the relationship.
15. ACCESS. Greiner has agreed to afford to URS and to
URS's financial advisors, legal counsel, accountants, financing
sources and other authorized representatives access during
normal business hours to all of its books, records, properties,
offices and personnel.
16. LIABILITY INSURANCE. Greiner has agreed to procure
(subject to the approval of URS) continuing directors' and
officers' liability coverage (tail coverage) for directors and
officers of Greiner who have served as directors and officers
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of Greiner or its affiliates, prior to the Effective Time of
the Merger, with respect to acts or failures to act prior to
the Effective Time of the Merger. Greiner has also agreed to
procure continuing fiduciary liability coverage (tail coverage)
for employees of Greiner who have served as fiduciaries under
any Greiner Plan prior to the Effective Time of the Merger,
with respect to acts or failures to act prior to the Effective
Time of the Merger.
Pre-Closing Covenants of URS.
----------------------------
1. REGISTRATION STATEMENT. The URS Common Stock to be
issued in the Merger will be registered under the 1933 Act.
URS has agreed to prepare and file with the SEC the
Registration Statement and any other documents required by the
1933 Act in connection with the Merger. URS has agreed to use
its best efforts to have the Registration Statement declared
effective as promptly as practicable after such filing. URS
has also agreed to take any action required to be taken under
any applicable state securities or "blue sky" laws in
connection with the issuance of the URS Common Stock in the
Merger.
2. LISTING AGREEMENT. URS has agreed to prepare and
submit to each of the NYSE and the PSE a listing application
covering the shares of the URS Common Stock to be issued in
connection with the Merger. URS has agreed to use its best
efforts to obtain, prior to the Effective Time of the Merger,
approval for the listing of such URS Common Stock, subject to
official notice of issuance.
THE FOREGOING IS INTENDED MERELY AS A SUMMARY OF CERTAIN COVENANTS
OF GREINER, ACQUISITION CORP. AND URS. REFERENCE IS MADE TO
ARTICLE 6 OF THE MERGER AGREEMENT ATTACHED HERETO AS APPENDIX B FOR
A COMPLETE STATEMENT OF THE COVENANTS OF EACH PARTY.
CONDITIONS PRECEDENT TO CONSUMMATION OF MERGER. The Merger
will occur only if the Merger Agreement is approved and adopted by
the requisite vote of Greiner stockholders. In addition,
consummation of the Merger is subject to the satisfaction of certain
other conditions, unless waived (to the extent such waiver is
permitted by law). A failure of any such condition to be satisfied,
if not waived, could prevent the consummation of the Merger.
CONDITIONS TO OBLIGATIONS OF GREINER. The obligation of
Greiner to consummate the Merger is subject to the satisfaction of
the following conditions, among others:
1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties of URS and Acquisition Corp.
contained in the Merger Agreement are true in all material
respects at and as of the Closing Date.
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2. COVENANTS PERFORMED. All of the covenants of URS and
Acquisition Corp. to be performed at or before the Closing Date
pursuant to the terms of the Merger Agreement have been duly
performed.
3. CERTIFICATE. At the Closing, Greiner has received a
Certificate signed by the President of each of URS and
Acquisition Corp. to the effect that the conditions set forth
in items (1) and (2) have been satisfied.
4. APPROVAL OF STOCKHOLDERS. The Merger has been
approved by a majority of the outstanding shares of Greiner
Common Stock.
5. OPINION OF COUNSEL. Greiner has received an opinion
of counsel of Messrs. Sheppard, Mullin, Richter & Hampton,
L.L.P., counsel to URS and Acquisition Corp., dated as of the
Effective Time of the Merger, as to certain matters relating to
the organization of URS and Acquisition Corp. and the
authorization and enforceability of the Merger Agreement.
6. FORM S-4. The Registration Statement on Form S-4
pertaining to the URS Common Stock to be issued in connection
with the Merger has become effective under the 1933 Act, and is
not the subject of any stop order or proceedings seeking a stop
order.
7. MERGER DOCUMENTS. The Merger Documents have been
filed with the Secretary of State of the State of Nevada, as
required by law.
8. NO MATERIAL ADVERSE EFFECT. There has been no URS
Material Adverse Effect (as defined in the Merger Agreement)
between the date of the Merger Agreement and the Closing Date.
9. HSR FILING. Any waiting period applicable to the
consummation of the Merger under the Hart-Scott-Rodino
Antitrust Improvements Act (the "HSR Act") has expired or been
terminated, and no action has been instituted by the Department
of Justice ("DOJ") or Federal Trade Commission ("FTC")
challenging or seeking to enjoin the consummation of the
transaction contemplated by the Merger Agreement, which action
has not been withdrawn or terminated. The waiting period under
the HSR Act was terminated on January 4, 1996.
CONDITIONS TO OBLIGATIONS OF URS AND ACQUISITION CORP. The
obligations of URS and Acquisition Corp. to consummate the Merger
are subject to the satisfaction of the following conditions, among
others:
1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties of Greiner contained in the
Merger Agreement are true in all material respects at and as of
the Closing Date.
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2. COVENANTS PERFORMED. All of the covenants of Greiner
to be performed at or before the Closing Date pursuant to the
terms of the Merger Agreement have been duly performed.
3. CERTIFICATE. At the Closing, URS and Acquisition
Corp. has received a Certificate signed by the President of
Greiner to the effect that the conditions set forth in
items (1) and (2) have been satisfied.
4. APPROVAL OF STOCKHOLDERS. The Merger has been
approved by a majority of the outstanding shares of Greiner
Common Stock.
5. OPINION OF COUNSEL. URS has received an opinion of
counsel of Messrs. Nossaman, Guthner, Knox & Elliott, counsel
to Greiner, dated as of the Effective Time of the Merger, as to
certain matters relating to the organization of Greiner and the
authorization and enforceability of the Merger Agreement.
6. FORM S-4. The Registration Statement on Form S-4
pertaining to the URS Common Stock to be issued in connection
with the Merger has become effective under the 1933 Act and is
not the subject of any stop order or proceedings seeking a stop
order.
7. MERGER DOCUMENTS. The Merger Documents have been
filed with the Secretary of State of the State of Nevada, as
required by law.
8. NO MATERIAL ADVERSE EFFECT. There has been no
Greiner Material Adverse Effect (as defined in the Merger
Agreement) between the date of the Merger Agreement and the
Closing Date.
9. HSR FILING. Any waiting period applicable to the
consummation of the Merger under the HSR Act has expired or
been terminated, and no action has been instituted by the DOJ
or FTC challenging or seeking to enjoin the consummation of the
transaction contemplated by the Merger Agreement, which action
has not been withdrawn or terminated. The waiting period under
the HSR Act was terminated on January 4, 1996.
10. CONSENTS. Other than the filing of the Merger
Documents with the Nevada Secretary of State, the parties have
made such filings, and obtained all consents of Governmental
Entities (as defined in the Merger Agreement), required to
consummate the transactions contemplated by the Merger
Agreement.
11. NO LITIGATION. There is not pending any action,
proceeding or other application before any court or
Governmental Entity brought by any Governmental Entity (i)
challenging or seeking to restrain or prohibit the consummation
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of the transactions contemplated by the Merger Agreement, or
seeking to obtain any material damages, or (ii) seeking to
prohibit or impose any material limitations on URS's ownership
or operation of all or any portion of the combined business of
URS and Greiner.
12. SECURED CREDIT AGREEMENT. The conditions set forth
in Sections 4.2, 4.3 and 4.4 of the Secured Credit Agreement
have been satisfied. See "The Merger - Financing of the
Merger."
REPRESENTATIONS AND WARRANTIES. The following is a summary of
the representations and warranties of the parties contained in the
Merger Agreement.
REPRESENTATIONS AND WARRANTIES OF GREINER. In the Merger
Agreement, Greiner has made representations and warranties in
favor of URS and Acquisition Corp. with respect to the
following matters: (1) organization and good standing of
Greiner; (2) capitalization of Greiner; (3) subsidiaries of
Greiner; (4) material investments of Greiner; (5) corporate
power and authority of Greiner to enter into the Merger
Agreement; (6) consents and approvals required to consummate
the Merger; (7) accuracy of Greiner SEC filings and financial
statements; (8) accuracy of information supplied by Greiner in
connection with the preparation of this Proxy Statement/
Prospectus; (9) absence of material adverse changes in
Greiner's business; (10) absence of undisclosed litigation
involving Greiner; (11) absence of undisclosed liabilities of
Greiner; (12) absence of defaults under Greiner organizational
documents, contracts and agreements, orders, decrees, etc., or
registrations, licenses, permits, etc.; (13) good title to
Greiner's properties; (14) Greiner tax filings; (15) Greiner
benefit plans; (16) employee and labor relations matters;
(17) Greiner intellectual property rights; (18) nature and
scope of Greiner insurance policies; (19) compliance by Greiner
with applicable laws; (20) material contracts and agreements of
Greiner; (21) no prohibited payments by Greiner; (22) powers of
attorney issued by Greiner; (23) environmental matters and
compliance; (24) regulatory matters; (25) immigration law
compliance; (26) Greiner board approvals; (27) brokers used by
Greiner in connection with the Merger; and (28) accuracy of
disclosure by Greiner.
REPRESENTATIONS AND WARRANTIES OF URS. URS has made
representations and warranties in favor of Greiner with respect
to the following matters: (1) organization of URS and
Acquisition Corp.; (2) capitalization of URS and Acquisition
Corp.; (3) corporate power and authority of URS and Acquisition
Corp. to enter into the Merger Agreement; (4) consents and
approvals required to consummate the Merger; (5) accuracy of
URS SEC filings and financial statements; (6) accuracy of
information supplied by URS in connection with the preparation
of this Proxy Statement/Prospectus; (7) URS and Acquisition
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Corp. board approvals; (8) brokers used by URS in connection
with the Merger; and (9) accuracy of disclosure by URS.
The representations and warranties of all parties will
terminate at the Effective Time of the Merger.
TERMINATION. The Merger Agreement may be terminated at any
time before the Merger becomes effective in the following
circumstances:
1. By mutual agreement of URS and Greiner;
2. By either URS or Greiner if (i) the approval of the
Merger by a majority of the outstanding shares of Greiner
Common Stock is not obtained, (ii) a Governmental Entity shall
have issued an order, decree or ruling or taken any other
actions permanently restraining, enjoining or otherwise
prohibiting the Merger, or (iii) the Merger shall not have been
consummated before September 30, 1996 (provided that the
terminating party is not then in material breach of any
representation, warranty, covenant or agreement contained in
the Merger Agreement);
3. By URS, if there has been a breach by Greiner of any
representation, warranty, covenant or other agreement in the
Merger Agreement which has a Greiner Material Adverse Effect,
and such breach has not been cured, or Greiner has not
commenced reasonable efforts to cure such breach, within
30 days after written notice of such breach is given by URS to
Greiner;
4. By URS if Greiner shall enter into any discussions,
negotiations or any letter of intent, understanding or other
agreement relating to an Acquisition Proposal (as defined
below);
5. By Greiner if there has been a breach by URS or
Acquisition Corp. of any material representation, warranty,
covenant or other agreement, and such breach has not been
cured, or URS and Acquisition Corp. have not commenced
reasonable efforts to cure such breach, within 30 days after
written notice of such breach is given by Greiner to URS; and
6. By either party, if any of the conditions that must
be satisfied by the other party has not been fulfilled on or
prior to the date specified for fulfillment thereof, or has
become impossible to fulfill for reasons beyond the control of
the other party, and such condition has not been waived.
If the Merger Agreement is terminated by either Greiner or
URS for any of the aforesaid reasons, the Merger Agreement will
thereupon become void and have no effect, and there will be no
liability or obligation on the part of Greiner, URS or
Acquisition Corp., or their respective officers and directors,
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except that (i) the provisions of Section 6.2.3 of the Merger
Agreement (relating to Acquisition Proposals and the
Termination Fee), and the provisions of any then-existing
confidentiality agreements between the parties, will survive
any such termination; and (ii) no party whose breach of its
representations, warranties, covenants or agreements was the
basis of the other party's termination of the Merger Agreement
will be relieved from liability for damages occasioned by such
breach; provided, however, if the breach is the result of
negligence, damages may not exceed the sum of $500,000; but,
provided, further, if the breach is the result of recklessness
or willful misconduct, the amount of damages will not be
limited.
WAIVER AND AMENDMENT. At any time before the Merger becomes
effective, any party to the Merger Agreement may (i) extend the time
for the performance of any of the obligations or other acts of the
other parties to the Merger Agreement, (ii) waive any inaccuracies
in the representations and warranties contained in the Merger
Agreement, and (iii) waive compliance with any of the agreements,
covenants or conditions for the benefit of such party contained in
the Merger Agreement. However, the Secured Credit Agreement
provides that URS may not agree to any material amendment to, or
waive any of its material rights under, the Merger Agreement without
the prior written consent of the Administrative Agent (as defined
below) for the Lenders under its credit facility.
The Merger Agreement may be amended by the parties by action
taken by their respective Boards of Directors at any time prior to
or after the approval of the Greiner stockholders, but after the
approval of the Greiner stockholders has been obtained, no amendment
may be made which by law requires the further approval of the
Greiner stockholders without first obtaining such approval. The
Merger Agreement may not be amended except by a written instrument
signed on behalf of each of the parties.
ACQUISITION PROPOSALS; LIMITATION ON NEGOTIATIONS; TERMINATION
FEE. The Merger Agreement provides that Greiner and its
subsidiaries will not, and will cause their respective officers,
directors, employees, agents and representatives not to, directly or
indirectly, encourage, solicit, accept, initiate or conduct
discussions or negotiations with, provide any information to, or
enter into any agreement with, any corporation, partnership, limited
liability company, person or other entity or group concerning the
acquisition of all or a substantial part of the assets, business or
capital stock of Greiner, whether through purchase, merger,
consolidation, exchange or any other business combination (each of
the foregoing, an "Acquisition Proposal"). Notwithstanding the
foregoing, nothing in the Merger Agreement prevents Greiner and its
officers and directors from responding to and considering
unsolicited firm offers for any such transactions from persons other
than URS if and to the extent that, in the written opinion of
Greiner's outside counsel, failure to do so would be reasonably
likely to constitute a violation of applicable law or a breach of
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the fiduciary duties of Greiner's directors to Greiner's
stockholders. Greiner has agreed to immediately provide written
notice to URS of the terms and other details of any such unsolicited
inquiry or proposal relating to an Acquisition Proposal.
In the event that Greiner or any of its officers or directors
enters into any negotiations or discussions for any reason which
shall constitute a breach of the no-shop provisions of the Merger
Agreement as described in the preceding paragraph, Greiner has
agreed to immediately reimburse URS for all expenses and costs
incurred by URS in connection with the transactions contemplated by
the Merger Agreement. In the event that Greiner or any of its
officers or directors enters in to any letter of intent,
understanding or other agreement with a party other than URS
relating to the acquisition of all or a substantial part of the
assets, business or capital stock of Greiner, whether through
purchase, merger, consolidation, exchange or any other business
combination, either in violation of the no-shop provisions of the
Merger Agreement or within nine months after termination of the
Merger Agreement for any reason, then immediately upon entering into
such letter of intent, understanding or other agreement, Greiner has
agreed to pay to URS a termination fee (the "Termination Fee") of
$5,000,000 dollars; provided, however, that the Termination Fee will
not be payable if, prior to the entry by Greiner into such letter of
intent, understanding or other agreement, URS has unilaterally
declined to close the Merger. The foregoing provisions of the
Merger Agreement may have the effect of discouraging competing
offers to acquire or merge with Greiner.
In the event that either party terminates the Merger Agreement
because of a breach of any of the foregoing by the other party, and
in the event such breach is the result of negligence, the damages
recoverable by the non-breaching party shall not exceed the sum of
$500,000; but, provided, further, that in the event that such breach
is the result of recklessness or willful conduct, the amount of
damages shall not be limited hereby. See "The Merger - The Merger
Agreement."
Accounting Treatment
--------------------
The Merger will be treated as a "purchase" under generally
accepted accounting principles. The acquisition price will be
allocated to the assets acquired (including identifiable intangible
assets) and liabilities. To the extent any excess exists after the
allocation, such excess will be allocated to goodwill. See "The
Merger - Pro Forma Financial Information."
Certain Federal Income Tax Consequences
---------------------------------------
The following discussion is for general information only and is
based on the Federal income tax law now in effect, which is subject
to change, possibly retroactively. This summary does not discuss
all aspects of Federal income taxation which may be important to
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particular Greiner stockholders in light of their individual
circumstances (e.g., financial institutions, broker-dealers,
insurance companies, tax-exempt organizations and foreign
stockholders). In addition, there may be state or local tax
consequences, none of which are discussed below.
A Greiner stockholder whose Greiner Common Stock is converted
into shares of URS Common Stock and cash pursuant to the Merger
generally will recognize income (or loss) equal to the difference
between (i) the amount of cash and the fair market value (determined
as of the Effective Time of the Merger) of the URS Common Stock
received as Merger Consideration and (ii) the Greiner stockholder's
adjusted tax basis in the Greiner Common Stock so converted. The
Merger is NOT intended to constitute a tax-free "reorganization"
within the meaning of Section 368 of the Code. The characterization
of any such income (or loss) as capital gain (or capital loss) or
ordinary income (or ordinary loss) generally will depend on whether
the Greiner Common Stock surrendered in the exchange is held as a
"capital asset" within the meaning of Section 1221 of the Code. Any
capital gain or loss will be a long-term capital gain or loss if the
exchanging Greiner stockholder is treated as holding the Greiner
Common Stock surrendered in the exchange for more than one year.
The maximum Federal tax rate applicable to long-term capital gains
of an individual taxpayer is 28%. Congress is considering
legislation which would reduce this rate but it is uncertain whether
any legislation that is enacted would apply to gain from the Merger
recognized by a Greiner stockholder. Greiner stockholders will have
a tax basis in the URS Common Stock received in the Merger equal to
the fair market value of such URS Common Stock, determined as of the
Effective Time of the Merger.
A holder of Greiner Options who is paid an amount in connection
with the cancellation of the Greiner Options generally will
recognize ordinary income equal to the amount received.
Neither the Performance Plan nor the plan participants (as
defined in the Performance Plan) should recognize any Federal tax
consequences as a result of the Merger and the Greiner Per-
formance Plan's ceasing to be an ESOP within the meaning of
Section 4975(e)(7) of the Code. See "The Merger - Merger
Consideration."
THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX
CONSEQUENCES IS NOT TAX ADVICE AND CONSTITUTES ONLY A GENERAL
DESCRIPTION OF CERTAIN OF THE UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER TO GREINER STOCKHOLDERS WHO ARE CITIZENS
OR RESIDENTS OF THE UNITED STATES, WITHOUT CONSIDERATION OF THE
PARTICULAR FACTS AND CIRCUMSTANCES OF EACH STOCKHOLDER'S SITUATION.
ACCORDINGLY, EACH STOCKHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX
AND FINANCIAL ADVISORS AS TO MATTERS DESCRIBED HEREIN AND ALSO AS TO
ANY ESTATE, GIFT, STATE OR LOCAL OR FOREIGN TAX CONSEQUENCES ARISING
OUT OF THE MERGER.
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Regulatory Approvals
--------------------
Under the Merger Agreement, the obligations of URS and
Acquisition Corp. are conditioned upon the receipt of all required
consents of Governmental Entities (as defined therein). There can
be no assurance that any applicable regulatory authority will
approve or take other required action with respect to the Merger or
as to the date of such regulatory approval or other action. Greiner
and URS are not aware of any government approvals that are required
in order to consummate the Merger except as described below. Should
any other approval be required, Greiner and URS have agreed to use
their best efforts to obtain it. There can be no assurance as to
whether or when any such other approval, if required, could be
obtained. See "The Merger - The Merger Agreement."
HSR ACT. The parties' obligations to close the Merger are
subject to the conditions that the waiting period applicable under
the HSR Act has expired and that no action has been instituted by
the DOJ or FTC challenging or seeking to enjoin the consummation of
the transactions contemplated by the Merger Agreement. Greiner and
URS have submitted their respective applications under the HSR Act
to the DOJ and FTC and were notified of early termination of the
waiting period under the HSR Act on January 4, 1996.
FORM S-4. The Registration Statement on Form S-4 pertaining to
the URS Common Stock to be issued in connection with the Merger has
been filed with the SEC and been declared effective prior to the
mailing of this Proxy Statement/Prospectus. The effectiveness of
the Merger is conditioned upon the continued effectiveness of the
Registration Statement.
LISTING AGREEMENTS. URS has agreed to use its best efforts to
file listing applications with the NYSE and the PSE covering the
shares of URS Common Stock to be issued in connection with the
Merger. URS has filed the listing applications with the NYSE and
the PSE.
Rights of Dissenting Stockholders
---------------------------------
URS STOCKHOLDERS. Based upon the structure of the Merger and
under the Delaware General Corporation Law, URS stockholders will
not be called upon to vote upon the approval of the Merger and will
not have any dissenters' rights with respect to the Merger.
GREINER STOCKHOLDERS. Based upon the structure of the Merger
and under the Nevada General Corporation Law, holders of Greiner
Common Stock are not entitled to dissenters' rights with respect to
the Merger.
Financing of the Merger
-----------------------
GENERALLY. To finance the cash portion of the Merger, URS
executed a Credit Agreement, dated as of January 10, 1996 (the
"Secured Credit Agreement"), by and among URS, as Borrower, the
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financial institutions listed therein as Lenders (the "Lenders"),
and Wells Fargo, as Administrative Agent (the "Administrative
Agent") for the Lenders, pursuant to which the Lenders are making
the following loans to URS to finance the Merger and to provide for
the working capital needs of URS thereafter: (i) a $32,500,000
Tranche A term loan (the "Tranche A Term Loans") maturing on
October 31, 2002, with quarterly principal payments gradually
increasing from $500,000 to $1,750,000; (ii) a $17,500,000 Tranche B
term loan (the "Tranche B Term Loans") maturing on April 30, 2003,
with nominal quarterly principal payments until October 31, 2002 and
then balloon payments due in January and April 2003; and (iii) a
$20,000,000 revolving facility (including a letter of credit
facility) (the "Revolving Loans") expiring April 30, 1999 (the
Tranche A Term Loans, the Tranche B Term Loans and the Revolving
Loans are hereinafter collectively referred to as the "URS Loans").
The URS Loans will be secured by a pledge of the accounts receivable
and general intangibles of URS and its subsidiaries, and of the
stock of URS's subsidiaries. It is expected that the facility will
be syndicated to include other Lenders following consummation of the
Merger.
CONDITIONS TO INITIAL FUNDING. The Lenders' obligation to fund
the URS Loans will expire on May 31, 1996 (the "Initial Funding
Date"), PROVIDED, HOWEVER, that the Initial Funding Date can be
extended, in URS's sole discretion and upon the payment of an
increased commitment fee, until September 30, 1996.
In addition, although the Secured Credit Agreement has been
executed, the Lenders are not obligated to fund the URS Loans until
a number of conditions have been satisfied, including: URS and
Greiner must meet specified financial performance tests; there must
be no material adverse change in the business of URS or Greiner from
the date the Secured Credit Agreement was executed until the Initial
Funding Date; URS and Greiner must each conduct its business in the
ordinary course from the date the Secured Credit Agreement was
executed until the Initial Funding Date; all necessary governmental
approvals required for the Merger have been received; all conditions
to the consummation of the Merger have been satisfied; all necessary
documents and legal opinions must be delivered; all fees must be
paid to Wells Fargo; and there shall not have occurred any material
disruption in the financial, banking or capital markets that would
have an adverse effect on the loan syndication markets for loans
similar to the URS Loans. Although no assurance may be made,
management believes that all conditions to the funding of the URS
Loans will be satisfied.
INTEREST RATES. URS may select either of the following Wells
Fargo interest rates for the URS loans: (i) its Base Rate (the
higher of the rate most recently announced by Wells Fargo as its
"Prime Rate" or one-half of one percent in excess of the Federal
Funds Effective Rate); or (ii) its Adjusted Eurodollar Rate.
Tranche A Term Loans and Revolving Loans bearing interest at
the Base Rate will bear interest at the following rate: (i) from
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the Initial Funding Date until either January 29, 1997 or June 16,
1997 (depending upon when the Merger takes place), at the Base Rate
plus 1.375% per annum; and (ii) thereafter, at the Base Rate plus a
margin (which varies from a high of 1.375% to a low of 0%) depending
upon the ratio of URS's total debt to earnings (i.e., the lower the
ratio of funded debt to earnings, the lower the rate). Tranche B
Term Loans bearing interest at the Base Rate will bear interest at
the Base Rate plus 1.75% per annum.
Tranche A Term Loans and Revolving Loans bearing interest at
the Adjusted Eurodollar Rate will bear interest at the following
rate: (i) from the Initial Funding Date until either January 29,
1997 or June 16, 1997 (depending upon when the Merger takes place),
at the Adjusted Eurodollar Rate plus 2.625% per annum; and
(ii) thereafter, at the Adjusted Eurodollar Rate plus a margin
(which varies from a high of 2.625% to a low of 1.375%) depending
upon the ratio of URS's total debt to earnings (i.e., the lower the
ratio of funded debt to earnings, the lower the rate). Tranche B
Term Loans bearing interest at the Adjusted Eurodollar Rate will
bear interest at the Adjusted Eurodollar Rate plus 3% per annum.
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Pro Forma Financial Information
-------------------------------
The following unaudited pro forma combined condensed financial
statements are derived from the historical consolidated balance
sheets and related consolidated statements of operations of URS and
Greiner adjusted to give effect to the Merger using the purchase
method of accounting for business combinations.
The pro forma combined balance sheet gives effect to the Merger
as if the Merger were effective October 31, 1995. The pro forma
combined condensed statement of operations has been prepared as if
the Merger was effective November 1, 1994. In order to present
comparable data for the combining companies, the pro forma statement
of operations includes the historical data of Greiner for the twelve
month period ended December 31, 1995.
The pro forma combined condensed balance sheet and statement of
operations are provided for illustrative purposes only and should be
read in conjunction with the accompanying notes thereto, the audited
consolidated financial statement and notes thereto of URS for the
year ended October 31, 1995 and the audited financial statements and
notes thereto of Greiner for the year ended December 31, 1995. The
pro forma data is not necessarily indicative of the operating
results or financial position that would have been achieved had the
Merger been consummated at the dates indicated, nor is it
necessarily indicative of future operating results and financial
condition.
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<TABLE>
Unaudited Pro Forma Combined Condensed Balance Sheet
October 31, 1995
(dollars in thousands)
<CAPTION>
URS Greiner
October 31, December 31, Pro Forma Pro Forma
1995 1995 Adjustments Combined
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
ASSETS
------
Current assets:
Cash and short-term investments $ 8,836 $ 15,880 $(15,519) a $ 9,197
Accounts receivable, net 49,022 37,680 86,702
Other current assets 1,849 4,750 6,599
------- ------- ------- -------
Total current assets 59,707 58,310 (15,519) 102,498
------- ------- ------- -------
Property & equipment, net 5,835 9,380 15,215
Goodwill, net 7,765 691 29,533 b 37,989
Long-term investments - 2,993 (2,993) a -
Other assets 768 772 2,000 c 3,540
------- ------- ------- -------
14,368 13,836 28,540 56,744
------- ------- ------- -------
Total assets $ 74,075 $ 72,146 $ 13,021 $159,242
======= ======= ======= =======
LIABILITIES AND EQUITY
----------------------
Current liabilities:
Current bank debt $ - $ - $ 4,675 a $ 4,675
Trade payables 7,724 12,153 19,877
Other current liabilities 15,676 11,742 27,418
------- ------- ------- -------
Total current liabilities 23,400 23,895 4,675 51,970
Long-term debt 9,999 - 45,325 a 55,324
Other 1,198 1,297 2,495
------- ------- ------- -------
Total liabilities 34,597 25,192 50,000 109,789
------- ------- ------- -------
Greiner equity - 46,954 (46,954) d -
URS equity 39,478 9,975 a, d 49,453
------- ------- ------- -------
Total liabilities and equity $ 74,075 $ 72,146 $ 13,021 $159,242
======= ======= ======= =======
</TABLE>
See accompanying notes to pro forma combined
condensed financial statements.
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<TABLE>
Unaudited Pro Forma Combined Condensed Statement of Operations
Year Ended October 31, 1995
(dollars in thousands, except per share data)
<CAPTION>
URS Greiner
October 31, December 31, Pro Forma Pro Forma
1995 1995 Adjustments Combined
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Revenue $179,769 $154,175 $333,944
Expenses:
Direct operating expenses 108,845 93,276 202,121
Indirect, general & administrative
expenses 63,217 63,462 $ 1,000 e 125,679
Restructuring charges - 3,700 3,700
Valuation adjustment-investment in
partnership - 2,300 2,300
------- ------- ------- -------
Operating income (loss) 7,707 (8,563) 1,000 144
Interest (income) expense, net 1,351 (911) 5,990 f 6,430
------- ------- ------- -------
Income (loss) before taxes 6,356 (7,652) (4,990) (6,286)
Income tax expense (benefit) 1,300 (2,170) (1,140) g (2,010)
------- ------- ------- -------
Net income (loss) $ 5,056 $ (5,482) $ (3,850) $ (4,276)
======= ======= ======= =======
Weighted average shares outstanding 8,632 4,755 h 8,567
======= ======= =======
Earnings (loss) per share:
Primary $ 0.68 $ (1.15) $ (0.50)
======= ======= =======
Fully diluted $ 0.67 $ (1.15) $ (0.50)
======= ======= =======
</TABLE>
See accompanying notes to pro forma combined
condensed financial statements.
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Notes to the Pro Forma Combined Condensed
Financial Statements
for the year ended October 31, 1995
(Unaudited)
1. Organization and Basis of Presentation:
The Merger Agreement described within this Proxy Statement/
Prospectus contemplates the merger of a wholly owned subsidiary of
URS with and into Greiner, after which Greiner will be a wholly
owned subsidiary of URS. Greiner stockholders will receive $13.50
per share in cash plus 0.298 shares of URS Common Stock for each
outstanding share of Greiner Common Stock. Based on the 4,704,642
outstanding shares of Greiner Common Stock (net of shares held in
treasury) on the date of this Proxy Statement/Prospectus, the
aggregate consideration will be approximately $64,000,000 in cash
and 1,400,000 shares of URS Common Stock.
The pro forma financial statements have been prepared based on
the historical financial statements of Greiner, whose fiscal year
ends December 31, and URS, whose fiscal year ends October 31, as
adjusted for the effects of the proposed Merger under the purchase
method of accounting. The pro forma balance sheet assumes the
Merger was consummated on October 31, 1995, and the statement of
operations has been prepared as if the Merger had been consummated
on November 1, 1994. However, in order to present comparable data
for the combining companies, the pro forma statement of operations
includes the historical data of Greiner for the twelve month period
ended December 31, 1995. These statements should be read in
conjunction with the historical financial statements, and the
related notes thereto, incorporated by reference herein.
The unaudited pro forma financial statements are not
necessarily indicative of what the actual financial position would
have been at October 31, 1995, nor of the actual results of
operations for the year ended October 31, 1995, had the Merger
occurred on October 31, 1995, and November 1, 1994, respectively,
nor does it purport to present the future financial position or
results of operations of URS and Greiner.
2. The Pro Forma Adjustments:
a. The balance sheet has been adjusted to reflect the cash to
be paid, debt to be incurred and equity to be issued to acquire
Greiner as if URS had acquired Greiner on October 31, 1995 (dollars
in thousands).
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Cash $15,519
Long-term investments 2,993
Term loan - current portion 4,675
Term loan - long term portion 45,325
Common stock 9,975
-------
$78,487
=======
b. Pro forma adjustments resulting in the excess purchase
price over net assets acquired consist of the following (dollars
in thousands):
Purchase price of Greiner (net of
prepaid loan fees of $2,000) $76,487
Fair value of net assets acquired (46,954)
Excess purchase price over net -------
assets acquired $29,533
=======
URS management believes that the amounts reflected on Greiner's
historical consolidated balance sheet as to tangible assets and
liabilities approximate the fair market values of such assets and
liabilities and, accordingly, such amounts have not been adjusted in
the accompanying pro forma financial statements. The excess
purchase price over net assets acquired resulting from the Merger
will be amortized on a straight-line basis over 30 years.
c. Fees and expenses related to the Merger are estimated to
be $5,000,000, $2,000,000 of which are associated with the financing
of the transaction. The financing fees are being capitalized and
charged to interest expense over the term of the loan. The
remaining fees and expenses are being capitalized as goodwill.
d. The pro forma combined condensed balance sheets reflect
the issuance of approximately 1,400,000 shares of URS Common Stock
and cash consideration of $13.50 per Greiner share in exchange for
100% of the shares of Greiner Common Stock, based upon an assumed
URS closing stock price of $7.125 per share.
e. Adjustments to reflect: 1) the reductions in public
company costs and expenses of approximately $2,000,000, net of,
2) $1,000,000 of amortization of goodwill arising from the Merger.
f. Adjustment includes interest expense related to debt
incurred in connection with the Merger, and the reduction in
interest income incurred as follows (dollars in thousands):
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Increase in interest expense $5,090
Decrease in interest income 900
------
Net $5,990
======
g. Subsequent to the Merger, Greiner's operating results will
be included in URS's consolidated tax returns, which results in a
pro forma reduction to the income tax provision of $1,140,000 for
the year ended October 31, 1995.
h. The pro forma combined loss per share calculation is based
upon the weighted average number of shares of URS Common Stock
outstanding, assuming the issuance of 1,400,000 shares of URS Common
Stock pursuant to the Merger. Common stock equivalents, such as
options and warrants, have been excluded from the calculation as
they are anti-dilutive.
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Interests of Certain Persons in the Transaction
-----------------------------------------------
With the approval of URS, Mr. Costello expects to execute an
employment agreement with Greiner to be effective upon consummation
of the Merger. Under this agreement, Mr. Costello will (i) be
employed by Greiner for a term of three years from the date the
agreement is executed, (ii) receive an annual base salary of
$250,000, and (iii) be entitled to a 40% target bonus award
percentage to be calculated under an incentive compensation plan to
be established by Greiner which will be comparable to URS
Consultants, Inc. 1995 Incentive Compensation Plan, with appropriate
modifications. If Mr. Costello's employment is terminated
involuntarily by Greiner without cause (other than by reason of
death or disability), he will be entitled to a severance payment of
one hundred percent (100%) of his annual base compensation (subject
to certain adjustments) and group long-term disability insurance
coverage, basic term life insurance coverage with a death benefit of
up to $100,000 and reimbursement of dental and health insurance
premiums for a period of one year after such termination. If
Mr. Costello is terminated by Greiner other than for cause or
voluntarily leaves for specified reasons within one year following a
Change of Control (as defined in the agreement), Mr. Costello will
be entitled to receive a severance payment equal to two hundred
percent (200%) of his then current base salary.
Mr. Costello was previously granted options to acquire 49,500
shares of Greiner Common Stock at exercise prices ranging from
$10.38 to $16.00 per share. As described generally in "The Merger -
Merger Consideration - Greiner Stock Options" above, like other
holders of Greiner options, upon consummation of the Merger such
options will be cancelled and Mr. Costello will be entitled to
receive a cash payment of approximately $137,500 (assuming a per
share Merger Consideration of $15.50 at the Effective Time of the
Merger). Upon consummation of the Merger, Mr. Costello will also be
granted an option to purchase 50,000 shares of URS Common Stock
under the URS Corporation 1991 Stock Incentive Plan, as amended.
With the approval of URS, Greiner also expects to offer basic
employment agreements to certain other senior executive officers of
Greiner to become effective upon the consummation of the Merger.
These agreements will provide for two year employment terms with
base salaries at varying levels, and for a severance payment of one
hundred percent (100%) of base salary (subject to certain adjust-
ments) in the event of involuntary termination, but will not contain
change of control provisions. At the current time, it is not known
how many senior executive officers will accept such agreement.
William E. Guthner, Jr., a director of Greiner, is a Partner
of Nossaman, Guthner, Knox & Elliott, attorneys at law. Nossaman,
Guthner, Knox & Elliott represents Greiner in connection with the
transactions described herein.
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ANNUAL ELECTION OF GREINER BOARD OF DIRECTORS
---------------------------------------------
The Greiner Meeting will include the annual election of
directors to serve if the Merger does not close or is delayed for
any reason. Pursuant to the authority granted in Greiner's Restated
Articles of Incorporation and Bylaws, the Board has determined that
five directors be elected at the Greiner Meeting to serve until the
next annual meeting and until their successors are elected and have
nominated for election as directors the persons identified below.
If, by reason of death or other unexpected occurrence, any one
or more of the nominees should for any reason become unavailable
for election, the persons named as proxies in the accompanying
form of proxy may vote for the election of such substitute nominees,
and for such term or terms, as the Board of Directors may propose.
All of the nominees were elected to the Board of Directors at the
last Annual Meeting, except for Robert L. Costello, who was elected
by action of the Board in July 1995.
Nominees for the Greiner Board of Directors
-------------------------------------------
The nominees for directors of Greiner, their ages, the period
they have served as directors, the number of shares of Greiner
Common Stock that they beneficially owned, directly or indirectly,
and their percentage of outstanding Greiner Common Stock, at
February 6, 1996 are shown below. Unless indicated otherwise,
beneficial ownership includes both sole voting and sole investment
power.
Shares of Percent of
Director Common Outstanding
Director Age Since Stock Shares
-------- --- -------- --------- -----------
William H. Bowen . . . 79 1982 362,089<F1> 7.70%
Russell Cleveland . . . 57 1983 42,790 0.91%
Robert L. Costello . . 44 1995 26,934<F2> 0.57%
William E. Guthner, Jr. 64 1969 2,290 0.05%
Patrick M. Sullivan . . 52 1995 53,729<F3> 1.14%
All directors and
executive officers as a
group (15 persons) . . 664,670<F4> 14.13%
[FN]
<F1> Includes 282,673 shares owned by Mr. Bowen personally; 21,374
shares owned by Camway, Inc., a corporation controlled by
Mr. Bowen; and 58,042 shares owned by Mr. Bowen's wife, Bebe D.
Bowen as of December 31, 1995. Does not include 7,200 shares
held in trust, as to which Mr. Bowen has expressly disclaimed
beneficial ownership.
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<F2> Includes 16,780 shares of exercisable stock options and 3,843
shares held by the Trust for the Performance Plan for
Mr. Costello's account as of December 31, 1995.
<F3> Includes 52,585 shares owned by Dr. Sullivan's wife,
Patricia B. Sullivan, and 1,144 shares owned by Grayson, Inc.,
a corporation in which Dr. Sullivan is an officer, director,
and majority stockholder.
<F4> Includes 111,255 shares of exercisable stock options and 63,226
shares held by the Trust for the Performance Plan in accounts
for such officers as of December 31, 1995.
The present principal occupations and other biographical
information with respect to Greiner's nominees for directors are as
follows:
WILLIAM H. BOWEN has been a director of Greiner since 1982. He
served as Chairman of the Board of Greiner from May 1985 until June
1992 and was elected interim Chairman in August 1995. Mr. Bowen is
also Chairman of the Board and President of GARVON, Inc., a private
investment company, a position he has held since 1971. He is a
graduate of the University of Chicago and the Harvard Law School.
RUSSELL CLEVELAND has been a director of Greiner since 1983.
He is President of the Renaissance Capital Group, Inc., Renaissance
Capital Partners, Ltd., Renaissance Capital Partners, II, Ltd., and
Renaissance Capital Growth and Income Fund III, Inc., which are
investment partnerships. In addition, Mr. Cleveland serves on the
Board of Directors of Global Environmental Corp., UNICO, Inc. and
Biopharmaceutics, Inc. He is a graduate of the University of
Pennsylvania and the Wharton School of Finance and Commerce.
ROBERT L. COSTELLO was elected Chief Executive Officer in
August 1995 and a director in July 1995. He has served as President
and Chief Operating Officer since February 1994. Prior to this
appointment, Mr. Costello served as Chief Administrative and
Financial Officer, Treasurer and Executive Vice President of
Greiner. He has been employed with Greiner or its subsidiaries for
over 17 years and holds a master's degree in business administration
from the University of Oregon.
WILLIAM E. GUTHNER, JR. has been a director of Greiner since
1969. He has been a Partner of Nossaman, Guthner, Knox & Elliott,
attorneys at law, Los Angeles, California, since 1965. Mr. Guthner
is a graduate of Northwestern University and the University of
Michigan Law School.
PATRICK M. SULLIVAN has been a director of Greiner since 1995.
Since 1992, Dr. Sullivan has served as President of Caribbean
Marine, Inc., a privately held diversified operating company, and
has also served as a director for this company, or its predecessors
since 1979. Dr. Sullivan is a son-in-law of William H. Bowen, a
Director of Greiner. He has a degree in chemistry from St. Louis
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University and is also a graduate of the Stanford University School
of Medicine.
Based solely on Greiner's review of Forms 3, 4, and 5 and
amendments thereto furnished to Greiner pursuant to Rule 16a-3(e)
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), covering the period from January 1, 1995 through December 31,
1995, Greiner believes that its officers, directors, and ten percent
stockholders complied with all applicable filing requirements under
Section 16 of the Exchange Act.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH
---
NOMINEE FOR THE GREINER BOARD OF DIRECTORS.
1995 Meetings of the Greiner Board of Directors
-----------------------------------------------
Greiner's Board of Directors held five regularly scheduled
meetings and two special meetings, with all current members of the
Board attending.
Committees of the Greiner Board of Directors
--------------------------------------------
Greiner's Board of Directors has standing Audit, Nominating,
Compensation, and Executive Committees.
AUDIT COMMITTEE. Greiner has an Audit Committee consisting of
three members appointed annually by the Greiner Board of Directors
from those directors who are neither officers nor employees of
Greiner or its subsidiaries. The members of the Audit Committee
during 1995 were William E. Guthner, Jr. (Chairman), Larry J. Cain,
who resigned from the Board in November 1995, and Patrick M.
Sullivan, who was appointed to the Audit Committee in May 1995. The
Audit Committee reviews Greiner's audited financial statements and
considers and recommends the employment of, and approves the fee
arrangement with, Greiner's independent public accountants. The
Audit Committee met twice during 1995, with all members attending.
NOMINATING COMMITTEE. Greiner has a Nominating Committee
consisting of two members appointed annually by the Greiner Board of
Directors. The members of the Nominating Committee during 1995 were
William H. Bowen (Chairman) and William E. Guthner, Jr. The
Nominating Committee has the responsibility for recommending the
Board's slate of directors, which may include proposed new directors
who would replace existing directors or become additional directors.
The Nominating Committee met once during 1995, with both members
attending.
The Nominating Committee will consider nominees recommended by
Greiner's stockholders provided that such recommendations are
accompanied by information sufficient to enable the Nominating
Committee to evaluate the qualifications of the nominee.
Stockholders wishing to recommend nominees should do so in a written
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communication addressed to the Nominating Committee, care of Melissa
K. Holder, Corporate Secretary of Greiner, at Greiner's principal
office, at 909 E. Las Colinas Boulevard, Suite 1900, Irving, Texas
75039. Such recommendations must be submitted no later than the
first day of December preceding the annual meeting of stockholders.
COMPENSATION COMMITTEE. Greiner has a Compensation Committee
consisting of four members appointed annually by the Greiner Board
of Directors. Such Committee has the responsibility of reviewing
and making recommendations with respect to compensation and benefit
programs for Greiner's employees. The members of the Compensation
Committee during 1995 were Russell Cleveland (Chairman), William H.
Bowen, Larry J. Cain, who resigned from the Board in November 1995,
and Patrick M. Sullivan, who was appointed May 1995. The Committee
met three times during 1995, with all members attending.
EXECUTIVE COMMITTEE. Greiner has an Executive Committee
consisting of three members appointed annually by the Greiner Board
of Directors. The members of the Executive Committee during 1995
were William H. Bowen (Chairman), Russell Cleveland, and Frank T.
Callahan, who resigned from the Executive Committee in July 1995,
and Robert L. Costello, who was appointed to the Executive Committee
in July 1995. The Committee has the responsibility of maintaining
close contact with the operational management of Greiner and
advising management of Greiner on behalf of the Board in such
matters as are appropriate in the interest of timeliness. The
Committee is required to report to the entire Board on a regular
basis. The Committee held one regular meeting and one special
meeting in 1995, with all members attending.
Director Compensation
---------------------
All non-employee directors of Greiner receive $1,000 per month
for their services as directors and are also reimbursed for
reasonable travel expenses incurred in attending Board and committee
meetings. Non-employee Executive Committee members also receive
$1,000 per month for their services on this committee. In addition,
non-employee directors receive $1,000 for each Board meeting
attended, $250 for each partial-day committee meeting attended and
$500 for each full-day or Executive Committee meeting attended.
Compensation Committee Report on Executive Compensation
-------------------------------------------------------
The Compensation Committee of the Greiner Board of Directors is
charged with the responsibility of reviewing and making recom-
mendations with respect to compensation and benefit programs for
Greiner and its executives. With regard to executive compensation,
it is the philosophy of the Greiner organization to provide a
program which encourages continuous improvements in our ability to
provide quality services for our clients while achieving a level of
financial performance that exceeds the average of our industry peer
group for our stockholders, employees, and the ongoing needs of
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Greiner. Greiner's program is designed to link all compensation for
executives to the achievement of Greiner's immediate and long-term
business performance and goals.
The primary elements of this program are Base Salary, Cash
Incentive Compensation, Stock Options, and participation in standard
company benefit programs such as health and disability insurance and
the 401(k)/ESOP which are available to all employees. No single
element of compensation is awarded without consideration of the
potential total compensation to be paid for the designated position.
Base Salary ranges are established for each position, based on
the duties and level of responsibility held, taking into account
"market ranges/rates" for specific positions, verified against
similar or like duties and responsibilities that exist within the
market and industry (defined as professional service firms providing
engineering and architectural consulting services). Once ranges are
established, factors such as local cost-of-living differences or the
movement of the consumer price index have only minor impact on
changes to the person's base compensation. Adjustments to base
compensation are made based upon assigned responsibility and
performance and are measured against successful attainment of
specific goals and objectives of Greiner and individual employees.
Greiner believes that Cash Incentive Compensation plays a
strong role in stimulating management actions aimed at achievement
of Company profit goals. Acceptable profit levels shall be
determined by the Board of Directors in consultation with the
Compensation Committee and with management of Greiner. Overall
economic conditions, the markets for Greiner's services and other
factors may be taken into consideration when determining such profit
levels. Currently, a minimum level of profit (before taxes and
incentives) equal to six percent of net revenue is necessary to
generate a contribution pool for this plan.
If a cash incentive pool is generated, it is distributed to
executives upon consideration of individual attainment of Company
objectives and upon review of all aspects of the individual's total
compensation package. All such awards are reviewed and approved by
this Compensation Committee.
Stock Options are awarded to executives in order to encourage
future management actions aimed at improving Greiner's sales
efforts, client service quality and Company profitability. If
Greiner is successful in improving these areas, it is anticipated
that these actions will generate a positive impact on the value of
Greiner's stock for stockholders, and the individuals will be given
the opportunity to share in the increased value that results from
their efforts. Specific awards of options are based on the
individual's ability to impact company-wide performance and with
consideration of the total compensation appropriate for the
position.
-58-
Page 70 of 256 <PAGE>
In establishing compensation levels for Mr. Callahan and
Mr. Costello, consideration was given to individual performance
level relative to their role as Chief Executive Officer, as well
as the progress made in meeting strategic company objectives.
Based on the philosophy of providing a competitive total
compensation package, Mr. Callahan's and Mr. Costello's duties
and responsibilities, actual performance results, and the overall
profitability of Greiner were evaluated and compared to industry
norms to determine the total compensation paid.
Amounts paid or accrued for fiscal 1995 under these plans for
the Chief Executive Officers and four highest-paid executive
officers are presented elsewhere in this Proxy Statement/Prospectus.
No member of this committee is a former or current officer or
employee of Greiner or any of its subsidiaries.
Compensation Committee
William H. Bowen
Russell Cleveland
Patrick M. Sullivan
-59-
Page 71 of 256 <PAGE>
Performance Graph
-----------------
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG GREINER ENGINEER, INC.,
S&P 500 INDEX AND PEER GROUP INDEX
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, PEER GROUP AND BROAD MARKET
<TABLE>
<CAPTION>
- -------------------------------------------- FISCAL YEAR ENDING -------------------------------
COMPANY 1990 1991 1992 1993 1994 1995
- ----------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
GREINER ENGIN INC 100 115.82 129.66 102.71 80.07 105.83
PEER GROUP 100 154.44 157.03 130.40 94.90 127.83
BROAD MARKET 100 130.48 140.46 154.62 156.66 215.54
</TABLE>
(1) The above graph compares the performance of Greiner Engineering, Inc.
with that of the S&P 500 Composite Index and the weighted performance
of a peer group of similar engineering companies. It should be noted
that many of the companies which provide services similar to Greiner's
are privately held and therefore are not included in this comparison.
The peer index of publicly held companies is comprised of Greiner and:
ICF International, Jacobs Engineering Group, Inc., Michael Baker
Corporation, STV Group, Inc. and URS Corporation.
(2) The comparison of total return on investment (change in year-end stock
price plus reinvested dividends) as of December 31 for each of the
periods assumes that $100 was invested on January 1, 1991 in each of
Greiner Engineering, Inc., the S&P 500 Composite Index and the peer
group, with investment weighted by relative market capitalization.
-60-
Page 72 of 256 <PAGE>
Independent Accountants
-----------------------
The Board of Directors of Greiner appointed the firm of Price
Waterhouse LLP ("Price Waterhouse") to act as independent
accountants for calendar year 1995. A representative of Price
Waterhouse is expected to be present at the Greiner Meeting and
available to respond to appropriate questions and, although it has
been indicated that no statement will be made, an opportunity for a
statement will be provided.
Greiner has not selected an independent accountant for 1996 as
its policy is for the Board of Directors to do so after the Annual
Meeting each year.
The reports of Price Waterhouse on Greiner's financial
statements for each of three years in the period ended December 31,
1995 contained unqualified opinions.
Other Matters
-------------
At the time of mailing this Proxy Statement/Prospectus, Greiner
was not aware of any matter not referred to in the form of proxy
that would be presented for action at the meeting. If, however, any
other business shall properly come before the meeting, it is
intended that the shares represented by proxies will be voted with
respect thereto in accordance with the judgment of the person voting
them.
If the Merger is not consummated for any reason, Greiner's
stockholders may submit proposals for consideration at Greiner's
1997 Annual Meeting of Stockholders. Any such proposal must be
received by December 1, 1996.
-61-
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SELECTED FINANCIAL INFORMATION
------------------------------
Selected URS Historical Financial Data
--------------------------------------
The selected historical consolidated financial information of
URS shown below for the five years ended October 31, 1995 has been
derived from URS's audited consolidated financial statements. This
information should be read in conjunction with URS's consolidated
financial statements and related notes included elsewhere in this
Proxy Statement/Prospectus. Historical operating results are not
necessarily indicative of the results that may be expected in any
future period.
<TABLE>
<CAPTION>
Years Ended October 31,
------------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue $179,769,000 $164,088,000 $145,761,000 $136,793,000 $122,838,000
Net income $ 5,056,000 $ 4,439,000 $ 1,293,000 $ 4,268,000 $ 2,292,000
Earnings per share:
Primary $ .68 $ .60 $ .18 $ .55 $ .40
Fully diluted $ .67 $ .60 $ .18 $ .55 $ .38
Balance Sheet Data
(end of period):
Total assets $ 74,075,000 $ 65,214,000 $ 58,074,000 $ 54,892,000 $ 49,831,000
Working capital $ 36,307,000 $ 33,674,000 $ 27,684,000 $ 26,836,000 $ 21,891,000
Long-term liabilities $ 11,197,000 $ 10,650,000 $ 9,846,000 $ 10,038,000 $ 10,621,000
Stockholders' equity $ 39,478,000 $ 33,973,000 $ 29,389,000 $ 27,878,000 $ 23,264,000
</TABLE>
-62-
Page 74 of 256 <PAGE>
URS Management's Discussion and Analysis of Financial Condition and
Results of Operations
-------------------------------------------------------------------
Results of Operations.
---------------------
FISCAL 1995 COMPARED WITH FISCAL 1994. Revenues in fiscal
1995 were $179.8 million, or 10% over the amount reported in fiscal
1994. The growth in revenues is primarily attributable to increases
in revenues derived from all areas of URS's business, particularly
transportation and other infrastructure projects in the Northeast.
Revenues generated from URS's three largest contracts: Navy CLEAN;
EPA ARCS 9 & 10; and EPA ARCS 6, 7, & 8, decreased in fiscal 1995 to
$37.1 million as compared to $41.0 million in fiscal 1994. 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. Revenues generated from
private commercial businesses increased from $16.3 million in fiscal
1994 to $21.1 million in fiscal 1995.
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 is due to an overall increase in URS's business in fiscal
1995 as compared to fiscal 1994. Indirect general and admin-
istrative expenses ("IG&A") increased to $63.2 million in fiscal
1995 from $55.5 million in fiscal 1994. Expressed as a percentage of
revenues, IG&A expenses increased from 34% in fiscal 1994 to 35% in
fiscal 1995. URS attributes this increase to the overall increase
in URS's business. Net interest expense remained relatively
constant at $1.4 million in fiscal 1995.
URS earned $6.4 million before income taxes in fiscal 1995
compared to $4.9 million in fiscal 1994. While URS has available
net operating loss ("NOL") carryforwards which partially off-set
otherwise taxable income for Federal income tax purposes, for state
income tax purposes such amounts are not necessarily available to
offset income subject to tax. Accordingly, URS's effective tax rate
for fiscal 1995 was approximately 20%. This effective income tax
rate is based on URS using a significant portion of the unlimited
NOL available to it in fiscal year 1995. See "Income Taxes" below
and "Note 6 - Income Taxes" to URS's consolidated financial
statements.
Net income increased to $5.1 million in fiscal 1995 as compared
to $4.4 million in fiscal 1994. URS earned $.67 per share on a
fully-diluted basis in fiscal 1995 compared to $.60 per share in
fiscal 1994.
URS'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 URS'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.
-63-
Page 75 of 256 <PAGE>
FISCAL 1994 COMPARED WITH FISCAL 1993. Revenues in fiscal
1994 grew to $164.1 million, or 13%, over the amount reported in
fiscal 1993. The growth in revenues was primarily attributable to
increases in revenues generated from all areas of URS's business,
particularly transportation and other infrastructure projects in the
Northeast. Revenues derived from URS's three largest contracts:
Navy CLEAN; EPA ARCS 9 & 10; and EPA ARCS 6, 7 & 8, were
$41.0 million in fiscal 1994 compared to $38.5 million in fiscal
1993. The increase in revenues from these contracts was due to an
increase in the number of task orders for hazardous waste clean-up
services. Revenues generated from private commercial businesses
decreased to $16.3 million from $16.7 million in fiscal 1993.
Direct operating expenses, which consist of direct labor and
direct expenses including subcontractor costs, increased
$11.0 million, or 12%, over the amount reported in fiscal 1993.
The increase was due to an overall increase in URS's business in
fiscal 1994 as compared to fiscal 1993. In fiscal 1994, IG&A
expenses increased to $55.5 million from $51.6 million in fiscal
1993. However, expressed as a percentage of revenues, IG&A expenses
decreased from 35% in fiscal 1993 to 34% in fiscal 1994. URS
attributes this decrease to continued emphasis on cost controls, as
well as the one-time charge of $2.0 million taken in the third
quarter of fiscal 1993 in connection with the planned phase-out of
certain of URS's architectural offices and for claims on certain of
URS's architectural projects. Net interest expense remained
constant at $1.2 million in fiscal 1994 due to significantly lower
debt levels in fiscal 1993 and 1994 as the result of the secondary
common stock offering completed by URS in June 1991.
URS earned $4.9 million before income taxes in fiscal 1994
compared to $1.4 million in fiscal 1993. While URS 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, URS's effective tax rate for fiscal 1994 was
approximately 9%.
Net income increased 238% to $4.4 million compared to
$1.3 million in fiscal 1993. URS earned $.60 per share in fiscal
1994 compared to $.18 per share in fiscal 1993.
URS's backlog of signed and funded contracts at October 31,
1994 was $159.1 million as compared to $142.0 million at October 31,
1993. The value of URS's designations, which are awarded projects
for which contracts have not been signed, was $172.0 million at
October 31, 1994 as compared to $213.6 million at October 31, 1993.
INCOME TAXES. Prior to October 10, 1989, URS had available NOL
carryforwards for Federal income tax purposes of approximately
$51.0 million. As a result of a change in ownership as defined by
Section 382 of the Code, that occurred on October 10, 1989, URS's
NOL carryforwards for financial statement and Federal income tax
purposes became limited to approximately $750,000 per year for the
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Page 76 of 256 <PAGE>
succeeding fifteen-year carryforward period, for an aggregate of
$11.2 million, plus NOL attributable to recognized built-in gains,
limited to $14.0 million by Section 382 of the Code, for a total of
$25.2 million. The financial statement tax benefits arising from
these NOL carryforwards will be recognized as a reduction in
financial statement tax expense and an addition to paid-in capital
in the years utilized. At October 31, 1995, URS had utilized
$18.4 million of the total $25.2 million for Federal income tax
purposes, including all of the $14.0 million NOL attributable to
recognized built-in gains. The remaining available NOL is limited
to $750,000 per year.
Effective November 1, 1993, URS adopted the provisions of
Statement of Financial Accounting Standards ("SFAS") Number 109,
"Accounting for Income Taxes." This standard requires companies to
record all deferred tax liabilities and assets for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax basis, including tax loss carryforwards. As
permitted under SFAS Number 109, prior years' financial statements
were not restated. This change did not materially affect URS's
consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES. URS's liquidity and capital
measurements are set forth below:
October 31,
------------------------------------------
1995 1994 1993
----------- ------------ ------------
Working capital $36,307,000 $33,674,000 $27,684,000
Working capital ratio 2.6 to 1 2.6 to 1 2.5 to 1
Average days to convert
billed accounts receivable
to cash 62 66 67
Percentage of debt to
equity 25.0% 27.3% 28.2%
-65-
Page 77 of 256 <PAGE>
As discussed in "Information Concerning URS - Acquisitions"
below, on January 4, 1995, URS acquired E. C. Driver & Associates,
Inc. for an aggregate purchase price of $3,596,000, which was paid
in cash.
In April 1995, URS amended its existing line of credit with
Wells Fargo Bank, National Association (the "Bank"), to be an
unsecured line of credit up to $15,000,000 and expiring April 29,
1997. Borrowings on the unsecured line of credit bear interest at
the option of URS at a per annum rate equal to either the Bank's
prime rate, or 1.5% over the interest rate offered to the Bank in
the interbank Eurodollar market, adjusted for the Bank's Eurodollar
reserve requirements. At October 31, 1995, URS had outstanding
letters of credit totaling $386,000, which reduced the amount
available to URS under the unsecured line of credit to $14,614,000.
See "Note 7 - Long-Term Debt - Credit Agreement" to URS's
consolidated financial statements. Under the unsecured credit
agreement, URS is required to satisfy certain financial and non-
financial covenants. URS was in compliance with all financial and
non-financial covenants contained in the unsecured credit agreement
at October 31, 1995 and a predecessor secured credit agreement at
October 31, 1994.
As discussed more fully in "The Merger," on December 3, 1995,
URS and Greiner executed a letter of intent for URS to acquire all
the outstanding stock of Greiner pursuant to a merger of Greiner
with a wholly-owned subsidiary of URS. To finance the cash portion
of this proposed acquisition, URS has executed the Secured Credit
Agreement, as more fully discussed in "The Merger - Financing of the
Merger." See also "Note 7 - Long-Term Debt - Credit Agreement" to
URS's consolidated financial statements.
URS is a professional services organization and, as such, is
not capital intensive. Capital expenditures during fiscal years
1995, 1994, and 1993 were $1,610,000, $2,149,000, and $1,952,000,
respectively. The expenditures were principally for computer-aided
design and drafting equipment and facilities expansion to accom-
modate URS's growth. URS expects fiscal 1996 capital expenditures
to be comparable to the expenditures in fiscal 1995.
URS believes that its existing financial resources, together
with its planned cash flow from operations and its unused line of
credit, as well as the credit facilities provided for in the Secured
Credit Agreement, will provide sufficient capital to fund its
operations and its capital expenditure needs for the foreseeable
future.
-66-
Page 78 of 256 <PAGE>
Selected Greiner Historical Financial Data
------------------------------------------
The selected historical consolidated financial information of
Greiner shown below for the five years ended December 31, 1995 has
been derived from Greiner's audited consolidated financial
statements and should be read in conjunction therewith. Historical
operating results are not necessarily indicative of the results that
may be expected in any future period.
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------------------------------------
1995<F1> 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue $154,175,000 $151,856,000 $140,555,000 $131,803,000 $127,012,000
Net income (loss) $ (5,482,000) $ 3,979,000 $ 4,226,000 $ 4,040,000 $ 3,415,000
Earnings (loss) per share $ (1.15) $ .82 $ .88 $ .86 $ .75
Cash dividends per share $ .30 $ .28 $ .24 $ .24 $ .20
Balance Sheet Data
(end of period):
Total assets $ 72,146,000 $ 76,189,000 $ 73,398,000 $ 67,813,000 $ 61,941,000
Working capital $ 34,415,000 $ 41,232,000 $ 37,824,000 $ 34,669,000 $ 32,599,000
Long-term liabilities $ 1,297,000 $ 1,388,000 $ 1,367,000 $ 1,344,000 $ 1,663,000
Stockholders' equity $ 46,954,000 $ 55,226,000 $ 52,098,000 $ 48,424,000 $ 42,888,000
</TABLE>
[FN]
<F1> During 1995, Greiner initiated various activities to
restructure certain of its operations in order to reduce its
cost structure and improve future profitability, resulting in
$3,700,000 of restructuring charges. Also in 1995, Greiner
reduced the carrying value of its investment in a partnership
by $2,300,000.
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Greiner Management's Discussion and Analysis of Financial Condition
and Results of Operations
-------------------------------------------------------------------
RESULTS OF OPERATIONS. The following table sets forth, for the
years 1995, 1994 and 1993, the percentage of gross revenue
represented by the items in Greiner's consolidated statements of net
income:
Year Ended December 31,
----------------------------
1995 1994 1993
-------- -------- --------
Gross revenue 100.0% 100.0% 100.0%
Direct costs, principally outside
services 26.2 24.6 23.9
----- ----- -----
Net revenue 73.8 75.4 76.1
Operating expenses:
Salaries and related costs 54.0 53.7 55.1
General expenses 21.5 17.9 16.4
Restructuring charges 2.4 - -
Partnership valuation adjustment 1.5 - -
----- ----- -----
79.4 71.6 71.5
----- ----- -----
Income (loss) from operations (5.6) 3.8 4.6
Other income, principally interest 0.6 0.6 0.4
----- ----- -----
Income (loss) before income taxes (5.0) 4.4 5.0
Income tax provision (benefit) (1.4) 1.8 2.0
----- ----- -----
Net income (loss) (3.6)% 2.6% 3.0%
===== ===== =====
REVENUE. During each of the years 1993 through 1995,
Greiner generated approximately 80% of its revenue from public
sector clients and the remainder of its revenue from private sector
clients. Greiner reports its services by division based on the type
of client and market for which the service is performed. All of
Greiner's services are performed in one segment and are all
engineering and architectural services. In 1995, Greiner expanded
its reporting of divisions to include marine transportation and
federal/military clients. In previous periods, the marine
transportation division was included with the air transportation
division and the federal/military division was included with the
institutional division. Greiner's total revenue was derived from
-68-
Page 80 of 256 <PAGE>
the following market-focused divisions in the approximate
percentages as shown in the following table:
1995 1994 1993
---- ---- ----
Surface transportation 46% 48% 53%
Air transportation 24% 24% 23%
Development 10% 10% 10%
Institutional 13% 16% 12%
Water resources 2% 2% 2%
Marine transportation 2% - -
Federal/military 3% - -
Greiner's gross revenue increased to $154,175,000 in 1995, from
$151,856,000 in 1994, an increase of 1.5%. The increase in revenue
in 1995 is primarily due to the increased use of subconsultants
which permitted a greater volume of work to be performed by Greiner.
This increase in revenue followed an increase of 8.0% in 1994. The
1994 revenue increase was primarily due to additional contracts
resulting from an increased marketing effort.
DIRECT COST OF REVENUE. As a percentage of gross revenue,
Greiner's direct cost of revenue increased to 26.2% in 1995 from
24.6% in 1994 and 23.9% in 1993. These changes primarily resulted
from the increased use of subconsultants on various projects. On
many projects with public clients, Greiner is required to have
subcontractors complete specified percentages of the awarded
contracts. This percentage to be completed by subcontractors varies
by client and project. Additionally, Greiner uses subconsultants on
some projects to provide additional engineering services or other
areas of expertise for which Greiner does not have available staff.
SALARIES AND RELATED COSTS. Salaries and related costs
(payroll taxes, insurance and other fringe) increased slightly in
1995 to 54.0% of gross revenue from 53.7% in 1994. This increase
relates primarily to project labor overruns in the California land
development and mid-Atlantic operations, as well as increased
indirect labor due to the greater marketing effort on international
projects. These increases were partially offset by declines in the
employee incentive and insurance expense. Because of the operating
loss recorded in 1995, there was not a Greiner incentive
contribution.
In 1994, salaries and related costs declined to 53.7% of gross
revenue from 55.1% in 1993. This decrease is a result of decreases
in the direct labor incurred to fulfill contract requirements and a
decline in the employee incentive expense. Salaries and related
costs were higher in 1994 over 1993 for marketing pursuits and for
indirect activities related to employee training, quality management
and long-term strategic planning.
GENERAL EXPENSES. General expenses increased to 21.5% of
gross revenue in 1995 compared to 17.9% in 1994. Greiner
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Page 81 of 256 <PAGE>
experienced three significant increases in general expenses in 1995.
First, Greiner recorded a $850,000 addition to the allowance for
doubtful accounts as a result of contract and payment disputes
related to a contract termination in Hong Kong. Second, Greiner
accrued approximately $600,000 of non-reimbursable expenses related
to the completion of various projects in the California residential
land development operations. Third, Greiner incurred higher costs
related to contract audit matters, litigation and other contin-
gencies. Additionally, depreciation expense increased approximately
$700,000 due to continued upgrading of computer hardware and
software, and data processing expense was higher as fewer of these
expenses were directly reimbursable on projects in 1995 compared to
1994.
In 1994, general expenses increased to 17.9% of gross revenue
from 16.4% in 1993. The primary reasons for this increase were:
higher marketing and travel expenses resulting from Greiner's
expanded international marketing efforts; increased depreciation
expense due to continued upgrading of computer hardware and
software; and increased reserves related to litigation and other
contingencies.
RESTRUCTURING CHARGES. During 1995, Greiner incurred
approximately $3,700,000 of restructuring charges related to the
reduction of operations in Greiner's California residential land
development and Hong Kong operations. The decision by Greiner to
restructure these operations resulted in the following charges in
1995: $1,375,000 associated with the closing of the California
residential land development offices and the early termination or
sublease of office leases; additional office exit costs in
California of $85,000; employee severance costs of $240,000 related
to the termination of approximately 30 employees in California; the
reduction of the carrying value of goodwill associated with the
California residential land development operations of $1,500,000;
and $500,000 related primarily to lease termination costs in the
restructured Hong Kong operations. See Note 10 in the Notes to
Consolidated Financial Statements.
PARTNERSHIP VALUATION ADJUSTMENT. The National
Transportation Authority ("NTA") - a general partnership between
Greiner and The Perot Group - was formed in 1992 to pursue the
planning, financing, construction, and operation of tollroad
facilities worldwide, principally through public/private
partnerships. NTA currently holds the franchise rights for the
tollway extension to State Route 57 (SR 57) in Orange County,
California. To date, NTA has been unsuccessful in securing
necessary financing for the preliminary environmental phases of the
SR 57 project and currently holds no other significant project
franchises. Although NTA is continuing to pursue financing
alternatives for the SR 57 project and is actively seeking new
project opportunities in public/private transportation projects, the
lack of progress on the SR 57 project has caused Greiner to record a
non-cash charge of $2,300,000 in 1995 to reduce the carrying value
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Page 82 of 256 <PAGE>
of its investment in NTA. See Note 4 in the Notes to Consolidated
Financial Statements.
OTHER INCOME. Other income, consisting primarily of
interest income, remained relatively constant in 1995 compared to
1994. Other income increased in 1994 compared to 1993 as a result
of the increase in interest rates on Greiner's investments.
PROVISION (BENEFIT) FOR INCOME TAXES. The effective
income tax rate for 1995, 1994 and 1993 was (28.4%), 40% and 40%
respectively. The income tax rate for 1995 reflects deferred tax
benefits resulting from the losses recorded during the year,
partially offset by permanent differences, primarily related to the
$1,500,000 writeoff of goodwill discussed above.
LIQUIDITY AND CAPITAL RESOURCES. For internal management
purposes, Greiner reviews, among other things, its working capital,
accounts receivable activity and the percentage of debt to equity on
a continuing basis.
Greiner's liquidity and capital measurements are set forth
below:
December 31,
-----------------------------
1995 1994 1993
------ ------ ------
Working capital (in thousands) $34,415 $41,232 $37,824
Working capital ratio 2.4 to 1 3.1 to 1 2.9 to 1
Average days to convert billed
accounts receivable to cash 78 72 73
Percentage of debt to equity - 0.4% 0.5%
The decline in Greiner's working capital and working capital
ratio is primarily a result of the operating losses incurred in
1995, which resulted in increases in accounts payable and accrued
liabilities partially offset by an increase in current deferred tax
benefits. Also in 1995, Greiner's long-term investments increased
due to the purchase of treasury notes in excess of one year. The
increase in 1995 in the average days to convert billed accounts
receivable to cash is primarily a result of Greiner's emphasis on
accelerating the billing process which increased billed accounts
receivable but significantly reduced unbilled accounts receivable.
See Note 2 in the Notes to Consolidated Financial Statements.
In 1995, Greiner paid off all outstanding debt resulting in
the decline in the percentage of debt to equity.
Greiner's assets include cash and investments in excess of its
day-to-day operating needs. It is anticipated that a substantial
-71-
Page 83 of 256 <PAGE>
portion of Greiner's cash will be used to pay the cash portion of
the Merger Consideration to holders of Greiner Common Stock.
Greiner has an unsecured bank line of credit which aggregates
$15,000,000 and provides for the payment of interest at the lower of
the bank's prime rate or 1-1/2% over the bank's cost of funds rate.
At December 31, 1995, 1994 and 1993, there were no working capital
borrowings outstanding. This line of credit will be terminated if
the merger discussed above is consummated.
Greiner has had a cash dividend program which provided for cash
dividend payments of $.30, $.28 and $.24 per share of Greiner's
outstanding common stock for 1995, 1994 and 1993, respectively.
Greiner may not pay cash dividends in 1996 if the proposed merger is
completed.
On March 7, 1995 Greiner's Board of Directors authorized the
purchase of up to 500,000 shares of Greiner's common stock to be
held in treasury. Through December 31, 1995, 127,292 shares of
common stock had been purchased to be held in treasury, of which
6,200 of these shares were released in 1995 for the exercise of
stock options.
Greiner's operations are professional services and as such are
not capital intensive. However, in order to enhance productivity,
remain competitive and potentially increase revenue, Greiner has
increased its annual purchases of computer hardware and software.
Greiner presently has no material commitments for purchases of
additional equipment.
-72-
Page 84 of 256 <PAGE>
INFORMATION CONCERNING URS
--------------------------
Overview
--------
URS offers a broad range of planning, design and program and
construction management services for engineering, architectural and
environmental projects. URS serves public and private sector
clients throughout the United States in two principal markets:
infrastructure projects involving transportation systems,
institutional and commercial facilities and water resources, and
environmental projects involving hazardous waste management and
pollution control.
URS conducts its business through 24 offices located throughout
the United States. URS has approximately 1,500 full-time and
part-time and temporary employees, many of whom hold advanced or
technical degrees and have extensive experience in sophisticated
disciplines applicable to URS's business. URS 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.
URS provides professional services through URS's 24 offices in
three major areas: planning, design and program and construction
management. Each of these offices is responsible for obtaining
local or regional contracts. This approach allows regional
government agencies and private clients to view URS's offices as
local businesses with superior service delivery capabilities.
Because URS can draw from its large and diverse network of
professional and technical resources, URS 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
involve developing alternative concepts for project implementation
and analyzing the impacts of each alternative.
In addition to traditional engineering and architectural
planning services, URS 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. URS'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, URS 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
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construction. Other critical tasks in the design process may
include value analysis and the assessment of construction and
maintenance requirements.
PROGRAM AND CONSTRUCTION MANAGEMENT. URS'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, URS
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, URS's objective is to monitor a
project's schedule, cost and quality. URS generally does not take
contractual responsibility for the contractor's risks and methods,
nor for site safety conditions.
Markets
-------
URS's strategy is to focus on two major markets:
(i) infrastructure projects involving transportation systems,
institutional and commercial facilities and water resources; and
(ii) environmental projects involving hazardous waste management and
pollution control. URS has developed a nationwide identity based on
its successful completion of a number of highly visible rehabilita-
tion and expansion projects in these markets. Although URS views
these markets as being distinct, URS provides its planning, design
and program and construction management services to both markets.
INFRASTRUCTURE. URS has significant expertise in three areas
relating to the infrastructure market: transportation systems,
institutional and commercial facilities and water resources
projects.
TRANSPORTATION SYSTEMS. URS's engineers, designers,
planners and managers provide services for projects involving
all types of transportation networks, such as highways,
roadways, streets, bridges, rapid and mass transit systems,
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
preliminary and final design to construction management.
Historically, URS's emphasis in this market area has been on
the design of new transportation facilities, but in recent
years the rehabilitation of existing facilities has become a
major focus.
INSTITUTIONAL AND COMMERCIAL FACILITIES. URS 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.
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WATER RESOURCES. URS'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.
ENVIRONMENTAL. URS has developed expertise in two principal
environmental markets: hazardous waste management and pollution
control.
HAZARDOUS WASTE MANAGEMENT. URS 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. URS 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 URS include facility siting, transfer station design and
community-wide master planning.
URS has been awarded several significant contracts with
government agencies, including a contract with the U.S.
Department of Defense for environmental engineering and
remediation work in the Northwest and Alaska under the
Comprehensive Long-Term Environmental Action-Navy ("Navy
CLEAN") program and two contracts with the U.S. Environmental
Protection Agency ("EPA") under its Alternative Remedial
Contracting Strategy ("EPA ARCS") program. Under the Navy
CLEAN contract, URS provides site inspections, site
characterizations, remediation designs and action plans for
contaminated Navy facilities. A portion of the Navy CLEAN
contract, which is expected to have a ten-year term, is awarded
each year over the life of the contract. In fiscal 1995 and
1994, URS generated revenues associated with the Navy CLEAN
contract of $16.6 million and $14.3 million, respectively.
URS's services under the ten-year EPA ARCS contracts include
investigating the nature and extent of contamination by
hazardous materials, performing risk assessments, evaluating
the feasibility of various options for remedial action and
providing management, technical, quality assurance and health
and safety reviews of potentially responsible party submittals.
Work under the EPA ARCS contracts is performed on a task order
basis. In fiscal 1995 and 1994, URS recognized revenues of
$20.5 million and $26.7 million, respectively, under the EPA
ARCS contracts.
POLLUTION CONTROL. URS's principal services in this
market include the planning and design of new wastewater
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facilities, such as sewer systems and wastewater treatment
plants, and the analysis and expansion of existing systems.
The types of work performed by URS include infiltration/inflow
studies, combined sewer overflow studies, water quality
facilities planning projects and design and construction
management services for wastewater treatment plants.
Competition
-----------
The engineering and architectural services industry is highly
fragmented and very competitive. As a result, in each specific
market area URS competes with many engineering and consulting firms,
several of which are substantially larger than URS and which possess
greater financial resources. No firm currently dominates any
significant portion of URS's market areas.
Competition is based on quality of service, expertise, price,
reputation and local presence. URS believes that it competes
favorably with respect to each of these factors in the market areas
it serves.
Clients
-------
URS's clients include local, state and Federal government
agencies and private sector businesses. URS's revenues from local,
state and Federal government agencies and private businesses for the
last five fiscal years are as follows:
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---------------- ---------------- ---------------- ---------------- ----------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Local and state
agencies $ 99,871 56% $ 88,207 54% $ 80,350 55% $ 65,315 48% $ 68,720 56%
Federal agencies 58,751 33 59,611 36 48,713 33 52,530 38 35,614 29
Private businesses 21,147 11 16,270 10 16,698 12 18,948 14 18,504 15
------- --- ------- --- ------- --- ------- --- ------- ---
Total $179,769 100% $164,088 100% $145,761 100% $136,793 100% $122,838 100%
======= === ======= === ======= === ======= === ======= ===
</TABLE>
Contract Pricing and Terms of Engagement
----------------------------------------
Under its cost-plus contracts, URS charges clients negotiated
rates based on URS's direct and indirect costs. Labor costs and
subcontractor services are the principal components of URS'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, URS estimates all
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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. URS 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, URS must obtain a contract modification
in order to receive payment for such overage. URS's profit margin
will increase to the extent URS 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, URS's profit margin will decrease and URS may realize a
loss on the project if URS 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 URS's Federal contracts for fiscal years
ended through October 31, 1988, resulting in immaterial adjustments.
Under its fixed-price contracts, URS receives an agreed sum
negotiated in advance for the specified scope of work. Under fixed-
price contracts, no payment adjustments are made if URS 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, URS'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 URS 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
---------------------------------------------------------------
URS's contract backlog was $196,400,000 at October 31, 1995,
compared to $159,100,000 at October 31, 1994. URS'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 $196,400,000 at October 31,
1995, approximately 30%, or $59,000,000, is not reasonably expected
to be filled within the next fiscal year ending October 31, 1996.
URS has also been designated by customers as the recipient of
certain future contracts. These "designations" are projects that
have been awarded to URS 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
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$194,000,000 at October 31, 1995, as compared to $172,000,000 at
October 31, 1994. 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. Examples of such
contracts are the Navy CLEAN and EPA ARCS contracts. Certain
indefinite delivery contracts are for a definite time period with
renewal option periods at the client's discretion. While URS
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 URS and the
realization of their potential maximum values under these contracts
is not assured.
However, because of the increasing frequency with which URS's
government and private sector clients use this contracting method,
URS believes their potential value should be disclosed along with
backlog and designations as an indicator of URS's future business.
When the client notifies URS 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, 1995, the potential value
of URS's five largest indefinite delivery contracts was as follows:
<TABLE>
<CAPTION>
At October 31, 1995
---------------------------------
Revenues
Recognized
Total thru Estimated
Potential October 31, Funded Estimated Remaining
Contract Term Values 1995 Backlog Designations Values
--------------------------- ---------- --------- ----------- ------- ------------ ---------
(In millions)
<S> <C> <C> <C> <C> <C> <C>
EPA ARCS (9 & 10) 1989-1999 $182.5 $ 29.7 $10.6 $ 6.8 $135.4
Navy CLEAN 1989-1999 166.0 109.4 6.4 3.2 47.0
EPA ARCS (6, 7 & 8) 1989-1999 119.7 61.0 3.3 3.0 52.4
Brooks AFB System 1994-1999 50.0 1.7 5.0 - 43.3
NY State Environmental
Remediation 1990-1996 20.0 7.7 1.4 - 10.9
----- ----- ---- ---- -----
Total $538.2 $209.5 $26.7 $13.0 $289.0
===== ===== ==== ==== =====
</TABLE>
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Employees
---------
URS has approximately 1,500 full-time and part-time and
temporary employees, many of whom hold advanced or technical degrees
and have extensive experience in a variety of disciplines applicable
to URS's business. URS also employs, at various times on a
temporary basis, up to several hundred additional persons to meet
contractual requirements. Twenty-seven of URS's employees are
covered by a collective bargaining agreement. URS has never
experienced a strike or work stoppage. URS believes that employee
relations are good.
Acquisitions
------------
In January 1995, URS acquired privately-held E.C. Driver &
Associates, Inc. ("ECD") of Tallahassee, Florida. ECD is a leading
Florida-based transportation engineering firm specializing in bridge
and highway design, including particular expertise in moveable
bridges. The 50-person firm has annualized revenues of
approximately $5,000,000.
On December 3, 1995, URS and Greiner executed a letter of
intent for URS to acquire all the outstanding stock of Greiner
pursuant to a merger of Greiner with a wholly-owned subsidiary of
URS. Greiner is a professional services firm operating in the
engineering and architectural design services industry and
headquartered in Irving, Texas. The acquisition price will consist
of $13.50 in cash plus 0.298 shares of URS Common Stock for each of
the 4,704,642 outstanding shares of Greiner Common Stock, for an
aggregate price of approximately $64,000,000 and 1,400,000 shares of
URS Common Stock. Completion of this transaction is subject to due
diligence, mutual approval of a formal purchase agreement, and
shareholder, regulatory and other approvals. The transaction is
expected to close by April, 1996.
Properties
----------
URS leases office space in 24 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. URS 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.
Legal Proceedings
-----------------
Certain subsidiaries of URS have been named as defendants in
legal proceedings wherein substantial damages are claimed. Such
proceedings are not uncommon in its business and usually involve
claims against multiple defendants who were involved in the project
which is the subject of the proceeding. Historically, URS
subsidiaries have been successful in defending such actions or have
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settled them within insured limits. In the opinion of URS
management, based upon its present knowledge, URS ultimate
liability, if any, in these proceedings is not expected to exceed
amounts previously provided for in the Consolidated Financial
Statements. See "Risk Factors - Legal Proceedings/Liability
Insurance Coverage."
Description of URS Capital Stock
--------------------------------
The authorized capital stock of URS consists of 20,000,000
shares of URS Common Stock, $.01 par value per share, and 1,000,000
shares of preferred stock, $1.00 par value per share. As of
January 31, 1996, there were 7,167,591 shares of URS Common Stock
outstanding held by 2,013 holders of record and no outstanding
shares of preferred stock. The following summary is qualified in its
entirety by reference to URS's Certificate of Incorporation, which
is filed as an exhibit to the Registration Statement of which this
Proxy Statement/Prospectus is a part.
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INFORMATION CONCERNING GREINER
------------------------------
Overview
--------
Greiner is a professional services firm operating in the
engineering and architectural design services industry. Greiner,
through its operating subsidiaries, provides a broad range of
engineering, planning, architectural, environmental analysis,
design, surveying, program management and other services to public
and private sector clients throughout the United States, its
territories and in foreign countries, including Hong Kong and
Malaysia. Greiner's services have been provided through the
following market-focused divisions of Greiner:
* Surface Transportation - serving governmental agencies and
private entities responsible for planning, designing and
operating and maintaining highways, bridges and rail
transportation facilities.
* Air Transportation - serving governmental agencies and
private entities (including air carriers) responsible for
planning, designing and operating and maintaining airports
and airport-related facilities.
* Development - serving private sector owners, developers
and operators of commercial, industrial and recreational
properties.
* Institutional - serving public agencies and private
entities engaged in planning, designing and operating and
maintaining institutional facilities such as schools and
health care facilities.
* Water Resources - serving public agencies and private
entities engaged in the supply, storage, treatment and
control of water and wastewater and the provision of other
municipal services.
* Marine Transportation - serving developers and operators
of port and marine transportation facilities.
* Federal/Military - serving federal government agencies and
military branches responsible for planning, designing,
operating and maintaining government and military
facilities.
Greiner has historically concentrated its professional services
in the transportation infrastructure area (highways, bridges,
airports and transit systems). Greiner's specialization and
expertise in the field of transportation engineering dates back,
through its subsidiary operations, to the early 1900's. Among the
notable transportation projects in which Greiner has been involved
are the Pennsylvania Turnpike, the Chesapeake Bay Bridges, the
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Washington, D.C. Metro rail-transit system and the new Denver and
Hong Kong International Airports.
Greiner operates throughout the United States and in Hong Kong
and Malaysia through over 40 offices. Based on total revenue for the
year ended December 31, 1994, Greiner is ranked in the top 50 design
services firms in America and is one of the top five firms which
specialize in transportation engineering in the United States
according to the Engineering News Record (a McGraw-Hill publication).
-----------------------
Greiner was incorporated in California in 1954 and
reincorporated in Nevada in 1986. Greiner's shares are listed on
the NYSE and the PSE.
Competition
-----------
The market in which Greiner provides services is highly
competitive. Greiner's competitors include large national firms as
well as many small local firms. Greiner competes with these firms
on the basis of technical capabilities, qualifications and
availability of personnel, experience, reputation, quality of
performance and, to a lesser extent, price of services.
Sales and Backlog
-----------------
Greiner's revenues were earned as shown below:
<TABLE>
<CAPTION>
1995 1994 1993
-------------------- -------------------- --------------------
Period Revenues Percent Revenues Percent Revenues Percent
------------ ---------- ------- ---------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
1st Quarter $37,332,000 24.2 $37,148,000 24.5 $33,098,000 23.5
2nd Quarter 40,015,000 25.9 38,484,000 25.3 33,489,000 23.8
3rd Quarter 39,745,000 25.8 38,181,000 25.1 37,080,000 26.4
4th Quarter 37,083,000 24.1 38,043,000 25.1 36,888,000 26.3
---------- ----- ---------- ----- ---------- -----
$154,175,000 100.0 $151,856,000 100.0 $140,555,000 100.0
=========== ===== =========== ===== =========== =====
</TABLE>
The amount of revenue earned by Greiner for services performed
outside of the United States during each of the last three fiscal
years was not significant; however, Greiner has been involved in
major projects in Hong Kong in each of the last three years.
Revenue derived from services to domestic governmental agencies was
approximately 80% of the consolidated revenue for each of the years
1993 through 1995. Also, for each of the years 1993 through 1995
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Greiner had no single customer from which it derived 10% or more of
its revenue. Pass-through subconsultant and other direct materials
costs were approximately 26%, 25% and 24% of revenue in 1995, 1994
and 1993, respectively.
Greiner's backlog is the sum of its Category I and Category II
backlog. Category I backlog is the estimated revenue, excluding
pass-through subconsultant costs and other direct materials costs,
from contracts entered into with clients less that portion of the
contracts which Greiner has already reported as revenue. Category
II backlog is based upon estimated revenue, excluding pass-through
subconsultant costs and other direct materials costs, from projects
for which Greiner has been selected and is negotiating a contract or
is awaiting receipt of a "Notice to Proceed" on a signed contract.
Greiner's backlog at December 31, 1995 was approximately
$170,000,000 and at December 31, 1994 was approximately
$162,000,000. Management estimates that approximately $100,000,000
of services included in Greiner's backlog at December 31, 1995 will
be performed in 1996. Greiner also expects additional revenue in
1996 from sales generated in 1996 which are not included in the
December 31, 1995 backlog.
The composition of backlog as of the dates indicated was as
follows:
December 31,
---------------------------
1995 1994
------------ ------------
Category I backlog $ 98,000,000 $ 98,000,000
Category II backlog 72,000,000 64,000,000
----------- -----------
Total backlog $170,000,000 $162,000,000
============ ===========
Greiner's backlog is subject to revision from time to time due
to cancellations, modifications or changes in the scope of work or
changes in design and construction schedules of particular projects.
While Greiner management believes that its backlog estimates are
accurate, there can be no assurance that such backlog will be
realized.
Compliance with Environmental Laws
----------------------------------
Compliance with Federal, state and local regulations which have
been enacted or adopted relating to the protection of the
environment is not expected to have any material effect upon the
capital expenditures, earnings and competitive position of Greiner.
However, such compliance by Greiner's clients may increase the need
for the environmental related services which Greiner provides.
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Employees
---------
At December 31, 1995 Greiner employed approximately 1,500
persons, which include registered professionals (engineers,
architects and surveyors); technicians; and management and
administrative personnel. Except for approximately 25 surveyors
located in California, none of Greiner's employees is represented by
a labor union. Greiner considers its relations with its employees
to be good.
Properties
----------
Greiner's executive office is located in Irving, Texas and
occupies approximately 13,300 square feet of space. The office is
leased for a term expiring in 1999.
Greiner's subsidiaries lease approximately 400,000 square feet
of office space which includes the principal offices used for
engineering and planning or architectural services. These principal
offices are located in Grand Rapids, Michigan; Orlando, Florida;
Phoenix, Arizona; Santa Ana and Pleasanton, California; Tampa,
Florida; Timonium, Maryland; Rocky Hill, Connecticut; and Hong Kong.
Legal Proceedings
-----------------
Certain subsidiaries of Greiner have been named as defendants
in legal proceedings wherein substantial damages are claimed. Such
proceedings are not uncommon in its business and usually involve
claims against multiple defendants who were involved in the project
which is the subject of the proceeding. Historically, Greiner's
subsidiaries have been successful in defending such actions or have
settled them within insured limits. In the opinion of management,
based upon its present knowledge, Greiner's ultimate liability, if
any, in these proceedings is not expected to exceed amounts
previously provided for in the Consolidated Financial Statements.
See "Risk Factors - Legal Proceedings/Liability Insurance Coverage."
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URS MANAGEMENT
--------------
Executive Officers of URS
-------------------------
The following is a list of URS's executive officers and other
key employees, their ages and their positions as of February 1,
1996:
Name Age Position
---- --- --------
Martin M. Koffel 56 Chief Executive Officer, President and
Chairman of the Board
Kent P. Ainsworth 49 Vice President, Chief Financial
Officer and Secretary
Marvin J. Bloom 54 Senior Vice President and Regional
Manager of URSC
Joseph Masters 39 Vice President, Legal Affairs
Peter J. Pedalino 48 Vice President and Treasurer of URSC
Charles A. Rodenfels 40 Senior Vice President of Architectural
Services of URSC
Irwin L. Rosenstein 59 Vice President and Director of URS;
President of URSC
Martin S. Tanzer Ph.D. 51 Executive Vice President of URSC
Business Experience
-------------------
MARTIN M. KOFFEL has been the Chief Executive Officer,
President and Director of URS since May 1989. Mr. Koffel has served
as Chairman of the Board of URS since June 1989. Mr. Koffel has
also served as a Director of Regent Pacific Corporation since 1993.
KENT P. AINSWORTH has served as Vice President and Chief
Financial Officer of URS since January 1991. Mr. Ainsworth has also
served as Secretary of URS since May 1994. From March 1990 to
December 1990, Mr. Ainsworth served as a financial consultant. From
November 1987 to February 1990, Mr. Ainsworth was President and
Chief Financial Officer of DiGiorgio Corporation.
MARVIN J. BLOOM has served as Senior Vice President and
Regional Manager of URS Consultants, Inc., a wholly-owned subsidiary
of URS ("URSC") since January 1993. From December 1992 through
January 1993, Mr. Bloom served as Senior Vice President and Division
Manager of URSC. From March 1991 through December 1992, Mr. Bloom
served as Vice President and Division Manager of URSC. From August
1990 through February 1991, Mr. Bloom served as Vice President and
Branch Manager of URSC.
JOSEPH MASTERS has served as Vice President, Legal of URS since
July 1994. From April 1994 through July 1994, Mr. Masters served as
Vice President and Director of Legal Affairs for URSC. From May
1992 through April 1994, Mr. Masters served as Vice President and
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Associate General Counsel of URSC. From January 1990 through May
1992, Mr. Masters served as outside counsel to URSC.
PETER J. PEDALINO has served as Vice President and Treasurer of
URSC since July 1989.
CHARLES A. RODENFELS has served as Senior Vice President of
Architectural Services and National Director of Architectural
Services of URSC since July 1993. From November 1990 through
July 1993, Mr. Rodenfels served as Senior Vice President and Ohio
Division Manager of URS Consultants, Inc. - Ohio ("URSC - Ohio").
From November 1989 through November 1990, Mr. Rodenfels served
as Vice President and Ohio Branch Manager for URSC - Ohio. From
November 1981 through November 1989, Mr. Rodenfels served as
Director of Business Development of URSC.
IRWIN L. ROSENSTEIN has served as President of URSC since
February 1989. Mr. Rosenstein has served as Vice President of URS
since 1987 and as Director of URS since February 1989. From August
1986 through February 1989, Mr. Rosenstein served as President of
Eastern Region of URSC.
MARTIN S. TANZER Ph.D. has served as Executive Vice President
of URSC since February 1989. From 1984 through February 1989,
Dr. Tanzer served as Vice President of URSC.
Directors of URS
----------------
The following is an alphabetical list of URS's Directors, their
ages and their positions as of February 1, 1996:
Name Age Year First Elected
----- --- ------------------
Richard C. Blum 60 1975
Emmet J. Cashin, Jr. 73 1972
Armen Der Marderosian 58 1994
Adm. S. Robert Foley, Jr., USN (Ret.) 67 1994
Martin M. Koffel 56 1989
Richard B. Madden 66 1992
Richard Q. Praeger 71 1970
Irwin L. Rosenstein 59 1989
William D. Walsh 65 1988
Business Experience
-------------------
RICHARD C. BLUM has served as Chairman and President of
Richard C. Blum & Associates, Inc. ("RCBA Inc."), the sole general
partner of Richard C. Blum & Associates, L.P., a merchant banking
firm ("RCBA, L.P.") since 1985. Mr. Blum has also served as Vice
Chairman of the Board of Directors and financial consultant to URS
since 1985. Mr. Blum has also served as a Director of National
Education Corporation since 1985; Vice Chairman of Shanghai Pacific
Partners, Inc. since 1986; as a Director of Sumitomo Bank of
California since 1987; as a Director of Northwest Airlines Corp.
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since 1989; as a Director of Shaklee Corporation since 1990; as a
Director of Triad Systems Corporation since 1992 and as a Director
of CB Commercial since 1993.
EMMET J. CASHIN, JR. has served as Chairman of Cashin
Investments since 1993. Mr. Cashin has also served as Trustee for
Thompson McKinnon Asset Management, Inc. (Pimco Advisory Finds)
since 1980. From 1968 to 1993, Mr. Cashin served as Chairman and
Chief Executive Officer of Fox Group, a real estate investment
corporation.
ARMEN DER MARDEROSIAN has served as Senior Vice President,
Technology and Systems for GTE Corporation since 1995. From 1993 to
1995, Mr. Der Marderosian served as Executive Vice President and
General Manager for GTE Government Systems Corporation. From 1990
to 1992, Mr. Der Marderosian served as Vice President and General
Manager for GTE Government Systems Corporation.
ADMIRAL S. ROBERT FOLEY, JR., USN (RET.) has served as Vice
President of Raytheon International Inc. and President of Raytheon
Japan since January 1995. Admiral Foley has also served as Director
of New Japan Radio Company since 1995. From 1991 to 1993, Admiral
Foley served as Vice President, Commercial Marketing and Planning of
Raytheon Corporation. From 1990 to 1991, Admiral Foley served as
Vice Chairman of ICF Kaiser Engineers. From 1985 to 1987, Admiral
Foley served as Assistant Secretary for Defense Programs, United
States Department of Energy. From 1950 to 1985, Admiral Foley
served in the United States Navy, including Commander-in-Chief, U.S.
Pacific Fleet from 1982 to 1985.
MARTIN M. KOFFEL has been the Chief Executive Officer,
President and a Director of URS since May 1989. Mr. Koffel has
served as Chairman of the Board of URS since June 1989. Mr. Koffel
has also served as a Director of Regent Pacific Management
Corporation since 1993.
RICHARD B. MADDEN has served as Director since 1971, as
Chairman from 1977 to 1994, and as Chief Executive Officer from 1971
to 1994, of Potlatch Corporation. Mr. Madden has also served as a
Director of Pacific Gas and Electric Company since 1977; as a
Director of Consolidated Freightways, Inc. since 1992; and as a
Director of Pacific Gas Transmission Company since 1994.
RICHARD Q. PRAEGER has served as a management and engineering
consultant since 1974. Mr. Praeger is also the owner of Transition
Books, a book store, since 1979. Prior to 1974, Mr. Praeger served
as President of URS/Madigan-Praeger, Incorporated.
IRWIN L. ROSENSTEIN has served as President of URSC since 1989.
Mr. Rosenstein has also served as Vice President of URS since 1987
and as a Director of URS since 1989. From 1986 through 1989,
Mr. Rosenstein served as President of the Eastern Region of URSC.
-87-
Page 99 of 256 <PAGE>
WILLIAM D. WALSH has served as General Partner, Sequoia
Associates, a private investment firm, since 1983. Mr. Walsh has
also served as Chairman of the Board of Champion Road Machinery,
Ltd. and Newell Industrial Corporation since 1988. Mr. Walsh has
also served as a Director of National Education Corporation since
1987; as a Director of Basic Vegetable Products since 1990; as a
Director of Acquisition Newcourt Credit Group, Inc. since 1994 and
as a Director of Consolidated Freightways, Inc. since 1994.
-88-
Page 100 of 256 <PAGE>
Executive Compensation
----------------------
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
---------------------------- ------------------------------
Awards Payouts
--------------------- -------
Other
Annual Restricted Securities
Compen- Stock Underlying All Other
sation Award(s) Options/ LTIP Compen-
Salary Bonus <F1> <F2> SARs Payouts sation
Name Principal Position Year ($) ($) ($) ($) (#) ($) ($)
----- ------------------ ---- ------ ------ ------- --------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Martin M. Chairman of the Board; 1995 $385,000 $280,261 $1,585 $0 25,000 $0 $40,775 <F3>
Koffel Chief Executive 1994 $385,000 $283,580 $1,585 $0 40,000 $0 $39,639
Officer; President 1993 $385,000 $ 0 $3,220 $0 0 $0 $35,606
Irwin L. Vice President; 1995 $300,000 $190,659 $1,190 $0 25,000 $0 $13,270 <F4>
Rosenstein President, URS 1994 $300,400 $169,106 $ 840 $0 25,000 $0 $18,105
Consultants, Inc. 1993 $300,000 $ 0 $ 261 $0 0 $0 $16,707
Martin S. Executive Vice 1995 $238,780 $122,019 $1,904 $0 15,000 $0 $10,610 <F5>
Tanzer, President, URS 1994 $224,555 $ 99,209 $1,344 $0 27,500 $0 $22,431
Ph.D. Consultants, Inc. 1993 $220,000 $ 0 $ 492 $0 0 $0 $33,469
Kent P. Vice President; Chief 1995 $188,986 $ 94,633 $ 0 $0 12,000 $0 $ 1,500 <F6>
Ainsworth Financial Officer; 1994 $185,000 $ 90,844 $ 0 $0 10,000 $0 $ 1,500
Secretary 1993 $179,434 $ 0 $ 0 $0 0 $0 $ 1,803
Joseph Vice President - Legal 1995 $130,000 $ 31,544 $ 0 $0 2,400 $0 $ 1,100 <F7>
Masters 1994 $119,237 $ 21,489 $ 0 $0 3,000 $0 $ 842
1993 $104,998 $ 5,000 $ 0 $0 0 $0 $ 1,100
</TABLE>
[FN]
<F1> The amounts in this column primarily represent automobile
allowances.
<F2> The aggregate number and value as of October 31, 1995 of each
of the Named Executive's restricted share holdings are as
follows: Mr. Koffel, 0 shares, $0; Mr. Rosenstein, 0 shares,
$0; Dr. Tanzer, 5,000 shares, $28,750; Mr. Ainsworth, 7,500
shares, $43,125; Mr. Masters, 0 shares, $0. Dr. Tanzer's and
Mr. Ainsworth's shares vested in 1995.
<F3> Consists of matching contributions of $1,500 paid pursuant to
URS's Defined Contribution Plan, a $2,241 cost of living
adjustment to amounts previously credited under URS's Selected
Executives Deferred Compensation Plan, and $10,464 of term life
insurance premiums and $26,550 of disability insurance premiums
paid pursuant to Mr. Koffel's employment agreement (see
"Employment Agreements").
-89-
Page 101 of 256 <PAGE>
<F4> Consists of matching contributions of $1,500 paid by the
Company pursuant to URS's Defined Contribution Plan, $5,770
paid by URS for the surrender of accrued vacation time, a
$4,397 cost of living adjustment to amounts previously credited
under URS's Selected Executives Deferred Compensation Plan and
$1,603 for life and disability insurance premiums.
<F5> Consists of matching contributions of $1,500 paid by the URS
pursuant to URS's Defined Contribution Plan, $4,616 paid by URS
for the surrender of accrued vacation time, a $2,521 cost of
living adjustment to amounts previously credited under URS's
Selected Executives Deferred Compensation Plan and $1,973 for
life and disability insurance premiums.
<F6> Consists of matching contributions of $1,500 paid by URS
pursuant to URS's Defined Contribution Plan.
<F7> Consists of matching contributions of $1,100 paid by URS
pursuant to URS's Defined Contribution Plan.
-90-
Page 102 of 256 <PAGE>
Option/SAR Grants In Last Fiscal Year
-------------------------------------
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
--------------------------------------------------------------- ----------------
Number of % of Total
Securities Options/
Underlying SARs
Options/ Granted to Exercise
SARs Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh) Date 5% ($) 10% ($)
--------------- ---------- --------- ------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
M. M. Koffel 25,000 12% $5.75 3/21/2005 90,404 229,100
I. L. Rosenstein 25,000 12% $5.75 3/21/2005 90,404 229,100
M. S. Tanzer 15,000 7% $5.75 3/21/2005 54,242 137,460
K. P. Ainsworth 12,000 6% $5.75 3/21/2005 43,394 109,968
J. Masters 2,400 1% $5.75 3/21/2005 8,679 21,994
</TABLE>
-91-
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Aggregated Option/SAR Exercises In Last Fiscal Year
and FY-End Option/SAR Values
---------------------------------------------------
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/
Options/ SARs at
SARs at FY-End
FY-End (#) ($)<F1>
Shares ----------- ------------
Acquired On Value
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
-------------- ----------- -------- ------------- -------------
M. M. Koffel 0 $0 372,333 $1,118,000
51,667 $ 15,625
I. L. Rosenstein 0 $0 76,592 $ 0
41,667 $ 15,625
M. S. Tanzer 0 $0 49,366 $ 3,750
33,334 $ 16,875
K. P. Ainsworth 0 $0 63,334 $ 0
18,667 $ 7,500
J. Masters 0 $0 3,500 $ 0
4,400 $ 1,500
[FN]
<F1> Based on 1995 fiscal year-end share price equal to $6.375.
-92-
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Directors' Compensation
-----------------------
During fiscal year 1995, the non-employee members of URS's
Board of Directors received an annual director's fee of $15,000,
plus an attendance fee of $2,000 for each URS Board of Directors
meeting attended, and a fee of $500 for participation in any
telephonic URS Board of Directors meeting. Non-employee directors
who are members of a committee of the Board received $625 for each
committee meeting attended and the Chairman of the committee
received an additional $625 per meeting. Employee members of the
URS Board of Directors did not receive any such fees. In addition,
URS maintains a policy whereby non-employee directors may be hired
on an as-needed basis from time to time as consultants for special
projects at the rate of up to $3,000 per day (plus reasonable
expenses) upon the recommendation of the Chairman of the Board or
any officer designated by the Chairman of the Board.
Upon the conclusion of each Annual Meeting of Stockholders,
each non-employee director who is reelected to serve as a director
automatically receives an option to purchase 1,000 shares under the
1991 Stock Incentive Plan. During fiscal year 1995, Messrs. Blum,
Cashin, Der Marderosian, Foley, Madden, Praeger and Walsh each
received an option to purchase 1,000 shares under the 1991 Stock
Incentive Plan for services rendered as non-employee directors
during fiscal year 1995. Employee members of the URS Board of
Directors did not receive any such options.
Richard C. Blum, a director of URS, receives $60,000 per year
for services provided under a consulting agreement with URS. In
addition, URS pays $90,000 per year to RCBA, L.P. under a separate
consulting agreement. URS may terminate these consulting agreements
at any time. RCBA, Inc., in its capacity as the sole general
partner of RCBA, L.P., indirectly through several entities, holds
2,472,693 shares (assuming the exercise of certain warrants), or
approximately 34 percent, of URS's outstanding Common Stock.
Mr. Blum is the majority stockholder of RCBA, Inc.
Employment Agreements
---------------------
MARTIN M. KOFFEL. Mr. Koffel has an evergreen employment
agreement with URS, executed in December 1991, under which
Mr. Koffel is eligible for a target bonus equal to 60 percent of
his base salary and received an annual base salary of not less than
$385,000 through December 17, 1995. On December 15, 1995, the
Compensation/Option Committee increased Mr. Koffel's annual base
salary, effective December 18, 1995, to $415,000. The agreement
obligates URS to reimburse Mr. Koffel for the cost of maintaining
disability insurance providing monthly benefits of not less than
$10,000 in the event of his disability and provides for certain
supplemental life insurance benefits which currently are in the form
of a $1,155,000 term life insurance policy. If Mr. Koffel's
employment is terminated involuntarily by URS without cause (other
than by reason of death or disability), URS must pay a severance
payment equal to 150 percent of his then current base salary and his
-93-
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then current target bonus. If Mr. Koffel ceases to be employed by
URS for any reason other than for cause within one year following a
Change in Control (see below), he becomes entitled to a special
severance payment equal to three times the sum of his then current
base salary and his then current target bonus. In addition, all
awards held by Mr. Koffel under any of URS's incentive, deferred
compensation, bonus, stock and similar plans, to the extent
unvested, will become vested immediately upon a Change in Control.
A Change in Control is defined in the agreement to include (i) a
change in control required to be reported pursuant to Item 6(e) of
Schedule 14A of Regulation 14A under the Securities Exchange Act of
1934, as amended, or (ii) any person acquiring 20 percent or more of
the voting power of URS or (iii) more than two-thirds of the
Directors not having served on the Board for 24 months prior to the
Change in Control.
Under the terms of an earlier employment agreement executed in
May 1989, Mr. Koffel was granted SARs on 15,000 shares at the base
price of $28.75 which expire upon the earlier of May 9, 1999 or the
termination of Mr. Koffel's employment with URS. At URS's option,
Mr. Koffel's SARs may at any time be replaced with options to
purchase URS Common Stock on the same economic basis as the SARs.
The SARs are fully vested.
IRWIN L. ROSENSTEIN. Mr. Rosenstein has an evergreen employ-
ment agreement with URSC, executed in August 1991, under which
Mr. Rosenstein received an annual base salary of not less than
$300,000 from March 2, 1992 through December 17, 1995. On
December 15, 1995, the Compensation/Option Committee increased
Mr. Rosenstein's annual base salary, effective December 18, 1995, to
$315,000. The agreement also obligates URS to maintain a $400,000
term life insurance policy for Mr. Rosenstein and disability
insurance providing him with benefits of at least $7,000 per month
in the event of his disability. If Mr. Rosenstein's employment is
terminated involuntarily by URS without cause (other than by reason
of death or disability) he is entitled to continuation of his base
salary for one year (or until normal retirement at age 65, if less).
Under the agreement, as amended, if Mr. Rosenstein ceases to be
employed by URS within one year following a Change of Control (see
below), Mr. Rosenstein will be entitled to receive a severance
payment equal to 200 percent of his then current base salary.
Change in Control is defined in Mr. Rosenstein's agreement as the
acquisition by any person of 51 percent of more of URSC's or URS's
then current outstanding securities having the right to vote at
elections of Directors.
Under the terms of an earlier employment agreement executed in
February 1989, Mr. Rosenstein was granted SARs on 7,500 shares at
the base price of $27.50 which expire upon the earlier of
February 24, 1999 or the termination of Mr. Rosenstein's employment
with URS. At URS's option, Mr. Rosenstein's SARs may at any time be
replaced with options to purchase URS Common Stock on the same
economic basis as the SARs. The SARs are fully vested.
-94-
Page 106 of 256 <PAGE>
MARTIN S. TANZER, PH.D. Dr. Tanzer has an evergreen employment
agreement with URSC, executed in August 1991, under which Dr. Tanzer
received an annual base salary of $220,000 from November 1, 1992
through November 14, 1994 and $240,000 from November 15, 1994
through December 17, 1995. On December 15, 1995, the Compensation/
Option Committee increased Dr. Tanzer's annual base salary,
effective December 18, 1995, to $250,000. The agreement also
obligates URS to maintain a $400,000 term life insurance policy for
Dr. Tanzer and disability insurance providing him with benefits of
at least $7,000 per month in the event of his disability. If
Dr. Tanzer's employment is terminated involuntarily by URS without
cause (other than by reason of death or disability) he is entitled
to continuation of his base salary for one year (or until normal
retirement at age 65, if less). Under the agreement, as amended, if
Dr. Tanzer ceases to be employed by URS within one year following a
Change of Control (as defined above in the description of
Mr. Rosenstein's employment agreement), Dr. Tanzer will be entitled
to receive a severance payment equal to 200 percent of his then
current base salary.
Under the terms of an earlier employment agreement executed in
February 1989, Dr. Tanzer was granted SARs on 5,000 shares at the
base price of $26.25 which expire upon the earlier of February 27,
1999 or the termination of Dr. Tanzer's employment with URS. At
URS's option, Dr. Tanzer's SARs may at any time be replaced with
options to purchase URS Common Stock on the same economic basis as
the SARs. The SARs are fully vested.
KENT P. AINSWORTH. Mr. Ainsworth executed an evergreen
employment with URS in May 1991 following his employment as URS's
Vice President and Chief Financial Officer in January 1991. Under
this employment agreement, Mr. Ainsworth received an annual base
salary of $165,000 from February 24, 1992 through March 22, 1993,
$185,000 through December 14, 1994, and $195,000 through
December 17, 1995. On December 15, 1995, the Compensation/Option
Committee increased Mr. Ainsworth's annual base salary, effective
December 18, 1995, to $205,000. If Mr. Ainsworth's employment is
terminated involuntarily by URS without cause (other than by reason
of death or disability), he is entitled to continuation of his base
salary for one year (or until normal retirement at age 65, if less).
If Mr. Ainsworth is terminated by URS other than for cause or
voluntarily leaves for specified reasons within one year following a
Change of Control (as defined in the description of Mr. Koffel's
employment agreement), Mr. Ainsworth will be entitled to receive a
severance payment equal to 280 percent of his then current base
salary (reduced pro rata if such termination occurs within two years
prior to normal retirement). In addition, all awards held by
Mr. Ainsworth under any of URS's incentive, deferred compensation,
bonus, stock and similar plans, to the extent unvested, will become
vested immediately upon a Change of Control.
JOSEPH MASTERS. Mr. Masters does not have a written employment
agreement with URS. Mr. Masters's compensation is reviewed and
established periodically by the Compensation/Option Committee. In
-95-
Page 107 of 256 <PAGE>
fiscal year 1995, Mr. Masters's annual base salary was $130,000. On
December 15, 1995, the Compensation/Option Committee increased
Mr. Masters's annual base salary, effective December 18, 1995, to
$140,000. Mr. Masters has a severance agreement with URS, executed
on November 22, 1993, which provides that if Mr. Masters is
terminated by URS other than for cause or voluntarily leaves for
specified reasons within one year following a Change of Control (as
defined in the description of Mr. Koffel's employment agreement),
Mr. Masters will be entitled to receive his base salary and
participate in any insurance plans maintained by URS during a
severance period commencing on the date his employment terminates
and ending on the earlier of six months thereafter or his death.
Principal URS Stockholders
--------------------------
The following table contains information as of January 15, 1996
as to the beneficial ownership of URS Common Stock, including URS
Common Stock obtainable upon the exercise of warrants ("warrant
shares") and upon exercise of stock options exercisable on or prior
to March 16, 1996, by each director and nominee for director and the
executive officers. To URS's knowledge, the persons named in the
table have sole voting and investment power with respect to all URS
Common Stock shown as beneficially owned by them, subject to
applicable community property laws and except as otherwise noted.
Number Percent of
Name and Address of Shares Class<F1>
--------------------------------------------------------------------
Richard C. Blum &
Associates, L.P.
909 Montgomery Street
San Francisco, CA 94133
(directly)<F2> 996 shares Less than 1%
(through the following
entities)<F3>:
BK Capital Partners 104,719 shares 6.71%
403,546 warrant shares
---------
508,265
BK Capital Partners II 117,869 shares 6.89%
403,546 warrant shares
---------
521,415
BK Capital Partners III 248,738 shares 5.00%
115,299 warrant shares
---------
364,037
The Common Fund 1,077,980 shares 15.04%
-96-
Page 108 of 256 <PAGE>
Richard C. Blum<F4> 17,841 shares Less than 1%
Emmet J. Cashin, Jr.<F5> 8,000 shares Less than 1%
Martin M. Koffel<F6> 357,333 shares 4.75%
Richard B. Madden<F7> 7,000 shares Less than 1%
Richard Q. Praeger<F8> 12,211 shares Less than 1%
Irwin L. Rosenstein<F9> 71,206 shares Less than 1%
William D. Walsh<F10> 8,500 shares Less than 1%
Martin S. Tanzer, Ph.D.<F11> 49,866 shares Less than 1%
Kent P. Ainsworth<F12> 70,834 shares Less than 1%
Joseph Masters<F13> 3,601 shares Less than 1%
All Officers and Directors 3,079,085 shares 35.54%
as a group (10 persons)<F14>
[FN]
<F1> Percentages are calculated with respect to a holder of
warrants or options exercisable prior to March 16, 1996 as if
such holder had exercised its warrants or options. Warrant
shares and option shares held by other holders are not
included in the percentage calculation with respect to any
other stockholder.
<F2> Richard C. Blum is the President, Chief Executive Officer and
majority stockholder of RCBA, Inc.
<F3> RCBA, Inc. is the sole general partner of RCBA, L.P., which
is, in turn, the sole general partner of BK Capital Partners,
a California Limited Partnership, BK Capital Partners II, a
California Limited Partnership, and BK Capital Partners III
Limited Partnership, the address of each of which is 909
Montgomery Street, San Francisco, California 94133. RCBA,
L.P. is an investment adviser to The Common Fund, the address
of which is 909 Montgomery Street, San Francisco, California
94133. RCBA, L.P. exercises voting and investment discretion
as to all such shares.
<F4> Includes 7,387 shares held directly, 2,454 shares held as
beneficiary of the RCB Keogh Plan, and currently exercisable
portions of options. Does not include shares held by RCBA,
L.P. or entities managed by RCBA, L.P., which Mr. Blum may be
deemed to own indirectly in his capacity as the majority
stockholder of RCBA, Inc., in its capacity as the sole general
partner of RCBA, L.P.
-97-
Page 109 of 256 <PAGE>
<F5> Represents currently exercisable portions of options.
<F6> Represents currently exercisable portions of options.
<F7> Includes 5,000 shares held directly and currently exercisable
portions of options.
<F8> Includes 4,211 shares held directly and currently exercisable
portions of options.
<F9> Includes 2,114 shares held directly and currently exercisable
portions of options.
<F10> Includes 2,500 shares held directly and currently exercisable
portions of options.
<F11> Includes 5,500 shares held directly and currently exercisable
portions of options.
<F12> Includes 7,500 shares held directly and currently exercisable
portions of options.
<F13> Includes 101 shares held directly and currently exercisable
portions of options.
<F14> Includes shares held by RCBA, L.P. and by entities managed by
RCBA, L.P., which Mr. Blum may be deemed to own indirectly in
his capacity as the majority stockholder of RCBA, Inc., in its
capacity as the sole general partner of RCBA, L.P.
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Page 110 of 256 <PAGE>
GREINER MANAGEMENT
------------------
Identification of Executive Officers and Other Key Employees
------------------------------------------------------------
The following is an alphabetical list of Greiner's executive
officers and other key employees, their ages and their positions as
of February 1, 1996:
Name Age Position
---- --- --------
Carole A. Chaney 56 Vice President, Director of Human
Resources
Robert L. Costello 44 President and Chief Executive Officer
Arnold M. Davidson 44 Treasurer
Richard L. Haury 63 Division Director - Air Transportation
T. Wallace Hawkes 58 Division Director - Surface
Transportation
Melissa K. Holder 36 Corporate Secretary
William E. Kallas 49 Vice President, Director of Asian
Operations
Patrick J. McColpin 38 Vice President, Chief Financial
Officer
Sam Militello 58 Operations Director
William A. Stevenson 55 Division Director - Institutional;
Managing Principal, Grand Rapids,
Michigan
Frederick K. Walker 48 Division Director - Federal/Military
and Marine
There are no family relationships among the officers listed,
and there are no arrangements or understandings pursuant to which
any of them were elected as officers. All officers hold office for
one year and until their successors are elected and qualified,
unless otherwise specified by the Greiner Board of Directors;
provided, however, that the Chief Executive Officer of Greiner may
remove any other officer of Greiner if he deems such removal
appropriate whether or not said officer was elected by the Board of
Directors.
Business Experience
-------------------
CAROLE A. CHANEY has been Vice President, Director of Human
Resources since October 1993. Mrs. Chaney has been with Greiner for
over 28 years, most recently as human resources manager in Greiner's
Pleasanton, California office. She is a registered Senior
Professional in Human Resources, accredited by the Certification
Institute of the Society of Human Resource Management.
ROBERT L. COSTELLO was appointed Chief Executive Officer in
August 1995 and a Director in July 1995. He has served as President
and Chief Operating Officer since February 1994. Prior to this
-99-
Page 111 of 256 <PAGE>
appointment, Mr. Costello served as Chief Administrative and
Financial Officer, Treasurer and Executive Vice President of
Greiner. He has been employed with Greiner or its subsidiaries for
over 17 years and holds a master's degree in business administration
from the University of Oregon.
ARNOLD M. DAVIDSON was elected Treasurer of Greiner in May
1994. Prior to that he had served as Assistant Treasurer since May
1987. Mr. Davidson also served as Assistant Secretary from June
1985 to May 1990. He has been employed by Greiner or its
subsidiaries for more than 18 years and has served in an executive
capacity for more than eight years. Mr. Davidson is a graduate of
San Diego State University and is a certified public accountant.
RICHARD L. HAURY is the Division Director, Air Transportation,
and has been employed with Greiner for over 31 years. Mr. Haury's
experience includes managing, directing, coordinating, planning and
engineering for major, multidiscipline projects. He graduated from
Auburn University with a degree in civil engineering and is a
registered professional engineer.
T. WALLACE HAWKES is the Division Director, Surface
Transportation, and has been employed with Greiner for over
38 years. In May 1992, Mr. Hawkes was appointed to the management
committee of NTA, a general partnership formed to participate in
public/private transportation projects. He has extensive experience
in all aspects of highway planning and design and is a registered
professional engineer.
MELISSA K. HOLDER was elected Corporate Secretary in February
1994. Mrs. Holder previously served as Assistant Secretary since
May 1990. She currently has responsibility for the Management of
Administrative Services for Greiner. Mrs. Holder earned her
Bachelors degree from Sam Houston State University. She has been
employed by Greiner for over 10 years.
WILLIAM E. KALLAS was appointed Director of Asian Operations in
December 1994 and has served as Vice President since May 1991. Mr.
Kallas previously served as Director of Marketing of Greiner and was
Marketing Manager for the north and midwest operations. He has been
employed by Greiner for 27 years and is a registered professional
engineer. Mr. Kallas holds both Bachelors and Masters degrees in
civil engineering from the University of Maryland.
PATRICK J. McCOLPIN was appointed Vice President and Chief
Financial Officer in May 1994. From 1991 to 1994, Mr. McColpin was
Executive Vice President for Integra Management Company, and from
1992-1994, he was Vice President of Integra-A Hotel and Restaurant
Company, both in Irving, Texas. Prior to that position,
Mr. McColpin was employed for 13 years by the public accounting firm
of Deloitte and Touche. Mr. McColpin holds a Bachelors degree from
the University of Texas and is a certified public accountant.
-100-
Page 112 of 256 <PAGE>
SAM MILITELLO is an Operations Director and has been employed
with Greiner for over 34 years. Mr. Militello's professional
experience includes management responsibility for a wide variety of
projects, including roadway and airport projects. He graduated from
the University of Florida with a degree in civil engineering and is
a registered professional engineer.
WILLIAM A. STEVENSON is the Division Director for the
Institutional Division of Greiner, and has been employed with
Greiner for over 26 years. In January 1996, he assumed responsi-
bility as Managing Principal for Greiner's Grand Rapids, Michigan
office. Mr. Stevenson has extensive experience in the architectural
design of health care, educational and vocational facilities. He
graduated from Cornell University with a degree in architecture and
is a registered architect.
FREDERICK K. WALKER is the Division Director for the Federal/
Military and Marine Divisions of Greiner, and has been employed with
Greiner for over 23 years. Mr. Walker was previously Division
Manager for the Air/Marine Transportation Division of Greiner's
Tampa office operations, and has extensive experience in multi-
discipline design and construction of airports and military
facilities. He received an undergraduate degree from Ohio Wesleyan
University, a Master of Science in Civil Engineering from Case
Western Reserve University, and a Master of Science degree from
Georgia Institute of Technology and is a registered professional
engineer.
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Page 113 of 256 <PAGE>
Executive Compensation and Other Information
--------------------------------------------
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION. The following
table shows all cash compensation paid by Greiner during the fiscal
years indicated to the Chief Executive Officers and the four
highest-paid executive officers of Greiner in 1995 in all capacities
in which they served:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------- --------------------------------
Awards Payouts
--------------------- ---------
Other
Name Annual Restricted No. of Long-Term
and Principal Fiscal Compen- Stock Options Incentive All Other
Position Year Salary Bonus sation Awards /SARs Payouts Compensation
------------- ------ ------ ----- ------- ---------- ------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frank T. Callahan, 1995 $128,000 $ - - - 16,000 - $61,261<FB>
Chairman of the Board 1994 165,000 24,000 - - 15,000 - 8,096
and Chief Executive 1993 164,500 70,000 - - 5,000 - 16,754
Officer <FA>
Robert L. Costello 1995 140,000 - - - 16,000 - 10,558<FD>
President and 1994 129,600 24,000 - - 20,000 - 13,807
Chief Executive Officer 1993 109,800 38,000 - - 5,000 - 10,004
<FC>
William E. Kallas 1995 141,500 - 19,038<FE> - 4,000 - 37,534<FF>
Director of Asian 1994 106,500 12,000 - - 4,000 - 8,122
Operations 1993 104,000 37,000 - - 2,000 - 10,593
Mark S. Anderson 1995 130,000 - - - 4,000 - 12,154<FH>
Operation Director <FG> 1994 130,000 11,000 - - 4,000 - 8,122
1993 129,100 35,000 - - 3,000 - 10,593
Richard L. Haury 1995 117,000 - - - 9,000 - 1,410<FI>
Division Director, 1994 117,000 13,000 - - 4,000 - 41,523
Air/Marine 1993 116,700 35,000 - - 3,000 - 12,051
Transportation
T. Wallace Hawkes, 1995 117,000 - - - 9,000 - 8,319<FJ>
Division Director, 1994 117,000 11,000 - - 4,000 - 5,685
Surface Transportation 1993 116,000 45,000 - - 3,000 - 16,766
</TABLE>
[FN]
<FA> Mr. Callahan retired as Chairman and Chief Executive Officer in
July 1995. He maintained his seat on the Board of Directors.
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<FB> "All Other Compensation" for the 1995 fiscal year for
Mr. Callahan includes the following items: $757 - for company-
paid life insurance; $2,491 - for company-paid executive
medical plan; $58,013 for relocation expenses and retirement
payments. Also, in connection with Mr. Callahan's retirement,
a consultant's agreement providing $6,000 in monthly payments
for 36 months was executed.
<FC> Mr. Costello was appointed Chief Executive Officer in July
1995. He continues to also serve as President and Chief
Operating Officer.
<FD> "All Other Compensation" for Mr. Costello for the 1995 fiscal
year includes the following items: $263 - for company-paid
life insurance; $2,495 - for company-paid executive medical
plan; and $7,800 - cash out of accrued vacation time.
<FE> Mr. Kallas received $19,038 in Other Annual Compensation for
services related to his employment in Hong Kong.
<FF> "All Other Compensation" for Mr. Kallas for the 1995 fiscal
year includes the following items: $1,412 - for company-paid
life insurance; $3,710 - for company-paid executive medical
plan; $788 - cash out of accrued vacation time; and $31,624 for
relocation expenses.
<FG> Mr. Anderson resigned December 22, 1995.
<FH> "All Other Compensation" for Mr. Anderson for the 1995 fiscal
year includes the following items: $263 - for company-paid
life insurance; $3,710 - for company-paid executed medical
plan; and $8,181 - cash out of accrued vacation at resignation.
<FI> "All Other Compensation" for Mr. Haury for the 1995 fiscal year
includes the following items: $652 - for company-paid life
insurance; and $758 - for company-paid executive medical plan.
<FJ> "All Other Compensation" for Mr. Hawkes for the 1995 fiscal
year includes the following items: $519 - for company-paid
life insurance; $1,955 - for company-paid executive medical
plan; and $5,845 - cash out of accrued vacation time.
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GREINER OPTIONS. The following table contains information
concerning the grant of stock options made during fiscal 1995 under
Greiner's 1991 Stock Option Plan to the named executive officers:
Option Grants in Last Fiscal Year <FA>
--------------------------------------
<TABLE>
<CAPTION>
Potential Realizable
Value of Assumed
Annual Rates of
Stock Price
Appreciation for
Option Term <FB>
------------------------------------------------------------------------
% of Total
Options
No. of Granted to Exercise
Options Employees Price
Granted in Fiscal (Per Expiration
Name <FC><FD> Year Share) Date 5% 10%
----------------- -------- --------- --------- ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Frank T. Callahan . 16,000 14.7% $10.375 08/31/95<FE> $ - $ -
Robert L. Costello 16,000 14.7% 10.375 01/11/2000 45,862 101,344
William E. Kallas . 4,000 3.7% 10.375 01/11/2000 11,465 25,336
Mark S. Anderson . 4,000 3.7% 10.375 12/22/95<FF> - -
Richard L. Haury . 9,000 8.3% 10.375 01/11/2000 25,797 57,006
T. Wallace Hawkes . 9,000 8.3% 10.375 01/11/2000 25,797 57,006
</TABLE>
[FN]
<FA> No SARs were granted to any of the named executives during the
last fiscal year.
<FB> Potential realizable value illustrates what might be realized
upon exercise of options at assumed compounded rates of
appreciation. The actual value, if any, will depend on the
excess of market value over option price on the date stock is
sold after it is exercised.
<FC> Options granted in 1995 are 30% exercisable one year from date
of grant, with an additional 30% exercisable two years from
date of grant and the remaining 40% exercisable three years
from date of grant for all options except Mr. Costello's, which
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are exercisable as follows: 8% one year from grant, 10% two
years from grant; 10% three years from grant; 45% four years
from grant and the final 27% on January 11, 2000.
<FD> All options were granted for a term of five years, subject to
earlier termination in certain events.
<FE> Mr. Callahan's options granted in 1995 lapsed upon his
retirement at August 31, 1995.
<FF> Mr. Anderson's options lapsed upon his resignation on
December 22, 1995.
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OPTION/SAR EXERCISES AND HOLDINGS. The following table sets
forth information, with respect to the named executive officers,
concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of the fiscal year.
Aggregated Option/SAR Exercises In Last Fiscal Year,
And Fiscal Year-End Option/SAR Value
----------------------------------------------------
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options/SARs at Options/SARs at
Fiscal Year-End Fiscal Year-End <FA>
--------------------------------------------------------
No. of
Shares
Acquired Value
on Realized
Name Exercise <FB> Exercisable Unexercisable Exercisable Unexercisable
----------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Frank T. Callahan . 0 $ 0 14,825 0 $2,500 $ 0
Robert L. Costello 0 0 15,500 34,000 1,750 52,000
William E. Kallas . 0 0 5,400 7,600 150 12,850
Mark S. Anderson . 6,200 0 0 0 0 0
Richard L. Haury . 0 0 11,500 13,000 1,400 28,475
T. Wallace Hawkes . 0 0 10,500 13,000 1,025 28,475
</TABLE>
[FN]
<FA> Market value of underlying securities at December 31, 1995,
minus the exercise price.
<FB> Market value of underlying securities on date of exercise,
minus the exercise price.
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Beneficial Ownership of Greiner Common Stock
--------------------------------------------
The following table summarizes the number of shares of Greiner
Common Stock that the Chief Executive Officers and the four highest-
paid executive officers of Greiner beneficially owned, directly or
indirectly, and the percentage thereto of the outstanding Greiner
Common Stock, at December 31, 1995:
Percent of
Shares of Outstanding
Name Common Stock Shares
--------------- ------------ -----------
Frank T. Callahan 27,485<FA> .58%
Robert L. Costello 26,934<FB> .57%
William E. Kallas 9,426<FC> .20%
Mark S. Anderson 17,242<FD> .37%
Richard L. Haury 23,487<FE> .50%
T. Wallace Hawkes 18,669<FF> .40%
[FN]
<FA> Includes 14,825 shares of exercisable stock options and
12,660 shares held by the Trust for the Performance Plan as of
December 31, 1995 in an account for Mr. Callahan.
<FB> Includes 16,780 shares of exercisable stock options and
3,843 shares held by the Trust for the Performance Plan as of
December 31, 1995 in an account for Mr. Costello.
<FC> Includes 6,600 shares of exercisable stock options and
2,826 shares held by the Trust for the Performance Plan as of
December 31, 1995 in an account for Mr. Kallas.
<FD> Includes 2,968 shares held by the Trust for the Performance
Plan as of December 31, 1995 in an account for Mr. Anderson.
<FE> Includes 14,200 shares of exercisable stock options and
6,473 shares held by the Trust for the Performance Plan as of
December 31, 1995 in an account for Mr. Haury.
<FF> Includes 13,200 shares of exercisable stock options and
2,969 shares held by the Trust for the Performance Plan as of
December 31, 1995 in an account for Mr. Hawkes.
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Principal Stockholders of Greiner
---------------------------------
The following table sets forth certain information with respect
to the beneficial ownership of Greiner Common Stock as of
December 31, 1995 as to (i) each person known by Greiner to own
beneficially more than five percent of the outstanding shares of
Greiner Common Stock, (ii) each director of Greiner, and (iii) all
directors and executive officers of Greiner as a group. Except as
otherwise noted, the named beneficial owner has sole voting and
investment power with respect to the shares shown.
Each person known to management to be the beneficial owner of
more than 5% of the outstanding Greiner Common Stock based on the
most recent information available, is listed below.
<TABLE>
<CAPTION>
Percent of
No. of Outstanding
Stockholder Address Shares Shares
----------- ------- -------- -----------
<S> <C> <C> <C>
The Greiner Engineering, Inc. 909 East Las Colinas Boulevard, 939,422 <F1> 19.97%
Performance Plan and Employee Stock Suite 1900
Ownership Trust Irving, Texas 75039
William H. Bowen 5646 Milton Street, Suite 900 369,289 <F2> 7.70%
Dallas, Texas 75206
Brinson Partners, Inc. 209 South LaSalle 366,400 <F3> 7.79%
Chicago, Illinois 60604-1295
Dimensional Fund Advisors Inc. 1299 Ocean Avenue, 11th Floor 330,671 <F4> 7.03%
Santa Monica, CA 90401
Weiss, Peck & Greer One New York Plaza 317,700 <F5> 6.75%
New York, New York 10004
</TABLE>
[FN]
<F1> Pursuant to the terms of The Performance Plan and Employee
Stock Ownership Plan of Greiner Engineering, Inc. (the
"Performance Plan"), the participants in the Performance Plan
will have an opportunity to vote 939,422 shares. The Trustees
of the Performance Plan are Carole A. Chaney, Arnold M.
Davidson, Katherine L. Gardner, Thomas D. Jenkins, and
Robert J. Vensas.
<F2> Includes 21,374 shares held by Camway, Inc., a corporation
controlled by Mr. Bowen, 58,042 shares held by Mr. Bowen's
spouse, Bebe D. Bowen, and 7,200 shares held in trust to which
Mr. Bowen has expressly disclaimed beneficial ownership.
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<F3> Includes 216,616 shares held by Brinson Trust Company, its
wholly-owned subsidiary. Information as of Schedule 13G dated
February 13, 1995.
<F4> Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of
330,671 shares as of December 31, 1995, all of which shares are
held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA
Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, to all of which
Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
Information as of Schedule 13G dated February 9, 1996.
<F5> In the Schedule 13G filed with Greiner, Weiss, Peck & Greer has
expressly disclaimed beneficial ownership of such shares.
Information as of Schedule 13G dated February 8, 1995.
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COMPARISON OF RIGHTS OF STOCKHOLDERS OF URS AND GREINER
URS is incorporated in the state of Delaware and is subject to
the provisions of the Delaware General Corporation Law (the "DGCL").
Greiner is incorporated in the state of Nevada and is subject to the
provisions of the Nevada General Corporation Law ("NGCL").
Following the consummation of the Merger, stockholders of Greiner
will hold URS Common Stock rather than Greiner Common Stock and,
therefore, the rights of such stockholders will be governed by the
DGCL and URS's Certificate of Incorporation (the "URS Certificate")
and URS's Bylaws.
There are many similarities between the DGCL and the NGCL, as
well as between the charter and bylaws of URS and Greiner; however,
a number of differences do exist. The following is a summary
comparison of certain differences affecting stockholder rights in
the provisions of the NGCL and the DGCL and the charter documents
and bylaws of URS and Greiner. This summary does not purport to be
a complete discussion of, and is qualified in its entirety by
reference to, the corporate statutes of Nevada and Delaware, and the
URS Certificate and the URS Bylaws and the Greiner Restated Articles
of Incorporation (the "Greiner Articles") and the Greiner Bylaws.
Cumulative Voting
-----------------
In an election of directors governed by cumulative voting
rights, each share of stock otherwise having one vote is entitled to
a number of votes equal to the number of directors to be elected. A
stockholder may then cast all such votes for a single nominee or may
allocate them among as many nominees as the stockholder may choose.
Without cumulative voting rights, the holders of a majority of the
shares present at an annual meeting or any special meeting held to
elect directors would have the power to elect all the directors to
be elected at that meeting, and it is possible that no person could
be elected without the support of holders of a majority of the
shares voting at such meeting.
Under the DGCL and the NGCL, cumulative voting rights in the
election of directors are not mandatory and are not available to
stockholders unless provided for in the corporation's certificate of
incorporation. Neither the URS Certificate nor the Greiner Articles
provide for cumulative voting rights.
Stockholder Power to Call Special Stockholders Meetings
-------------------------------------------------------
Under the DGCL and the NGCL, a special meeting of stockholders
may be called by the board of directors or any other person
specified in the certificate of incorporation or bylaws. Greiner's
Bylaws provide that only the president or chairman of the board may
call special meetings. URS's Bylaws provide that special meetings
of the stockholders, for any purpose or purposes, may be called by
the president, and must be called by the president or the secretary
at the request in writing of a majority of the URS Board of
Directors, or at the request in writing of stockholders owning not
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less than 20% of the issued and outstanding capital stock of URS
entitled to vote.
Size of Board of Directors
--------------------------
Under the NGCL and the DGCL, the number of directors may be
stated in the certificate of incorporation or the bylaws, or may be
determined in the manner provided in the bylaws. Greiner's Bylaws
provide that the number of directors may be not less than three nor
more than eleven, and will be determined from time to time by
resolution of the Greiner Board of Directors. Greiner's Board of
Directors currently consists of six members. URS's Bylaws provide
that the number of directors may be not less than five nor more than
eleven, and will be determined from time to time by resolution of
the Greiner Board of Directors or by the stockholders at the annual
meeting. The URS Board of Directors currently consists of nine
members.
Classified Board of Directors
-----------------------------
The DGCL and the NGCL each provide that a corporation's board
of directors may be divided into various classes with staggered
terms of office; provided that, in the case of the NGCL, at least
one-fourth of the directors must be elected annually. Classifica-
tion of directors has the effect of making it more difficult for
stockholders to change the composition of a corporation's board. At
least two annual meetings of stockholders, instead of one, will
generally be required to effect a change in the majority of a
corporation's board. Such a delay may help ensure that the
corporation's directors, if confronted by a holder attempting to
force a proxy contest, a tender or exchange offer or other
extraordinary corporate transaction, would have sufficient time to
review the proposal as well as any available alternatives to the
proposal and to act in what they believe to be the best interests of
the stockholders.
The classification provisions could also have the effect of
discouraging a third party from initiating a proxy contest, making a
tender offer or otherwise attempting to obtain control of a
corporation, even though such a transaction could be beneficial to
the corporation and its stockholders. The classification of a
corporation's board might also increase the likelihood that
incumbent directors will retain their positions.
None of the Greiner Articles, Greiner Bylaws, URS Certificate
or URS Bylaws currently provide for a classified board. The
adoption of a classified board would require the vote of the
stockholders of Greiner or URS.
Removal of Directors
--------------------
Under the NGCL, a director may be removed by the vote of the
holders of not less than 66-2/3% of the voting power of the voting
stock, subject to certain restrictions concerning cumulative voting.
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However, a Nevada corporation may include in its articles of
incorporation a provision requiring the approval of a larger
percentage of the stockholders to remove a director. Any vacancy in
the board of directors may be filled by a majority of the remaining
directors, though less than a quorum, even if the vacancy is due to
an increase in the number of directors. The Greiner Bylaws do not
permit cumulative voting, and provide that directors may be removed
with or without cause by the vote of not less than 66-2/3% of the
voting power of the voting stock.
Under the DGCL, a director of a corporation that does not have
a classified board of directors may be removed with or without cause
by stockholder vote; PROVIDED, that in the case of a corporation
having cumulative voting, if less than the entire board is to be
removed, a director may not be removed if the shares voted against
such removal would not be sufficient to elect the director under
cumulative voting rules at an election of the Board of Directors. A
director of a corporation with a classified board of directors can
be removed only for cause unless the certificate of incorporation
otherwise provides. Since there is no controlling definition of
"cause" under Delaware law, the resolution of any dispute as to what
constitutes "cause" may be a matter for determination by the courts.
The URS Certificate and Bylaws do not provide for a classified board
of directors or for cumulative voting.
Voting Requirements
-------------------
The NGCL requires most amendments to the articles of
incorporation to be approved by the board of directors, then by the
vote of the holders of a majority of the voting stock, unless the
articles of incorporation require a greater percentage of votes. If
an amendment would alter any preferences or relative rights of a
class or series of outstanding shares, it must be approved by a
majority of the outstanding shares of each class or series so
affected, regardless of limitations or restrictions on the voting
power thereof. The NGCL gives the board of directors the power to
make bylaws, subject to any limitations contained in bylaws adopted
by the stockholders. The Greiner Articles do not contain any
provisions requiring a greater percentage of votes for amendment.
The Greiner Bylaws may be amended by the vote of a majority of
directors at any meeting at which a quorum is present.
Under the DGCL, a corporation with stock outstanding or
subscribed ordinarily may amend its charter provided that the
amendment is advised by the board of directors and approved by
affirmative vote of a majority of all the votes entitled to be cast.
Holders of a class of stock may vote as a class if the amendment
would increase or decrease the number of authorized shares of such
class or the par value of shares of such class, or would alter the
preferences, powers, or special rights of any class so as to affect
them adversely. The URS Certificate provides that the corporation
reserves the right to amend, alter, change or repeal any provision
in the certificate of incorporation as prescribed by the DGCL. As a
result, the URS Certificate may be amended provided that the
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amendment is advised by the board of directors and approved by the
affirmative vote of a majority of all of the outstanding shares of
URS Common Stock.
Business Combinations/Reorganizations
-------------------------------------
Section 203 of the DGCL provides that, subject to certain
exceptions specified therein, a corporation shall not engage in any
business combination with any "interested stockholder" for a three-
year period following the date that such stockholder becomes an
interested stockholder unless (i) prior to such date, the board of
directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder
becoming an interested stockholder, (ii) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the
transaction commenced (excluding shares held by directors who are
also officers and employee stock purchase plans in which employee
participants do not have the right to determine confidentially
whether plan shares will be tendered in a tender or exchange offer)
or (iii) on or subsequent to such date, the business combination is
approved by the board of directors of the corporation and by the
affirmative vote at an annual or special meeting, and not by written
consent, of at least 66-2/3% of the outstanding voting stock which
is not owned by the interested stockholder.
Except as specified in Section 203 of the DGCL, an interested
stockholder is defined to include (a) any person that is the owner
of 15% or more of the outstanding voting stock of the corporation or
is an affiliate or associate of the corporation and was the owner of
15% or more of the outstanding voting stock of the corporation, at
any time within three years immediately prior to the relevant date
and (b) the affiliates and associates of any such person.
For purposes of Section 203, the term "business combination" is
defined broadly to include mergers with or caused by the interested
stockholder; sales or other dispositions to the interested stock-
holder (except proportionately with the corporation's other
stockholders) of assets of the corporation or a subsidiary equal to
ten percent or more of the aggregate market value of the
corporation's consolidated assets or its outstanding stock; the
issuance or transfer by the corporation or a subsidiary of stock of
the corporation or such subsidiary to the interested stockholder
(except for transfers in a conversion or exchange or a pro rata
distribution or certain other transactions, none of which increase
the interested stockholder's proportionate ownership of any class or
series of the corporation's or such subsidiary's stock); or receipt
by the interested stockholder (except proportionately as a
stockholder), directly or indirectly, of any loans, advances,
guarantees, pledges or other financial benefits provided by or
through the corporation or a subsidiary.
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The three-year moratorium imposed on business combinations by
Section 203 does not apply if: (a) prior to the date on which such
stockholder becomes an interested stockholder the board of directors
approves either the business combination or the transaction which
resulted in the person becoming an interested stockholder; (b) the
interested stockholder owns 85% of the corporation's voting stock
upon consummation of the transaction which made him an interested
stockholder (excluding from the 85% calculation shares owned by
directors who are also officers of the target corporation and shares
held by employee stock plans which do not permit employees to decide
confidentially whether to accept a tender or exchange offer); or
(c) on or after the date such person becomes an interested
stockholder, the board approves the business combination and it is
also approved at a stockholder meeting by sixty-six and two-thirds
percent (66-2/3%) of the voting stock not owned by the interested
stockholder.
Section 203 only applies to Delaware corporations which have a
class of voting stock that is listed on a national securities
exchange, are quoted on an interdealer quotation system such as the
New York Stock Exchange (as is URS) or are held of record by more
than 2,000 stockholders. A Delaware corporation may subsequently
elect not to be governed by Section 203 by an amendment to its
charter or to the bylaws, which amendment must be approved by
majority stockholder vote.
Under certain circumstances, Section 203 of the DGCL may make
it more difficult for a person who would be an "interested
stockholder" to effect various business combinations with a
corporation for a three-year period, although the corporation's
certificate of incorporation or stockholders may elect to exclude a
corporation from the restrictions imposed thereunder. The URS
Certificate does not exclude URS from the restrictions imposed under
Section 203 of the DGCL. It is anticipated that the provisions of
Section 203 of the DGCL may encourage companies interested in
acquiring URS to negotiate in advance with URS, since the
stockholder approval requirement would be avoided if a majority of
the directors then in office approve either the business combination
or the transaction which results in the stockholder becoming an
interested stockholder.
Section 203 has been challenged in lawsuits arising out of
ongoing takeover disputes, and it is not yet clear whether and to
what extent its constitutionality will be upheld by the courts.
Although the United States District Court for the District of
Delaware has consistently upheld the constitutionality of Section
203, the Delaware Supreme Court has not yet considered the issue.
URS believes that so long as the constitutionality of Section 203 is
upheld, Section 203 will encourage any potential acquiror to
negotiate with URS's Board of Directors. Section 203 also has the
effect of limiting the ability of a potential acquiror to make a
two-tiered bid for URS in which all stockholders would not be
treated equally. Section 203 may also discourage certain potential
acquirors unwilling to comply with its provisions.
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The NGCL also prohibits certain business combinations between a
corporation and an "interested stockholder" (one beneficially
holding, directly or indirectly, at least 10% of the outstanding
voting stock) for five years after such person became an interested
stockholder unless such interested stockholder, prior to becoming an
interested stockholder, obtained the approval of the board of
directors of either the business combination or the transaction that
resulted in such person becoming an interested stockholder. Not-
withstanding the foregoing, the NGCL permits business combinations
that meet all requirements of the corporation's articles of
incorporation and (i) are approved by the board of directors before
the interested stockholder became an interested stockholder (or as
to which the purchase of shares made by the interested stockholder
had been approved by the board of directors before the date of
purchase), (ii) are approved by the affirmative vote of the holders
of stock representing a majority of the voting stock (excluding
voting stock of the interested stockholder and its affiliates and
associates) at a meeting called for such purpose no earlier than
five years after the interested stockholder became an interested
stockholder, or (iii) the form and amount of consideration to be
received by stockholders (excluding the interested stockholder) of
the corporation satisfy certain tests and, with limited exceptions,
the interested stockholder has not become the beneficial owner of
additional voting shares of the corporation after becoming an
interested stockholder and before the business combination is
consummated. A corporation may expressly exclude itself from
application of the foregoing business combination provisions of the
NGCL but Greiner has not done so.
Rights of Dissenting Stockholders
---------------------------------
Under the NGCL, dissenter's rights do not exist in a merger if
the holder's shares are listed on a national securities exchange,
unless the consideration to be received in the merger is anything
but cash and/or stock. Under the DGCL, dissenters' rights are not
available with respect to (a) a sale of assets, (b) a merger by a
corporation, if the shares of the corporation are either listed on a
national securities exchange or held by more than 2,000 stockholders
of record or if stockholders receive shares of the surviving
corporation or of a listed or widely-held corporation, or (c) a
merger in which the corporation is the surviving corporation;
PROVIDED, that no vote of its stockholders is required to approve
the merger. Because Greiner Common Stock is listed on the NYSE and
because Greiner stockholders will receive cash and stock in the
Merger, stockholders of Greiner will not be entitled to appraisal
rights with respect to the proposed Merger.
Inspection of Books and Records
-------------------------------
The NGCL provides for an absolute right of inspection of a
corporation's books and records for persons holding 15% or more of
the corporation's voting shares. The DGCL, however, gives any
stockholder of record the right to inspect a corporation's books and
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Page 127 of 256 <PAGE>
records for a purpose reasonably related to such person's interest
as a stockholder.
Dividends
---------
The NGCL permits the payment of dividends, if authorized by the
Board of Directors, however, dividends may not be paid if, after
giving it effect, the corporation would not be able to pay its debts
as they become due or the corporation's assets would be less than
the corporation's total liabilities plus whatever amount would be
needed to satisfy preferential rights under dissolution.
The DGCL also permits the payment of dividends out of surplus
or, if there is no surplus, out of net profits for the current and
preceding fiscal years (provided that the amount of capital of the
corporation is not less than the aggregate amount of the capital
represented by the issued and outstanding stock of all classes
having a preference upon the distribution of assets). In addition,
Delaware law generally provides that a corporation may redeem or
repurchase its own shares only if such redemption or repurchase
would not "impair the capital" of the corporation. The ability of a
Delaware corporation to pay dividends on, or redeem or to make
repurchases or redemptions of, its shares is dependent on the
financial status of the corporation standing alone and not on a
consolidated basis. In determining the amount of surplus of a
Delaware corporation, the assets of the corporation, including stock
of subsidiaries owned by the corporation, must be valued at their
fair market value as determined by the board of directors, without
regard to their historical value.
The Greiner Bylaws provide that dividends may be paid at the
discretion of the Greiner Board. Greiner has paid dividends since
1988. URS has not paid cash dividends since 1986. See "Summary -
Dividend Policy."
Limitation of Liability and Indemnification of Directors
--------------------------------------------------------
Both the NGCL and the DGCL permit a corporation to include a
provision in its articles or certificate of incorporation
eliminating or limiting the personal liability of a director or
officer to the corporation or its stockholders for damages for
breach of the director's fiduciary duty, subject to certain
limitations. Each of the Greiner Articles and the URS Certificate
include such a provision, to the maximum extent permitted by law.
The Greiner Articles provide that a director will not be
personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except
for liability (i) for acts or omissions which involve intentional
misconduct, fraud or a knowing violation of the law or (ii) the
payment of dividends in violation of Section 78.300 of the NGCL.
Article XI of the URS Certificate provides that a director of
the corporation shall not be personally liable to the corporation or
-116-
Page 128 of 256 <PAGE>
its stockholders for monetary damages for breach of fiduciary duty
as a director, except for liability (i) for any beach of the
director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, as the same exists or hereafter may be
amended, or (iv) for any transaction from which the director derived
an improper personal benefit. Article XI of the URS Certificate
further provides that if the DGCL is amended to authorize the
further elimination or limitation of the liability of directors,
then the liability of a director of the corporation, in addition to
the limitation on personal liability provided in Article XI as
currently written, shall be limited to the fullest extent permitted
by the amended DGCL. Finally, Article XI provides that any repeal
or modification of Article XI shall be prospective only, and shall
not adversely affect any limitation on the personal liability of a
director of the corporation existing at the time of such repeal or
modification.
While these provisions provide directors with protection from
awards for monetary damages for breaches of their duty of care, they
do not eliminate such duty. Accordingly, these provisions will have
no effect on the availability of equitable remedies such as an
injunction or rescission based on a director's breach of his or her
duty of care. The provisions described above apply to an officer of
the corporation only if he or she is a director of the corporation
and is acting in his or her capacity as director, and do not apply
to officers of the corporation who are not directors.
In addition, both the NGCL and the DGCL permit a corporation to
indemnify officers, directors, employees and agents for actions
taken in good faith and in a manner they reasonably believed to be
in, or not opposed to, the best interests of the corporation, and
with respect to any criminal action, which they had no reasonable
cause to believe was unlawful. Both states' laws provide that a
corporation may advance expenses of defense (upon receipt of a
written undertaking to reimburse the corporation if indemnification
is not appropriate) and must reimburse a successful defendant for
expenses, including attorney's fees, actually and reasonably
incurred, and both states permit a corporation to purchase and
maintain liability insurance for its directors and officers. Both
the NGCL and the DGCL provide that indemnification may not be made
for any claim, issue or matter as to which a person has been
adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable to the corporation, unless and
only to the extent a court determines that the person is entitled to
indemnity for such expenses as the court deems proper.
The Greiner Articles provide that each person who is involved
in any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the
fact that he or she is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
-117-
Page 129 of 256 <PAGE>
corporation or of a partnership, joint venture, trust or other
enterprise will be indemnified by the corporation if such person
acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of Greiner, and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The indemnification rights
conferred by the Greiner Articles are not exclusive of any other
right to which a person seeking indemnification may be entitled
under any law, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
The URS Bylaws provide that any officer, director or employee
of URS who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
wither civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation), by reason of the
fact that he or she 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 of a
partnership, joint venture, trust or other enterprise, shall be
indemnified by the corporation if such person acted in good faith
and in a manner he or she 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 no reasonable cause to
believe that his or her conduct was unlawful. In addition, the URS
Bylaws provide that 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 or she
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, partnership, joint
venture, trust or other enterprise, shall be indemnified by the
corporation if such person acted in good faith any in a manner he or
she 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 or her
duties to the corporation (unless a court shall determine, upon
application, that such person is reasonably entitled to indemnity
for such expenses which the court deems proper). The
indemnification rights conferred by the URS Bylaws are not exclusive
of any other right to which a person seeking indemnification may be
entitled under any law, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
controlling the registrant pursuant to the foregoing provisions, the
registrant has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Act and
is therefore unenforceable.
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Page 130 of 256 <PAGE>
AFFILIATES' RESTRICTION ON SALE OF URS COMMON STOCK
---------------------------------------------------
The shares of URS Common Stock to be issued pursuant to the
Merger have been registered under the Securities Act by a
Registration Statement on Form S-4, thereby allowing such securities
to be traded without restriction by any former holder of Greiner
Common Stock who is not deemed to be an "affiliate" of Greiner prior
to the consummation of the Merger, as "affiliate" is defined for
purposes of Rule 145 under the Securities Act, and who does not
become an "affiliate" of URS after the consummation of the Merger.
Shares of URS Common Stock received by persons who are deemed
to be affiliates of Greiner prior to the Merger may be resold by
them only in transactions permitted by the resale provisions of Rule
145 promulgated under the Securities Act or as otherwise permitted
under the Securities Act. Rule 145, as currently in effect, imposes
restrictions in the manner in which such affiliates, and others with
whom they might act in concert, may sell URS Common Stock within any
three-month period. Persons who may be deemed to be affiliates of
Greiner generally include individuals or entities that control, are
controlled by or are under common control with Greiner and may
include certain officers and directors as well as principal
stockholders of Greiner. Greiner stockholders who are identified as
affiliates will be so advised by Greiner prior to the Effective
Date.
Each of URS and Greiner will use its best efforts to cause each
and any Greiner stockholder who is an affiliate to agree not to make
any public sale of any URS Common Stock received upon consummation
of the Merger except in compliance with Rule 145 under the
Securities Act or otherwise in compliance with the Securities Act.
In general, Rule 145, as currently in effect, imposes restrictions
on the manner in which such affiliates may make resales of URS
Common Stock and also on the quantity of resales that such stock-
holders, and others with whom they may act in concert, may make
within any three-month period for a period of two (2) years after
consummation of the Merger. In addition, officers and directors of
URS following the Merger will be subject to the resale restrictions
of Rule 144 as it applies to affiliates of an issuer.
-119-
Page 131 of 256 <PAGE>
LEGAL MATTERS
-------------
Certain legal matters with respect to the validity of the URS
Common Stock to be issued in connection with the Merger being passed
upon for URS by Sheppard, Mullin, Richter & Hampton LLP, San
Francisco, California. The Federal income tax consequences to
Greiner stockholders in connection with the Merger are being passed
upon for Greiner by Nossaman, Guthner, Knox & Elliott, L.L.P.,
San Francisco, California.
EXPERTS
-------
The Consolidated Financial Statements of URS for the three year
period ended October 31, 1995, have been included in this Proxy
Statement/Prospectus and Registration Statement in reliance upon the
report of Coopers & Lybrand L.L.P. independent certified public
accountants, given on the authority of said firm as experts in
auditing and accounting.
The Consolidated Financial Statements of Greiner for the
three year period ended December 31, 1995 have been included in this
Proxy Statement/Prospectus and Registration Statement in reliance on
the reports of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
-120-
Page 132 of 256 <PAGE>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
Page
----
URS CORPORATION
Report of Independent Accountants . . . . . . . . . . . F-2
Consolidated Balance Sheets as of October 31, 1994
and 1995 . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Statements of Operations at October 31,
1993, 1994 and 1995 . . . . . . . . . . . . . . . . . F-4
Consolidated Statements of Changes in Stockholders'
Equity at October 31, 1993, 1994 and 1995 . . . . . . F-5
Consolidated Statements of Cash Flow at October 31,
1993, 1994 and 1995 . . . . . . . . . . . . . . . . . F-6
Notes to Consolidated Financial Statements . . . . . . . F-7
GREINER ENGINEERING, INC.
Report of Independent Accountants . . . . . . . . . . . F-23
Consolidated Balance Sheets as of December 31, 1994
and 1995 . . . . . . . . . . . . . . . . . . . . . . . F-24
Consolidated Statements of Operations at December 31,
1993, 1994 and 1995 . . . . . . . . . . . . . . . . . F-26
Consolidated Statements of Stockholders' Equity at
December 31, 1993, 1994 and 1995 . . . . . . . . . . . F-27
Consolidated Statements of Cash Flows at December 31,
1993, 1994 and 1995 . . . . . . . . . . . . . . . . . F-28
Notes to Consolidated Financial Statements . . . . . . . F-30
F-1
Page 133 of 256 <PAGE>
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, 1995 and
1994, 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, 1995. These financial statements
are the responsibility of the Company's management. Our responsi-
bility 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,
1995 and 1994, and the consolidated results of their operations and
their cash flows for each of the three years in the period ended
October 31, 1995, in conformity with generally accepted accounting
principles.
As discussed in the Notes to the Consolidated Financial
Statements, effective November 1, 1993, the Company adopted
Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
San Francisco, California
December 15, 1995
F-2
Page 134 of 256 <PAGE>
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
October 31,
----------------------
1995 1994
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 8,836 $ 9,457
Accounts receivable, including retainage
amounts of $3,895 and $2,925, less
allowance for doubtful accounts of $664
and $495 35,822 30,132
Costs and accrued earnings in excess of
billings on contracts in process, less
allowances for losses of $606 and $646 13,200 13,747
Prepaid expenses 1,849 929
------ ------
Total current assets 59,707 54,265
Property and equipment at cost, net 5,835 5,469
Goodwill, net 7,765 4,787
Other assets 768 693
------ ------
$74,075 $65,214
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,724 $ 9,440
Accrued salaries and wages 6,588 5,700
Accrued expenses and other 9,088 5,451
------ ------
Total current liabilities 23,400 20,591
Long-term debt 7,204 6,638
Long-term debt to related parties 2,795 2,632
Deferred compensation and other 1,198 1,380
------ ------
Total liabilities 34,597 31,241
------ ------
Commitments and contingencies (Note 8)
Stockholders' equity:
Common Shares, par value $.01; authorized
20,000 shares; issued 7,167 and 7,019
shares, respectively 73 71
Treasury stock (287) (59)
Additional paid-in capital 31,791 30,261
Retained earnings since February 21, 1990,
date of quasi-reorganization 7,901 3,700
------ ------
Total stockholders' equity 39,478 33,973
------ ------
$74,075 $65,214
====== ======
See Notes to Consolidated Financial Statements
F-3
Page 135 of 256 <PAGE>
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Years Ended October 31,
----------------------------------
1995 1994 1993
-------- -------- --------
Revenues $179,769 $164,088 $145,761
------- ------- -------
Expenses:
Direct operating 108,845 102,500 91,501
Indirect, general and
administrative 63,217 55,455 51,607
Interest expense, net 1,351 1,244 1,220
------- ------- -------
173,413 159,199 144,328
------- ------- -------
Income before taxes 6,356 4,889 1,433
Income tax expense 1,300 450 140
------- ------- -------
Net income $ 5,056 $ 4,439 $ 1,293
======= ======= =======
Net income per share:
Primary $ .68 $ .60 $ .18
======= ======= =======
Fully diluted $ .67 $ .60 $ .18
======= ======= =======
See Notes to Consolidated Financial Statements
F-4
Page 136 of 256 <PAGE>
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands)
<TABLE>
<CAPTION>
Common Shares Additional Retained Total
---------------- Treasury Paid-in Earnings Shareholders'
Number Amount Stock Capital (Deficit) Equity
------ ------ ------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balances November 1, 1992 6,959 $ 70 $ 0 $27,697 $ 111 $27,878
----- ----- ----- ------ ------ ------
Stock in lieu of interest 4 - - 31 - 31
Employee stock purchases 26 - - 187 - 187
Quasi-reorganization
NOL carryforward - - - 450 (450) -
Net income - - - - 1,293 1,293
----- ----- ----- ------ ------ ------
Balances, October 31, 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
===== ===== ===== ====== ====== ======
</TABLE>
See Notes to Consolidated Financial Statements
F-5
Page 137 of 256 <PAGE>
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Years Ended October 31,
----------------------------
1995 1994 1993
-------- -------- --------
Cash flows from operating activities:
Net income $ 5,056 $ 4,439 $ 1,293
------ ------ ------
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
Depreciation and amortization 3,124 2,596 2,986
Changes in current assets and
liabilities:
Increase in accounts receivable and
costs and accrued earnings in
excess of billings on contracts in
process (4,067) (4,938) (1,949)
Decrease (increase) in prepaid
expenses and other (881) 26 137
Increase in accounts payable,
accrued salaries and wages and
accrued expenses 1,252 1,682 1,455
Other, net (391) 28 517
------ ------ ------
Total adjustments (963) (606) 3,146
Net cash provided by operating ------ ------ ------
activities 4,093 3,833 4,439
------ ------ ------
Cash flows from investing activities:
Payment for business acquisition (3,596) - -
Capital expenditures (1,610) (2,149) (1,952)
Other 43 - (400)
Net cash used by investing ------ ------ ------
activities (5,163) (2,149) (2,352)
------ ------ ------
Cash flows from financing activities:
Repayment of debt - - (1,340)
Repurchase of common shares (228) (59) -
Proceeds from sale of common shares 247 204 152
Proceeds from exercise of stock
options 430 - -
Other - 1,000 -
Net cash provided (used) by ------ ------ ------
financing activities 449 1,145 (1,188)
------ ------ ------
Net increase (decrease) in cash (621) 2,829 899
Cash at beginning of year 9,457 6,628 5,729
------ ------ ------
Cash at end of year $ 8,836 $ 9,457 $ 6,628
====== ====== ======
See Notes to Consolidated Financial Statements
F-6
Page 138 of 256 <PAGE>
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 and its subsidiaries, all of which are wholly-owned. All
significant intercompany accounts and transactions have been
eliminated in consolidation.
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 URS for additional contract compensation is recorded
when agreed to by the customer. If estimated total costs on any
contract indicate a loss, URS 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 1995 are
subject to review by the U.S. Government.
Cash and Cash Equivalents
-------------------------
URS considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. Cash
equivalents are recorded at cost, which approximates fair value.
F-7
Page 139 of 256 <PAGE>
Income Taxes
------------
Effective November 1, 1993, URS adopted the provisions of
Statement of Financial Accounting Standards ("SFAS") Number 109,
"Accounting for Income Taxes." This standard requires companies to
record all deferred tax liabilities and assets for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax basis, including tax loss carryforwards. As
permitted under SFAS Number 109, prior years' financial statements
were not restated. This did not materially affect URS's
Consolidated Financial Statements.
Depreciation and Amortization
-----------------------------
Depreciation is provided on the straight-line method over the
useful service lives of the assets. Goodwill is amortized on the
straight-line method ranging from 10 to 20 years.
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 URS'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.
F-8
Page 140 of 256 <PAGE>
Computation of Net Income Per Share
(In thousands, except per share data)
Years Ended October 31,
-----------------------
1995 1994 1993
------ ------ ------
Net income $5,056 $4,439 $1,293
Add:
Interest on debentures and notes, net of
applicable income taxes 696 715 -
----- ----- -----
Net income for fully-diluted income per
common share $5,752 $5,154 $1,293
===== ===== =====
Weighted average number of common shares
outstanding during the year 7,080 7,001 6,971
Add:
Common equivalent shares (determined
using the "treasury stock" method)
representing shares issuable upon
exercise of employee stock options and 2,985 2,959 -
warrants
Less:
Twenty percent limit on repurchase (1,433) (1,404) -
----- ----- -----
Weighted average number of shares used in
calculation of fully-diluted income per
share 8,632 8,556 6,971
===== ===== =====
Fully-diluted income per common share $ .67 $ .60 $ .18
===== ===== =====
F-9
Page 141 of 256 <PAGE>
Industry Segment Information
----------------------------
URS's single business segment, consulting, provides engineering
and architectural services to local and state governments, the
Federal government and the private sector. URS's services are
primarily utilized for planning, design and program and construction
management of infrastructure and environmental projects.
URS'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,
----------------------------------------------
1995 1994 1993
-------------- -------------- --------------
(In thousands)
Local and state
agencies $ 99,871 56% $ 88,207 54% $ 80,350 55%
Federal
agencies 58,751 33 59,611 36 48,713 33
Private
business 21,147 11 16,270 10 16,698 12
------- --- ------- --- ------- ---
Total $179,769 100% $164,088 100% $145,761 100%
======= === ======= === ======= ===
NOTE 2. QUASI-REORGANIZATION
In conjunction with a restructuring completed in fiscal year
1990, URS, 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 URS'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. ACQUISITION
During the year ended October 31, 1995, URS acquired E.C.
Driver & Associates, Inc. ("ECD") for an aggregate purchase price of
$3,596,000, and the assumption of ECD's liabilities totaling
$1,356,000. This acquisition was accounted for by the purchase
method of accounting and the net assets of ECD are included in URS's
consolidated balance sheet as of October 31, 1995 based upon its
F-10
Page 142 of 256 <PAGE>
estimated fair value at the transaction's effective date of
January 4, 1995. Pro forma operating results for the years ended
October 31, 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 URS's reported results. The excess of the purchase
price over the estimated fair value of the assets acquired
(goodwill) of $3,596,000 will be amortized on a straight line basis
over twenty years.
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
October 31,
--------------------
1995 1994
-------- --------
(In thousands)
Furniture and fixtures $ 2,713 $ 3,192
Equipment 9,074 7,764
Leasehold improvements 887 866
------ ------
12,674 11,822
Less: Accumulated depreciation
and amortization (6,839) (6,353)
------ ------
Net property and equipment $ 5,835 $ 5,469
====== ======
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 URS. Accumulated amortization at October 31, 1995 and 1994 was
$3,129,000 and $2,507,000, respectively.
F-11
Page 143 of 256 <PAGE>
NOTE 6. INCOME TAXES
The components of income tax expense applicable to the
operations each year are as follows:
Years Ended October 31,
------------------------
1995 1994 1993
---- ---- ----
(In thousands)
Current:
Federal $1,325 $ 150 $ 70
State and local 590 230 85
----- ----- -----
Subtotal 1,915 380 155
----- ----- -----
Deferred:
Federal (385) - -
State and local (230) 70 (15)
----- ----- -----
Subtotal (615) 70 (15)
----- ----- -----
Total tax provision $1,300 $ 450 $ 140
===== ===== =====
As of October 31, 1995, URS has available net operating loss
("NOL") carryforwards for Federal income tax purposes and financial
statement purposes of $6,750,000. The NOL utilization is limited to
$750,000 per year.
While URS 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. Accordingly, state income taxes have
been provided.
F-12
Page 144 of 256 <PAGE>
The significant components of URS's deferred tax assets and
liabilities as of October 31, 1995 are as follows:
Deferred tax assets/(liabilities) - due to:
(In thousands)
1995 1994
-------- --------
State taxes $ 201 $ 78
Allowance for doubtful accounts 202 183
Other accruals and reserves 3,073 3,155
Net operating loss 2,302 3,135
Alternative minimum tax credit - 360
------ ------
Total 5,778 6,911
Valuation allowance (3,907) (5,166)
------ ------
Deferred tax asset 1,871 1,745
------ ------
Other deferred gain and unamortized bond
premium (1,826) (1,979)
Depreciation & amortization (45) -
Deferred tax liability (1,871) (1,979)
------ ------
Net deferred tax liability $ -0- $ (234)
====== ======
The net change in the total valuation allowance for the year
ended October 31, 1995 was a decrease of $1,259,000 due to the
utilization of net operating losses, AMT credits and other changes
in deferred tax assets.
F-13
Page 145 of 256 <PAGE>
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,
----------------------------
1995 1994 1993
-------- -------- --------
(In thousands)
Federal income tax expense based upon
Federal statutory tax rate of 34% $ 2,160 $ 1,665 $ 490
Nondeductible goodwill amortization 160 160 185
Nondeductible expenses 217 120 60
NOL carryforwards utilized (1,142) (1,693) (640)
AMT credit utilized (333) - -
State taxes, net of Federal benefit 238 198 45
------ ------ ------
Total taxes provided $ 1,300 $ 450 $ 140
====== ====== ======
NOTE 7. LONG-TERM DEBT
Long-term debt consists of the following:
October 31,
--------------------
1995 1994
-------- --------
(In thousands)
Third party:
6-1/2% Convertible Subordinated Debentures
due 2012 (net of bond issue costs of $41
and $44) $ 2,104 $ 2,101
8-5/8% Senior Subordinated Debentures due
2004 (net of discount and bond issue costs
of $3,830 and $3,969) (effective interest
rate on date of restructuring was 25%) 2,625 2,486
Obligations under capital leases 3,406 2,721
------ ------
8,135 7,308
Less: Current maturities of capital leases 931 670
------ ------
$ 7,204 $ 6,638
====== ======
Related parties:
January Notes (net of discount of $1,205 and
$1,368) (effective interest rate on date
of restructuring was 12%) $ 2,795 $ 2,632
====== ======
F-14
Page 146 of 256 <PAGE>
Credit Agreement
----------------
At October 31, 1995, URS's unsecured line of credit agreement
with Wells Fargo Bank, National Association (the "Bank") provides
for advances up to $15,000,000 and expires April 30, 1997. Borrowings
on the line of credit bear interest at the option of URS at a per
annum rate equal to either the Bank's prime rate, or 1.5% over the
interest rate offered to the Bank in the interbank Eurodollar market,
adjusted for the Bank's Eurodollar reserve requirements. At
October 31, 1995, URS had outstanding letters of credit totaling
$386,000 which reduced the amount available to URS under its unsecured
line of credit to $14,614,000.
To finance the cash portion of the proposed Greiner acquisition
(discussed more fully in "Note 16 - Subsequent Event"), URS is
negotiating to obtain a $20,000,000 senior secured revolving credit
facility expiring three years from the closing of the loan and a
$50,000,000 senior secured term loan maturing six years from the
closing of the loan. The senior secured revolving credit facility
would replace the current unsecured line of credit.
Under the unsecured line of credit agreement URS is required to
satisfy certain financial and non-financial covenants. The
declaration of dividends, except stock dividends, is restricted by
the terms of URS's unsecured credit agreement with the Bank and the
indenture governing the 8-5/8% Senior Subordinated Debentures due
2004 (the "8-5/8 Indenture"), described below. URS was in compliance
with all financial and non-financial covenants related to the
unsecured line of credit agreement at October 31, 1995 and to a
predecessor secured line of credit agreement October 31, 1994.
Related Parties
---------------
At October 31, 1995, URS had fully-drawn $4,000,000 under
its line of credit with Richard C. Blum & Associates, L.P. ("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 partner-
ships, beneficially owns approximately 22% of URS's common shares
(approximately 34% assuming exercise of additional warrants)
outstanding at October 31, 1995. Richard C. Blum, a director of
URS, is also Chairman of RCBA.
F-15
Page 147 of 256 <PAGE>
Debentures
----------
URS's 6-1/2% Convertible Subordinated Debentures due 2012 are
convertible into URS'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 URS's 8-5/8% Senior
Subordinated Debentures due 2004. Both the 6-1/2% Convertible
Subordinated Debentures and the 8-5/8% Senior Subordinated
Debentures are subordinate to all debt to RCBA and the Bank.
The amounts of long-term debt outstanding at October 31, 1995
maturing in the next five years are as follows:
(In thousands)
1996 $ -
1997 -
1998 -
1999 -
2000 -
Thereafter $ 12,600
Amounts payable under capitalized lease agreements are excluded
from the above table.
Obligations under Leases
------------------------
Total rental expense included in operations for operating
leases for the fiscal years ended October 31, 1995, 1994 and 1993
amounted to $5,717,000, $5,275,000 and $4,938,000, 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)
1996 $ 1,253 $ 5,384
1997 1,137 4,346
1998 833 3,355
1999 643 2,584
2000 440 1,994
Thereafter 63 3,311
------ ------
Total minimum lease payments $ 4,369 $20,974
======
Less amounts representing interest 963
------
Present value of net minimum lease $ 3,406
payments ======
F-16
Page 148 of 256 <PAGE>
NOTE 8. COMMITMENTS AND CONTINGENCIES
Currently, URS has $31,000,000 per occurrence and aggregate
commercial general liability insurance coverage. URS is also
insured for professional errors and omissions ("E&O") and pollution
liability ("EIL") claims with an aggregate limit of $25,000,000
after a self-insured deductible of $500,000. The E&O and EIL
coverages are on a "claims made" basis, covering only claims
actually made during the policy period currently in effect. Thus,
if URS 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 URS's
intent to maintain this type of coverage, but there can be no
assurance that URS 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 URS 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 URS's insurance coverage. URS's management does not believe
that any of such proceedings will have a material adverse effect on
the consolidated financial position and operations of URS.
NOTE 9. CAPITAL STOCK
Declaration of dividends, except Common Stock dividends, is
restricted by the unsecured 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, URS 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 URS's Board of
Directors on September 13, 1994.
The 1987 Restricted Stock Plan (the "Plan") provides for grants
of up to 16,537 shares of Common Stock to key employees of URS 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, 1995, 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 URS and its subsidiaries at prices and
for periods (not to exceed ten years) as determined by the Board of
F-17
Page 149 of 256 <PAGE>
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 URS 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 URS 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 1995, URS had issued 21,200 shares of
Restricted Stock under 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 partici-
pant'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. The ESP Plan was suspended effective
September 19, 1988. On March 24, 1992, the stockholders approved
reinstating the ESP Plan. Employees purchased 46,610 shares under
the ESP Plan in fiscal 1995 and 36,195 shares in fiscal 1994.
On February 21, 1990, URS 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.
F-18
Page 150 of 256 <PAGE>
A summary of the number of stock options granted under the
1979, 1989 and 1991 Plans is as follows:
October 31, 1995
-------------------------
Shares Per Share<F1>
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<F1>
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 -
October 31, 1993
-------------------------
Shares Per Share<F1>
Number of options: ------ ---------
Outstanding at year end 856,445 $3.12 - 31.25
Exercisable at year end 689,275 $3.12 - 31.25
Exercised during the year - -
Available for grant at year end 705,565 -
[FN]
<F1> Reflects lowest and highest exercise price.
NOTE 10. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Years Ended October 31,
--------------------------
1995 1994 1993
------ ------ ------
Interest $ 891 $1,301 $1,170
Income taxes $1,358 $ 499 $ 518
URS purchased all of the capital stock of ECD for $3,596,000.
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 $ - $ -
===== ===== =====
There were no significant non-cash investing or financing
activities in fiscal 1994 and 1993.
F-19
Page 151 of 256 <PAGE>
NOTE 11. DEFINED CONTRIBUTION PLAN
URS 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 URS
are made at the discretion of the Board of Directors. Contributions
in the amount of $643,000, $551,000 and $486,000 were made to the
plan in fiscal 1995, 1994 and 1993, respectively.
NOTE 12. VALUATION AND ALLOWANCE ACCOUNTS
Additions
Charged Deduc-
to Costs tions
Beginning and from Ending
Balance Expenses Reserves Balance
--------- -------- -------- -------
(In thousands)
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
October 31, 1993
Allowances for losses and
doubtful collections $ 768 $ 603 $ 290 $1,081
NOTE 13. RELATED PARTY TRANSACTIONS
Interest paid to related parties in connection with the January
Notes was $194,000, $363,000 and $254,000 in fiscal 1995, 1994 and
1993, respectively. (See "Note 7 - Long-Term Debt").
URS has agreements for business consulting services to be
provided by RCBA and Richard C. Blum, a Director of URS. Under
these agreements, URS paid $90,000 and $60,000 to RCBA and
Richard C. Blum, respectively, for fiscal 1995, 1994 and 1993.
Richard C. Blum also received an additional $25,000, $24,000 and
$19,000 for his services as a Director of URS in fiscal 1995, 1994
and 1993, respectively. In addition, during fiscal 1993, URS
Consultants, Inc., a wholly-owned subsidiary of URS ("URSC"),
performed an underground storage tank remediation investigation on
behalf of RCBA. Such investigation was completed by October 28,
1993, and on November 19, 1993, RCBA, Inc. paid URSC $70,000 in
gross revenues.
NOTE 14. CONCENTRATION OF CREDIT RISK
URS provides services primarily to local, state and Federal
government agencies. URS believes the credit risk associated with
these types of revenues is minimal. However, URS does perform
F-20
Page 152 of 256 <PAGE>
ongoing credit evaluations of its customers and, generally, requires
no collateral. URS maintains reserves for potential credit losses
and such losses have been within management's expectations.
NOTE 15. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Selected quarterly financial data for fiscal 1995 and 1994 is
summarized as follows:
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
====== ====== ====== ======
Fiscal 1994 Quarters Ended
----------------------------------------
Jan. 31 Apr. 30 July 31 Oct. 31
------- ------- ------- -------
(In thousands, except per share data)
Revenues $36,756 $40,520 $41,333 $45,479
Gross profit 13,928 15,769 15,878 16,013
Operating income 1,050 1,484 1,450 2,149
Net income $ 651 $ 1,016 $ 985 $ 1,787
Income per share:
Primary $ .10 $ .14 $ .14 $ .23
====== ====== ====== ======
Fully diluted $ .09 $ .14 $ .14 $ .23
====== ====== ====== ======
Weighted average number
of shares 8,280 8,568 8,571 8,567
====== ====== ====== ======
Operating income represents continuing operations before
interest income and interest expense.
F-21
Page 153 of 256 <PAGE>
NOTE 16. SUBSEQUENT EVENT
Subsequent to URS's year-end, a letter of intent was signed to
acquire Greiner Engineering, Inc. for a combination cash and stock
transaction aggregating $63.4 million in cash, and 1.4 million
shares of URS's Common Stock. Completion of this transaction is
subject to a number of conditions including a satisfactory due
diligence review, mutual approval of a formal purchase agreement,
and shareholder, regulatory and other approvals. The completion
of this transaction is anticipated by April, 1996. The completion
of the cash portion of this acquisition will necessitate financing
via a revolving credit facility and senior secured term loan,
increasing URS's debt and interest expense. URS is negotiating a
banking agreement which secures adequate and appropriate financing
for this acquisition as well as other future growth opportunities.
F-22
Page 154 of 256 <PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
Board of Directors and Stockholders
Greiner Engineering, Inc.
Irving, Texas
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations of stockholders'
equity and of cash flows present fairly, in all material respects,
the financial position of Greiner Engineering, Inc. and its
subsidiaries at December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the
period ended December 31, 1995, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of Greiner's management; our responsibility is to
express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which 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, assessing
the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Dallas, Texas
February 14, 1996
F-23
Page 155 of 256 <PAGE>
GREINER ENGINEERING, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31,
------------------------------
1995 1994
---------- ----------
Current assets:
Cash and cash equivalents $13,873,000 $15,043,000
Short-term investments 2,007,000 5,871,000
Accounts receivable, net 37,680,000 37,723,000
Deferred tax assets 2,589,000 -
Prepaid expenses and other
current assets 2,161,000 2,170,000
---------- ----------
Total current assets 58,310,000 60,807,000
Property and equipment, net 9,380,000 8,959,000
Long-term investments 2,993,000 973,000
Investment in partnerships 153,000 2,475,000
Excess of cost over net
assets acquired, net 691,000 2,359,000
Other assets 619,000 616,000
---------- ----------
$72,146,000 $76,189,000
========== ==========
See Notes to Consolidated Financial Statements
F-24
Page 156 of 256 <PAGE>
GREINER ENGINEERING, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31,
------------------------
1995 1994
---------- ----------
Current liabilities:
Accounts payable $12,153,000 $ 8,222,000
Accrued liabilities 11,742,000 8,484,000
Accrued profit sharing and incentives - 1,726,000
Current and deferred income taxes - 1,099,000
Long-term debt due within one year - 44,000
---------- ----------
Total current liabilities 23,895,000 19,575,000
---------- ----------
Long-term liabilities:
Long-term debt - 157,000
Other 1,297,000 1,231,000
---------- ----------
Total long-term liabilities 1,297,000 1,388,000
---------- ----------
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $1.00 par value,
1,000,000 shares authorized, none - -
issued
Common stock, $.50 par value,
20,000,000 shares authorized,
4,825,734 (1995 and 1994) shares
issued and outstanding 2,413,000 2,413,000
Paid-in capital 24,809,000 24,797,000
Retained earnings 21,107,000 28,016,000
---------- ----------
48,329,000 55,226,000
Common stock held in treasury, at
cost, 121,092 shares (1995) (1,375,000) -
---------- ----------
Total stockholders' equity 46,954,000 55,226,000
---------- ----------
$72,146,000 $76,189,000
========== ==========
See Notes to Consolidated Financial Statements
F-25
Page 157 of 256 <PAGE>
GREINER ENGINEERING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
--------------------------------------
1995 1994 1993
---------- ---------- ----------
Gross revenue $154,175,000 $151,856,000 $140,555,000
Direct cost, principally
outside services 40,422,000 37,385,000 33,546,000
----------- ----------- -----------
Net revenue 113,753,000 114,471,000 107,009,000
Operating expenses:
Salaries and related
costs 83,318,000 81,599,000 77,477,000
General expenses 32,998,000 27,140,000 23,139,000
Restructuring charges 3,700,000 - -
Valuation adjustment -
investment in
partnership 2,300,000 - -
----------- ----------- -----------
122,316,000 108,739,000 100,586,000
----------- ----------- -----------
Income (loss) from
operations (8,563,000) 5,732,000 6,423,000
Other income (expense):
Other income,
principally interest 929,000 914,000 637,000
Interest expense (18,000) (15,000) (17,000)
Income (loss) before
income taxes (7,652,000) 6,631,000 7,043,000
Income tax provision
(benefit) (2,170,000) 2,652,000 2,817,000
----------- ----------- -----------
Net income (loss) $ (5,482,000) $ 3,979,000 $ 4,226,000
=========== =========== ===========
Earnings (loss) per share $ (1.15) $ 82 $ .88
=========== =========== ===========
Weighted average shares
outstanding 4,754,837 4,825,734 4,820,720
=========== =========== ===========
See Notes to Consolidated Financial Statements
F-26
Page 158 of 256 <PAGE>
GREINER ENGINEERING, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
Common Stock Treasury Stock
----------------------- -----------------------
Paid-In Retained ESOP
Shares Par Value Capital Earnings Shares Cost Basis Receivable
---------- ----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
January 1, 1993 4,802,193 $ 2,401,000 $24,460,000 $22,319,000 - $ - $(756,000)
Exercise of stock options 23,541 12,000 337,000 - - - -
Payments received from ESOP,
net - - - - - - 256,000
Cash dividends - - - (1,157,000) - - -
Net income - - - 4,226,000 - - -
---------- ---------- ---------- ---------- --------- --------- ---------
December 31, 1993 4,825,734 2,413,000 24,797,000 25,388,000 - - (500,000)
Payments received from
ESOP - - - - - - 500,000
Cash dividends - - - (1,351,000) - - -
Net income - - - 3,979,000 - - -
---------- ---------- ---------- ---------- --------- --------- ---------
December 31, 1994 4,825,734 2,413,000 24,797,000 28,016,000 - - -
Purchase of treasury stock - - - - 127,292 1,445,000 -
Exercise of stock options - - 12,000 - (6,200) (70,000) -
Cash dividends - - - (1,427,000) - - -
Net loss - - - (5,482,000) - - -
---------- ---------- ---------- ---------- --------- --------- ---------
December 31, 1995 4,825,734 $ 2,413,000 $24,809,000 $21,107,000 121,092 $1,375,000 $ -
========== ========== ========== ========== ========= ========= =========
</TABLE>
See Notes to Consolidated Financial Statements
F-27
Page 159 of 256 <PAGE>
GREINER ENGINEERING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income (loss) $(5,482,000) $ 3,979,000 $ 4,226,000
Adjustments to reconcile to cash
provided by operating activities:
Depreciation and amortization 3,962,000 3,681,000 2,980,000
Valuation adjustment - investment in
partnership 2,300,000 500,000 -
Valuation adjustment - writedown of
goodwill 1,500,000 - -
Provision for losses on accounts
receivable 1,362,000 15,000 27,000
Other 84,000 (11,000) 16,000
Changes in assets and liabilities:
Accounts receivable (1,319,000) (2,939,000) (2,944,000)
Accounts payable and accrued
liabilities 5,463,000 (935,000) 1,968,000
Current and deferred income taxes (3,688,000) 576,000 (83,000)
Prepaid expenses 9,000 (158,000) (119,000)
Other assets and liabilities - - (15,000)
---------- ---------- ----------
Net cash provided by operating
activities 4,191,000 4,708,000 6,056,000
---------- ---------- ----------
Cash Flows From Investing Activities:
Change in short-term investments 3,864,000 37,000 (5,909,000)
Change in long-term investments (2,020,000) - -
Increase in ESOP receivable - - (500,000)
Payments received on ESOP receivable - 500,000 756,000
Change in investment in partnership 22,000 (16,000) 44,000
Additions to property and equipment (4,210,000) (4,394,000) (3,647,000)
Payments received on notes receivable - 480,000 -
Proceeds from sale of property and
equipment 1,000 11,000 54,000
Net changes in other assets (93,000) 9,000 27,000
---------- ---------- ----------
Net cash used by investing activities $(2,436,000) $(3,373,000) $(9,175,000)
---------- ---------- ----------
</TABLE>
continued on next page
See Notes to Consolidated Financial Statements
F-28
Page 160 of 256 <PAGE>
GREINER ENGINEERING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Cash Flows From Financing Activities:
Cash dividends paid $(1,427,000) $(1,351,000) $(1,157,000)
Purchase of treasury stock (1,375,000) - -
Payments on debt (201,000) (43,000) (40,000)
Exercise of stock options 12,000 - 349,000
Net increase in other long-term
liabilities 66,000 65,000 65,000
---------- ---------- ----------
Net cash used by financing activities (2,925,000) (1,329,000) (783,000)
---------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents (1,170,000) 6,000 (3,902,000)
Cash and cash equivalents at beginning of
year 15,043,000 15,037,000 18,939,000
---------- ---------- ----------
Cash and cash equivalents at end of year $13,873,000 $15,043,000 $15,037,000
========== ========== ==========
Supplemental cash flow disclosures:
Interest paid $ 18,000 $ 15,000 $ 17,000
========== ========== ==========
Income taxes paid $ 1,518,000 $ 2,076,000 $ 2,900,000
========== ========== ==========
Non-Cash Investing Activities:
Exchange of property and equipment for
long-term notes receivable $ - $ - $ 480,000
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
F-29
Page 161 of 256 <PAGE>
GREINER ENGINEERING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995, 1994 and 1993
NOTE 1 - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Description of Business:
-----------------------
Greiner, through its subsidiaries, operates a single line of
business which provides a broad range of engineering, planning,
architectural, environmental analysis, design, surveying, program
management and other services to public and private sector clients
throughout the United States, its territories and in foreign
countries, including Hong Kong and Malaysia. Revenue derived from
services to domestic governmental agencies was approximately 80% of
the consolidated revenue for 1993 through 1995. Greiner did not
derive more than 10% of its consolidated revenue from any one client
in any of the years 1993 through 1995.
Principles of Consolidation:
---------------------------
The Consolidated Financial Statements include the accounts of
the Company and its subsidiaries, all of which are wholly owned.
All material intercompany transactions and balances have been
eliminated.
Use of Estimates in the Preparation of Financial Statements:
-----------------------------------------------------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure 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.
Method of Accounting for Contracts:
----------------------------------
Greiner records income on its contracts on the percentage-of-
completion method. Revenue is recorded as costs are incurred, and
profit is recognized on each contract based on the percentage that
incurred costs bear to estimated total costs. In the event of an
anticipated loss, the entire amount of the loss is charged to
current operations.
Revenue and the direct cost of revenue include amounts
applicable to subconsultants and other direct material costs on
contracts for which Greiner is responsible.
F-30
Page 162 of 256 <PAGE>
Depreciation and Amortization:
-----------------------------
Greiner depreciates and amortizes property and equipment, which
are stated at cost, on the straight-line method over the following
useful lives:
Buildings 16-30 years
Leasehold improvements 10 years or term of
lease, whichever is less
Office furnishings and fixtures 5-7 years
Equipment 3-5 years
Cash Equivalents:
----------------
Greiner considers all short-term investments, including U.S.
Treasury repurchase agreements, U.S. Treasury Bills, certificates of
deposit and/or commercial paper with original maturities of 90 days
or less to be cash equivalents.
Short-term Investments:
----------------------
Greiner includes in short-term investments all U.S. Treasury
repurchase agreements, U.S. Treasury Bills, certificates of deposit
and/or commercial paper with original maturities greater than 90
days but less than one year. The carrying values of these
investments are approximately equal to their fair market value at
the end of each year.
Excess of Costs Over Net Assets Acquired:
----------------------------------------
The excess of costs over net assets acquired of $691,000 at
December 31, 1995, is net of accumulated amortization of $3,204,000.
In 1994, the balance of $2,359,000 is net of accumulated amortiza-
tion of $1,536,000. The amounts are being amortized on a straight-
line basis over a 20-year period. During the third quarter of 1995,
Greiner incurred restructuring charges which included additional
amortization of $1,500,000 to reduce the carrying value of goodwill
related to the 1990 acquisition of Bissell and Karn, Inc.
Other Assets:
------------
Other assets are composed primarily of investments in real
property of $442,000 and $411,000 in 1995 and 1994, respectively.
Investment in Partnerships:
--------------------------
Greiner accounts for its investment in non-majority owned
partnerships using the equity method of accounting. It is Greiner's
policy to periodically review the underlying assets and expected
future revenues of these partnerships and adjust the carrying value
in accordance with such review.
F-31
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Long-Term Investments:
---------------------
Greiner had long-term investments of $2,993,000 and $973,000
invested in U.S. Treasury Notes at December 31, 1995 and 1994,
respectively, with maturity dates in excess of one year.
Earnings (Loss) and Cash Dividends Per Share Information:
--------------------------------------------------------
Earnings (loss) per share information is based on the weighted
average number of shares of Common Stock outstanding during each
period, adjusted for stock options that have a materially dilutive
effect on the calculations of earnings per share. Earnings per
share are computed independently for each of the quarters. As a
result, the sum of the quarterly earnings per share may not equal
the earnings per share for the year-to-date results.
Annual cash dividends of $.30, $.28 and $.24 per share of
Common Stock were declared in 1995, 1994 and 1993, respectively, on
the historical shares outstanding at the time of the dividend record
dates.
Reclassifications:
-----------------
Certain reclassifications have been made to the 1994 and 1993
financial statements to conform to the 1995 presentation.
Newly Issued Accounting Standards:
---------------------------------
In 1995, Statement of Financial Accounting Standards No. 121,
"Accounting for Long-Lived Assets" (SFAS 121) as issued. Greiner
will adopt this standard in 1996. The effect of the adoption is not
expected to be significant. In October 1995, Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-based
Compensation" ("SFAS 123"), was issued. This statement requires the
fair value of stock options and other stock-based compensation
issued to employees to either be included as compensation expense in
the income statement, or the pro forma effect on net income and
earnings per share of such compensation expense to be disclosed in
the footnotes to Greiner's financial statements commencing in 1996.
Greiner expects to adopt SFAS 123 on a disclosure basis only. As
such, implementation of SFAS 123 is not expected to impact Greiner's
consolidated balance sheet or income statement.
F-32
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NOTE 2 - ACCOUNTS RECEIVABLE
Accounts receivable are composed of:
December 31,
---------------------------
1995 1994
------------ ------------
Billed accounts receivable $33,382,000 $30,381,000
Unbilled accounts receivable 6,809,000 8,925,000
---------- ----------
40,191,000 39,306,000
Less allowance for doubtful accounts (2,511,000) (1,583,000)
---------- ----------
$37,680,000 $37,723,000
========== ==========
Unbilled accounts receivable principally represent revenue
earned during the latter part of the year but not billed until the
following year. Included in billed accounts receivable are
retainages of approximately $2,800,000 at December 31, 1995 and
$2,700,000 at December 31, 1994, which Greiner expects to collect
within one year.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment are composed of:
December 31,
---------------------------
1995 1994
------------ ------------
Leasehold improvements $ 1,063,000 $ 785,000
Office furnishings and fixtures 4,275,000 3,762,000
Equipment, primarily computers 18,536,000 15,684,000
---------- ----------
23,874,000 20,231,000
Less accumulated depreciation and
amortization (14,494,000) (11,272,000)
---------- ----------
$ 9,380,000 $ 8,959,000
========== ==========
Depreciation and amortization of property and equipment was
$3,794,000, $3,085,000 and $2,440,000 in 1995, 1994 and 1993,
respectively.
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NOTE 4 - INVESTMENT IN PARTNERSHIPS
In 1992, Greiner acquired a 50% interest in a partnership, the
National Transportation Authority ("NTA"), for a $1,000,000 cash
contribution and a contribution of common stock valued at
$2,000,000. The following is a summary of the partnership's
financial position at December 31, 1995 and 1994 and results of
operations for the periods then ended:
December 31,
(Unaudited)
--------------------------------
1995 1994
------------ ------------
Cash $ 227,000 $ 117,000
Other Assets 4,512,000 4,907,000
---------- ----------
Total Assets $ 4,739,000 $ 5,024,000
========== ==========
Other Accrued Liabilities $ - $ 75,000
Partner's Capital - Greiner 2,869,000 2,975,000
Partner's Capital - Other 1,870,000 1,974,000
---------- ----------
Total Equity $ 4,739,000 $ 5,024,000
========== ==========
Net Loss $ (510,000) $ (4,000)
========== ==========
NTA currently holds the franchise for the tollway extension to
State Route 57 ("SR 57") in Orange County, California. To date, NTA
has been unsuccessful in securing necessary financing for the
preliminary environmental phases of the SR 57 project and currently
holds no other significant project franchises. Although NTA is
continuing to pursue financing alternatives for the SR 57 project
and is actively seeking new project opportunities in public/private
transportation projects, the lack of progress on the SR 57 project
caused Greiner to record a non-cash charge of $500,000 in the fourth
quarter of 1994 and $2,300,000 in the third quarter of 1995 to
reduce the carrying value of its investment in NTA.
F-34
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NOTE 5 - INCOME TAXES
The income tax provision (benefit) is composed of:
December 31,
------------------------------------------
1995 1994 1993
------------ ------------ ------------
Current:
Federal $ 670,000 $ 2,000,000 $ 1,806,000
State 225,000 475,000 445,000
Foreign 123,000 (11,000) 6,000
---------- ---------- ----------
1,018,000 2,464,000 2,257,000
---------- ---------- ----------
Deferred:
Federal (2,974,000) 180,000 534,000
State (214,000) 8,000 26,000
---------- ---------- ----------
(3,188,000) 188,000 560,000
---------- ---------- ----------
$(2,170,000) $2,652,000 $2,817,000
========== ========== ==========
A reconciliation of the income tax provision and the amount
computed by applying the statutory rate to income before income
taxes is as follows:
December 31,
----------------------------
1995 1994 1993
------ ------ ------
Federal statutory rate (34.0)% 34.0% 34.0%
State income taxes (net of
federal income tax effect) - 4.8 4.4
Nondeductible costs (primarily
goodwill) 8.9 2.3 1.8
Permanent difference (basis
adjustment) (5.5) - -
Other (2.2) (1.1) (.2)
------ ------ ------
Income tax provision (benefit) (28.4)% 40.0% 40.0%
====== ====== ======
F-35
Page 167 of 256 <PAGE>
Greiner provides for deferred taxes on the tax effect of
changes in temporary differences between financial and tax
reporting. The source of these differences and the tax effect of
each are as follows:
December 31,
---------------------------------
1995 1994 1993
-------- -------- --------
Change in retainages $ 33,000 $ 11,000 $ 63,000
Change in accrued vacation
benefits (103,000) 63,000 (8,000)
Depreciation and amortization 42,000 333,000 242,000
Change in deferred earnings and
profits (446,000) (43,000) 123,000
Change in accrued legal
settlements (595,000) (56,000) 96,000
Change in provision for
doubtful accounts (479,000) 18,000 47,000
Valuation adjustment -
investment in partnership (729,000) (122,000) -
Change in deferred
restructuring charges (748,000) - -
Other (163,000) (16,000) (3,000)
---------- -------- --------
$(3,188,000) $ 188,000 $ 560,000
========== ======== ========
Deferred tax liabilities (assets) are comprised of the
following at December 31:
December 31,
------------------------------
1995 1994
------------ ------------
Deferred earnings and profits $ 632,000 $ 1,078,000
Retainages 957,000 924,000
Depreciation and amortization 575,000 533,000
Other - 23,000
---------- ----------
Gross deferred tax liabilities 2,164,000 2,558,000
---------- ----------
Accrued vacation benefits (391,000) (288,000)
Accrued legal settlements (1,330,000) (735,000)
Provision for doubtful accounts (1,017,000) (538,000)
Deferred compensation (441,000) (419,000)
Deferred restructuring charges (748,000) -
Valuation adjustment -investment
in partnership (851,000) (122,000)
Other (118,000) -
Gross deferred tax assets (4,896,000) (2,102,000)
---------- ----------
Net deferred tax (assets) $(2,732,000) $ 456,000
liabilities ========== ==========
F-36
Page 168 of 256 <PAGE>
NOTE 6 - LONG-TERM DEBT AND OTHER LONG-TERM LIABILITIES
Long-term debt consists of the following:
December 31,
-----------------------
1995 1994
-------- --------
Notes payable in annual installments of
$57,914 (principal and interest) through
1998, at varying interest rates; fully
paid in 1995 $ - $ 201,000
Less amounts due within one year - (44,000)
-------- --------
$ - $ 157,000
======== ========
Greiner has an unsecured bank line of credit with an aggregate
limit of $15,000,000 bearing interest at the lower of the bank's
prime rate (8-1/2% at December 31, 1995) or 1-1/2% over the bank's
cost of funds rate (5%-5-3/4% at December 31, 1995 depending on the
length of the loan). Under the terms of the line of credit,
maintenance of specified amounts of net worth and ratios of working
capital are required and payments of cash dividends are restricted
to an amount not in excess of Greiner's current year's earnings.
Greiner exceeded these dividend restrictions in 1995, however, the
bank waived those restrictions for 1995. At December 31, 1995 and
1994, no borrowings were outstanding on the line of credit.
Also included in long-term liabilities are other deferred
credits of $1,297,000 (1995) and $1,231,000 (1994) consisting
primarily of liabilities associated with deferred compensation plans
discussed in Note 8.
NOTE 7 - CAPITAL STOCK AND STOCK PLANS
Capital Stock:
-------------
Greiner had a cash dividend program in 1995 which provided for
quarterly payments of $.075 per share on Greiner's outstanding
Common Stock. The quarterly dividend rate for 1994 was $.07 per
share per quarter.
Treasury Stock:
--------------
On March 7, 1995 Greiner's Board of Directors authorized the
purchase of up to 500,000 shares of Greiner's common stock to be
held in treasury. Purchases will be made from time to time, either
on the open market or in private transactions, at a price and limit
to be determined by Greiner. Through December 31, 1995 127,292
shares of common stock had been purchased to be held in treasury, of
F-37
Page 169 of 256 <PAGE>
which 6,200 shares were released in 1995 for the exercise of stock
options.
Stock Option Plans:
------------------
Greiner has two stock option plans designated the 1981 Stock
Option Plan ("1981 Plan") and the 1991 Stock Option Plan ("1991
Plan"). Under both plans the exercise price of the options granted
may not be less than the fair market value of the Common Stock on
the date the option is granted. The term of options granted under
these plans may not exceed ten years. Options are exercisable over
a period of years as determined by the Board of Directors and in
accordance with the other provisions of the Plans.
1981 Plan
---------
The 1981 Plan was approved by stockholders to be effective
April 24, 1981. No options may be granted under this plan after
April 23, 1991.
A summary of the 1981 Plan activity is as follows:
Shares Price Range
-------- ---------------
Outstanding at December 31, 1992 227,412 $13.25 - $15.84
Cancelled (11,784) $14.13 - $15.84
Exercised (23,541) $13.25 - $15.84
-------
Outstanding at December 31, 1993 192,087 $13.25 - $15.84
Cancelled (4,200) $14.13 - $15.00
-------
Outstanding at December 31, 1994 187,887 $13.25 - $15.84
Cancelled (144,387) $13.25 - $15.84
Exercised (5,000) $13.25 - $13.25
-------
Outstanding at December 31, 1995 38,500 $13.25 - $13.25
=======
As of December 31, 1995 options covering 38,500 shares of
Common Stock were exercisable.
1991 Plan
---------
The 1991 Plan was approved by stockholders in May 1991 with an
effective date of April 24, 1991 and reserved 200,000 shares of
Greiner's Common Stock for grants to employees as designated by the
Board of Directors. In May 1993, stockholders approved the first
amendment to the Plan increasing the total number of reserved shares
to 400,000. And, in May 1995, stockholders approved a second
amendment to the 1991 Plan, increasing the total number of reserved
shares to 650,000. A summary of the 1991 Plan activity is as
follows:
F-38
Page 170 of 256 <PAGE>
Shares Price Range
-------- ---------------
Outstanding at December 31, 1992 98,350 $15.00 - $16.38
Granted 108,250 $16.00 - $16.00
Cancelled (9,400) $15.00 - $16.38
--------
Outstanding at December 31, 1993 197,200 $15.00 - $16.38
Granted 115,000 $13.38 - $13.38
Cancelled (23,050) $13.38 - $16.38
--------
Outstanding at December 31, 1994 289,150 $13.38 - $16.38
Granted 109,000 $10.38 - $13.38
Cancelled (56,300) $10.38 - $16.38
Exercised (1,200) $13.38 - $13.38
--------
Outstanding at December 31, 1995 340,650 $10.38 - $16.38
=======
As of December 31, 1995, options covering 123,255 shares of
Common Stock were exercisable.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Rental Commitments:
------------------
Future minimum rental commitments under noncancellable
operating leases, principally on buildings and office space, with an
initial or remaining term of more than one year approximated
$17,354,000 at December 31, 1995, payable as follows: $6,356,000
(1996); $4,972,000 (1997); $2,463,000 (1998); $1,913,000 (1999),
$1,009,000 (2000) and $641,000 thereafter. Certain leases provide
options for renewal at the end of the lease, provide for the payment
of real estate taxes, utilities and insurance and have rent or
operating cost escalation provisions (see Note 10).
Rental expense was $10,800,000 (1995), $8,543,000 (1994) and
$8,194,000 (1993). The amounts of noncancellable subleases, which
are not material, have been deducted from rental expense.
Greiner leases approximately 30,000 square feet of office space
in Pleasanton, California from a partnership of which certain
partners were employees of Greiner. Total payments by Greiner under
this lease agreement were approximately $628,000 in 1995, $613,000
in 1994 and $610,000 in 1993.
Contingencies:
-------------
Certain subsidiaries of Greiner have been named as defendants
in legal proceedings wherein substantial damages are claimed. Such
proceedings are not uncommon in Greiner's business and usually
involve claims against multiple defendants who were involved in the
project which is the subject of the proceeding. Historically,
F-39
Page 171 of 256 <PAGE>
Greiner's subsidiaries have been successful in defending such
actions or have settled them within insured limits. In the opinion
of management, based upon its present knowledge, Greiner's ultimate
liability, if any, in these proceedings is not expected to exceed
amounts previously provided for in Greiner's Consolidated Financial
Statements. Because of the nature of the professional services
provided by Greiner and the size and nature of many of the projects
upon which such services are performed, the potential for claims in
excess of insurance limits always exists. Should that occur, and if
Greiner's resulting liability is material, then Greiner's operations
and financial condition would be adversely affected. It is also
possible that a large number of claims in any given year could cause
the total amount paid with respect to the deductible amounts
relating to such claims to be material, in which event Greiner's
operations and financial condition could be adversely affected.
In 1995, Greiner was notified by the staff of the Central
Regional Office of the Securities and Exchange Commission (the
"Staff") that it planned to recommend that a subsidiary of Greiner
be named as a respondent in an administrative action relating to the
issuance of certain revenue bonds used to finance the construction
of the new Denver International Airport. The subsidiary was a
member of a joint venture formed for the sole purpose of acting as
the program management consultant for the City and County of Denver
on the new Denver International Airport project. The joint venture
was dissolved at the completion of the project. The Staff
recommendation relates to certain information about the airport
project provided by the subsidiary to the City and County of Denver
in connection with the related bond offering. Greiner has disputed
the Staff's recommendations. Management does not anticipate that
the resolution of this matter will have a material effect on
Greiner's operations or financial condition.
Greiner presently carries professional liability insurance
against claims resulting from Greiner's alleged negligent
performance of professional services, with an aggregate limit of
$30,000,000 per year in excess of an aggregate $1,000,000 annual
self-insured retention and a deductible of $250,000 per occurrence.
This insurance, consistent with industry practice, is on a "claims
made" basis, which means coverage must be in place when a claim is
made. In addition, such insurance is subject to standard exclusions,
including exclusions for claims arising out of actual, alleged or
threatened discharge, dispersal, seepage, migration, release or
escape of pollutants and the performance of or failure to perform
professional services rendered in the abatement, replacement or
removal of any product, material or process containing asbestos.
The continued availability and cost of professional liability
insurance will depend upon market conditions, the claims record of
Greiner and the claims experience of the insurers providing such
coverage.
Greiner performs services for certain government entities which
are subject to post contract audit adjustments for periods beyond
the project completion date. In the opinion of management, based
F-40
Page 172 of 256 <PAGE>
upon its present knowledge, Greiner's ultimate liability, if any,
related to these contract audits is not expected to exceed amounts
previously provided for in Greiner's financial statements.
Deferred Compensation Plans:
---------------------------
Greiner has deferred compensation plans covering certain of its
former senior executives, which provide for periodic payments upon
retirement. Charges to operations under these plans were $186,000
(1995), $193,000 (1994) and $189,000 (1993).
Employee Incentive Programs:
---------------------------
Greiner has adopted a profit sharing formula for determining
its contribution to the Performance Plan and Employee Stock
Ownership Plan of Greiner Engineering, Inc. (the "Performance Plan")
and for management cash incentive payments. The profit sharing
formula is based on a sliding scale of Company profits. A minimum
level of profit equal to six percent of net revenue before taxes and
incentives is necessary to generate a contribution pool for these
plans. The maximum contribution to these plans is 33% of Greiner's
profit before computation of taxes and contributions to these
incentive plans. Total charges to operations under the profit
sharing formula amounted to $0 (1995), $1,681,000 (1994) and
$2,770,000 (1993).
The total number of allocated shares held in the ESOP were
612,459, 552,477 and 494,384 at December 31, 1995, 1994 and 1993,
respectively.
Employees who have attained the age of twenty-one years and
completed six months of employment are eligible to participate in
the Performance Plan. The Performance Plan, which is qualified
under section 401(k) of the Internal Revenue Code, includes an
employee stock ownership provision, pursuant to which all Company
contributions to the Performance Plan have been used to purchase
shares of Greiner's Common Stock.
If the proposed merger discussed in Note 11 is consummated, the
ESOP would be terminated and all shares will be converted into other
investment options in the Performance Plan designated by the
participants.
F-41
Page 173 of 256 <PAGE>
NOTE 9 - ACCRUED LIABILITIES
Accrued liabilities are composed of the following:
December 31,
--------------------------
1995 1994
------------ ------------
Payroll and related taxes $ 3,989,000 $ 3,977,000
Legal fees and self-insurance 3,688,000 2,160,000
Restructuring charges (see Note 10) 2,200,000 -
Deferred rent payments 892,000 1,404,000
Other 973,000 943,000
---------- ----------
Total accrued liabilities $11,742,000 $ 8,484,000
========== ==========
NOTE 10 - RESTRUCTURING CHARGES
During 1995, Greiner initiated various activities to
restructure certain of its operations in order to reduce its cost
structure and improve profitability.
Greiner shifted its center of Asian operations from Hong Kong
to Kuala Lumpur, Malaysia. Through consolidation of the Asian
activities in its Kuala Lumpur office, Greiner will be able to
reduce its office staff and office space in Hong Kong. Greiner
recorded a 1995 restructuring charge of $500,000 for this office
shift, primarily related to the termination of lease obligations.
Greiner has historically maintained two principal service
disciplines in the California marketplace - land development design
and surface transportation design. Continuing hardships in
California's residential land development market have prompted
Greiner's decision to de-emphasize residential land development
services within that geography. The firm intends to continue to
pursue transportation infrastructure projects and serve commercial,
recreational and industrial clients. In redirecting its market
priorities, the firm will complete existing contract obligations to
residential developers and then reduce staff and office space and
consolidate office locations to match its ongoing level of
operations.
Restructuring charges associated with the closing of these
offices and the early termination or sublease of the office leases
of $1,375,000 were recorded in 1995. An additional $85,000 was
accrued in 1995 to cover the office closeout costs. Approximately
30 employees in Greiner's land development group will be terminated
in 1996. Costs related to these staff reductions of $240,000 were
accrued in 1995.
F-42
Page 174 of 256 <PAGE>
A significant portion of Greiner's residential land development
business was obtained through the 1990 acquisition of Bissell and
Karn, Inc. As a result of the restructuring of the California
operations, Greiner recorded a non-cash charge of $1,500,000 in 1995
to reduce the carrying value of the goodwill associated with the
acquired residential land development operations.
The following table sets forth Greiner's restructuring accruals
as of December 31, 1995:
Restructuring Costs Remaining
Accruals Incurred Balance
------------- -------- ---------
Lease Termination - Hong Kong $ 500,000 - $ 500,000
Lease Termination - California 1,375,000 - 1,375,000
Employee Termination -
California 240,000 - 240,000
Exit Costs - California 85,000 - 85,000
--------- ---------
$2,200,000 $2,200,000
========= =========
NOTE 11 - SUBSEQUENT EVENT
On January 10, 1996, Greiner entered into a definitive
agreement to merge with a newly formed subsidiary of URS. Under the
terms of the agreement, Greiner stockholders will receive $13.50
cash and .298 of a share of URS common stock for each share of
Greiner common stock owned. The agreement is subject to approval by
Greiner stockholders and certain other closing conditions. The
Consolidated Financial Statements do not include adjustments, if
any, which might result from the consummation of this transaction.
F-43
Page 175 of 256 <PAGE>
APPENDICES
----------
Appendix A -- Fairness Opinion of Houlihan Lokey Howard & Zukin
Appendix B -- Agreement and Plan of Merger among Greiner
Engineering, Inc., URS Corporation and URS Acquisition
Corporation
Page 176 of 256 <PAGE>
APPENDIX A
TO PROXY STATEMENT/PROSPECTUS
HOULIHAN LOKEY HOWARD & ZUKIN
-----------------------------
A Specialty Investment Banking Firm
January 10, 1996
To The Board of Directors
Greiner Engineering, Inc.
909 East Los Colinas Boulevard
Suite 1900 LB 44
Irving, TX 75039-3907
Gentlemen:
We understand that pursuant to the Agreement and Plan of Merger
Among Greiner Engineering, Inc. ("Greiner" or the "Company"), URS
Corporation ("URS"), and URS Acquisition Corporation, the "Merger
Agreement," Greiner plans to merge into and become a wholly owned
subsidiary of URS, (the "Merger"). We further understand that
ownership in Greiner is currently represented by 4,704,642 shares of
common stock issued and outstanding, 121,092 shares are issued and
held in treasury, and 377,650 options for common stock issued and
outstanding. Moreover, we understand that ownership of URS is
represented by 7,167,591 shares of common stock issued and
outstanding, with 287,000 shares of common stock issued but held in
treasury. Finally, we understand upon the close of the Merger, each
share of Greiner's common stock will be converted into the right to
receive consideration (the "Consideration") as follows: (i) 0.298
shares of URS common stock; and (ii) $13.50 in cash; all of which
shall be payable upon the surrender of the certificates representing
such shares of Greiner stock. The Merger, the payment of the
Consideration in exchange for Greiner's common stock, and all
related transactions disclosed to Houlihan Lokey Howard & Zukin are
referred to collectively herein as the "Transaction."
You have requested our opinion (the "Opinion") as to the matters set
forth below. The Opinion does not address the Company's underlying
business decision to effect the Transaction. We have not been
requested to, and did not, solicit third party indications of
interest in acquiring all or any part of the Company. Furthermore,
at your request, we have not negotiated the Transaction or advised
you with respect to alternatives to it.
In connection with this Opinion, we have made such reviews, analyses
and inquiries as we have deemed necessary and appropriate under the
circumstances. Among other things, we have:
A-1
Page 177 of 256 <PAGE>
1. reviewed the Company's annual reports to shareholders and
on Form 10-K for the five fiscal years ended December 31,
1994 and quarterly reports on Form 10-Q for the three
quarters ended September 30, 1995, and Company-prepared
interim financial statements for the period ended
November 30, 1995, which the Company's management has
identified as being the most current financial statements
available;
2. reviewed URS's annual reports to shareholders and on Form
10-K for the four fiscal years ended October 31, 1994, a
draft of Form 10-K for the fiscal year ended October 31,
1995, and quarterly reports on Form 10-Q for the three
quarters ended July 31, 1995;
3. reviewed a copy of the Merger Agreement dated January 10,
1996;
4. reviewed a copy of the Company's latest proxy statement;
5. met with certain members of the senior management of the
Company and URS to discuss the operations, financial
condition, future prospects and projected operations and
performance of the Company, and met with representatives
of the Company's counsel to discuss certain matters;
6. visited certain facilities and business offices of the
Company;
7. reviewed the 1996 business plans for the Company's
principal offices and divisions, and forecasts and
projections prepared by the Company's management with
respect to the Company for the years ended December 31,
1996 through 2002;
8. reviewed the historical market prices and trading volume
for the Company's and URS's publicly traded securities;
9. reviewed certain other publicly available financial data
for certain companies that we deem comparable to the
Company, and publicly available prices and premiums paid
in other transactions that we considered similar to the
Transaction;
10. conducted such other studies, analyses and inquiries as we
have deemed appropriate.
We have relied upon and assumed, without independent verification,
that the financial forecasts and projections provided to us have
been reasonably prepared and reflect the best currently available
estimates of the future financial results and condition of the
Company, and that there has been no material change in the assets,
financial condition, business or prospects of the Company since the
date of the most recent financial statements made available to us.
A-2
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We have not independently verified the accuracy and completeness of
the information supplied to us with respect to the Company and do
not assume any responsibility with respect to it. We have not made
any physical inspection or independent appraisal of any of the
properties or assets of the Company. Our opinion is necessarily
based on business, economic, market and other conditions as they
exist and can be evaluated by us at the date of this letter.
Based upon the foregoing, and in reliance thereon, it is our opinion
that the Consideration to be received by the public stockholders of
the Company in connection with the Transaction is fair to them from
a financial point of view.
/s/ HOULIHAN, LOKEY, HOWARD & ZUKIN, INC.
HOULIHAN, LOKEY, HOWARD & ZUKIN, INC.
A-3
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APPENDIX B
TO PROXY STATEMENT/PROSPECTUS
AGREEMENT AND PLAN OF MERGER
AMONG
GREINER ENGINEERING, INC.,
URS CORPORATION,
AND
URS ACQUISITION CORPORATION
January 10, 1996
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TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 1. THE MERGER . . . . . . . . . . . . . . . . . 2
1.1 Merger of the Subsidiary into Greiner . . . 2
1.2 Effective Time of the Merger . . . . . . . . 2
1.3 Effects of the Merger . . . . . . . . . . . 2
ARTICLE 2. EFFECT OF MERGER ON CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS . . . . . . 4
2.1 Conversion of the Greiner Common Stock. . . 4
2.2 Conversion of the Subsidiary Common Stock . 7
2.3 Cancellation of Treasury Shares . . . . . . 7
2.4 Withholding Tax . . . . . . . . . . . . . . 8
ARTICLE 3. CLOSING . . . . . . . . . . . . . . . . . . 8
3.1 Closing; Closing Date . . . . . . . . . . . 8
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF GREINER . 8
4.1 Organization . . . . . . . . . . . . . . . . 8
4.2 Capitalization . . . . . . . . . . . . . . . 9
4.3 Subsidiaries . . . . . . . . . . . . . . . . 9
4.4 Material Investments . . . . . . . . . . . 10
4.5 Authority Relative to this Agreement . . . . 11
4.6 Consents and Approvals; No Violations . . . 11
4.7 Greiner SEC Reports and Financial
Statements . . . . . . . . . . . . . . . . . 12
4.8 Information Supplied . . . . . . . . . . . . 13
4.9 Absence of Material Adverse and Other
Changes . . . . . . . . . . . . . . . . . . 14
4.10 Litigation . . . . . . . . . . . . . . . . . 14
4.11 Absence of Undisclosed Liabilities . . . . . 15
4.12 No Default . . . . . . . . . . . . . . . . . 15
4.13 Properties, Liens, Etc. . . . . . . . . . . 16
4.14 Taxes . . . . . . . . . . . . . . . . . . . 16
4.15 Benefit Plans . . . . . . . . . . . . . . . 17
4.16 Employment Matters; Labor Relations . . . . 21
4.17 Intellectual Property . . . . . . . . . . . 22
4.18 Insurance . . . . . . . . . . . . . . . . . 24
4.19 Compliance with Applicable Law . . . . . . . 24
4.20 Certain Contracts and Arrangements . . . . . 24
4.21 Prohibited Payments . . . . . . . . . . . . 25
4.22 Powers of Attorney . . . . . . . . . . . . . 26
4.23 Environmental Matters . . . . . . . . . . . 26
4.24 Regulatory Matters . . . . . . . . . . . . . 27
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4.25 Immigration Reform and Control Act . . . . . 27
4.26 Board Approvals; Opinion of Financial
Advisor . . . . . . . . . . . . . . . . . . 28
4.27 Brokers . . . . . . . . . . . . . . . . . . 28
4.28 Disclosure . . . . . . . . . . . . . . . . . 28
4.29 Reliance . . . . . . . . . . . . . . . . . . 28
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF URS . . . 28
5.1 Organization . . . . . . . . . . . . . . . . 28
5.2 Capitalization . . . . . . . . . . . . . . . 29
5.3 Authority Relative to this Agreement . . . . 30
5.4 Consents and Approvals; No Violations . . . 30
5.5 URS SEC Reports and Financial Statements . . 31
5.6 Information Supplied . . . . . . . . . . . . 32
5.7 Board Approvals; Opinion of Financial
Advisor . . . . . . . . . . . . . . . . . . 32
5.8 Brokers . . . . . . . . . . . . . . . . . . 32
5.9 Disclosure . . . . . . . . . . . . . . . . . 33
ARTICLE 6. PRE-CLOSING COVENANTS . . . . . . . . . . . 33
6.1 Covenants of All Parties . . . . . . . . . . 33
6.1.1 Advice of Changes . . . . . . . . 33
6.1.2 Regulatory Approvals . . . . . . . 33
6.1.3 Confidentiality . . . . . . . . . 33
6.1.4 Best Efforts . . . . . . . . . . . 34
6.1.5 Credit Agreement . . . . . . . . . 34
6.2 Covenants of Greiner . . . . . . . . . . . . 34
6.2.1 Conduct of Business Pending
Merger . . . . . . . . . . . . . . 34
6.2.2 Stockholders' Meeting; Proxy
Statement . . . . . . . . . . . . 37
6.2.3 Acquisition Proposals . . . . . . 37
6.2.4 Maintenance of Business . . . . . 38
6.2.5 Access . . . . . . . . . . . . . . 38
6.2.6 Liability Insurance . . . . . . . 39
6.3 Covenants of URS . . . . . . . . . . . . . . 39
6.3.1 Registration Statement . . . . . . 39
6.3.2 Listing Agreement . . . . . . . . 39
ARTICLE 7. CONDITIONS TO CONSUMMATION OF THE MERGER . . 40
7.1 Conditions to Obligations of Greiner . . . . 40
7.1.1 Representations and
Warranties True at Closing . . . . 40
7.1.2 Covenants Performed . . . . . . . 40
7.1.3 Certificate . . . . . . . . . . . 40
7.1.4 Approval of Stockholders . . . . . 40
7.1.5 Opinion of Counsel . . . . . . . . 40
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7.1.6 Form S-4 . . . . . . . . . . . . . 41
7.1.7 Merger Documents . . . . . . . . . 41
7.1.8 Material Adverse Changes . . . . . 41
7.1.9 HSR Filing . . . . . . . . . . . . 41
7.2 Conditions to Obligations of URS and
the Subsidiary . . . . . . . . . . . . . . . 41
7.2.1 Representations and
Warranties True at Closing . . . . 42
7.2.2 Covenants Performed . . . . . . . 42
7.2.3 Certificate . . . . . . . . . . . 42
7.2.4 Approval of Stockholders . . . . . 42
7.2.5 Opinion of Counsel . . . . . . . . 42
7.2.6 Form S-4 . . . . . . . . . . . . . 43
7.2.7 Merger Documents . . . . . . . . . 43
7.2.8 Material Adverse Changes . . . . . 43
7.2.9 HSR Filing . . . . . . . . . . . . 43
7.2.10 Consents . . . . . . . . . . . . . 43
7.2.11 No Litigation . . . . . . . . . . 43
7.2.12 Credit Agreement . . . . . . . . . 43
ARTICLE 8. ADDITIONAL AGREEMENTS . . . . . . . . . . . 44
8.1 Public Announcements . . . . . . . . . . . . 44
8.2 Confidentiality . . . . . . . . . . . . . . 44
8.3 Additional Agreements . . . . . . . . . . . 44
8.4 Use of Name . . . . . . . . . . . . . . . . 44
8.5 Employee Matters . . . . . . . . . . . . . 44
8.6 Non-Liability of Agents and Stockholders . . 45
8.7 Greiner Engineering, Inc. Performance Plan
and Employee Stock Ownership Plan . . . . . 45
ARTICLE 9. TERMINATION . . . . . . . . . . . . . . . . 46
9.1 Termination . . . . . . . . . . . . . . . . 46
9.2 Effect of Termination and Abandonment . . . 47
9.3 Amendment . . . . . . . . . . . . . . . . . 47
9.4 Extension; Waiver . . . . . . . . . . . . . 47
ARTICLE 10. MISCELLANEOUS . . . . . . . . . . . . . . . 48
10.1 Survival of Representations and Warranties . 48
10.2 Entire Agreement; Modification; Waiver . . . 48
10.3 Counterparts . . . . . . . . . . . . . . . . 48
10.4 Assignment . . . . . . . . . . . . . . . . . 48
10.5 Fees and Expenses . . . . . . . . . . . . . 48
10.6 Notices . . . . . . . . . . . . . . . . . . 49
10.7 Governing Law . . . . . . . . . . . . . . . 50
10.8 Further Action . . . . . . . . . . . . . . . 50
10.9 No Third Party Beneficiary . . . . . . . . . 50
10.10 Effect of Headings . . . . . . . . . . . . . 50
10.11 Severability . . . . . . . . . . . . . . . . 50
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Agreement and Plan of Merger
----------------------------
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"),
is entered into as of January 10, 1996, by and among GREINER
ENGINEERING, INC., a Nevada corporation ("Greiner"), URS
CORPORATION, a Delaware corporation ("URS"), and URS
ACQUISITION CORPORATION, a Nevada corporation (the
"Subsidiary"). Greiner is sometimes referred to herein as the
"Surviving Corporation" and Greiner and the Subsidiary are
sometimes collectively referred to herein as the "Constituent
Corporations."
RECITALS
--------
A. Greiner is a corporation duly organized and existing
under the laws of the State of Nevada, having as of the date
hereof authorized capital stock consisting of (i) 20,000,000
shares of common stock, par value $0.50 per share (the "Greiner
Common Stock"), of which as of the date hereof, 4,704,642 are
issued and outstanding, 121,092 are issued and held in
treasury, and 15,174,266 are reserved for issuance, and
(ii) 1,000,000 shares of preferred stock, par value $1.00 per
share, of which no shares are issued and outstanding.
B. URS is a corporation duly organized and existing
under the laws of the State of Delaware, having as of the date
hereof authorized capital stock consisting of (i) 20,000,000
shares of common stock, par value $0.01 per share (the "URS
Common Stock"), of which as of the date hereof, 7,167,591 are
issued and outstanding, 287,000 are issued and held in
treasury, and 12,545,409 are reserved for issuance, and
(ii) 1,000,000 shares of preferred stock, par value $1.00 per
share, of which no shares are issued and outstanding.
C. The Subsidiary is a corporation duly organized and
existing under the laws of the State of Nevada, having as of
the date hereof authorized capital stock consisting of 100
shares of common stock, par value $1.00 per share (the
"Subsidiary Common Stock"), all of which have been issued to,
and are owned by, URS.
D. URS, Greiner and the Subsidiary have determined that
it is advisable that the Subsidiary be merged with and into
Greiner on the terms and conditions set forth herein and
pursuant to the applicable statutes and regulations (the
"Merger").
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E. The respective boards of directors of Greiner, URS
and the Subsidiary have authorized and approved the execution,
delivery and the performance of this Agreement and the
transactions contemplated hereby, and the board of directors of
Greiner has directed that this Agreement be submitted to the
stockholders of Greiner for consideration of and vote upon the
approval of this Agreement.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained herein, and
subject to the terms and conditions hereof, and intending to be
legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1.
THE MERGER
----------
Section 1.1 MERGER OF THE SUBSIDIARY INTO GREINER.
Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the Nevada Business
Corporation Law set forth in Title 7 of the Nevada Revised
Statues (the "Nevada Law"), at the Effective Time of the Merger
(as defined in Section 1.2 below), the Subsidiary shall be
merged with and into Greiner, and the separate existence of the
Subsidiary shall thereupon cease, and Greiner shall continue
its corporate existence as the surviving corporation of the
Merger under the laws of the State of Nevada under the name of
Greiner Engineering, Inc., and Greiner shall succeed to and
assume all the rights and obligations of the Subsidiary in
accordance with the Nevada Law.
Section 1.2 EFFECTIVE TIME OF THE MERGER. Subject to the
provisions of this Agreement, as soon as practicable after the
Closing Date, the parties shall file articles of merger,
certificate of merger or other appropriate documents (in any
such case, the "Merger Documents"), executed in accordance with
the relevant provisions of the Nevada Law and shall make all
other filings or recordings required under the Nevada Law. The
Merger shall become effective at such time as the Merger
Documents are duly filed with the Secretary of State of the
State of Nevada, or at such other time as the parties hereto
shall agree should be specified in the Merger Documents (the
"Effective Time of the Merger").
Section 1.3 EFFECTS OF THE MERGER. At the Effective Time
of the Merger:
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(a) the separate corporate existence of the
Subsidiary shall cease and the Subsidiary shall be merged with
and into Greiner, which shall be the Surviving Corporation, and
all of the assets of the Subsidiary shall become the property
of Greiner as the Surviving Corporation of the Merger, subject
to the liabilities of the Subsidiary as of the Effective Time
of the Merger;
(b) the Articles of Incorporation of Greiner, as in
effect immediately prior to the Effective Time of the Merger,
shall be the Articles of Incorporation of the Surviving
Corporation, and may be amended thereafter as provided by law;
(c) the by-laws of Greiner, as in effect immediately
prior to the Effective Time of the Merger, shall be the by-
laws of the Surviving Corporation; such by-laws may be amended
thereafter in accordance with their terms and as provided by
law;
(d) the directors of the Subsidiary immediately
prior to the Effective Time of the Merger shall be the
directors of the Surviving Corporation, each of such directors
to hold office, subject to the applicable provisions of the
Articles of Incorporation and by-laws of the Surviving
Corporation, until the next annual stockholders' meeting of the
Surviving Corporation and until their successors are elected
and duly qualified; if at the Effective Time of the Merger, any
of the foregoing persons shall for any reason be unwilling or
unable to serve, the resulting vacancy shall be filled as
provided in such by-laws;
(e) the officers of Greiner immediately prior to the
Effective Time of the Merger shall be the officers of the
Surviving Corporation, each of such officers to hold office,
subject to the applicable provisions of the Articles of
Incorporation and by-laws of the Surviving Corporation, at the
pleasure of the board of directors of the Surviving Corporation
and until their successors are elected and duly qualified; and
(f) the Surviving Corporation shall possess all the
rights, privileges, immunities, powers and purposes of each of
the Constituent Corporations; and all the property, real,
personal or mixed, including causes of action and every other
asset of each of the Constituent Corporations, shall vest in
the Surviving Corporation without further act or deed. The
Surviving Corporation shall be responsible and liable for all
liabilities and obligations of each of the Constituent
Corporations. No liability or obligation due or to become due,
claim or demand for any cause existing against either of the
Constituent Corporations, or any stockholder, officer or
director thereof, shall be released or impaired by the Merger.
No action or proceeding, whether civil or criminal, then
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pending by or against the Constituent Corporations, or any
stockholder, officer or director thereof, shall abate or be
discontinued by the Merger, but may be enforced, prosecuted,
settled or compromised as if the Merger had not occurred, or
the Surviving Corporation may be substituted in such action or
special proceeding in place of the Constituent Corporations.
ARTICLE 2.
EFFECT OF MERGER ON CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
-------------------------------
Section 2.1 CONVERSION OF THE GREINER COMMON STOCK.
(a) CONVERSION; MERGER CONSIDERATION. At the
Effective Time of the Merger, each share of the Greiner Common
Stock issued and outstanding immediately prior to the Effective
Time of the Merger shall, by virtue of the Merger, and without
any action on the part of the holder thereof, be converted into
the right to receive (i) 0.298 shares of the URS Common Stock,
and (ii) $13.50 in cash, all of which shall be payable upon the
surrender of the certificate(s) formerly representing such
shares of Greiner Common Stock. The cash and the URS Common
Stock so deliverable is hereinafter collectively referred to as
the "Merger Consideration."
(b) FRACTIONAL SHARES. No fractional shares of the
URS Common Stock will be issued as a result of the Merger. In
lieu of the issuance of any fractional shares of the URS Common
Stock, holders of shares of the Greiner Common Stock who would
otherwise have been entitled to receive a fraction of a share
of the URS Common Stock shall be entitled to receive, from URS,
an amount of cash, without interest, equal to the closing price
of the URS Common Stock as reported on the New York Stock
Exchange on the trading day immediately preceding the Closing
Date as listed in The Wall Street Journal, multiplied by the
-----------------------
fraction of a share of the URS Common Stock to which such
holder would otherwise have been entitled.
(c) OPTIONS. At the Effective Time of the Merger,
all options to purchase Greiner Common Stock (the "Greiner
Options") issued under the 1981 Stock Option Plan of Greiner
Engineering, Inc. (the "1981 Greiner Plan") or under the 1991
Stock Option Plan of Greiner Engineering, Inc. (the "1991
Greiner Plan") which remain outstanding at that time (whether
or not previously exercisable or vested) shall, by virtue of
the Merger, and without any further action on the part of
Greiner or any holder of said Greiner Options, be cancelled.
If, at the Effective Time of the Merger, the Exercise Price per
share with respect to any Greiner Option (whether or not
previously exercisable or vested) so cancelled (the "Exercise
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Price") is less than the sum of (x) $13.50 per share, plus
(y) 0.298 multiplied by the closing price per share of the URS
Common Stock as reported on the New York Stock Exchange on the
trading day immediately preceding the Closing Date as listed in
The Wall Street Journal (the "Merger Value"), then the holder
-----------------------
of such Greiner Option shall be paid as soon as practicable
following the Closing Date cash in an amount per each share of
Greiner Common Stock subject to such option equal to the
excess, if any, of the Merger Value over the Exercise Price.
Notwithstanding anything to the contrary in this Section
2.1(c), pursuant to the terms of Section 6(b) of the 1981
Greiner Plan and Section 6(b) of the 1991 Greiner Plan,
promptly following execution of this Agreement, Greiner shall
give each holder of the Greiner Options (whether or not
previously exercisable or vested) written notice that such
Greiner Options will be cancelled in connection with the Merger
and, shall permit said holders to exercise their Greiner
Options and purchase Greiner Common Stock pursuant to the terms
of the 1981 Greiner Plan and/or the 1991 Greiner Plan, as the
case may be.
(d) SURRENDER OF CERTIFICATES AND RECEIPT OF
CONSIDERATION.
(1) APPOINTMENT OF EXCHANGE AGENT; EXCHANGE
FUND. As of the Effective Time of the Merger, URS shall
deposit, or shall cause to be deposited with an exchange agent
selected by URS and reasonably satisfactory to Greiner (the
"Exchange Agent"), for the benefit of holders of the Greiner
Common Stock, for exchange in accordance with this Article 2,
(i) certificates representing the number of shares of the URS
Common Stock issuable as part of the Merger Consideration, and
(ii) cash in an amount equal to the aggregate cash component of
the Merger Consideration, and (iii) cash to be paid in lieu of
the issuance of fractional shares (such cash and certificates
for the shares of URS Common Stock are hereinafter referred to
collectively as the "Exchange Fund").
(2) NOTICE TO GREINER STOCKHOLDERS. As soon
as reasonably practicable after the Effective Time of the
Merger, URS shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates representing
the Greiner Common Stock (A) a letter of transmittal which
shall specify that delivery shall be effected, and risk of loss
and title to the certificates for shares of the Greiner Common
Stock shall pass, only upon delivery of the certificates for
the shares of the Greiner Common Stock to the Exchange Agent,
and shall be in such form and have such other provisions as URS
may reasonably specify, and (B) instructions for use in
effecting the surrender of the certificates for the shares of
the Greiner Common Stock in exchange for the Merger
Consideration.
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(3) SURRENDER OF GREINER STOCK CERTIFICATES.
Upon surrender of a certificate for shares of the Greiner
Common Stock (a "Greiner Stock Certificate") for cancellation
to the Exchange Agent or to such other agent or agents as may
be appointed by URS, together with such letter of transmittal,
duly executed and completed in accordance with the instructions
thereto, the holder thereof shall be entitled to receive in
exchange therefor the number of whole shares of the URS Common
Stock to which the holder of the Greiner Common Stock is
entitled pursuant to this Article 2 plus that portion of the
Exchange Fund which such holder has the right to receive
pursuant to the provisions of this Section 2.1, after giving
effect to any required withholding tax, and the Greiner Stock
Certificate for the shares of the Greiner Common Stock so
surrendered shall forthwith be cancelled.
(4) LIMITATIONS. Notwithstanding any other
provision of this Agreement, until holders of Greiner Stock
Certificates representing shares of the Greiner Common Stock
have surrendered them for exchange as provided herein, (1) no
dividends or other distributions shall be paid with respect to
any shares represented by such Certificates and no payment for
fractional shares shall be made, and (2) without regard to when
such Greiner Stock Certificates are surrendered for exchange as
provided herein, no interest shall be paid on any dividends or
other distributions or any payment for fractional shares. Upon
surrender of a Greiner Stock Certificate, there shall be paid
to the holder of such Greiner Stock Certificate the amount of
any dividends or other distributions which theretofore became
payable, but which were not paid by reason of the preceding
sentence, with respect to the number of whole shares of URS
Common Stock represented by the Greiner Stock Certificate or
Certificates issued upon such surrender. If any certificate
for URS Common Stock is to be issued in a name other than in
which the Greiner Stock Certificate surrendered in exchange
therefore is registered, it shall be a condition of such
exchange that the person requesting such exchange pay any
transfer or other taxes required by reason of the issuance of
certificates for such shares of URS Common Stock in a name
other than that of the registered holder of the Greiner Stock
Certificate surrendered, or establish to the satisfaction of
Greiner that such tax has been paid or is not applicable.
Certificates of URS Common Stock issued to holders of Greiner
Common Stock issued under a Greiner restricted stock plan shall
bear legends substantially similar to the legends presently on
the Greiner Common Stock Certificates and as required by
applicable law.
(5) PAYMENT. The Exchange Agent shall within
15 business days of receipt of such Greiner Stock Certificate
pay the holder of such Certificate, in immediately available
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funds, the amount of cash into which the shares theretofore
represented by such Certificate shall have been converted
pursuant to Section 2.1, and the Greiner Stock Certificate so
surrendered shall be cancelled. In the event of a transfer of
ownership of shares of Greiner Common Stock that is not
registered in the transfer records of Greiner, payment may be
made to a person other than the person in whose name the
Certificate so surrendered is registered, if such Certificate
shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a
person other than the registered holder of such Greiner Stock
Certificate or establish to the satisfaction of the Greiner
that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.1, each Greiner
Stock Certificate shall be deemed at any time after the
Effective Time of the Merger to represent only the right to
receive upon such surrender the amount of the Merger
Consideration, without interest, into which the shares
theretofore represented by such Greiner Stock Certificate shall
be converted pursuant to Section 2.1. No interest will be paid
or will accrue on the cash payable upon the surrender of any
Greiner Stock Certificate.
(e) CANCELLATION OF THE GREINER COMMON STOCK. At
the Effective Time of the Merger, all of the authorized and
outstanding shares of the Greiner Common Stock shall be
cancelled and cease to represent any interest in Greiner and
such holders shall cease to have any rights of a stockholder of
Greiner. From and after the Effective Time of the Merger, the
holders of shares of the Greiner Common Stock outstanding
immediately prior to the Effective Time of the Merger as such
holders shall be entitled to receive only the Merger
Consideration. From the Effective Time of the Merger, the
holders of the shares of the Greiner Common Stock which shall
be converted into the URS Common Stock pursuant to Section
2.1(a) shall have all of the rights of holders of the number of
shares of the URS Common Stock into which such Greiner Common
Stock has been converted.
Section 2.2 CONVERSION OF THE SUBSIDIARY COMMON STOCK.
At the Effective Time of the Merger, each share of the
Subsidiary Common Stock outstanding immediately prior to the
Effective Time of the Merger shall be converted into one (1)
share of a newly-created class of $1.00 par value common stock
of the Surviving Corporation.
Section 2.3 CANCELLATION OF TREASURY SHARES. Any share
of the Greiner Common Stock held in the treasury of Greiner at
the Effective Time of the Merger shall be cancelled and retired
at the Effective Time of the Merger and no shares shall be
issuable with respect thereto.
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Section 2.4 WITHHOLDING TAX. The right of any
shareholder to receive the Merger Consideration shall be
subject to and reduced by the amount of any required tax
withholding obligation.
ARTICLE 3.
CLOSING
-------
Section 3.1 CLOSING; CLOSING DATE. Unless this Merger
Agreement shall have been terminated and the Merger abandoned
pursuant to the provisions of Article 9, a closing ("Closing")
shall take place at the offices of Messrs. Sheppard, Mullin,
Richter & Hampton, Four Embarcadero Center, Suite 1700, San
Francisco, CA 94111, at 10:00 A.M., California time, on the
business day following approval of the Greiner stockholders as
contemplated by Section 6.2.2, or at such other time and place
as may be agreed upon in writing by the parties hereto (the
"Closing Date").
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF GREINER
-----------------------------------------
Except as otherwise disclosed to URS in a letter delivered
to it prior to the execution hereof (which letter shall contain
appropriate references to identify the representations and
warranties herein to which the information in such letter
relates) (the "Greiner Disclosure Letter"), Greiner represents
and warrants to URS and the Subsidiary as follows:
Section 4.1 ORGANIZATION. Each of Greiner and the
Greiner Subsidiaries (as hereinafter defined) is a corporation
duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to own, lease, and
operate its properties, and to carry on its business as now
being conducted, except where the failure to be so organized,
existing, and in good standing or to have such power and
authority would not have a Greiner Material Adverse Effect (as
defined below). Each of Greiner and the Greiner Subsidiaries
is duly qualified or licensed and in good standing to do
business in each jurisdiction in which the property owned,
leased, or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in
any such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not have a
Greiner Material Adverse Effect (defined below) on the Business
Condition (defined below) of Greiner. For purposes of this
Agreement: (a) "Greiner Material Adverse Effect" means, when
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used in connection with Greiner, any change or effect that is
materially adverse to the Business Condition of Greiner, other
than changes or effects resulting from (i) changes attributable
to conditions affecting the engineering business generally,
(ii) changes in general economic conditions, or (iii) changes
attributable to the announcement or pendency of the Merger; and
(b) "Business Condition" with respect to an entity shall mean
the business, financial condition, results of operations, or
assets (without giving effect to the consequences of the
transactions contemplated by this Agreement) of such entity and
its Subsidiaries taken as a whole.
Section 4.2 CAPITALIZATION. The authorized capital stock
of Greiner consists of 20,000,000 shares of Greiner Common
Stock, par value $0.50 per share, and 1,000,000 shares of
preferred stock, par value $1.00 per share (the "Greiner
Preferred Stock"). As of the date hereof, (i) 4,704,642 shares
of Greiner Common Stock are issued and outstanding,
(ii) options to acquire 377,650 shares of Greiner Common Stock
are outstanding under all stock option plans and agreements of
Greiner, (iii) 737,300 shares of Greiner Common Stock
(including shares of Greiner Common Stock issuable upon
exercise of the options identified in clause (ii) above) are
reserved for issuance pursuant to all employee plans of
Greiner, and (iv) there are no shares of Greiner Preferred
Stock outstanding. All of the issued and outstanding shares of
Greiner Common Stock are validly issued, fully paid and
nonassessable and free of preemptive rights. Except as set
forth above or as specified in Section 4.2 of the Greiner
Disclosure Letter, as of the date of this Agreement there are
no shares of capital stock of Greiner issued or outstanding or
any options, warrants, subscriptions, calls, rights,
convertible securities or other agreements or commitments
obligating Greiner to issue, transfer, sell, redeem, repurchase
or otherwise acquire any shares of its capital stock or
securities. Except as provided in this Agreement or as set
forth in Section 4.2 of the Greiner Disclosure Letter, after
the Effective Time of the Merger, Greiner will have no
obligation to issue, transfer or sell any shares of its capital
stock pursuant to any employee benefit plan or otherwise.
Section 4.3 SUBSIDIARIES. Section 4.3 of the Greiner
Disclosure Letter identifies each corporation or other entity
of which Greiner, directly or indirectly, owns or controls
voting securities or other interests which are sufficient to
elect a majority of the board of directors or others performing
similar functions of such corporation or other entity (a
"Greiner Subsidiary") and sets forth for each Greiner
Subsidiary: (i) its name and jurisdiction of incorporation or
organization; (ii) its authorized capital stock; and (iii) the
number of issued and outstanding shares of capital stock.
Greiner owns directly or indirectly each of the outstanding
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shares of capital stock (or other ownership interests having by
their terms ordinary voting power to elect a majority of
directors or others performing similar functions with respect
to such Greiner Subsidiary) of each of the Greiner
Subsidiaries. Each of the outstanding shares of capital stock
of each of the Greiner Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable. Each of the outstanding
shares of capital stock of each Greiner Subsidiary is owned,
directly or indirectly, by Greiner, free and clear of all
liens, pledges, security interests, claims, or other
encumbrances of any nature whatsoever ("Liens"). There are not
now, and at Closing there will not be, (a) any issued or
outstanding securities convertible into or exchangeable for, or
any options, warrants, calls, subscriptions or other rights
(preemptive or otherwise) to acquire, any shares of capital
stock of any of the Greiner Subsidiaries; or (b) any
agreements or contractual commitments obligating Greiner, or
restricting Greiner's rights, to transfer, sell, or vote, the
capital stock of the Greiner Subsidiaries owned by it,
directly or indirectly.
Section 4.4 MATERIAL INVESTMENTS. Except as set forth in
Section 4.4 of the Greiner Disclosure Letter, Greiner does not
directly or indirectly own any equity or similar interest in,
or any interest convertible into or exchangeable or exercisable
for any equity or similar interest in, any corporation (other
than a Greiner Subsidiary), partnership, joint venture or other
business association or entity that is material to Greiner.
With respect to those entities indicated on Section 4.4 of the
Greiner Disclosure Letter, Greiner has heretofore delivered to
URS financial statements (audited to the extent available) and
interim unaudited financial statements of each of such entities
(through the most recently concluded fiscal quarter for each of
such persons) and, to the best knowledge of Greiner, such
financial statements fairly present, in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis (except as may be indicated in the notes
thereto or in Section 4.4 of the Greiner Disclosure Letter),
the financial condition of each thereof as at and the results
of operations for the periods so indicated (subject to normal
year-end adjustments in the case of the interim unaudited
financial statements), and Greiner's disclosures with respect
to its investment in each such entities otherwise included in
the Greiner SEC Reports (as defined below) do not contain any
untrue statements of material fact or omit to state any
material fact required to be stated therein or which are
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Except as set forth in Section 4.4 of the Greiner Disclosure
Letter, Greiner (or, as indicated thereon, a Greiner
Subsidiary) has good and marketable title to the securities
evidencing its investment in the entities indicated in Section
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4.4 of the Greiner Disclosure Letter, which have been validly
issued and are fully paid and nonassessable and are held by
Greiner or a Greiner Subsidiary free and clear of any Lien,
restraint on alienation, or any other restriction with respect
of the transferability or assignability thereof (other than
restrictions on transfer imposed by Federal or state securities
laws).
Section 4.5 AUTHORITY RELATIVE TO THIS AGREEMENT.
Greiner has all requisite corporate power and authority to
enter into this Agreement and subject, in the case of this
Agreement, to approval of this Agreement by the stockholders of
Greiner and to the consents and approvals set forth in Section
4.6 below, to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by
Greiner and the consummation by Greiner of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Greiner, including the
unanimous approval of the Board of Directors of Greiner, and no
other corporate proceedings on the part of Greiner are
necessary to authorize this Agreement or the transactions
contemplated hereby (except for approval by the stockholders of
Greiner). This Agreement has been duly and validly executed
and delivered by Greiner and constitutes a valid and binding
agreement of Greiner, enforceable against Greiner in accordance
with its terms, except that such enforceability may be subject
to (i) bankruptcy, insolvency, reorganization or other similar
laws relating to enforcement of creditors' rights generally,
and (ii) general equitable principles.
Section 4.6 CONSENTS AND APPROVALS; NO VIOLATIONS.
Except for applicable requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
the Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (the HSR Act, Securities Act and Exchange Act,
collectively, the "Governmental Requirements"), state or
foreign laws relating to takeovers, if applicable, state
securities or blue sky laws, state and local laws and
regulations relating to licensing, and the filing of the
Documents of Merger as required by the Nevada Law, no filing
with, and no permit, authorization, consent or approval of, any
court or tribunal or administrative, governmental or regulatory
body, agency or authority ("Government Entity") is necessary
for the execution, delivery and performance of this Agreement
by Greiner or the transactions contemplated by this Agreement.
Neither the execution, delivery nor performance of this
Agreement by Greiner, nor the consummation by Greiner of the
transactions contemplated hereby, nor compliance by Greiner
with any of the provisions hereof, will (i) conflict with or
result in any breach of any provisions of the Articles of
Incorporation or By-Laws of Greiner or the Articles or
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Certificate of Incorporation, as the case may be, or By-Laws of
any of the Greiner Subsidiaries, (ii) except as set forth in
Section 4.6(ii) of the Greiner Disclosure Letter, result in a
violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, acceleration, vesting,
payment, exercise, suspension or revocation) under, any of the
terms, conditions or provisions of any note, bond, mortgage,
deed of trust, security interest, indenture, license, contract,
agreement, plan or other instrument or obligation to which
Greiner or any of the Greiner Subsidiaries is a party or by
which any of them or any of their properties or assets may be
bound or affected, (iii) except as set forth in Section
4.6(iii) of the Greiner Disclosure Letter, violate any order,
writ, injunction, decree, statute, rule or regulation
applicable to Greiner, any Greiner Subsidiary or any of their
properties or assets, (iv) except as set forth in Schedule
4.6(iv) of the Greiner Disclosure Letter, result in the
creation or imposition of any Lien on any asset of Greiner or
any Greiner Subsidiary, or (v) except as set forth in Section
4.6(v) of the Greiner Disclosure Letter, cause the suspension
or revocation of any certificates of need, accreditation,
registrations, licenses, permits and other consents or
approvals of governmental agencies or accreditation
organizations, except in the case of clauses (ii), (iii), (iv)
and (v) for violations, breaches, defaults, terminations,
cancellations, accelerations, creations, impositions,
suspensions or revocations which would not individually or in
the aggregate have a Greiner Material Adverse Effect.
Section 4.7 GREINER SEC REPORTS AND FINANCIAL STATEMENTS.
Greiner has delivered or made available to URS true and
complete copies of each registration statement, report and
proxy or information statement, including, without limitation,
its Annual Reports to Stockholders incorporated in material
part by reference in certain of such reports, in the form
(including exhibits and any amendments thereto) required to be
filed with the Securities and Exchange Commission ("SEC") since
January 1, 1992 (collectively, the "Greiner SEC Reports").
Except as set forth in Section 4.7 of the Greiner Disclosure
Letter, as of the respective dates such Greiner SEC Reports
were filed or, if any such Greiner SEC Reports were amended, as
of the date such amendment was filed, each of the Greiner SEC
Reports (i) complied in all material respects with all
applicable requirements of the Securities Act and the Exchange
Act, and the rules and regulations promulgated thereunder, and
(ii) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Each of the audited Consolidated Financial Statements and
unaudited consolidated interim financial statements of Greiner
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(including any related notes and schedules) included (or
incorporated by reference) in its Annual Reports on Form 10-K
for each of the three fiscal years ended December 31, 1992,
1993 and 1994 and Quarterly Reports on Form 10-Q for all
interim periods subsequent thereto (the "Greiner Financial
Statements") fairly present, in conformity with GAAP applied on
a consistent basis (except as may be indicated in the notes
thereto), the consolidated financial position of Greiner and
the Greiner Subsidiaries as of its date and the consolidated
results of operations and cash flows for the period then ended
(subject to normal year-end adjustments in the case of any
unaudited interim financial statements). There has been no
change in Greiner's accounting policies or the methods of
making accounting estimates or changes in estimates that are
material to the Greiner Financial Statements, except as
described in the notes thereto.
Section 4.8 INFORMATION SUPPLIED. None of the
information supplied or to be supplied by Greiner or the
Greiner Subsidiaries, auditors, attorneys, financial advisors,
or other consultants or advisors for inclusion in (a) the
registration statement on Form S-4, and any amendment thereto,
to be filed under Securities Act with the SEC by URS in
connection with the issuance of the URS Common Stock in or as a
result of the Merger (the "Form S-4"), or (b) the proxy
statement and any amendment or supplement thereto to be
distributed in connection with Greiner's meeting of
stockholders to vote upon this Agreement and the transactions
contemplated hereby (the "Proxy Statement" and, together with
the Form S-4, the "Proxy Statement/Form S-4"), will: (i) in the
case of the Proxy Statement and any amendment or supplement
thereto, (1) at the time of the mailing of the Proxy Statement
and any amendments or supplements thereto, and (2) at the time
of Greiner's meeting of stockholders, and (ii) in the case of
the Form S-4, as amended or supplemented, (x) at the time it
becomes effective, (y) at the time of any post-effective
amendment thereto, and (z) at the time of the meeting of the
stockholders of Greiner, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. Greiner agrees to correct as promptly as
practicable any such information provided by it that shall have
become false or misleading in any material respect and to take
all steps necessary to file with the SEC and have declared
effective or cleared by the SEC any amendment or supplement to
the Proxy Statement so as to correct the same and to cause the
Proxy Statement as so corrected to be disseminated to Greiner's
stockholders to the extent required by applicable law. The
Proxy Statement/Form S-4 shall comply as to form in all
material respects with the provisions of all applicable laws,
including the provisions of the Exchange Act and the rules and
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regulations of the SEC thereunder, except that no
representation is made by Greiner with respect to information
supplied by URS specifically for inclusion therein.
Section 4.9 ABSENCE OF MATERIAL ADVERSE AND OTHER
CHANGES. Except as contemplated by this Agreement, and except
as set forth in Section 4.9 of the Greiner Disclosure Letter,
since September 30, 1995, Greiner and the Greiner Subsidiaries
have conducted their business in the ordinary course,
consistent with past practices, and there has not been:
(a) any event or occurrence that has resulted in a Greiner
Material Adverse Effect, or any development or combination of
developments of which Greiner has knowledge that is reasonably
likely, in Greiner's commercially reasonable judgment, to
result in a Greiner Material Adverse Effect, (b) any
declaration, setting aside or payment of any dividend or other
capital distributions in respect of any of its capital stock,
except for regular cash dividends to holders of Greiner Common
Stock in amounts and at times consistent with prior practice,
or any redemption or repurchase or other acquisition of any
shares of its capital stock, (c) any increase in the regular
compensation of any of the officers or employees of Greiner or
the Greiner Subsidiaries, except such increases as have been
granted in the ordinary course of business in accordance with
its customary practices (which shall include normal periodic
performance reviews, promotions and related compensation
increases), (d) any incurrence, assumption or guarantee by
Greiner or any of the Greiner Subsidiaries of any indebtedness
for borrowed money other than in the ordinary course of
business consistent with past practices, (e) any transaction or
commitment made, or any contract or agreement entered into, by
Greiner or any of the Greiner Subsidiaries (including the
acquisition or disposition of any assets) or any relinquishment
by Greiner or any of the Greiner Subsidiaries of any contract
or other right, in either case, material to Greiner's business
taken as a whole, other than transactions and commitments in
the ordinary course of business consistent with past practices
and those contemplated by this Agreement, (f) any change in any
method of accounting or accounting practice by Greiner or any
of the Greiner Subsidiaries, except for any such change after
the date hereof required by reason of a mandatory concurrent
change in GAAP, (g) any loss or damage to the properties or
assets of Greiner or the Greiner Subsidiaries which has
resulted or is reasonably likely to result in a Greiner
Material Adverse Effect, or (h) any agreement or any commitment
to take any of the actions described in this Section 4.9.
Section 4.10 LITIGATION. Except for litigation disclosed
in the notes to the financial statements included in the
Greiner SEC Reports or as set forth in Section 4.10 of the
Greiner Disclosure Letter, there is no suit, action or
proceeding (whether at law or equity, before or by any Federal,
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state or foreign court, tribunal, commission, board, agency or
instrumentality, or before any arbitrator) pending or, to the
best knowledge of Greiner, threatened against or affecting
Greiner or any of the Greiner Subsidiaries, the outcome of
which, in the reasonable judgment of Greiner, is likely
individually or in the aggregate to have a Greiner Material
Adverse Effect, or which challenges the validity of this
Agreement or seeks to prevent, enjoin, materially alter or
materially delay the transactions contemplated hereby, nor is
there any judgment, decree, injunction, rule or order of any
court, governmental department, commission, agency,
instrumentality or arbitrator outstanding against Greiner or
any of the Greiner Subsidiaries having, or which, insofar as
can reasonably be foreseen, in the future may have, any such
effect.
Section 4.11 ABSENCE OF UNDISCLOSED LIABILITIES. Except
for liabilities or obligations which are accrued or reserved
against in the Greiner Financial Statements (or reflected in
the notes thereto) or which were incurred after September 30,
1995 in the ordinary course of business and consistent with
past practices or in connection with the transactions
contemplated by this Agreement, Greiner and the Greiner
Subsidiaries do not have any liabilities or obligations
(whether absolute, accrued, contingent or otherwise) of a
nature required by GAAP to be reflected in a consolidated
balance sheet (or reflected in the notes thereto).
Section 4.12 NO DEFAULT. Except as set forth in
Section 4.12 of the Greiner Disclosure Letter, neither Greiner
nor any of the Greiner Subsidiaries is in violation or breach
of, or default under (and no event has occurred which with
notice or the lapse of time or both would constitute a
violation or breach of, or default under) any term, condition
or provision of (a) its Articles or Certificate of
Incorporation, as the case may be, or By-Laws, (b) any note,
bond, mortgage, deed of trust, security interest, indenture,
license, contract, agreement, plan, lease, commitment or other
instrument or obligation to which Greiner or any of the Greiner
Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound or affected, (c) any order,
writ, injunction, decree, statute, rule or regulation
applicable to Greiner or any of the Greiner Subsidiaries or any
of their properties or assets, or (d) any certificate of need,
accreditation, registration, license, permit and other consent
or approval of governmental agencies or accreditation
organization, except in the case of clauses (b), (c) and (d)
above for violations, breaches or defaults which would not
individually or in the aggregate have a Greiner Material
Adverse Effect.
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Section 4.13 PROPERTIES, LIENS, ETC. Greiner and the
Greiner Subsidiaries own all of their tangible and intangible
property, real and personal, free and clear of any Liens,
except for statutory mechanics' and materialmens' liens, liens
for current taxes not yet delinquent, and liens and
encumbrances which do not confer upon the secured parties
rights to property which, if exercised upon default, would have
a Greiner Material Adverse Effect. All plants, structures and
material equipment owned or leased by Greiner or the Greiner
Subsidiaries and used in the operation of their business are in
satisfactory condition and repair for the requirements of such
business as presently conducted. Neither Greiner nor any of
the Greiner Subsidiaries have received notice, or have
knowledge of, any pending, threatened or contemplated
condemnation proceeding, or of any sale or other disposition in
lieu of condemnation, affecting any real property owned or
leased by Greiner or any of the Greiner Subsidiaries.
Section 4.14 TAXES. Except as set forth in Section 4.14
of the Greiner Disclosure Letter:
(a) Greiner and each of the Greiner Subsidiaries has
(i) timely filed (or has had timely filed on its behalf) or
will cause to be timely filed all material Tax Returns (as
defined below) required by applicable law to be filed by any of
them for tax years ended prior to the date of this Agreement
and all such Tax Returns and amendments thereto are or will be
true, complete, and correct in all material respects, (ii) has
paid (or has had paid on its behalf) all Taxes due or has
properly accrued or reserved for all such Taxes for such
periods, and (iii) has accrued for all Taxes for periods
subsequent to the periods covered by such Tax Returns.
(b) There are no material liens for Taxes upon the
assets of Greiner or any of the Greiner Subsidiaries, except
liens for Taxes not yet due.
(c) There are no material deficiencies or
adjustments for Taxes that have been proposed or assessed by
any Tax Authority (as defined below) against Greiner or any of
the Greiner Subsidiaries and which remain unpaid.
(d) The Federal income tax returns of Greiner and
each of the Greiner Subsidiaries have been examined by the
Internal Revenue Service for all past taxable years and periods
to and including the years set forth in Section 4.14 of the
Greiner Disclosure Letter, and all material deficiencies
finally assessed as a result of such examinations have been
paid. Section 4.14 of the Greiner Disclosure Letter sets forth
(i) all taxable years and periods of Greiner and the Greiner
Subsidiaries that are presently under Audit (as defined below)
or in respect of which Greiner or any of the Greiner
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Subsidiaries has been notified in writing by the relevant Tax
Authority that it will be Audited, (ii) the taxable years of
Greiner and the Greiner Subsidiaries in respect of which the
statutory period of limitations for the assessment of Federal,
state and local income or franchise Taxes has expired, and
(iii) all waivers extending the statutory period of limitation
applicable to any material Tax Return filed by Greiner or any
of the Greiner Subsidiaries for any taxable period ending prior
to the date of this Agreement.
(e) Prior to the date hereof, Greiner and the
Greiner Subsidiaries have disclosed all material Tax sharing,
Tax indemnity, or similar agreements to which Greiner or any of
the Greiner Subsidiaries is a party to, is bound by, or has any
obligation or liability for Taxes.
(f) As used in this Agreement, (i) "Audit" shall
mean any audit, assessment of Taxes, other examination by any
Tax Authority, proceeding or appeal of such proceeding relating
to Taxes, (ii) "Taxes" shall mean all Federal, state, local and
foreign taxes, and other assessments of a similar nature
(whether imposed directly or through withholding), including
any interest, additions to tax, or penalties applicable
thereto, (iii) "Tax Authority" shall mean the Internal Revenue
Service and any other domestic or foreign governmental
authority responsible for the administration of any Taxes, and
(iv) "Tax Returns" shall mean all Federal, state, local and
foreign tax returns, declarations, statements, reports,
schedules, forms and information returns and any amended Tax
Return relating to Taxes.
Section 4.15 BENEFIT PLANS.
(a) Section 4.15 of the Greiner Disclosure Letter lists
each Greiner Plan. With respect to each of the Greiner Plans,
Greiner has heretofore delivered or made available to URS true
and complete copies of each of the following documents: (i) a
copy of each written plan (including all amendments thereto) or
a description of each unwritten plan; (ii) a copy of the annual
report, if required under ERISA, with respect to each Greiner
Plan for the last three years; (iii) a copy of the actuarial
report, if required under ERISA, with respect to each Greiner
Plan for the last three years and any interim actuarial reports
or calculations provided by the actuary since the date of the
most recent annual actuarial report; (iv) the most recent
summary plan description and all succeeding summaries of
material modifications for each Greiner Plan for which a
summary plan description is required; (v) if the Greiner Plan
is funded through a trust or any third party funding vehicle, a
copy of the trust or other funding agreement (including all
amendments thereto) and the latest financial statements
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thereof; and (vi) the most recent determination letter issued
with respect to each Qualified Greiner Plan. Each of the
Greiner Plans has been operated and administered in all
material respects in accordance with their terms and with all
applicable laws, including Federal and state securities laws.
Each Greiner Plan intended to be qualified under Section 401(a)
of the Code is so qualified and has received a favorable
determination letter from the Internal Revenue Service with
respect to such qualification, its related trust has been
determined to be exempt from taxation under Section 501(a) of
the Code and nothing has occurred since the date of such letter
that would adversely affect such qualification or exemption.
(b) Section 4.15 of the Greiner Disclosure Letter lists
each Greiner Benefit Arrangement. With respect to each of the
Greiner Benefit Arrangements, Greiner has heretofore delivered
to or made available to URS true and complete copies of each
written plan (including all amendments thereto) or a
description of each unwritten plan. Each Greiner Benefit
Arrangement has been maintained in substantial compliance with
its terms and with the requirements prescribed by any and all
statutes, orders, rules, and regulations, including, without
limitation, ERISA and the Code, that are applicable to such
Greiner Benefit Arrangement, including Federal and state
securities laws.
(c) Neither Greiner nor the Greiner Subsidiaries nor any
of their ERISA Affiliates has been involved in any transaction,
taken any action, or failed to take any action that could cause
Greiner or the Greiner Subsidiaries to be subject to any
liability that would likely cause a Greiner Material Adverse
Effect. No fiduciary of any Greiner Plan or Greiner Benefit
Arrangement has taken any action that would result in such
fiduciary being liable for the payment of damages under ERISA
Section 409 and that would result in any material liability for
Greiner, the Greiner Subsidiaries or URS.
(d) Except with respect to contributions to Greiner Plans
under Section 412 that are current and not past due, neither
Greiner nor the Greiner Subsidiaries has incurred (directly or
indirectly) prior to the Closing any current obligation to pay
(i) any liability under Title IV of ERISA or (ii) any liability
under Section 412 of the Code that remains unpaid at the date
of signing of this Agreement. There is no "unfunded pension
liability," i.e., excess of the value of benefits earned to
date over assets, with respect to Employee Benefit Plans
subject to Title IV of ERISA. All premiums owed to the Pension
Benefit Guaranty Corporation with respect to any Employee
Benefit Plan subject to Title IV have been paid.
(e) None of Greiner, the Greiner Subsidiaries, or their
ERISA Affiliates is making or accruing an obligation to make
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contributions or has, on or after January 1, 1980, made or
accrued an obligation to make contributions to a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA.
(f) Full payment has been made of all amounts that
Greiner and the Greiner Subsidiaries are required to pay as
contributions to the Employee Benefit Plans as of the last day
of the most recent fiscal year of each of the plans ended prior
to the date of this Agreement.
(g) No Greiner Plan or Greiner Benefit Arrangement
provides or ever provided benefits, including without
limitation, death or medical benefits (whether or not insured
and whether or not funded), with respect to current or former
employees of Greiner and the Greiner Subsidiaries beyond their
retirement or other termination of service (other than
(i) coverage mandated by applicable law, (ii) death benefits or
retirement benefits under any "employee pension benefit plan,"
as that term is defined in Section 3(2) of ERISA,
(iii) deferred compensation benefits accrued as liabilities on
the books of Greiner and disclosed heretofore to URS, or
(iv) benefits the full cost of which are borne by the current
or former employee (or his or her beneficiary)). The
consummation of the transactions contemplated hereby will not
(i) entitle any current or former employee of Greiner or the
Greiner Subsidiaries to severance pay, unemployment
compensation or any similar payment, or (ii) accelerate the
time of payment or vesting, or increase the amount of any
compensation due to any such employee or former employee.
(h) With respect to Greiner Plans and Greiner Benefit
Arrangements, all reports, forms, and other documents required
to be filed with any governmental authority or distributed to
plan participants (including, without limitation, summary plan
descriptions, Forms 5500, and summary annual reports) have been
timely filed (if applicable) and distributed (if applicable)
and were accurate.
(i) There are no pending, threatened, or anticipated
claims (other than routine claims for benefits) by, on behalf
of, or against any Greiner Plans or Greiner Benefit
Arrangements. No Greiner Plans or Greiner Benefit Arrangements
are presently under audit or examination (nor has notice been
received of a potential audit) by the Internal Revenue Service,
the Department of Labor, or PBGC, nor are there any matters
pending with respect to any Greiner Plan with the Internal
Revenue Service under its Voluntary Compliance Resolution
program, its Closing Agreement Program, or other similar
programs.
(j) No "prohibited transaction," as such term is defined
in Code Section 4975 and ERISA Section 406, has occurred with
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respect to any Greiner Plan or Greiner Benefit Arrangement that
could subject such plan, any fiduciary thereof, Greiner, the
Greiner Subsidiaries or URS to a material penalty for such
prohibited transaction imposed by ERISA Section 502 or a
material tax imposed by Code Section 4975.
(k) Any bonding required by applicable provisions of
ERISA with respect to any Greiner Plan or Greiner Benefit
Arrangement has been obtained and is in full force and effect.
(l) For purposes of this Section 4.15:
(1) "Greiner Benefit Arrangement" means each
employment, severance, or other similar contract, arrangement,
or policy and each plan or arrangement (written or oral, formal
or informal) providing for insurance coverage (including any
self-insured arrangements), cafeteria benefits under Section
125 of the Code, fringe benefits (including but not limited to
paid holidays, personal leave, employee discount, educational
benefit, or similar programs), workers' benefits, vacation
benefits, severance benefits, disability benefits, death
benefits, retirement benefits, deferred compensation,
profit-sharing, bonuses, stock options, stock purchase, phantom
stock, stock appreciation or other forms of incentive
compensation or postretirement insurance or health benefits,
compensation or benefits that (i) is not a Greiner Plan, (ii)
is or has been entered into, maintained, or contributed to by
Greiner or its ERISA Affiliates, and (iii) covers, or within
the last five years covered and has further or continuing
obligations, any employee of Greiner or any Greiner Subsidiary.
(2) "Greiner Plan" means any Employee Benefit
Plan or "multiemployer plan" as defined in Section 4001(a)(3)
of ERISA (a) maintained or contributed to by or on behalf of
Greiner or any Greiner Subsidiary, whether currently or within
the six years prior to the Closing Date, or (b) in which any
employee of Greiner or any Greiner Subsidiary has participated,
as an employee of Greiner or any Greiner Subsidiary, within the
six years prior to the Closing Date, or under which any such
employee has accrued and remains entitled to any benefit.
(3) "Employee Benefit Plan" means any deferred
compensation, retirement, severance, health, or other plan or
program constituting an "employee benefit plan" as defined in
Section 3(3) of ERISA maintained or previously maintained for
current or former employees of Greiner or the Greiner
Subsidiaries, or any ERISA Affiliate of Greiner or the Greiner
Subsidiaries or in which any such employees participate or
participated, other than a Multiemployer Plan.
(4) "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended, and all regulations
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and published interpretations promulgated thereunder, as in
effect from time to time.
(5) "ERISA Affiliate" means each person (as
defined in Section 3(9) of ERISA) that, together with Greiner
or a Greiner Subsidiary, would be treated as a single employer
under Section 4001(b) of ERISA or that would be deemed to be a
member of the same "controlled group" within the meaning of
Section 414(b), (c), (m), and (o) of the Code (provided,
however, that when the subject of the provision is a
Multiemployer Plan only subsections (b) and (c) of Section 414
shall be taken into account).
Section 4.16 EMPLOYMENT MATTERS; LABOR RELATIONS.
(a) Section 4.16 of the Greiner Disclosure Letter
sets forth a true and complete list of the names,
classifications, dates of hire and base compensation for the
year ending December 31, 1995, of each employee of Greiner and
the Greiner Subsidiaries whose base compensation exceeds
$75,000 per annum.
(b) With respect to current or former employees of
Greiner and the Greiner Subsidiaries,
(i) Each of Greiner and the Greiner
Subsidiaries is in substantial compliance with all applicable
laws respecting employment and employment practices, and
occupational safety and health, except for such violations, if
any, that in the aggregate have not had and would not have a
Greiner Material Adverse Effect. There is no charge or
compliance action pending or threatened against or with respect
to Greiner or any of the Greiner Subsidiaries before the Equal
Employment Opportunity Commission or any state, local, or
foreign agency responsible for the prevention of unlawful
employment practices as to which there is a reasonable
likelihood of adverse determination. None of Greiner nor any
of the Greiner Subsidiaries has received notice of the intent
of any Federal, state, local or foreign agency responsible for
the enforcement of labor or employment laws to conduct an
investigation, and, to Greiner's knowledge, no such
investigation is in progress.
(ii) The employees of Greiner and the Greiner
Subsidiaries are not represented by any labor union, nor are
there any collective bargaining agreements or any other types
of agreements with labor unions otherwise in effect with
respect to such employees, nor are any collective bargaining
agreements currently being negotiated, and, to Greiner's
knowledge, no union organizational campaign is in progress.
None of Greiner or the Greiner Subsidiaries is engaged in any
unfair labor practices as defined in the National Labor
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Relations Act or other applicable law, ordinance, or
regulation. There is no unfair labor practice charge or
complaint against any of Greiner or the Greiner Subsidiaries
pending or, to Greiner's knowledge, threatened before the
National Labor Relations Board. There is no labor strike,
lockout, slow-down or work stoppage pending or threatened
against Greiner or any of the Greiner Subsidiaries. None of
Greiner and the Greiner Subsidiaries has experienced any
significant work stoppage or been party to any proceedings
before the National Labor Relations Board for the past three
years.
Section 4.17 INTELLECTUAL PROPERTY.
(a) Except as set forth in Section 4.17 of the
Greiner Disclosure Letter, and except to the extent that the
inaccuracy of any of the following (or the circumstances giving
rise to such inaccuracy), individually and in the aggregate,
would not have a Greiner Material Adverse Effect:
(i) Greiner and the Greiner Subsidiaries own,
or are licensed or otherwise have the right to use (in each
case, clear of any lien or encumbrance of any kind) all
Intellectual Property (as defined below) that in any material
respect is used or proposed to be used in the business of
Greiner and the Greiner Subsidiaries.
(ii) No claims are pending, or to the knowledge
of Greiner, threatened that Greiner or any of the Greiner
Subsidiaries is infringing on or otherwise violating the rights
of any person with regard to any Intellectual Property owned by
and/or licensed to Greiner or the Greiner Subsidiaries.
(iii) To the knowledge of Greiner, no person is
infringing on or otherwise violating any right of Greiner or
any Greiner Subsidiary with respect to any Intellectual
Property owned by and/or licensed to Greiner or the Greiner
Subsidiaries, PROVIDED, that the foregoing representation is
qualified to the extent of publicly known problems of general
applicability with respect to software piracy and copyright
protection.
(iv) None of the former or current members of
management or key personnel of Greiner or any Greiner
Subsidiary, including all former and current employees, agents,
consultants and contractors who have contributed to or
participated in the conception and development of designs,
computer software or other Intellectual Property of Greiner or
the Greiner Subsidiaries, has asserted in writing any claim
against Greiner or any of the Greiner Subsidiaries in
connection with the involvement of such persons in the
conception and development of any design, computer software or
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other Intellectual Property, and no such claim, to the
knowledge of Greiner, has been threatened.
(v) The execution and delivery of this
Agreement, compliance with its terms and the consummation of
the transactions contemplated hereby do not and will not
conflict with or result in any violation or default (with or
without notice or the lapse of time) or give rise to any right,
license or encumbrance relating to the Intellectual Property,
or any right of termination, cancellation, or acceleration of
any material Intellectual Property right or obligation.
(b) For purposes of this Agreement, "Intellectual
Property" means (a) trademarks (registered on unregistered),
service marks, brand names, certification marks, trade dress,
assumed names, trade names and other indications of origin, the
goodwill associated with the foregoing and registrations in any
jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification
or renewal of any such registration or application;
(b) inventions, discoveries and ideas, whether patented,
patentable or not in any jurisdiction; (c) nonpublic
information, trade secrets and confidential information and
rights in any jurisdiction to limit the use or disclosure
thereof by any person; (d) writings and other works, whether
copyrighted, copyrightable or not in any jurisdiction;
(e) registration or applications for registration of copyrights
in any jurisdiction, and any renewals or extensions thereof;
(f) any similar intellectual property or proprietary rights and
computer programs and software (including source code, object
code and data); (g) licenses, immunities, covenants not to sue
and the like relating to the foregoing; and (h) any claims or
causes of action arising out of or related to any infringement
or misappropriation of any of the foregoing.
(c) Except for the name "Greiner" and the Greiner
logo, there are no (i) material domestic and foreign registered
trademarks, registered copyrights and patents, and applications
for registration of any of the foregoing; (ii) material trade
names, service marks, service names, logos and assumed names
which are owned by Greiner or any of the Greiner Subsidiaries,
as the case may be, and that are used or proposed to be used in
the business of Greiner and the Greiner Subsidiaries as
currently conducted; or (iii) material licenses and other
agreements to which Greiner or any Greiner Subsidiary is a
party and pursuant to which Greiner is authorized to use any
Intellectual Property. To the knowledge of Greiner, all
registered Intellectual Property has been validly issued or
registered and is subsisting. Neither Greiner nor the Greiner
Subsidiaries have taken or omitted to take any act which act or
omission might have the effect of waiving or impairing any of
the rights of Greiner to practice and enforce any patent, or to
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use and enforce any trademark or copyright listed on
Section 4.17 of the Greiner Disclosure Letter.
Section 4.18 INSURANCE. Section 4.18 of the Greiner
Disclosure Letter contains a complete and correct list and
accurate summary description of all insurance policies and
material completion bonds (including, without limitation,
professional liability coverage) maintained by or on behalf of
or covering Greiner and the Greiner Subsidiaries, their assets
or operations, or the conduct of their business. Greiner has
made available to URS complete and correct copies of all the
declaration sheets or binders (if declaration sheets are not
yet issued) relating to such policies and bonds. Except as
noted on Section 4.18 of the Greiner Disclosure Letter, all
such policies and bonds are in full force and effect, no
notices of cancellation or nonrenewal have been received with
respect thereto, and all premiums due thereon have been paid.
Greiner and the Greiner Subsidiaries have complied in all
material respects with the provisions of such policies and
bonds. Such policies and bonds are of the type and in amounts
customarily carried by persons conducting businesses similar to
the business conducted by Greiner and the Greiner Subsidiaries.
Section 4.19. COMPLIANCE WITH APPLICABLE LAW. Greiner
and the Greiner Subsidiaries are not in violation of, or to
Greiner's knowledge, are neither under investigation with
respect to nor have been threatened to be charged with or given
notice of any violation of, any applicable laws, ordinances,
rules and regulations of any court, administrative agency or
commission or other governmental authority or instrumentality,
whether domestic or foreign (each a "Governmental Entity")
applicable to Greiner or any Greiner Subsidiary, except for
such violations, if any, that, in the aggregate, have not had
and would not, in the reasonable judgment of Greiner, be likely
to have a Greiner Material Adverse Effect.
Section 4.20. CERTAIN CONTRACTS AND ARRANGEMENTS.
Section 4.20 of the Greiner Disclosure Letter lists all of the
following agreements to which Greiner or any of the Greiner
Subsidiaries is a party ("Material Agreements"):
(a) Each partnership, joint venture or other similar
agreement or arrangement to which Greiner or any Greiner
Subsidiary is a party that has involved or is expected to
involve an annual sharing of revenues of $5,000,000 or more to
other persons;
(b) Each lease for real or personal property in
which the amount of payments which Greiner or a Greiner
Subsidiary is required to make on an annual basis is $500,000
or more;
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(c) Each agreement of Greiner and the Greiner
Subsidiaries relating to indebtedness for borrowed money
(whether incurred, assumed, guaranteed or secured by any asset)
in an aggregate outstanding principal amount of $1,000,000 or
more;
(d) Each other agreement, license or franchise which
has not been terminated or performed in its entirety and not
renewed which may be, by its terms, terminated, impaired or
adversely affected by reason of the execution of this
Agreement, the closing of the Merger, or the consummation of
the transactions contemplated hereby or thereby, and the loss
of which would, individually or in the aggregate with other
such agreements, licenses, or franchises, have a Greiner
Material Adverse Effect;
(e) Each agreement of Greiner or the Greiner
Subsidiaries with or for the benefit of any affiliate of
Greiner with annual payments of $50,000 or more;
(f) Each contract containing covenants purporting
to materially limit the freedom of Greiner or any Greiner
Subsidiary to compete in any line of business or in any
geographic area; and
All Material Agreements are valid, binding and enforceable in
accordance with their terms and none of Greiner or the Greiner
Subsidiaries nor, to the knowledge of Greiner, any other party
thereto, is in default under any of such agreements, nor, to
the knowledge of Greiner, has any event or circumstance
occurred that, with notice or lapse of time or both, would
constitute any event of default by Greiner or the Greiner
Subsidiaries or any other party thereto other than with respect
to any of the foregoing such defaults, if any, that would not,
individually or in the aggregate, have a Greiner Material
Adverse Effect. To Greiner's knowledge, none of the parties to
the contracts identified in this Section have terminated, or
have expressed an intent to reduce materially or terminate
presently or in the future, such contracts.
Section 4.21 PROHIBITED PAYMENTS. Greiner has not, with
respect to the opportunities, business or operation of Greiner,
(a) entered into any understanding agreement or arrangement,
written or oral, under or pursuant to which bribes, kickbacks,
rebates, payoffs or other forms of illegal payments have been
or will be made, provided for or suffered, either directly or
indirectly, through agents, brokers or other intermediaries,
(b) made any illegal payment or contribution of moneys,
services or property to any political party, candidate or
elected official, directly or indirectly, for any purpose or
(c) directly or indirectly engaged in any activity prohibited
by the Foreign Corrupt Practices Act of 1977.
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Section 4.22 POWERS OF ATTORNEY. Greiner has not given a
power of attorney, except for revocable powers of attorney
routinely granted in the ordinary course of business which
related to routine representations before governmental agencies
or given in connection with the qualification to conduct
business in other jurisdictions.
Section 4.23 ENVIRONMENTAL MATTERS.
(a) (i) Greiner and each of the Greiner
Subsidiaries hold, and are in substantial compliance with, all
Environmental Permits, and with all applicable Environmental
Laws, except where the failure to hold such permits or to be in
compliance would not have a Greiner Material Adverse Effect.
(ii) Neither Greiner nor any of the Greiner
Subsidiaries has received any written request for information,
or has been notified that it is a potentially responsible
party, under the Federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or any
similar state law with respect to any on-site or off-site
location.
(iii) No notice, notification, demand,
request for information, citation, summons, complaint or order
has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review (collectively,
"Environmental Notices") is pending, or to Greiner's knowledge,
threatened by any governmental entity or other person with
respect to any (1) alleged violation by Greiner or any of the
Greiner Subsidiaries of any Environmental Law or liability
thereunder or (2) alleged failure by Greiner or any of the
Greiner Subsidiaries to have any Environmental Permit, except,
in each case, for Environmental Notices that would not have a
Greiner Material Adverse Effect.
(iv) To Greiner's knowledge, there have
been no discharges, emissions or releases of Hazardous
Substances by Greiner which are or were reportable under
Environmental Laws, other than such discharges, emissions or
releases that would not have a Greiner Material Adverse Effect.
(b) There has been no material environmental
investigation of Greiner, study, audit, test, review or other
analysis (including any Phase I environmental assessments)
conducted of which Greiner has knowledge in relation to any
real property or lease which has not been delivered to URS
prior to the date hereof. Neither Greiner nor any of the
Greiner Subsidiaries is subject to any judgment, decree or
order relating to compliance with, or the cleanup of regulated
substances under, any applicable Environmental Law.
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(c) For purposes of this Agreement: (i) the term
"Environmental Laws" means any and all applicable Federal,
state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, judicial orders,
decrees, codes, injunctions, permits, consent decrees, consent
orders and governmental restrictions, now in effect, relating
to human health, the environment or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment, including without limitation
ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof; (ii) the term
"Environmental Permits" means all permits licenses,
authorizations, certificates and approvals of governmental
authorities relating to or required by Environmental Laws and
necessary or proper for the business of Greiner and the Greiner
Subsidiaries as currently conducted; and (iii) "Hazardous
Substance" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-
products and other hydrocarbons, or any substance having any
constituent elements displaying any of the foregoing
characteristics, including, without limitation, any substance
regulated under Environmental Laws.
Section 4.24 REGULATORY MATTERS. Greiner has filed or
otherwise provided all reports, data, other information and
applications which are required to be filed with or otherwise
provided to the U.S. Environmental Protection Agency (the
"EPA"), the U.S. Occupational Safety and Health Administration
("OSHA"), and any other Federal, state, local or foreign
governmental authorities with jurisdiction and all regulatory
approvals in respect thereof are in full force and effect on
the date hereof, the failure to file or provide which or obtain
which would, in the aggregate, result in a Greiner Material
Adverse Effect.
Section 4.25 IMMIGRATION REFORM AND CONTROL ACT.
(a) Greiner has fully complied with the verification
requirements and the recordkeeping requirements of the
Immigration Reform and Control Act of 1986 ("IRCA").
(b) To the best knowledge and belief of Greiner and
the Greiner Subsidiaries, the information and documents on
which Greiner relied in complying with IRCA are true and
correct.
(c) There have not been any discrimination
complaints filed against Greiner pursuant to IRCA.
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Section 4.26 BOARD APPROVALS; OPINION OF FINANCIAL
ADVISOR. The Board of Directors of Greiner (at a meeting duly
called and held or pursuant to valid written consent) has
unanimously determined that the transactions contemplated
hereby are fair to and in the best interests of Greiner and its
stockholders. Greiner has received the opinion of Houlihan,
Lokey, Howard & Zukin, Inc. ("HL"), Greiner's financial
advisor, or another financial advisor selected by Greiner and
reasonably acceptable to URS, substantially to the effect that
the Merger consideration to be paid to holders of the Greiner
Common Stock in the Merger is fair to such stockholders from a
financial point of view.
Section 4.27 BROKERS. No broker, finder or investment
banker is entitled to any brokerage, finder's fee or commission
payable by Greiner in connection with the transactions
contemplated by this Agreement based upon arrangements made by
or on behalf of Greiner.
Section 4.28 DISCLOSURE. No representation or warranty
by Greiner in this Agreement, the schedules hereto or any
certificates delivered pursuant to the terms hereof, contains
or will contain an untrue statement of material fact, or omits
or will omit to state a material fact necessary to make the
statements contained herein or therein, in light of the
circumstances in which they were made, not misleading.
Section 4.29 RELIANCE. The foregoing representations
and warranties are made by Greiner with the knowledge and
expectation that URS is placing reliance thereon.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF URS
-------------------------------------
Except as otherwise disclosed to Greiner in a letter
delivered to it prior to the execution hereof (which letter
shall contain appropriate references to identify the
representations and warranties herein to which the information
in such letter relates) (the "URS Disclosure Letter"), URS and
the Subsidiary represent and warrant to Greiner as follows:
Section 5.1 ORGANIZATION. Each of URS and the Subsidiary
is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and
authority to own, lease, and operate its properties, and to
carry on its business as now being conducted, except where the
failure to be so organized, existing, and in good standing or
to have such power and authority would not have a URS Material
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Adverse Effect. Each of URS and the Subsidiary is duly
qualified or licensed and in good standing to do business in
each jurisdiction in which the property owned, leased, or
operated by it or the nature of the business conducted by it
makes such qualification necessary, except in any such
jurisdictions where the failure to be so duly qualified or
licensed and in good standing would not have a URS Material
Adverse Effect on the Business Condition of URS. For purposes
of this Agreement, "URS Material Adverse Effect" means, when
used in connection with URS, any change or effect that is
materially adverse to the Business Condition of URS, other than
changes or effects resulting from (i) changes attributable to
conditions affecting the engineering business generally, (ii)
changes in general economic conditions, or (iii) changes
attributable to the announcement or pendency of the Merger.
Section 5.2 CAPITALIZATION. The authorized capital stock
of URS consists of 20,000,000 shares of URS Common Stock, par
value $0.01 per share, and 1,000,000 shares of preferred stock,
par value $1.00 per share (the "URS Preferred Stock"). As of
the date hereof, (i) 7,167,591 shares of URS Common Stock are
issued and outstanding, (ii) options to acquire 1,166,324
shares of URS Common Stock are outstanding under all stock
option plans and agreements of URS, (iii) 1,559,665 shares of
URS Common Stock (including shares of URS Common Stock issuable
upon exercise of the options identified in clause (ii) above)
are reserved for issuance pursuant to all employee plans of
URS, and (iv) there are no shares of URS Preferred Stock
outstanding. All of the issued and outstanding shares of URS
Common Stock are validly issued, fully paid and nonassessable
and free of preemptive rights. All of the URS Common Stock
reserved for issuance in exchange for the shares of the Greiner
Common Stock at the Effective Time of the Merger in accordance
with this Agreement will be, when so issued, duly authorized,
validly issued, fully paid and nonassessable and free of
preemptive rights. The authorized capital stock of the
Subsidiary consists of 100 shares of the Subsidiary Common
Stock, par value $1.00 per share, all of which shares are
validly issued and outstanding, fully paid and nonassessable
and are owned by URS. Except as set forth above or as
specified in Section 5.2 of the URS Disclosure Letter, as of
the date of this Agreement there are no shares of capital stock
of URS issued or outstanding or any options, warrants,
subscriptions, calls, rights, convertible securities or other
agreements or commitments obligating URS to issue, transfer,
sell, redeem, repurchase or otherwise acquire any shares of its
capital stock or securities. Except as provided in this
Agreement or as set forth in Section 5.2 of the URS Disclosure
Letter, after the Effective Time of the Merger, URS will have
no obligation to issue, transfer or sell any shares of its
capital stock pursuant to any employee benefit plan or
otherwise.
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Section 5.3 AUTHORITY RELATIVE TO THIS AGREEMENT. Each
of URS and the Subsidiary has all requisite corporate power and
authority to enter into this Agreement and subject, in the case
of this Agreement, to the consents and approvals set forth in
Section 5.4 below, to consummate the transactions contemplated
hereby. The execution, delivery and performance of this
Agreement by URS and the Subsidiary and the consummation by URS
and the Subsidiary of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the
part of URS and the Subsidiary, including the unanimous
approval of their respective Boards of Directors, and no other
corporate proceedings on the part of URS or the Subsidiary are
necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by URS and the Subsidiary and consti-
tutes a valid and binding agreement of each of them,
enforceable against each of them in accordance with its terms,
except that such enforceability may be subject to (i) bank-
ruptcy, insolvency, reorganization or other similar laws
relating to enforcement of creditors' rights generally, and
(ii) general equitable principles.
Section 5.4 CONSENTS AND APPROVALS; NO VIOLATIONS.
Except for the applicable requirements of the Governmental
Requirements, state or foreign laws relating to takeovers, if
applicable, state securities or blue sky laws, state and local
laws and regulations relating to licensing, and the filing of
the Documents of Merger as required by the Nevada Law, no
filing with, and no permit, authorization, consent or approval
of, any Government Entity is necessary for the execution,
delivery and performance of this Agreement by URS and the
Subsidiary of the transactions contemplated by this Agreement.
Neither the execution, delivery nor performance of this
Agreement by URS and the Subsidiary, nor the consummation by
URS and the Subsidiary of the transactions contemplated hereby,
nor compliance by URS and the Subsidiary with any of the
provisions hereof, will (i) conflict with or result in any
breach of any provisions of the Certificate of Incorporation or
By-Laws of URS or the Subsidiary or the Articles or Certificate
of Incorporation, as the case may be, or By-Laws of any of the
URS Subsidiaries, (ii) except as set forth in Section 5.4(ii)
of the URS Disclosure Letter, result in a violation or breach
of, or constitute (with or without due notice or lapse of time
or both) a default (or give rise to any right of termination,
cancellation, acceleration, vesting, payment, exercise,
suspension or revocation) under, any of the terms, conditions
or provisions of any note, bond, mortgage, deed of trust,
security interest, indenture, license, contract, agreement,
plan or other instrument or obligation to which URS or any of
the URS Subsidiaries is a party or by which any of them or any
of their properties or assets may be bound or affected,
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(iii) except as set forth in Section 5.4(iii) of the URS
Disclosure Letter, violate any order, writ, injunction, decree,
statute, rule or regulation applicable to URS, any URS
Subsidiary or any of their properties or assets, (iv) except as
set forth in Section 5.4(iv) of the URS Disclosure Letter,
result in the creation or imposition of any Lien on any asset
of URS or any URS Subsidiary, or (v) except as set forth in
Section 5.4(v) of the URS Disclosure Letter, cause the
suspension or revocation of any certificates of need,
accreditation, registrations, licenses, permits and other
consents or approvals of governmental agencies or accreditation
organizations, except in the case of clauses (ii), (iii), (iv)
and (v) for violations, breaches, defaults, terminations,
cancellations, accelerations, creations, impositions,
suspensions or revocations which would not individually or in
the aggregate have a URS Material Adverse Effect.
Section 5.5 URS SEC REPORTS AND FINANCIAL STATEMENTS.
URS has delivered to Greiner true and complete copies of each
registration statement, report and proxy or information
statement, including, without limitation, its Annual Reports to
Stockholders incorporated in material part by reference in
certain of such reports, in the form (including exhibits and
any amendments thereto) required to be filed with SEC since
January 1, 1992 (collectively, the "URS SEC Reports"). Except
as set forth in Section 5.5 of the URS Disclosure Letter, as of
the respective dates such URS SEC Reports were filed or, if any
such URS SEC Reports were amended, as of the date such
amendment was filed, each of the URS SEC Reports (i) complied
in all material respects with all applicable requirements of
the Securities Act and the Exchange Act, and the rules and
regulations promulgated thereunder, and (ii) did not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each
of the audited Consolidated Financial Statements and unaudited
consolidated interim financial statements of URS (including any
related notes and schedules) included (or incorporated by
reference) in its Annual Reports on Form 10-K for each of the
three fiscal years ended October 31, 1992, 1993 and 1994, and
to be included on Form 10-K for the fiscal year ended
October 31, 1995, when filed, and Quarterly Reports on
Form 10-Q for all interim periods subsequent thereto (the "URS
Financial Statements") fairly present, in conformity with GAAP
applied on a consistent basis (except as may be indicated in
the notes thereto), the consolidated financial position of URS
and the URS Subsidiaries as of its date and the consolidated
results of operations and cash flows for the period then ended
(subject to normal year-end adjustments in the case of any
unaudited interim financial statements). There has been no
change in URS's accounting policies or methods of making
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accounting estimates or changes in estimates that are material
to the URS Financial Statements, except as described in the
notes thereto.
Section 5.6 INFORMATION SUPPLIED. None of the
information supplied or to be supplied by URS, the URS
Subsidiaries, auditors, attorneys, financial advisors, other
consultants or advisors or the Subsidiary for inclusion in the
Form S-4 or the Proxy Statement/Form S-4, will, in the case of
the Proxy Statement and any amendment or supplement thereto, at
the time of the mailing of the Proxy Statement and any
amendment or supplement thereto, and at the time of any meeting
of stockholders of Greiner to vote upon this Agreement and the
transactions contemplated hereby, or in the case of the Form
S-4, as amended or supplemented, at the time it becomes
effective and at the time of any post-effective amendment
thereto contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading or
necessary to correct any statement in any earlier filing with
the SEC of such Proxy Statement/Form S-4 or any amendment or
supplement thereto or any earlier communication (including the
Proxy Statement/Form S-4) to stockholders of Greiner with
respect to the transactions contemplated by this Agreement.
The Form S-4 and the Proxy Statement/Form S-4 will comply as to
form in all material respects with the provisions of all
applicable laws including the provisions of the Securities Act
and the Exchange Act and the rules and regulations of the SEC
thereunder, except that no representation is made by URS with
respect to information supplied by Greiner specifically for
inclusion therein.
Section 5.7 BOARD APPROVALS; OPINION OF FINANCIAL
ADVISOR. The Boards of Directors of URS and the Subsidiary (at
meetings duly called and held or pursuant to valid written
consents) have unanimously determined that the transactions
contemplated hereby are fair to and in the best interests of
URS and the Subsidiary and the stockholders of URS. URS has
received the opinion of Morgan Stanley & Co. Incorporated
("MS"), URS's financial advisor, substantially to the effect
that the Merger consideration to be paid to holders of the
Greiner Common Stock in the Merger is fair to URS from a
financial point of view.
Section 5.8 BROKERS. No broker, finder or investment
banker (other than MS) is entitled to any brokerage, finder's
fee or commission payable by URS in connection with the
transactions contemplated by this Agreement based upon
arrangements made by or on behalf of URS.
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Section 5.9 DISCLOSURE. No representation or warranty
by URS in this Agreement, the schedules hereto or any
certificates delivered pursuant to the terms hereof, contains
or will contain an untrue statement of material fact, or omits
or will omit to state a material fact necessary to make the
statements contained herein or therein, in light of the
circumstances in which they were made, not misleading.
ARTICLE 6.
PRE-CLOSING COVENANTS
---------------------
Section 6.1 COVENANTS OF ALL PARTIES. During the period
from the date of this Agreement until the earlier of the
termination of this Agreement or the Effective Time of the
Merger, each of the parties hereto covenants and agrees as
follows;
6.1.1 ADVICE OF CHANGES. Each party shall
promptly advise each of the other parties in writing (i) of any
event occurring subsequent to the date of this Agreement that
would render any representation or warranty of such party
contained in this Agreement, if made on or as of the date of
such event or the Closing Date, untrue or inaccurate in any
material respect.
6.1.2 REGULATORY APPROVALS. Each party shall
execute and file, or join in the execution and filing, of any
application or other document that may be necessary in order
to obtain the authorization, approval or consent of any
governmental body, Federal, state or local or foreign, which
may be reasonably required, or which the other party may
reasonably request, in connection with the consummation of the
transactions contemplated by this Agreement, including, without
limitation, filings under the HSR Act. Each party shall use
its best efforts to obtain all such authorizations, approvals
and consents.
6.1.3 CONFIDENTIALITY. Each party shall hold
in confidence all nonpublic information until such time as such
information is otherwise publicly available and, if this
Agreement is terminated, each party will deliver to the other
all documents, work papers and other materials (including
copies) obtained by such party or on its behalf from the other
party as a result of this Agreement or in connection herewith,
whether so obtained before or after the execution hereof. Each
party shall continue to abide by the terms of the
confidentiality agreement between URS and Greiner in effect as
of the date hereof.
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6.1.4 BEST EFFORTS. Upon the terms and subject
to the conditions herein provided, each of the parties hereto
agrees to use its best efforts to take or cause to be taken all
actions, to do or cause to be done, and to assist and cooperate
with the other party hereto in doing, all things necessary,
proper or advisable under applicable laws and regulations, to
consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement,
including (i) using all reasonable efforts to obtain all
necessary waivers, consents and approvals from third parties,
(ii) defending any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby and
thereby, and (iii) executing and delivering such instruments,
and taking such other actions as the other party hereto may
reasonably require in order to carry out the intent of this
Agreement.
6.1.5 CREDIT AGREEMENT. The parties hereto
shall take all actions as may be reasonably necessary to
fulfill the covenants and conditions set forth in that certain
Credit Agreement dated as of January 10, 1996 (the "Credit
Agreement"), by and among URS, as Borrower, the lenders listed
therein as Lenders, and Wells Fargo Bank, National Association,
as Administrative Agent.
Section 6.2 COVENANTS OF GREINER. During the period from
the date of this Agreement until the earlier of the termination
of this Agreement or the Effective Time of the Merger, Greiner
agrees (except as expressly contemplated by this Agreement or
with the prior written consent of URS) that:
6.2.1 CONDUCT OF BUSINESS PENDING MERGER.
(a) ORDINARY COURSE. Greiner and the Greiner
Subsidiaries shall carry on their respective businesses in the
usual, regular and ordinary course in substantially the same
manner as heretofore conducted and, to the extent consistent
with such businesses, use all reasonable efforts to preserve
intact their present business organizations, keep available the
services of their present officers and employees, and preserve
their relationships with customers, suppliers and others having
business dealings with Greiner and the Greiner Subsidiaries.
Greiner shall promptly notify URS of any event or occurrence or
emergency not in the ordinary course of business, of Greiner or
the Greiner Subsidiaries, and material and adverse to the
Business Condition of Greiner. Neither Greiner nor any of the
Greiner Subsidiaries shall (except with the prior written
consent of URS):
(i) accelerate, amend or change the period of
exercisability or vesting of options granted under any stock
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option plans or restricted stock, stock bonus or other awards
(including any discretionary acceleration of the exercise
periods by Greiner's Board of Directors permitted under such
plans) or authorize cash payments in exchange for any options,
restricted stock, stock bonus or other awards granted under any
of such plans;
(ii) grant any severance or termination pay to
any officer or director or, except in the ordinary course of
business consistent with past practices, to any employee of
Greiner or any Greiner Subsidiary;
(iii) except in the ordinary course of business
consistent with past practices and other than transfers between
or among Greiner and any Greiner Subsidiary, transfer to any
person or entity any rights to the Greiner Intellectual
Property Rights;
(iv) commence a lawsuit other than: (1) for the
routine collection of bills; (2) in such cases where Greiner in
good faith determines that failure to commence suit would
result in a material impairment of a valuable aspect of
Greiner's business, provided Greiner consults with URS prior to
filing such suit; or (3) for a breach of this Agreement; and
(v) enter into one or more leases which extend
for a period of two years beyond the date of this Agreement and
which obligate the Company to pay aggregate gross rent in
excess of $500,000.
(b) DIVIDENDS; CHANGES IN STOCK. Greiner shall not,
and it shall not permit any of the Greiner Subsidiaries to,
(i) declare or pay any dividends on or make other capital
distributions in respect of any of its capital stock, except
for intercompany dividends or regular quarterly cash dividends
in an amount which shall not exceed $0.075 per share to holders
of Greiner Common Stock and at times consistent with prior
practice, (ii) split, combine or reclassify any of its capital
stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (iii) repurchase, redeem or
otherwise acquire, any shares of its capital stock.
(c) ISSUANCES OF SECURITIES. Greiner shall not, and
it shall not permit any of the Greiner Subsidiaries to, issue,
deliver or sell, or authorize or propose the issuance, delivery
or sale of, any shares of its capital stock or any securities
convertible into such shares, or any rights, warrants, calls,
subscriptions or options to acquire, any such shares or
convertible securities, or any other ownership interests in
such capital stock.
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(d) GOVERNING DOCUMENTS. Greiner shall not, nor
shall it cause or permit any of the Greiner Subsidiaries to,
amend its articles or certificate of incorporation or by-laws.
(e) NO ACQUISITIONS. Greiner shall not, and it
shall not permit any of the Greiner Subsidiaries to acquire, or
agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or substantial
portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business
organization or division thereof.
(f) NO DISPOSITIONS. Other than sales or licenses
of products or technology in the ordinary course of business
consistent with prior practice, Greiner shall not, and it shall
not permit any of the Greiner Subsidiaries to, sell, lease,
license, encumber or otherwise dispose of, any of its assets,
except for such dispositions in the ordinary course of business
or in amounts which are not material, in the aggregate, to the
business of Greiner.
(g) INDEBTEDNESS. Greiner shall not, and shall not
permit any of the Greiner Subsidiaries to, incur any
indebtedness for borrowed money or guarantee any such
indebtedness or sell any debt securities or warrants or rights
to acquire any debt securities of Greiner or any of the Greiner
Subsidiaries or guarantee any debt securities of others, except
in the ordinary course of business consistent with past
practices.
(h) PLANS; COMPENSATION. Except as otherwise
provided in this Agreement, Greiner shall not, and shall not
permit any of the Greiner Subsidiaries to, adopt or amend in
any material respect any Greiner Plan or pay any pension or
retirement allowance not required by any existing Greiner Plan.
Greiner shall not and shall not permit any Greiner Subsidiary
to, enter into any employment contracts, pay any special
bonuses or special remuneration to officers, directors or
employees, or increase the salaries, wage rates or fringe
benefits of (i) any of its officers or employees whose
compensation exceeded $150,000 during the fiscal year ending
December 31, 1995, or (ii) any of its other officers and
employees other than pursuant to scheduled reviews under
Greiner's or the Greiner Subsidiary's normal compensation
review cycle, in all cases consistent with existing policies
and past practice.
(i) TAX MATTERS. Greiner shall not make any tax
election that would have a Greiner Material Adverse Effect or
settle or compromise any income tax liability of Greiner or any
of the Greiner Subsidiaries that would have a Greiner Material
Adverse Effect.
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(j) DISCHARGE OF LIABILITIES. Greiner shall not,
and it shall not permit any of the Greiner Subsidiaries to,
pay, discharge, settle or satisfy any claims, liabilities or
obligations, except in the ordinary course of business or in
amounts which are not material, individually or in the
aggregate, to the business of Greiner.
(k) MATERIAL AGREEMENTS. Except in the ordinary
course of business, neither Greiner nor any of the Greiner
Subsidiaries shall modify, amend, or terminate any Material
Agreement or waive, release or assign any material rights or
claims under such Material Agreement.
(l) AGREEMENT. Neither Greiner nor any of the
Greiner Subsidiaries shall agree or commit to do any of the
actions described in this Section 6.2.1.
6.2.2 STOCKHOLDERS' MEETING; PROXY STATEMENT.
Greiner shall hold a meeting of its stockholders at the
earliest practicable date to submit this Agreement and related
matters for their consideration and approval, which approval
shall be recommended by Greiner's Board of Directors (subject
to the fiduciary obligations of its directors and officers).
Greiner shall send to its stockholders, for the purpose of
considering and voting upon the Merger, a Proxy Statement
satisfying all requirements of applicable state and Federal
laws, and Greiner shall be solely responsible for any
statement, information or omission in said Proxy Statement
relating to it or its affiliates.
6.2.3 ACQUISITION PROPOSALS. From the date hereof
until the earlier of the termination of this Agreement or the
consummation of the Merger, Greiner and the Greiner
Subsidiaries will not, and will cause their respective
officers, directors, employees, agents and representatives not
to, directly or indirectly, encourage, solicit, accept,
initiate or conduct discussions or negotiations with, provide
any information to, or enter into any agreement with, any
corporation, partnership, limited liability company, person or
other entity or group concerning the acquisition of all or a
substantial part of the assets, business or capital stock of
Greiner, whether through purchase, merger, consolidation,
exchange or any other business combination (each of the
foregoing, an "Acquisition Proposal"). Notwithstanding
anything to the contrary in the preceding sentence, nothing
herein shall prevent Greiner and its officers and directors,
from responding to and considering unsolicited firm offers for
any such transaction from persons other than URS if and to the
extent that, in the written opinion of Greiner's outside
counsel, failure to do so would be reasonably likely to
constitute a violation of applicable law or a breach of the
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fiduciary duties of Greiner's directors to Greiner's
stockholders. Greiner shall immediately provide written notice
to URS of the terms and other details of any such unsolicited
inquiry or proposal relating to an Acquisition Proposal. In
the event that Greiner or any of its officers or directors
enters into any such negotiations or discussions for any reason
which thereby constitute a breach of this Section 6.2.3,
Greiner shall immediately reimburse URS for all expenses and
costs incurred by URS in connection with the transactions
contemplated by this Agreement. In the event that Greiner or
any of its officers or directors shall enter into any letter of
intent, understanding or other agreement with a party other
than URS relating to the acquisition of all or a substantial
part of the assets, business or capital stock of Greiner,
whether through purchase, merger, consolidation, exchange or
any other business combination, either in violation of the no-
shop agreement set forth in this Section or within nine (9)
months after termination of this Agreement for any reason, then
immediately upon entering into such letter of intent,
understanding or other agreement, Greiner shall pay to URS a
termination fee in the amount of $5.0 million (the "Termination
Fee"); provided, however, that such Termination Fee shall not
be payable if, prior to the entry by Greiner into such letter
of intent, understanding or other agreement, URS has
unilaterally declined to close the Merger. The parties
acknowledge and agree that the expense reimbursement obligation
and Termination Fee described in this Section shall not be the
exclusive remedy to URS in the event of a breach by Greiner of
this Agreement, and, in any such event, URS shall be entitled,
in addition to receiving such payments, to equitable remedies,
including, without limitation, specific performance and
enjoining of any actions determined to be in breach of this
Agreement.
6.2.4 MAINTENANCE OF BUSINESS. Greiner will use
its best efforts to carry on and preserve its business and its
relationships with clients, customers, suppliers, employees and
others in substantially the same manner as it has prior to the
date hereof. If Greiner becomes aware of a deterioration in
the relationship with any client, customer, supplier or key
employee, it will promptly bring such information to the
attention of URS in writing and, if requested by URS, will use
its best efforts to restore the relationship.
6.2.5 ACCESS. Greiner shall afford to URS and to
URS's financial advisors, legal counsel, accountants, financing
sources and other authorized representatives access during
normal business hours to all of its books, records, properties,
offices and personnel.
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6.2.6 LIABILITY INSURANCE.
(a) On or before the Closing Date, Greiner
shall procure (subject to the approval of URS) continuing
directors' and officers' liability coverage (tail coverage) for
directors and officers of Greiner who have served as directors
and officers of Greiner or its affiliates (the "Greiner D & O
Policy"), prior to the Effective Time of the Merger, with
respect to acts or failures to act prior to the Effective Time
of the Merger. Said policy shall have a term of not less than
three (3) years after the Closing Date.
(b) On or before the Closing Date, Greiner
shall procure (subject to the approval of URS) continuing
fiduciary liability coverage (tail coverage) for employees of
Greiner who have served as fiduciaries under any Greiner Plan
(the "Greiner Fiduciary Policy") prior to the Effective Time of
the Merger, with respect to acts or failures to act prior to
the Effective Time of the Merger. Said policy shall have a
term that shall expire not less than one (1) year after the
expiration of the term of the ESOP portion of The Performance
Plan and Stock Ownership Plan of Greiner Engineering, Inc.
Section 6.3 COVENANTS OF URS. During the period from the
date of this Agreement until the earlier of the termination of
this Agreement or the Effective Time of the Merger, URS and the
Subsidiary agree (except as expressly contemplated by this
Agreement or with the prior written consent of Greiner) that:
6.3.1 REGISTRATION STATEMENT. The URS Common Stock
to be issued in the Merger shall be registered under the 1933
Act on Form S-4. As promptly as practicable after the date
hereof, URS shall prepare and file with the SEC the Form S-4
and any other documents required by the 1933 Act in connection
with the Merger. URS shall use its best efforts to have the
Form S-4 declared effective as promptly as practicable after
such filing. URS shall also take any action required to be
taken under any applicable state securities or "blue sky" laws
in connection with the issuance of the URS Common Stock in
connection with the Merger.
6.3.2 LISTING AGREEMENT. As promptly as practicable
after the date hereof, URS shall prepare and submit to each of
the New York Stock Exchange and the Pacific Stock Exchange a
listing application covering the shares of the URS Common Stock
to be issued in connection with the Merger. URS shall use its
best efforts to obtain, prior to the Effective Time of the
Merger, approval for the listing of such URS Common Stock,
subject to official notice of issuance.
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ARTICLE 7.
CONDITIONS TO CONSUMMATION OF THE MERGER
----------------------------------------
Section 7.1 CONDITIONS TO OBLIGATIONS OF GREINER. The
obligations of Greiner to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the
Merger of the following conditions:
7.1.1 REPRESENTATIONS AND WARRANTIES TRUE AT
CLOSING. The representations and warranties contained in this
Agreement of URS and the Subsidiary shall be deemed to have
been made again at and as of the Closing with respect to the
stated facts then existing and shall be true in all material
respects.
7.1.2 COVENANTS PERFORMED. All of the
obligations of URS and the Subsidiary to be performed at or
before the Closing pursuant to the terms of this Agreement
shall be been duly performed.
7.1.3 CERTIFICATE. At the Closing, Greiner
shall have received a Certificate signed by the President of
each of URS and the Subsidiary to the effect that each of the
conditions set forth in Section 7.1.1 and 7.1.2 have been
satisfied.
7.1.4 APPROVAL OF STOCKHOLDERS. This Agreement
and the Merger shall have been approved by the stockholders of
Greiner.
7.1.5 OPINION OF COUNSEL. Sheppard, Mullin,
Richter & Hampton, counsel to URS, shall have issued an opinion
of counsel to Greiner, dated the Effective Time of the Merger,
in form and substance reasonably satisfactory to Greiner, to
the effect that:
(i) URS is a corporation validly existing
and in good standing under the laws of the State of
Delaware and has all requisite corporate power to own,
operate and lease its properties and to carry on its
business as it is now being conducted;
(ii) URS has full corporate power to enter
into this Agreement and to carry out the transactions
provided for herein;
(iii) All corporate action required to be
taken on the part of URS to authorize it to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby have been duly and validly taken.
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(iv) This Agreement has been duly and
validly authorized, executed and delivered by URS and,
assuming due authorization, execution, delivery and
performance by each of the other parties hereto,
constitutes the valid and binding obligation of URS,
enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy or other laws
relating to or affecting creditors' rights generally and
by equitable principles; and
(v) The shares of URS Common Stock
issuable in connection with the Merger have been duly and
validly authorized and, upon issuance, such shares will be
fully paid and nonassessable.
In giving such opinions, such counsel shall be
entitled to rely upon certificates of officers of URS or any of
its subsidiaries and public officials with respect to factual
matters upon which their opinions may be based, provided that
the extent of such reliance is set forth in such opinion and
such opinion states that it is reasonable for Greiner to rely
thereon.
7.1.6 FORM S-4. The Form S-4 pertaining to the
URS Common Stock to be issued in connection with the Merger
shall have become effective under the 1933 Act and shall not be
the subject of any stop order or proceedings seeking a stop
order.
7.1.7 MERGER DOCUMENTS. The Merger Documents
shall have been filed with the Secretary of State of the State
of Nevada, as required by law.
7.1.8 MATERIAL ADVERSE CHANGES. There shall
have been no URS Material Adverse Effect between the date of
this Agreement and the date of the Closing.
7.1.9 HSR FILING. Any waiting period
applicable to the consummation of the Merger under the HSR Act
shall have expired or been terminated, and no action shall have
been instituted by the Department of Justice or Federal Trade
Commission challenging or seeking to enjoin the consummation of
the transaction contemplated by this Agreement, which action
shall not have been withdrawn or terminated.
Section 7.2 CONDITIONS TO OBLIGATIONS OF URS AND THE
SUBSIDIARY. The obligations of URS and the Subsidiary to
effect the Merger shall be subject to the satisfaction at or
prior to the Effective Time of the Merger of the following
conditions:
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7.2.1 REPRESENTATIONS AND WARRANTIES TRUE AT
CLOSING. The representations and warranties contained in this
Agreement of Greiner shall be deemed to have been made again at
and as of the Closing with respect to the stated facts then
existing and shall be true in all material respects.
7.2.2 COVENANTS PERFORMED. All of the
obligations of URS and the Subsidiary to be performed at or
before the Closing pursuant to the terms of this Agreement
shall be been duly performed.
7.2.3 CERTIFICATE. At the Closing, URS and the
Subsidiary shall have received a Certificate signed by the
President of Greiner to the effect that each of the conditions
set forth in Section 7.2.1 and 7.2.2 have been satisfied.
7.2.4 APPROVAL OF STOCKHOLDERS. This Agreement
and the Merger shall have been approved by the stockholders of
Greiner.
7.2.5 OPINION OF COUNSEL. Nossaman, Guthner,
Knox & Elliott, counsel to Greiner, shall have issued an
opinion of counsel to URS, dated the Effective Time of the
Merger, in form and substance reasonably satisfactory to URS,
to the effect that:
(i) Greiner is a corporation validly
existing and in good standing under the laws of the State
of Nevada and has all requisite corporate power to own,
operate and lease its properties and to carry on its
business as it is now being conducted;
(ii) Greiner has full corporate power to
enter into this Agreement and to carry out the
transactions provided for herein;
(iii) All corporate action required to be
taken on the part of Greiner to authorize it to execute
and deliver this Agreement and to consummate the
transactions contemplated hereby have been duly and
validly taken; and
(iv) This Agreement has been duly and
validly authorized, executed and delivered by Greiner and,
assuming due authorization, execution, delivery and
performance by each of the other parties hereto,
constitutes the valid and binding obligation of Greiner,
enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy or other laws
relating to or affecting creditors' rights generally and
by equitable principles.
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In giving such opinions, such counsel shall be
entitled to rely upon certificates of officers of Greiner or
any of its subsidiaries and public officials with respect to
factual matters upon which their opinions may be based,
provided that the extent of such reliance is set forth in such
opinion and such opinion states that it is reasonable for URS
to rely thereon.
7.2.6 FORM S-4. The Form S-4 pertaining to the
URS Common Stock to be issued in connection with the Merger
shall have become effective under the 1933 Act and shall not be
the subject of any stop order or proceedings seeking a stop
order.
7.2.7 MERGER DOCUMENTS. The Merger Documents
shall have been filed with the Secretary of State of the State
of Nevada, as required by law.
7.2.8 MATERIAL ADVERSE CHANGES. There shall
have been no Greiner Material Adverse Effect between the date
of this Agreement and the date of the Closing.
7.2.9 HSR FILING. Any waiting period
applicable to the consummation of the Merger under the HSR Act
shall have expired or been terminated, and no action shall have
been instituted by the Department of Justice or Federal Trade
Commission challenging or seeking to enjoin the consummation of
the transaction contemplated by this Agreement, which action
shall not have been withdrawn or terminated.
7.2.10 CONSENTS. Other than the filing of the
Merger Documents as contemplated in Section 1.2, the parties
shall have made such filings, and obtained all consents of
Governmental Entities, required to consummate the transactions
contemplated hereby.
7.2.11 NO LITIGATION. There shall not be
pending any action, proceeding or other application before any
court or Government Entity brought by any Government Entity (i)
challenging or seeking to restrain or prohibit the consummation
of the transactions contemplated by this AGreement, or seeking
to obtain any material damages, or (ii) seeking to prohibit or
impose any material limitations on URS's ownership or operation
of all or any portion of the combined business of URS and
Greiner.
7.2.12 CREDIT AGREEMENT. The conditions set
forth in Sections 4.2, 4.3 and 4.4 of the Credit Agreement
shall have been satisfied.
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ARTICLE 8.
ADDITIONAL AGREEMENTS
---------------------
Section 8.1 PUBLIC ANNOUNCEMENTS. URS, the Subsidiary
and Greiner agree that they will not issue any press release or
otherwise make any public statement or respond to any press
inquiry with respect to this Agreement or the transactions
contemplated hereby without the prior approval of the other
party (which approval will not be unreasonably withheld),
except as may be required by applicable law.
Section 8.2 CONFIDENTIALITY. No party to this Agreement
shall use or disclose any non-public information obtained from
another party for any purpose unrelated to the Merger, and, if
this Agreement is terminated for any reason whatsoever, each
party shall return to the other all originals and copies of all
documents and papers containing all information furnished to
such party pursuant to this Agreement, or during the
negotiations which preceded this Agreement, and shall neither
use nor disclose any such information except to the extent that
such information is available to the public, is rightfully
obtained from third parties, or is independently developed.
Section 8.3. ADDITIONAL AGREEMENTS. In case at any time
after the Effective Time of the Merger any further action is
reasonably necessary or desirable to vest the Surviving
Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of either of the
constituent corporations, the proper officers and directors of
each corporation which is a party to this Agreement shall take
all such necessary corporate action.
Section 8.4. USE OF NAME. Without limiting the right of
URS to conduct its business in such manner as it deems
appropriate, URS intends, following the Closing Date, and for
the foreseeable period thereafter, to maintain Greiner as a
separate subsidiary operating under its own existing name.
Section 8.5. EMPLOYEE MATTERS. After the Closing Date,
URS will use reasonable efforts to maintain the business of
Greiner and, in particular, without limitation, URS will use
best efforts to maintain health, medical, dental and other
benefits for Greiner employees for a reasonable period after
the Closing Date which, in the aggregate, are reasonably
comparable to benefits provided to Greiner employees prior to
the Closing Date, subject to reasonable business practices and
changing conditions.
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Section 8.6. NON-LIABILITY OF AGENTS AND STOCKHOLDERS.
No stockholder, director, officer or employee of any party
hereto shall be individually liable for any breach of the
representations, warranties or covenants of any party hereto
contained herein in the absence of fraud or willful misconduct
on the part of such stockholder, director, officer or employee.
Section 8.7 THE PERFORMANCE PLAN AND STOCK OWNERSHIP PLAN
OF GREINER ENGINEERING, INC. URS, the Greiner Subsidiaries
and Greiner agree that as soon as practical following the
execution of this Agreement, effective as of the Closing Date
and contingent on closing the Merger, The Performance Plan and
Employees Stock Ownership Plan of Greiner Engineering, Inc.
(the "Plan") will be amended to cease to be an employee stock
ownership plan within the meaning of Section 4975(e)(7) of the
Code ("ESOP"), but will be continued as a profit sharing plan,
subject to the terms of the Plan document regarding amendment
and/or termination. Such Plan amendment will provide that the
cash proceeds received by the Plan pursuant to this Agreement
will not be reinvested in URS or Greiner stock, but shall be
reinvested in the various investment options available under
the non-ESOP portion of the Plan, as directed by Plan
Participants, and that employer stock will no longer be one of
the investment options offered under the Plan. URS stock
received pursuant to this Agreement shall continue to be held
by the Plan, subject to the investment discretion of the Plan's
trustee, but no additional investments in URS stock shall be
permitted, and, unless URS agrees otherwise, Plan Participants
shall not have investment discretion with respect to the URS
stock so held. In addition, in the event that as of the
Closing Date, the aggregate value of the unvested ESOP portion
of the Plan accounts shall be less than $1,000,000 (for
purposes of this Section 8.7, unvested shares of Greiner stock
shall be valued at an amount equal to the closing price of the
Greiner stock as reported on the New York Stock Exchange on the
trading day immediately preceding the Closing Date, as listed
in The Wall Street Journal), URS, the Greiner Subsidiaries and
-----------------------
Greiner agree that as soon as practical following the execution
of this Agreement, effective as of the Closing Date and
contingent on the closing of the Merger, the Plan will be
amended so that Plan Participants will be fully vested in the
ESOP portion of their accounts as of the Closing Date. The
parties shall cooperate and take all steps as may be reasonably
necessary to effect the foregoing.
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ARTICLE 9.
TERMINATION
-----------
Section 9.1. TERMINATION. This Agreement may be
terminated at any time prior to the Effective Time, whether
before or after the approval by the stockholders of Greiner
(the "Stockholder Approval") has been obtained:
9.1.1 by mutual written consent of URS and Greiner;
9.1.2 by either Greiner or URS if (i) the
Stockholder Approval shall not be obtained by reason of
stockholders holding a majority of the Greiner Common Stock
failing to vote in favor of approval of this Agreement at a
meeting of stockholders or any adjournment thereof; (ii) a
Governmental Entity of competent jurisdiction shall have issued
an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and
nonappealable; or (iii) the Merger shall not have been
consummated before September 30, 1996 (provided that the
terminating party is not then in material breach of any
representation, warranty, covenant or agreement contained in
this Agreement);
9.1.3 By URS if there has been a breach by
Greiner of any representation, warranty, covenant or other
agreement in this Agreement which has a Greiner Material
Adverse Effect, and such breach has not been cured, or Greiner
has not commenced reasonable efforts to cure such breach,
within thirty (30) days after written notice of such breach is
given by URS to Greiner;
9.1.4 By URS if Greiner shall enter into any
discussions, negotiations or any letter of intent,
understanding or other agreement relating to an Acquisition
Proposal, provided that no such termination shall effect the
rights of URS to reimbursement of expenses and the Termination
Fee as provided in Section 6.2.3; or
9.1.5 By Greiner if there has been a breach by
URS or the Subsidiary of any material representation, warranty,
covenant or other agreement, and such breach has not been
cured, or URS and the Subsidiary have not commenced reasonable
efforts to cure such breach, within thirty (30) days after
written notice of such breach is given by Greiner to URS.
9.1.6 By Greiner if any of the conditions set
forth in Section 7.1 hereof shall not have been fulfilled on or
prior to the date specified for fulfillment thereof, or shall
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have become impossible to fulfill for reasons beyond the
control of Greiner, and such condition shall not have been
waived.
9.1.7 By URS if any of the conditions set forth
in Section 7.2 hereof shall not have been fulfilled on or prior
to the date specified for fulfillment thereof, or shall have
become impossible to fulfill for reasons beyond the control of
URS, and such condition shall not have been waived.
Where action is taken to terminate this Agreement pursuant to
this Section 9.1, it shall be sufficient for such action to be
authorized by the Board of Directors of the party taking such
action without any requirement to submit such action to the
stockholders of such party.
Section 9.2. EFFECT OF TERMINATION AND ABANDONMENT. In
the event of termination of the Agreement by either Greiner or
URS as provided in Section 9.1, this Agreement shall forthwith
become void and have no effect, and there shall be no liability
or obligation on the part of Greiner, URS or the Subsidiary, or
their respective officers and directors, except that (i) the
provisions of Section 6.2.3, this Section 9.2, and the
Confidentiality Agreement shall survive any such termination,
and (ii) no party whose breach of its representations,
warranties, covenants or agreements set forth in this Agreement
was the basis of the other party's termination of this
Agreement shall be relieved from liability for damages
occasioned by such breach, including any expenses incurred by
the other party in connection with this Agreement and the
transactions contemplated hereby; provided, however, that in
the event such breach is the result of negligence, such damages
shall not exceed the sum of $500,000; but, provided, further,
that in the event that such breach is the result of
recklessness or willful conduct, the amount of damages shall
not be limited hereby.
Section 9.3. AMENDMENT. This Agreement may be amended by
the parties hereto, by action taken by their respective Boards
of Directors at any time before or after the approval of the
stockholders of Greiner (the "Stockholder Approval"), but after
the Stockholder Approval, no amendment shall be made which by
law requires the further approval of stockholders without
obtaining such approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of
the parties hereto.
Section 9.4. EXTENSION; WAIVER. At any time prior to the
Effective Time of the Merger, any party hereto, by action taken
by its Board of Directors may, to the extent legally allowed,
(a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto,
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(b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the
agreements, covenants, or conditions for the benefit of such
party contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert
any of its rights under this Agreement shall not constitute a
waiver of these rights.
ARTICLE 10.
MISCELLANEOUS
-------------
Section 10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
No representations or warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive
beyond the Effective Time of the Merger. This Section 10.1
shall not limit any covenant or agreement after the Effective
Time of the Merger.
Section 10.2 ENTIRE AGREEMENT; MODIFICATION; WAIVER.
This Agreement constitutes the entire agreement among the
parties pertaining to the subject matter contained herein and
supersedes all prior and contemporaneous agreements,
representations and undertakings of the parties. No
supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by all the parties. No
waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed
in writing by any party making the waiver.
Section 10.3 COUNTERPARTS. This Agreement may be
executed simultaneously in one or more counterparts, each of
which shall be deemed in original, but all of which together
shall constitute one and the same instrument.
Section 10.4 ASSIGNMENT. This Agreement shall be binding
on, and shall inure to the benefit of, the parties to it and
their respective heirs, legal representatives, successors and
assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the
other parties hereto.
Section 10.5 FEES AND EXPENSES. Each of the parties
shall pay their own fees, costs and expenses (including,
without limitation, legal and accounting expenses) incurred, or
to be incurred, by them in negotiating and preparing this
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Agreement and in closing and carrying out the transactions
contemplated by this Agreement.
Section 10.6 NOTICES. All notices, requests, demands and
other communications under this Agreement shall be in writing
and shall be deemed to have been duly given on the date of
service if served personally or by facsimile on the party to
whom notice is to be given, or on the fifth day after mailing,
if mailed to the party on whom notice is to be given, by
registered or certified mail, postage prepaid, and properly
addressed as follows:
If to URS and the Subsidiary:
URS Corporation
100 California Street, Suite 500
San Francisco, CA 94111-5239
Attn: Kent P. Ainsworth
Facsimile: (415) 398-1905
Confirmation: (415) 774-2700
with a copy to:
Sheppard, Mullin, Richter & Hampton
Four Embarcadero Center, Suite 1700
San Francisco, CA 94111
Attn: Samuel M. Livermore, Esq.
Facsimile: (415) 434-3947
Confirmation: (415) 434-9100
If to Greiner:
Greiner Engineering, Inc.
909 E. Las Colinas Blvd.,
Suite 1900, LB 44
Irving, TX 75039-3907
Attn: Patrick J. McColpin
Facsimile: (214) 869-3111
Confirmation: (214) 869-1001
with a copy to:
Nossaman, Guthner, Knox & Elliott
445 S. Figueroa Street, 31st Floor
Los Angeles, CA 90071-1602
Attn: William E. Guthner
Facsimile: (213) 612-7814
Confirmation: (213) 612-7800
Any party may change its address for purposes of this Section
by giving the other party written notice of the new address in
the manner set forth above.
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Section 10.7 GOVERNING LAW. This Agreement shall be
construed in accordance with, and governed by, the laws of the
State of California, United States of America, without giving
effect to provisions thereof relating to conflicts of law.
Section 10.8 FURTHER ACTION. Each of the parties hereto
shall use such party's best efforts to take such action as may
be necessary or reasonably requested by the other party hereto
to carry out and consummate the transactions contemplated by
this Agreement.
Section 10.9 NO THIRD PARTY BENEFICIARY. Nothing herein
is intended to create rights in any third party.
Section 10.10 EFFECT OF HEADINGS. The subject headings
of the Articles and Sections of this Agreement are included for
purposes of convenience only, and shall not affect the
construction or interpretation of any of its provisions.
Section 10.11 SEVERABILITY. If any term of this
Agreement or application thereof shall be invalid or
unenforceable, the remainder of this Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties to this Agreement
have duly executed it on the day and year first above written.
GREINER: GREINER ENGINEERING, INC.
By: /s/ ROBERT COSTELLO
-------------------------
Title: President and Chief
Executive Officer
URS: URS CORPORATION
By: /s/ KENT AINSWORTH
--------------------------
Title: Vice President and
Chief Financial Officer
THE SUBSIDIARY: URS ACQUISITION CORPORATION
By: /s/ KENT AINSWORTH
--------------------------
Title: Vice President and
Chief Financial Officer
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The registrant's Certificate of Incorporation contains a
provision, permitted by Section 102(b)(7) of the Delaware General
Corporation Law (the "Delaware Law"), eliminating the personal
liability of a director to the registrant or its stockholders for
monetary damages for breach of fiduciary duties as a director,
except for liability (i) for breach of the director's duty of
loyalty, (ii) under Section 174 of the Delaware Law (concerning
the illegal payment of dividends by a corporation), (iii) for acts
or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iv) for any
transaction from which the director derived an improper personal
benefit.
Section 145 of the Delaware Law permits, subject to
certain conditions, the indemnification of directors or officers
of a Delaware corporation for expenses (including attorney's
fees), judgments, fines and amounts paid in settlement incurred in
connection with the defense of any action, suit or proceeding in
relation to certain matters against them as such directors or
officers. Article VI of the registrant's By-laws generally
provides that the registrant shall indemnify its officers and
directors in accordance with the provisions of Section 145 of the
Delaware Law. The registrant has entered into indemnification
agreements with each of the registrant's directors indemnifying
the directors as provided in the afore-mentioned Article of the
By-laws to the fullest extent permitted by the Delaware Law.
A third-party insurance carrier has agreed to reimburse
the registrant for losses resulting from certain liabilities for
wrongful acts or matters claimed against officers or directors by
reason of their status as such, including liabilities that may
arise in connection with certain sales of securities by the
registrant.
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Item 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
Number Exhibit
------ --------------------------------------------
2 Agreement and Plan of Merger, dated as of January 10,
1996, between the registrant, URS Acquisition
Corporation and Greiner Engineering, Inc., filed as
Exhibit 2(a) to the Form 8-K filed on January 12, 1996,
and incorporated herein by reference.
3.1 Certificate of Incorporation of the registrant, 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 registrant as amended, filed as
Exhibit 3.2 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.
4.1 Indenture, dated as of February 15, 1987, between the
registrant and First Interstate Bank of California,
Trustees, relating to $57.5 million of the registrant's
6-1/2% Convertible Subordinated Debentures Due 2012,
filed as Exhibit 4.10 to the registrant'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 registrant and First
Interstate Bank of California, Trustee, filed as
Exhibit 4.9 to the registrant'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
registrant and MTrust Corp., National Association,
Trustee relating to the registrant's 8-5/8% Senior
Subordinated Debentures due 2004, filed as Exhibit 13C
to the registrant'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 8-5/8% 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 8-5/8% Senior
Subordinated Debentures due 2004, dated February 21,
1990, between the registrant and MTrust Corp. National
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Association, Trustee, filed as Exhibit 4.12 to the 1990
Form S-1, and incorporated herein by reference.
5 Opinion of Sheppard, Mullin, Richter & Hampton LLP.
FILED HEREWITH.
10.1 1979 Stock Option Plan of the registrant, filed as
Exhibit 10.01 to the registrant'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 registrant, filed as
Appendix I to the registrant's definitive proxy
statement filed with the Commission on March 2, 1987,
and incorporated herein by reference.
10.3 1985 Employee Stock Purchase Plan as amended and
restated, filed as Exhibit 10.3 to the 1991 Form 10-K,
and incorporated herein by reference.
10.4 1991 Stock Incentive Plan of the registrant as amended,
filed as Exhibit 10.4 to the 1992 Form 10-K, and
incorporated herein by reference.
10.5 Selected Executive Deferred Compensation Plan of the
registrant, filed as Exhibit 10.3 to the 1990 Form S-1,
and incorporated herein by reference.
10.6 1995 Incentive Compensation Plan of the registrant,
filed as Exhibit 10.6 to the Annual Report on Form 10-K
for the fiscal year ended October 31, 1995 ("1995 Form
10-K"), and incorporated herein by reference.
10.7 1995 Incentive Compensation Plan of URS Consultants,
Inc., filed as Exhibit 10.7 to the 1995 Form 10-K, and
incorporated herein by reference.
10.8 Stock Appreciation Rights Agreement, dated July 18,
1989, between the registrant and Irwin L. Rosenstein,
filed as Exhibit 10.13 to the 1990 Form S-1, and
incorporated herein by reference.
10.9 Stock Appreciation Rights Agreement, dated October 9,
1989, between the registrant and Martin M. Koffel, filed
as Exhibit 10.15 to the 1990 Form S-1, and incorporated
herein by reference.
10.10 Stock Appreciation Rights Agreement, dated August 23,
1989, between the registrant and Martin S. Tanzer, filed
as Exhibit 10.11 to the 1991 Form 10-K, and incorporated
herein by reference.
10.11 Employment Agreement, dated August 1, 1991, between URS
Consultants, Inc. and Irwin L. Rosenstein, filed as
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Exhibit 10.12 to the 1991 Form 10-K, and incorporated
herein by reference.
10.12 Amendment to Employment Agreement, dated October 11,
1994, between URS Consultants, Inc., and Irwin L.
Rosenstein, filed as Exhibit 10.12(a) to the Annual
Report on Form 10-K for the fiscal year ended
October 31, 1994 ("1994 Form 10-K"), and incorporated
herein by reference.
10.13 Employment Agreement, dated December 16, 1991, between
the registrant and Martin Koffel, filed as Exhibit 10.13
to the 1991 Form 10-K, and incorporated herein by
reference.
10.14 Employment Agreement, dated August 1, 1991, between URS
Consultants, Inc. and Martin S. Tanzer, filed as
Exhibit 10.15 to the 1991 Form 10-K, and incorporated
herein by reference.
10.15 Amendment to Employment Agreement, dated October 11,
1994, between URS Consultants, Inc., and Martin S.
Tanzer, filed as Exhibit 10.15(a) to the 1994 Form 10-K,
and incorporated herein by reference.
10.16 Employment Agreement, dated May 7, 1991, between the
registrant and Kent P. Ainsworth, filed as Exhibit 10.16
to the 1991 Form 10-K, and incorporated herein by
reference.
10.17 Third Restated Credit Agreement, dated as of May 12,
1995, between Wells Fargo Bank, N.A., the registrant,
and URS Consultants, Inc., filed as Exhibit 10.11 to the
1995 second quarter Form 10-Q, and incorporated herein
by reference.
10.18 Letter Agreement, dated May 31, 1990, among the
registrant 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.
10.19 Thortec Entities Credit and Security Agreement, dated
January 30, 1989, between the registrant 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.
10.20 First, Second, Third and Fourth Amendments to the
Thortec Entities Credit and Security Agreement, dated
January 30, 1989, between the registrant 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.
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10.21 Fifth, Sixth and Seventh Amendments to the Thortec
Entities Credit and Security Agreement, dated
January 30, 1989, between the registrant and certain
entities managed or advised by Richard C. Blum &
Associates, Inc., filed as Exhibit 10.21 to the 1992
Form 10-K, and incorporated herein by reference.
10.22 Letter Agreement, dated February 14, 1990, between the
registrant and Richard C. Blum, filed as Exhibit 10.31
to the 1990 Form S-1, and incorporated herein by
reference.
10.23 Letter Agreement, dated February 14, 1990, between the
registrant and Richard C. Blum & Associates, Inc., filed
as Exhibit 10.32 to the 1990 Form S-1, and incorporated
herein by reference.
10.24 Registration Rights Agreement, dated February 21, 1990,
among the registrant, 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.
10.25 Warrant Agreement, dated February 21, 1990, between the
registrant, 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.
10.26 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.
10.27 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.
10.28 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.
10.29 URS Corporation Warrant Agreement, dated February 21,
1990, issued to Executive Life Insurance registrant,
filed as Exhibit 10.28 to the 1990 Form S-1, and
incorporated herein by reference.
10.30 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.
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10.31 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.
10.32 Post-Affiliation Agreement, dated July 19, 1989, between
the registrant and URS International, Inc., filed as
Exhibit 10.42 to the 1989 Form 10-K, and incorporated
herein by reference.
10.33 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.<F1>
10.34 Form of Indemnification Agreement dated as of May 1,
1992 between the registrant and each of
Messrs. Ainsworth, Blum, Cashin, Koffel, Madden,
Praeger, Rosenstein and Walsh, and Dr. Tanzer, filed as
Exhibit 10.34 to the 1992 Form 10-K, and incorporated
herein by reference.
10.35 Form of Indemnification Agreement dated as of March 22,
1994 between the registrant 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.
10.36 Letter of Intent and Transaction Term Sheet dated
December 3, 1995, filed as Exhibit 2(a) to the Form 8-K
filed on December 5, 1995.
10.37 Severance Agreement, dated as of November 22, 1993,
between the registrant and Joseph Masters, filed as
Exhibit 10.35 to the 1995 Form 10-K, and incorporated
herein by reference.
10.38 Credit Agreement, dated as of January 10, 1996, by and
among the registrant, 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 Form 8-K filed on
January 12, 1996, and incorporated herein by reference.
[FN]
<F1> Certain material contained in this exhibit and indicated by
an asterisk has been omitted and filed separately with the
Securities and Exchange 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 Securities and Exchange Commission effective
April 30, 1992.
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23.1 Consent of Coopers & Lybrand L.L.P. FILED HEREWITH.
23.2 Consent of Sheppard, Mullin, Richter & Hampton LLP
(included in Exhibit 5).
23.3 Consent of Price Waterhouse LLP. FILED HEREWITH.
23.4 Consent of Nossaman, Guthner, Knox & Elliott, L.L.P.
FILED HEREWITH.
24 Powers of Attorney of the registrant's directors and
officers (see Part II, Page 10).
(b) 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 contained
in the Prospectus attached as Part I of this Form S-4.
(c) Reports, Opinions and Appraisals
The opinion of Houlihan, Lokey, Howard & Zukin, Inc.,
financial advisors to Greiner Engineering, Inc., is attached as
Appendix A to the Prospectus attached as Part I of this Form S-4.
Item 22. UNDERTAKINGS
(a) (i) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 (the "Act") may be
permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnifica-
tion by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(ii) The undersigned registrant hereby undertakes
that, for purposes of determining any liability under the Act,
each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of any employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange
II-7
Page 240 of 256 <PAGE>
Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) The undersigned registrant hereby undertakes to
respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or
13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of
the registration statement through the date of responding to the
request.
(c) The undersigned registrant hereby undertakes to
supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the
registration statement when it became effective.
II-8
Page 241 of 256 <PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, State of California, on
February 20, 1996.
URS CORPORATION,
a Delaware corporation
By /s/MARTIN M. KOFFEL
--------------------------------
Martin M. Koffel
Chairman of the Board,
President and
Chief Executive Officer
Page 242 of 256 <PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby
appoints Martin M. Koffel and Kent P. Ainsworth, and each of them
severally, acting alone and without the other, his true and lawful
attorney-in-fact with authority to execute in the name of each
such person, and to file with the Securities and Exchange
Commission, together with any exhibits thereto and other documents
therewith, any and all amendments (including without limitation
post-effective amendments) to this registration statement
necessary or advisable to enable the registrant to comply with the
Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission in respect
thereof, which amendments may make such other changes in the
registration statement as the aforesaid attorney-in-fact deems
appropriate.
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed below by the
following persons in the capacities and on the date indicated.
Signature Title Date
------------------------ --------------------- --------------
/s/MARTIN M. KOFFEL Chairman of the Board, February 20, 1996
------------------------ Chief Executive
Martin M. Koffel Officer, President and
Director (Principal
Executive Officer)
/s/KENT P. AINSWORTH Vice President, Chief February 20, 1996
------------------------ Financial Officer
Kent P. Ainsworth (Principal Accounting
Officer) and Secretary
/s/IRWIN L. ROSENSTEIN Vice President and February 20, 1996
------------------------ Director
Irwin L. Rosenstein
/s/RICHARD C. BLUM Director February 20, 1996
------------------------
Richard C. Blum
Page 243 of 256 <PAGE>
Signature Title Date
------------------------ --------------------- --------------
/s/EMMET J. CASHIN, JR. Director February 20, 1996
-------------------------
Emmet J. Cashin, Jr.
/s/RICHARD Q. PRAEGER Director February 20, 1996
------------------------
Richard Q. Praeger
/s/WILLIAM D. WALSH Director February 20, 1996
------------------------
William D. Walsh
/s/ RICHARD B. MADDEN Director February 20, 1996
------------------------
Richard B. Madden
/s/ARMEN DER MARDEROSIAN Director February 20, 1996
------------------------
(Armen Der Marderosian)
/s/ADM. S. ROBERT Director February 20, 1996
FOLEY, JR., USN (RET.)
------------------------
(Adm. S. Robert Foley, Jr.,
USN (Ret.))
Page 244 of 256 <PAGE>
EXHIBIT INDEX
Sequential
Number Exhibit Page No.
------ ------- ----------
2 Agreement and Plan of Merger, dated as of
January 10, 1996, between the registrant, URS
Acquisition Corporation and Greiner
Engineering, Inc., filed as Exhibit 2(a) to
the Form 8-K filed on January 12, 1996, and
incorporated herein by reference.
3.1 Certificate of Incorporation of the
registrant, 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 registrant as amended, filed as
Exhibit 3.2 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.
4.1 Indenture, dated as of February 15, 1987,
between the registrant and First Interstate
Bank of California, Trustees, relating to
$57.5 million of the registrant's 6-1/2%
Convertible Subordinated Debentures Due 2012,
filed as Exhibit 4.10 to the registrant'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
registrant and First Interstate Bank of
California, Trustee, filed as Exhibit 4.9 to
the registrant'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 registrant and MTrust Corp., National
Association, Trustee relating to the
registrant's 8-5/8% Senior Subordinated
Debentures due 2004, filed as Exhibit 13C to
the registrant's Form T-3 under the Trust
Indenture Act of 1939 (Commission File
No. 22-19189), and incorporated herein by
reference.
Page 245 of 256 <PAGE>
4.4 Amendment Number 1 to Indenture governing
8-5/8% 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
8-5/8% Senior Subordinated Debentures due
2004, dated February 21, 1990, between the
registrant and MTrust Corp. National
Association, Trustee, filed as Exhibit 4.12 to
the 1990 Form S-1, and incorporated herein by
reference.
5 Opinion of Sheppard, Mullin, Richter & Hampton
LLP. FILED HEREWITH. 252
10.1 1979 Stock Option Plan of the registrant,
filed as Exhibit 10.01 to the registrant'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 registrant,
filed as Appendix I to the registrant's
definitive proxy statement filed with the
Commission on March 2, 1987, and incorporated
herein by reference.
10.3 1985 Employee Stock Purchase Plan as amended
and restated, filed as Exhibit 10.3 to the
1991 Form 10-K, and incorporated herein by
reference.
10.4 1991 Stock Incentive Plan of the registrant as
amended, filed as Exhibit 10.4 to the 1992
Form 10-K, and incorporated herein by
reference.
10.5 Selected Executive Deferred Compensation Plan
of the registrant, filed as Exhibit 10.3 to
the 1990 Form S-1, and incorporated herein by
reference.
10.6 1995 Incentive Compensation Plan of the
registrant, filed as Exhibit 10.6 to the
Annual Report on Form 10-K for the fiscal year
ended October 31, 1995 ("1995 Form 10-K"), and
incorporated herein by reference.
10.7 1995 Incentive Compensation Plan of URS
Consultants, Inc., filed as Exhibit 10.7 to
the 1995 Form 10-K, and incorporated herein by
reference.
Page 246 of 256 <PAGE>
10.8 Stock Appreciation Rights Agreement, dated
July 18, 1989, between the registrant and
Irwin L. Rosenstein, filed as Exhibit 10.13 to
the 1990 Form S-1, and incorporated herein by
reference.
10.9 Stock Appreciation Rights Agreement, dated
October 9, 1989, between the registrant and
Martin M. Koffel, filed as Exhibit 10.15 to
the 1990 Form S-1, and incorporated herein by
reference.
10.10 Stock Appreciation Rights Agreement, dated
August 23, 1989, between the registrant and
Martin S. Tanzer, filed as Exhibit 10.11 to
the 1991 Form 10-K, and incorporated herein by
reference.
10.11 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.
10.12 Amendment to Employment Agreement, dated
October 11, 1994, between URS Consultants,
Inc., and Irwin L. Rosenstein, filed as
Exhibit 10.12(a) to the Annual Report on
Form 10-K for the fiscal year ended
October 31, 1994 ("1994 Form 10-K"), and
incorporated herein by reference.
10.13 Employment Agreement, dated December 16, 1991,
between the registrant and Martin M. Koffel,
filed as Exhibit 10.13 to the 1991 Form 10-K,
and incorporated herein by reference.
10.14 Employment Agreement, dated August 1, 1991,
between URS Consultants, Inc. and Martin S.
Tanzer, filed as Exhibit 10.15 to the 1991
Form 10-K, and incorporated herein by
reference.
10.15 Amendment to Employment Agreement, dated
October 11, 1994, between URS Consultants,
Inc., and Martin S. Tanzer, filed as
Exhibit 10.15(a) to the 1994 Form 10-K, and
incorporated herein by reference.
10.16 Employment Agreement, dated May 7, 1991,
between the registrant and Kent P. Ainsworth,
filed as Exhibit 10.16 to the 1991 Form 10-K,
and incorporated herein by reference.
Page 247 of 256 <PAGE>
10.17 Third Restated Credit Agreement, dated as of
May 12, 1995, between Wells Fargo Bank, N.A.,
the registrant, and URS Consultants, Inc.,
filed as Exhibit 10.11 to the 1995 second
quarter Form 10-Q, and incorporated herein by
reference.
10.18 Letter Agreement, dated May 31, 1990, among
the registrant 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.
10.19 Thortec Entities Credit and Security
Agreement, dated January 30, 1989, between the
registrant 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.
10.20 First, Second, Third and Fourth Amendments to
the Thortec Entities Credit and Security
Agreement, dated January 30, 1989, between the
registrant 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.
10.21 Fifth, Sixth and Seventh Amendments to the
Thortec Entities Credit and Security
Agreement, dated January 30, 1989, between the
registrant and certain entities managed or
advised by Richard C. Blum & Associates, Inc.,
filed as Exhibit 10.21 to the 1992 Form 10-K,
and incorporated herein by reference.
10.22 Letter Agreement, dated February 14, 1990,
between the registrant and Richard C. Blum,
filed as Exhibit 10.31 to the 1990 Form S-1,
and incorporated herein by reference.
10.23 Letter Agreement, dated February 14, 1990,
between the registrant and Richard C. Blum &
Associates, Inc., filed as Exhibit 10.32 to
the 1990 Form S-1, and incorporated herein by
reference.
Page 248 of 256 <PAGE>
10.24 Registration Rights Agreement, dated February
21, 1990, among the registrant, 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.
10.25 Warrant Agreement, dated February 21, 1990,
between the registrant, 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.
10.26 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.
10.27 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.
10.28 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.
10.29 URS Corporation Warrant Agreement, dated
February 21, 1990, issued to Executive Life
Insurance registrant, filed as Exhibit 10.28
to the 1990 Form S-1, and incorporated herein
by reference.
10.30 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.
10.31 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.
10.32 Post-Affiliation Agreement, dated July 19,
1989, between the registrant and URS
International, Inc., filed as Exhibit 10.42 to
the 1989 Form 10-K, and incorporated herein by
reference.
Page 249 of 256 <PAGE>
10.33 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.<F2>
10.34 Form of Indemnification Agreement dated as of
May 1, 1992 between the registrant and each of
Messrs. Ainsworth, Blum, Cashin, Koffel,
Madden, Praeger, Rosenstein and Walsh, and
Dr. Tanzer, filed as Exhibit 10.34 to the 1992
Form 10-K, and incorporated herein by
reference.
10.35 Form of Indemnification Agreement dated as of
March 22, 1994 between the registrant 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.
10.36 Letter of Intent and Transaction Term Sheet
dated December 3, 1995, filed as Exhibit 2(a)
to the Form 8-K filed on December 5, 1995.
10.37 Severance Agreement, dated as of November 22,
1993, between the registrant and Joseph
Masters, filed as Exhibit 10.35 to the 1995
Form 10-K, and incorporated herein by
reference.
10.38 Credit Agreement, dated as of January 10,
1996, by and among the registrant, 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
Form 8-K filed on January 12, 1996, and
incorporated herein by reference.
[FN]
<F2> Certain material contained in this exhibit and
indicated by an asterisk has been omitted and filed
separately with the Securities and Exchange
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 Securities and
Exchange Commission effective April 30, 1992.
Page 250 of 256 <PAGE>
23.1 Consent of Coopers & Lybrand L.L.P. FILED
HEREWITH. 254
23.2 Consent of Sheppard, Mullin, Richter & Hampton
LLP (included in Exhibit 5).
23.3 Consent of Price Waterhouse LLP. FILED
HEREWITH. 255
23.4 Consent of Nossaman, Guthner, Knox & Elliott,
L.L.P. FILED HEREWITH. 256
24 Powers of Attorney of the registrant's
directors and officers (see Part II, Page 10).
Page 251 of 256 <PAGE>
EXHIBIT 5
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
A Limited Liability Partnership
Including Professional Corporations
Attorneys at Law
Four Embarcadero Center, Suite 1700
San Francisco, California 94111
Telephone (415) 434-9100
------
Facsimile (415) 434-3947
Our File Number
February 20, 1996 HMF-56393
URS Corporation
100 California Street, Suite 500
San Francisco, California 94111-4529
Gentlemen:
We have acted as counsel to you, URS Corporation, a
Delaware corporation ("URS"), in connection with the
transactions contemplated by that certain Agreement and Plan of
Merger, dated as of January 10, 1996 (the "Merger Agreement"),
between URS, URS Acquisition Corporation and Greiner
Engineering, Inc. ("Greiner"), pursuant to which URS
Acquisition Corporation, your wholly-owned subsidiary, will be
merged with and into Greiner and each outstanding share of the
common stock of Greiner will be converted into the right to
receive (i) 0.298 shares of the common stock, par value $.01
per share, of URS ("URS Common Stock"), and (ii) $13.50 in cash
(the "Acquisition").
In connection with the Acquisition, URS is filing
with the Securities and Exchange Commission (the "Commission")
a Registration Statement on Form S-4 (the "Registration
Statement") to register under the Securities Act of 1933, as
amended, 1,401,984 shares of URS Common Stock to be issued
under the terms of the Merger Agreement (the "Additional Common
Stock").
We have examined a copy of the Merger Agreement, the
Registration Statement and such other documents and
certificates of representatives of URS as we have deemed
necessary as a basis for the opinions expressed herein. We
have assumed the genuineness of all documents submitted to us
as originals, the conformance to the originals of all documents
Page 252 of 256 <PAGE>
URS Corporation
February 20, 1996
Page 2
submitted to us as copies and the genuineness of all signatures
on such documents.
Based on the foregoing, we are of the opinion that
the Additional Common Stock, when issued under the terms of the
Merger Agreement and as contemplated by the Proxy
Statement/Prospectus included in the Registration Statement,
will be legally issued, fully paid and non-assessable.
We do not purport to render an opinion based on the
laws of any jurisdiction other than the laws of the State of
California and the Federal laws of the United States of
America, and the corporate laws of the State of Delaware, and
we express no opinion as to the effect of any other laws.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and consent to the
reference of our name in the related Proxy Statement/Prospectus
under the heading "Legal Matters."
Very truly yours,
/s/ SHEPPARD, MULLIN, RICHTER & HAMPTON
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
RBA/SML
Page 253 of 256 <PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in the Proxy Statement/Prospectus
constituting Part I of the Registration Statement on Form S-4 of
URS Corporation of our report dated December 15, 1995 relating to
the financial statements of URS Corporation which appears in such
Proxy Statement/Prospectus. We also consent to the reference to
us under the heading "Experts" in such Proxy Statement/Prospectus.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
San Francisco, California
February 20, 1996
Page 254 of 256 <PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in the Prospectus constituting part
of this Registration Statement on Form S-4 of URS Corporation of
our report dated February 14, 1996 relating to the financial
statements of Greiner Engineering, Inc. which appears in such
Prospectus. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Dallas, Texas
February 20, 1996
Page 255 of 256 <PAGE>
EXHIBIT 23.4
CONSENT OF COUNSEL
------------------
We hereby consent to the reference of our name under
the heading "Legal Matters" in the Proxy Statement/Prospectus
of Greiner Engineering, Inc. constituting Part I of the
Registration Statement on Form S-4 of URS Corporation.
/s/ NOSSAMAN, GUTHNER, KNOX & ELLIOTT, L.L.P.
NOSSAMAN, GUTHNER, KNOX & ELLIOTT, L.L.P.
February 20, 1996
Page 256 of 256 <PAGE>
