SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
URS CORPORATION
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
URS CORPORATION
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
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or Item 22(a)(2) or Schedule 14A
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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<PAGE>
URS Corporation
100 California Street, Suite 500
Martin M. Koffel San Francisco, California 94111-4529
Chairman and Telephone: (415) 774-2700
Chief Executive Officer Direct: (415) 774-2711
Facsimile: (415) 398-2038
February 13, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders on Tuesday, March 25, 1997, beginning at 9:30 A.M. Pacific Standard
Time, at the Park Hyatt Hotel, 333 Battery Street, San Francisco, California
94111.
Holders of URS Corporation common stock are being asked to
vote on all of the matters presented in the attached Notice of Annual Meeting of
Stockholders. Whether or not you plan to attend the meeting in person, it is
important that your shares of URS Corporation common stock be represented and
voted at the meeting. Accordingly, after reading the attached Notice of Annual
Meeting and Proxy Statement, please sign and date the enclosed proxy card and
mail it in the envelope provided.
We hope you can join us on March 25.
Very truly yours,
/s/ MARTIN M. KOFFEL
--------------------------
Martin M. Koffel
<PAGE>
URS CORPORATION
100 California Street, Suite 500
San Francisco, California 94111-4529
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 25, 1997
The Annual Meeting of Stockholders of URS Corporation will be
held on Tuesday, March 25, 1997, at 9:30 A.M., Pacific Standard Time, at the
Park Hyatt Hotel, 333 Battery Street, San Francisco, California for the
following purposes:
1. To elect directors;
2. To consider approval of the URS Corporation Employee Stock
Purchase Plan, as amended and restated;
3. To consider approval of the URS Corporation 1991 Stock
Incentive Plan, as amended and restated;
4. To consider approval of the URS Corporation 1997
Non-Executive Directors Stock Grant Plan;
5. To consider ratification of the selection of Coopers &
Lybrand as URS Corporation's independent auditors for fiscal year 1997;
and
6. To transact such other business as may properly come before
the meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on
February 6, 1997 as the record date for determining the stockholders who will be
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
thereof. A complete list of stockholders entitled to vote will be available at
the offices of URS Corporation, 100 California Street, Suite 500, San Francisco,
California 94111-4529 for ten days prior to the meeting.
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, YOU ARE
REQUESTED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE SO
THAT YOUR SHARES WILL BE REPRESENTED.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kent P. Ainsworth, Secretary
Kent P. Ainsworth, Secretary
February 13, 1997
<PAGE>
URS CORPORATION
------------------------
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors
of URS Corporation, a Delaware corporation (the "Company"), to be used in voting
at the Annual Meeting of Stockholders to be held at 9:30 A.M. on Tuesday, March
25, 1997, at the Park Hyatt Hotel, 333 Battery Street, San Francisco, California
and at any adjournment of such meeting.
The record date for the determination of stockholders entitled
to notice of, and to vote at, the Annual Meeting or any adjournment thereof has
been fixed at February 6, 1997. As of that date, 8,640,266 shares of Common
Stock of the Company were outstanding. Each common share is entitled to one vote
on all matters presented.
Any proxy given may be revoked by a stockholder at any time
before it is voted by filing with the Secretary of the Company a notice in
writing revoking it, by duly executing a proxy bearing a later date, or by
attending and voting in person at the Meeting. Subject to any such revocation,
all shares represented at the Meeting by properly executed proxies will be voted
in accordance with the specifications on the proxy. If no specification is made,
the shares will be voted FOR (i) election of the nominees named herein as
Directors, (ii) approval of the URS Corporation Employee Stock Purchase Plan, as
amended and restated, (iii) approval of the URS Corporation 1991 Stock Incentive
Plan, as amended and restated, (iv) approval of the URS Corporation 1997
Non-Executive Directors Stock Grant Plan, and (v) ratification of the selection
of Coopers & Lybrand as the independent auditors for the Company for fiscal year
1997.
The Company will bear the expense of preparing, printing and
mailing this Proxy Statement and the proxies solicited hereby and will reimburse
banks, brokerage firms and nominees holding shares of record for their
reasonable expenses in forwarding solicitation materials to beneficial owners of
such shares. In addition to the solicitation of proxies by mail, officers and
regular employees of the Company may communicate with stockholders either in
person or by telecommunication for the purpose of soliciting such proxies, but
no additional compensation will be paid for such solicitation.
This Proxy Statement, the accompanying proxy and the Company's
1996 Annual Report are being sent to stockholders on or about February 13, 1997.
A copy of the Company's Annual Report on Form 10-K for its fiscal year ended
October 31, 1996 may be obtained upon written request addressed to the Secretary
at the Company's principal executive offices located at 100 California Street,
Suite 500, San Francisco, California 94111-4529. Copies of the exhibits to the
Form 10-K may be obtained upon written request addressed to the Secretary at the
above address and the payment of $0.25 per page for photocopying.
ELECTION OF DIRECTORS
Directors will be elected to hold office until the next annual
meeting of stockholders or until their successors shall have been elected.
Although Management anticipates that all of the nominees will be able to serve,
if any nominee is unable or unwilling to serve at the time of the Meeting, the
proxy will be voted for a substitute nominee chosen by Management, or the number
of directors to be elected may be reduced in accordance with the Company's
By-Laws.
1.
<PAGE>
All of the nominees are presently directors of the Company.
Set forth below are the names and ages of the nominees, the principal occupation
of each nominee at present and for at least the past five years, certain
directorships held by each and the year in which each became a director of the
Company.
Year
First
Name of Director Principal Occupation Age Elected
- ---------------- -------------------- --- -------
Richard C. Blum Chairman and President, Richard C. 61 1975
Blum & Associates, Inc. ("RCBA,
Inc."), the sole general partner of
Richard C. Blum & Associates, L.P., a
merchant banking firm ("RCBA, L.P.");
Vice Chairman of the Board of
Directors and financial consultant to
the Company; Director of National
Education Corporation since 1985; Vice
Chairman of Shanghai Pacific Partners,
Inc. since 1986; Director of Sumitomo
Bank of California since 1987;
Director of Northwest Airlines
Corporation since 1989; Director of
Shaklee Corporation since 1990;
Director of Triad Systems Corporation
since 1992; Director of CB Commercial
since 1993.
Emmet J. Cashin, Chairman of Cashin Investments since 74 1972
Jr. 1993; Trustee, Thompson McKinnon Asset
Management, Inc. (Pimco Advisory
Funds) since 1980; Chairman and Chief
Executive Officer, Fox Group, a real
estate investment corporation, from
1968 to 1993.
Robert L. Costello Executive Vice President of URS 45 1996
Greiner Engineering, Inc. (formerly
Greiner Engineering, Inc. ("GEI")),
one of the Company's principal
subsidiaries, since 1996; Vice
President and Director of the Company
since 1996; Director and Chief
Executive Officer of GEI from August
1995 to March 1996; President and
Chief Operating Officer of GEI from
February 1994 to August 1995; Vice
President and Chief Financial Officer
of GEI from 1987 to February 1994.
Armen Senior Vice President, Technology and 59 1994
Der Marderosian Systems, GTE Corporation since 1995;
Executive Vice President and General
Manager, 1993 to 1995, and Vice
President and General Manager, 1990 to
1992, GTE Government Systems
Corporation.
Admiral S. Robert Vice President, Raytheon International 68 1994
Foley, Jr., USN Inc. and President, Raytheon Japan
(Ret.) since January 1995; Director of New
Japan Radio Company since 1995; Vice
President, Commercial Marketing and
Planning, Raytheon Corporation, 1991
to 1993; Commander-In-
2.
<PAGE>
Chief, U.S. Pacific Fleet, United
States Navy, 1982 to 1985.
Robert D. Glynn, President, Chief Operating Officer and 54 1996
Jr. Director since December 1996 of PG&E
Corporation (which in January 1997
became the holding company for Pacific
Gas and Electric Company, Pacific Gas
Transmission Company and PG&E
Enterprises); President, Chief
Operating Officer and Director of
Pacific Gas and Electric Company since
1995; Executive Vice President from
July 1994 to 1995; Senior Vice
President and General Manager,
Customer Energy Services, from January
1994 to June, 1994; Senior Vice
President and General Manager,
Electric Supply, from 1991 to 1994;
Director of Pacific Gas Transmission
Company since 1995; Director of PG&E
Enterprises since 1995.
Senator J. Bennett President of Johnston Development Co. 63 1997
Johnston since 1997; President of Johnston &
Associates, L.L.C. since 1997; United
States Senator (D-LA) 1972 to 1996;
Chairman of the Senate Committee on
Energy and Natural Resources for eight
years; Director of Chevron Corp. since
1997.
Martin M. Koffel Chief Executive Officer and President 57 1989
of the Company since May 1989;
Chairman of the Board since June 1989.
Richard B. Madden Retired Chairman, since 1994, 67 1992
Chairman, from 1977 to 1994, and Chief
Executive Officer, from 1971 to 1994,
of Potlatch Corporation; Director of
Potlatch Corporation since 1971;
Director of PG&E Corporation since
1997 and Pacific Gas and Electric
Company since 1977; Director of CNF
Transportation Inc. since 1992.
Richard Q. Praeger Management and engineering consultant 72 1970
since 1974; Owner, Transition Books, a
book store, since 1979; prior to
November 1974, President, URS/Madigan-
Praeger, Incorporated.
Irwin L. President, URS Greiner Consultants, 60 1989
Rosenstein Inc. (formerly URS Consultants, Inc.),
one of the Company's principal
subsidiary ("URSG"), since February
1989; Vice President of the Company
since 1987.
William D. Walsh President, Chief Executive Officer and 66 1988
General Partner, Sequoia Associates, a
private investment firm,
3.
<PAGE>
since 1982; Chairman of the Board of
Consolidated Freightways Corporation
since 1996; Chairman of the Board of
Champion Road Machinery, Ltd., Newell
Manufacturing Corporation and Newell
Industrial Corporation since 1988;
Chairman of the Board of Clayton
Group, Inc. since 1996; Chairman of
the Board of Golden Valley Farms LLC
since 1996; Director of National
Education Corporation since 1987;
Director of Newcourt Credit Group
since 1994; Director of Basic
Vegetable Products since 1990;
Director of Crown Vantage, Inc. since
1996; Chairman of the Board of Deanco,
Inc. from 1994 to 1995; Director of
Consolidated Freightways, Inc. from
1994 to 1996; Director of Mike Yurosek
& Son, L.P. from 1990 to 1995.
During fiscal year 1996, the Board of Directors held five
meetings. The Board of Directors has a Compensation/Option Committee, an Audit
Committee and a Board Affairs Committee. Each Director attended at least 75
percent of the aggregate of (1) the total number of the meetings of the Board of
Directors (held during the period for which he has been a Director) and (2) the
total number of meetings held by all the committees of the Board of Directors on
which he served (during the periods that he served).
The Compensation/Option Committee consists of Mr. Praeger,
Chairman, and Messrs. Cashin, Madden, Walsh and Der Marderosian. The
Compensation/Option Committee held four meetings during fiscal year 1996. The
primary responsibilities of the Compensation/Option Committee are to approve
remuneration plans and other executive benefits and to administer the incentive
compensation plans maintained by the Company and its subsidiaries and the
Company's Employee Stock Purchase Plan and the 1991 Stock Incentive Plan.
The Audit Committee consists of Mr. Walsh, Chairman, and
Messrs. Cashin, Madden, Praeger and Foley. The Audit Committee held two meetings
during fiscal year 1996. The primary responsibilities of the Audit Committee are
to direct and approve the scope of the auditors' annual examination of the
Company's consolidated financial statements, review with the auditors the
results for the year, discuss any outstanding issues with the auditors and
approve the auditor's fee.
The Board Affairs Committee (previously called the Nominating
Committee) consists of Mr. Madden, Chairman, and Messrs. Koffel and Walsh. The
Board Affairs Committee held two meetings during fiscal year 1996. The primary
responsibilities of the Board Affairs Committee are to identify, evaluate,
review and recommend qualified candidates to the entire Board of Directors, to
recommend to the Board of Directors prior to each annual meeting of stockholders
(or other meeting of stockholders at which Directors are to be elected) a slate
of nominees, to recommend an individual or individuals to fill any vacancy on
the Board of Directors, and to make an annual assessment of the performance of
the Board of Directors (including committees) and present the results to the
Board of Directors with any recommendations to improve the effectiveness or the
balance of expertise of the members. The Board Affairs Committee also has
responsibility to conduct periodic reviews of the Company's corporate governance
guidelines and other corporate governance issues that may, from time to time,
merit consideration by the entire Board of Directors. The Board Affairs
Committee will consider nominees recommended by security holders. Any security
holder who wishes to recommend a nominee
4.
<PAGE>
for membership on the Company's Board of Directors must submit such nomination
in writing to Mr. Richard B. Madden, Chairman of the Board Affairs Committee, in
care of the Company at its principal executive offices. All such nominations
will be thoroughly reviewed by the Board Affairs Committee.
5.
<PAGE>
EXECUTIVE COMPENSATION
Report of the Compensation/Option Committee On Executive Compensation
The Compensation/Option Committee (the "Committee") has the
responsibility, under delegated authority from the Company's Board of Directors,
for developing, administering and monitoring the executive compensation policies
of the Company in the long term interests of the Company and its stockholders.
The Committee is composed solely of independent non-employee Directors of the
Company. In fulfilling its responsibilities, the Committee has used the services
of independent compensation consultants.
With the approval of the Committee, the Company has developed
compensation plans and programs designed to attract and retain qualified key
executives and senior managers critical to the Company's success, and also to
provide such executives and managers with performance-based incentives clearly
tied to Company profitability and stockholder returns. Compensation of the
Company's executives, including the Chief Executive Officer, consists of three
basic components: base compensation, annual bonuses and long-term incentive
awards.
In determining targets and levels for each of these
compensation components, the Committee makes subjective judgments, based on both
qualitative and quantitative factors. No predetermined weights are assigned to
these factors with respect to any compensation component. However, the Committee
has emphasized annual and long term incentives as key elements of the
compensation packages for executives and managers, to better relate their pay
with the Company's financial performance. While the Committee considers
prevailing compensation levels and practices, it does not make its decisions
solely with reference to the compensation practices of any specific peer group
of companies. Among the factors considered by the Committee are the
recommendations of the Chief Executive Officer with respect to the Company's
other officers. However, the Committee makes the final compensation decisions
concerning officer compensation.
Base Compensation
Officer base compensation is established through negotiation
between the Company and the executive at the time the executive is first hired,
subject to Committee approval. Officer base salaries are currently regularly
reviewed and adjusted as needed based on individual performance and competitive
practices.
Of the Company's senior executives named in the following
Summary Compensation Table (collectively the "Named Executives"), Messrs.
Koffel, Rosenstein, Ainsworth and Costello have received employment contracts
which provide for a minimum base salary and other base compensation benefits
(see "Employment Agreements"). Under such contracts, base salaries are subject
to periodic review and possible increase by the Committee, but cannot be
decreased without the Named Executive's consent. Base salaries of all other
executives and senior managers are subject to periodic review and increase or
decrease by the Company's Chief Executive Officer at his option, within the
overall framework of the compensation policies established by the Committee.
When establishing or reviewing base compensation levels for
the Named Executives, the Committee considers numerous factors, including but
not limited to the following: (i) the qualifications of the executive; (ii)
whether the base compensation is within a reasonable range of executive pay
levels at other publicly and privately-held companies which potentially compete
with the Company for business
6.
<PAGE>
and executive talent; (iii) the financial performance of those companies
relative to the Company; (iv) the Company's strategic goals for which the
executive has responsibility, and (v) the recommendations of the Company's Chief
Executive Officer (except with respect to his own base compensation). While the
Committee, as discussed above, considers prevailing compensation levels and
practices at other publicly and privately-held companies, such companies are not
necessarily those identified in the stockholder return peer group discussed in
the "Stockholder Return Chart" below because the Company competes for executive
talent with numerous companies outside that peer group.
Annual Bonus Programs
In addition to base compensation, each of the Company's
executives and selected senior managers, including the Named Executives,
participate in the annual URS Corporation Incentive Compensation Plan (the "URS
Plan"), the annual URS Consultants, Inc. Incentive Compensation Plan (the "URSG
Plan") or the Greiner Engineering, Inc. Incentive Compensation Plan (the
"Greiner Plan") (for 1997 the URSG Plan and the Greiner Plan have been combined
into one such plan). Under these plans, participating executives and senior
managers ("Participants") can earn annual bonuses based on a formula tied to
certain predefined financial performance targets. Each Participant is assigned a
"Target Bonus" at the beginning of the plan year expressed as a percentage of
his or her base salary. If the financial performance targets are met, each
Participant's bonus is equal to the Target Bonus. If performance targets are not
met, bonuses are determined as a declining percentage of Target Bonuses
depending on the extent of the shortfall. No bonus is paid under the plan if the
Company fails to achieve a predefined minimum performance level. Conversely, if
performance targets are exceeded, then each Participant can earn a bonus in
excess of the Target Bonus determined by the extent of the performance in excess
of target, up to a maximum of two times the Target Bonus.
Mr. Koffel's Target Bonus is established by contract at 60
percent of his base salary. Target bonuses for the other Named Executives and
the other Participants, are established annually by the Chief Executive Officer
within the overall framework of the compensation policies established by the
Committee. For the Named Executives, Target Bonuses currently range from 20
percent to 60 percent of base salary.
Financial performance targets are initially developed by the
Chief Executive Officer and are approved by the Committee. Under the URS Plan,
the financial measurement used to gauge individual performance is the Company's
fiscal year net income. Under the URSG Plan and the Greiner Plan, measurements
of operating profit contribution, cash flow and new contracts are applied to the
financial performance of the operating division or unit for which the
Participant has management responsibility. However, increasing emphasis is
placed on Company-wide financial performance as the Participants'
responsibilities increase. Overall Company profitability thresholds must be met
before any bonuses can be earned at all participation levels.
Long-Term Incentive Awards
The Company has also adopted the 1991 Stock Incentive Plan, as
amended (the "1991 Plan"), to provide executives and other key employees with
incentives to maximize stockholder value. Cumulative grants under the 1991 Plan
have consumed essentially all the shares available for grants under the 1991
Plan. Accordingly, on December 17, 1996, the Board of Directors approved the
amendment and restatement of the 1991 Plan, subject to the approval of the
Company's stockholders, to increase the number of shares available for grants
under the 1991 Plan by 750,000 shares and to make certain additional amendments
described in "Approval of Amendments to the URS Corporation 1991 Stock
7.
<PAGE>
Incentive Plan" below. Awards under the 1991 Plan, as amended, can be either
stock options or restricted stock, which are designed both to encourage
recipients to focus on critical long-range objectives and award recipients with
an equity stake in the Company, thereby closely aligning their interests with
those of the Company's stockholders. Restricted stock grants are generally
reserved for key technical talent and options are typically used for the
Company's key managers and executives.
Recipients generally fall into five different groups:
corporate management, division managers, office managers, key technical staff,
and key administrative staff, and the size of awards are generally consistent
within each of these groups. The Committee periodically considers whether to
approve specific awards under the 1991 Plan based on the recommendations of the
Chief Executive Officer, who recommends the timing and size of awards. Factors
considered include the executive's or key employee's position in the Company,
his or her performance and responsibilities, and long-term incentive award
levels of comparable executives and key employees at companies which compete
with the Company for talented executives and managers. However, the 1991 Plan
does not provide any formulaic method for weighing these factors, and a decision
to grant an award is primarily based upon an evaluation of the past as well as
the future anticipated performance and responsibilities of the individual in
question. Finally, the Committee weighs how much grants under long-term
stockholder plans can potentially dilute the Company's outstanding common stock
in comparison to other publicly-traded companies which potentially compete with
the Company for business and executive talent.
Chief Executive Officer Compensation
The compensation of Mr. Koffel during fiscal year 1996 was
determined on the same basis as discussed above for certain of the Named
Executives: he received his base salary under the terms of his employment
agreement, he participated in the 1996 URS Plan with a Target Bonus of 60
percent of his base salary, and he received a grant of 18,000 stock options
under the 1991 Plan. The Company's financial performance in fiscal year 1996 was
strong and net income exceeded Maximum levels. As a result of this performance,
Mr. Koffel received a bonus of $492,000 under the 1996 URS Plan. In December
1995, the Committee approved an increase to Mr. Koffel's base compensation from
$385,000 to $415,000. This was the first adjustment to Mr. Koffel's base
compensation since 1991.
Tax Deductibility of Executive Compensation
Section 162 (m) of the Internal Revenue Code of 1986, as
amended (the "Code"), which was added to the Code by the Omnibus Budget
Reconciliation Act of 1993, precludes the deduction by a publicly held
corporation for compensation paid to certain employees to the extent that such
compensation exceeds $1,000,000, except for compensation paid under a written
binding contract in existence on February 17, 1993. The Internal Revenue Service
has issued regulations for Section 162(m), which provide that qualified
performance-based compensation will not be subject to the deduction limit if (i)
it is payable solely on account of the attainment of preestablished, objective
performance goals, (ii) the performance goals are established by a compensation
committee composed solely of two or more "outside-directors", (iii) the material
terms of the compensation and the performance goals are disclosed to and
approved by stockholders before payment, and (iv) the compensation committee
certifies that the performance goals have been satisfied before payment. Because
the Committee did not approve any executive compensation in fiscal year 1996
which was within the scope of Section 162(m) of the Code, the regulations do not
affect the preparation of the Company's tax filings for fiscal year 1996.
However, in the event that in the future the Committee anticipates that any
compensation to be paid by the Company might fall within the scope of Section
162(m) of the Code, the Committee anticipates that it would take
8.
<PAGE>
steps so that the Company's performance-based compensation would prospectively
meet Section 162(m) requirements where it deems appropriate.
Respectfully Submitted,
THE COMPENSATION/OPTION COMMITTEE
Richard Q. Praeger, Chairman
Emmet J. Cashin, Jr.
Armen Der Marderosian
Richard B. Madden
William D. Walsh
Compensation and Option/SAR Tables
The following tables set forth certain information regarding the salary
and benefits paid by the Company during each of the three most recent fiscal
years, and options granted by the Company in the most recent fiscal year, to its
Chief Executive Officer and its four most highly compensated executive officers
(other than the Chief Executive Officer) for services rendered to the Company
and its subsidiaries.
9.
<PAGE>
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation
-------------------------------------------------------------------
Other
Annual
Principal Compen-
Name Position Year Salary Bonus sation (1)
-------- ------------ ---- ------ ----- ----------
($) ($) ($)
<S> <C> <C> <C> <C> <C>
Martin M. Chairman of the 1996 $410,000 $492,000 $3,235
Koffel Board; Chief 1995 $385,000 $280,261 $1,585
Executive Officer; 1994 $385,000 $283,580 $1,585
President
Irwin L. Vice President 1996 $312,513 $242,800 $375
Rosenstein 1995 $300,000 $190,659 $1,190
1994 $300,400 $169,106 $840
Robert L. Vice President 1996 $178,082 $81,104 $0
Costello (5)
Kent P. Executive Vice 1996 $212,083 $169,666 $0
Ainsworth President; 1995 $188,986 $94,633 $0
Chief Financial 1994 $185,000 $90,844 $0
Officer; Secretary
Joseph Masters Vice President, 1996 $138,333 $55,334 $0
Legal 1995 $130,000 $31,544 $0
1994 $119,237 $21,489 $0
</TABLE>
<TABLE>
<CAPTION>
Long Term Compensation
----------------------------------------------------
Awards Payouts
---------------------------------- ----------
Securities
Restricted Underlying All Other
Stock Options/ LTIP Compen-
Name Award(s) (2) SARs Payouts sation
-------- -------- -------- ------- ---------
($) (#) ($) ($)
<S> <C> <C> <C> <C>
Martin M. $0 18,000 $0 $41,583 (3)
Koffel $0 25,000 $0 $40,775
$0 40,000 $0 $39,639
Irwin L. $0 12,000 $0 $14,785 (4)
Rosenstein $0 25,000 $0 $13,270
$0 25,000 $0 $18,105
Robert L. $0 50,000 $0 $203,830 (6)
Costello
Kent P. $0 4,800 $0 $1,500 (7)
Ainsworth $0 12,000 $0 $1,500
$0 10,000 $0 $1,500
Joseph Masters $0 2,400 $0 $1,100 (8)
$0 2,400 $0 $1,100
$0 3,000 $0 $ 842
<FN>
===================================================================================================================================
(1) The amounts in this column primarily represent automobile allowances.
(2) The aggregate number and value as of October 31, 1996 of each of the Named
Executive's restricted share holdings are as follows: Mr. Koffel, zero (0)
shares, $0; Mr. Rosenstein, zero (0) shares, $0; Mr. Costello, zero (0)
shares, $0; Mr. Ainsworth, 7,500 shares, $43,125; Mr. Masters, zero (0)
shares, $0. Mr. Ainsworth's shares vested in 1995.
(3) Consists of matching contributions of $1,500 paid pursuant to the
Company's Defined Contribution Plan, a $2,183 cost of living adjustment to
amounts previously credited under the Company's Selected Executives
Deferred Compensation Plan, and $11,350 of term life insurance premiums
and $26,550 of disability insurance premiums paid pursuant to Mr. Koffel's
employment agreement (see "Employment Agreements").
(4) Consists of matching contributions of $1,500 paid by the Company pursuant
to the Company's Defined Contribution Plan, $6,058 paid by the Company for
the surrender of accrued vacation time, a $4,843 cost of living adjustment
to amounts previously credited under the Company's Selected Executives
Deferred Compensation Plan and $2,009 for life and disability insurance
premiums.
(5) Mr. Costello has been employed by the Company since March 29, 1996.
(6) Consists of matching contributions of $1,500 paid by the Company pursuant
to the Company's Defined Contribution Plan, $60,852 paid by the Company
for moving expenses, a $139,669 stock option payout and $1,809 for life
and medical insurance premiums.
(7) Consists of matching contributions of $1,500 paid by the Company pursuant
to the Company's Defined Contribution Plan.
(8) Consists of matching contributions of $1,100 paid by the Company pursuant
to the Company's Defined Contribution Plan.
</FN>
</TABLE>
10.
<PAGE>
<TABLE>
Option/SAR Grants In Last Fiscal Year
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants for Option Term
- --------------------------------------------------------------------------------------------------- ---------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
------ ----------- ----------- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
M. M. Koffel 18,000 7% $6.75 3/26/2006 76,411 193,640
I. L. Rosenstein 12,000 5% $6.75 3/26/2006 50,940 129,093
R.L. Costello 50,000 21% $6.75 3/29/2006 212,252 537,888
K. P. Ainsworth 4,800 2% $6.75 3/26/2006 20,376 51,637
J. Masters 2,400 1% $6.75 3/26/2006 10,188 25,819
</TABLE>
<TABLE>
Aggregated Option/SAR Exercises In Last Fiscal Year
and FY-End Option/SAR Values
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARs at
Options/SARs at FY-End ($)(1)
FY-End (#)
Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable
---- --------------- -------- --------------- -----------------
(#) ($)
<S> <C> <C> <C> <C>
M. M. Koffel 0 $0 442,000 $2,019,250
0 $0
I. L. Rosenstein 0 $0 109,167 $160,420
20,333 $35,583
R.L. Costello 0 $0 0 $0
50,000 $87,500
K. P. Ainsworth 0 $0 86,800 $77,650
0 $0
J. Masters 0 $0 5,300 $8,200
5,000 $10,350
<FN>
(1) Based on 1996 fiscal year-end share price equal to $8.50.
</FN>
</TABLE>
-11-
<PAGE>
Directors' Remuneration
During fiscal year 1996, the non-employee members of the
Company's Board of Directors received an annual Directors' fee of $15,000, plus
an attendance fee of $2,000 for each Board of Directors meeting attended in
person, and a fee of $500 for participation in any Board of Directors meeting by
telephone. Non-employee Directors who are members of a committee of the Board
received $625 for each committee meeting attended in person, and a fee of $500
for participation in any committee meeting by telephone. The Chairman of the
committee received an additional $625 per meeting. Employee members of the Board
of Directors did not receive any such fees. Non-employee Directors also are
entitled to participate, at the Company's expense, in both a life insurance
program with a $50,000 death benefit and a medical benefit plan. Based upon the
Company's costs, the monetary value of these benefits to those non-employee
Directors participating in fiscal year 1996 was $7,476 for the medical
healthcare plan and $150 for the life insurance policy. The Company also
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.
Prior to this Annual Meeting of Stockholders, upon the
conclusion of each annual meeting of stockholders, each non-employee Director
who was reelected to serve as a Director automatically received an option to
purchase 1,000 shares under the 1991 Stock Incentive Plan. During fiscal year
1996, 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 1996.
The exercise prices of such options were set at the fair market value of the
Common Stock on the date of grant. Employee members of the Board of Directors
did not receive any such options. However, in the event that the amended and
restated 1991 Stock Incentive Plan and the 1997 Non-Executive Directors Stock
Equity Plan are approved by the Company's stockholders at this Annual Meeting of
Stockholders, such annual grants of options to non-employee Directors will be
eliminated and replaced with an annual stock grant equal to that number of
shares of Common Stock determined by dividing $15,000 by the closing price of
the Common Stock on the date of each annual meeting of stockholders. See
"Approval of Amendments to the URS Corporation 1991 Stock Incentive Plan" and
"Approval of the URS Corporation 1997 Non-Executive Directors Stock Grant Plan"
below. The Company believes this modification is warranted to maintain a
competitive Director remuneration package and link Director and stockholder
interests.
Certain Relationships and Related Transactions
Richard C. Blum, a Director of the Company, receives $60,000
per year for services provided under a consulting agreement with the Company. In
addition, the Company pays $90,000 per year to RCBA, L.P. under a separate
consulting agreement. The Company may terminate these consulting agreements at
any time. Mr. Blum is the majority stockholder of RCBA, Inc. RCBA, Inc., in its
capacity as the sole general partner of RCBA, L.P., indirectly through several
entities, holds 2,952,729 shares (assuming the exercise of certain warrants), or
approximately 33 percent, of the Company's outstanding Common Stock.
12
<PAGE>
Employment Agreements
Martin M. Koffel
Mr. Koffel has an evergreen employment agreement with the
Company, 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 the
Company 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 the Company without cause
(other than by reason of death or disability), the Company must pay a severance
payment equal to 150 percent of his then current base salary and his then
current target bonus. If Mr. Koffel voluntarily resigns his employment within
one year following a Change in Control (see below), or if Mr. Koffel is
terminated for any reason other than for cause at any time after a Change of
Control, he becomes entitled to a special severance payment equal to 300 percent
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 the Company'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 (the "Exchange Act"), or (ii) any
person acquiring 20 percent or more of the voting power of the Company or (iii)
more than two-thirds of the Directors not having served on the Board for 24
months prior to the "Change in Control." On or about May 10, 1996, Heartland
Advisors, Inc. ("Heartland"), one of the Company's stockholders, purchased
additional shares of the Company's Common Stock, which increased Heartland's
ownership of outstanding Common Stock from approximately 19 percent to
approximately 22 percent (the "Heartland Transaction"), resulting in a technical
"Change of Control" under Mr. Koffel's employment agreement and the terms of the
1991 Plan. As a result, the special severance payment will now be payable to Mr.
Koffel if he voluntarily resigns his employment before May 10, 1997, or if he is
terminated for any reason other than for cause at any time during the term of
his employment agreement. In addition, the options previously granted to Mr.
Koffel in 1994, 1995 and 1996 under the 1991 Plan are now fully vested.
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 the Company. At the Company's option, Mr. Koffel's SARs
may at any time be replaced with options to purchase Common Stock on the same
economic basis as the SARs. The SARs are fully vested.
Irwin L. Rosenstein
Mr. Rosenstein has an evergreen employment agreement with
URSG, 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 the Company 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 the Company
13
<PAGE>
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 the Company 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. A "Change in Control" is defined in
Mr. Rosenstein's agreement as the acquisition by any person of 51 percent of
more of URSG's or the Company's then current outstanding securities having the
right to vote at elections of Directors. The Heartland Transaction did not
result in a "Change of Control" under Mr. Rosenstein's employment agreement, but
resulted in a technical "Change of Control" under certain stock options granted
to Mr. Rosenstein in 1995 under the 1991 Plan. As a result, such options are now
fully vested.
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 the Company. At the Company's option, Mr.
Rosenstein's SARs may at any time be replaced with options to purchase Common
Stock on the same economic basis as the SARs. The SARs are fully vested.
Robert L. Costello
Mr. Costello has an employment agreement with Greiner, Inc.
("Greiner"), a wholly-owned subsidiary of the Company, executed in March 1996,
which provides for a term of three years (unless terminated earlier as provided
therein), under which Mr. Costello receives an annual base salary of not less
than $250,000. If Mr. Costello's employment is terminated involuntarily by
Greiner without cause (other than by reason of death or disability) or Mr.
Costello voluntarily resigns his employment in the event that his salary is
reduced or Greiner has breached its obligation to employ Mr. Costello in an
executive position as described in the agreement, Greiner must pay a severance
payment equal to 100 percent of his then current base salary less base salary
paid to Mr. Costello for any period up to one month between the date of
termination and the date that notice thereof is given plus any accrued and
unpaid vacation at the time of such termination. Under the agreement, if Mr.
Costello ceases to be employed by the Company within one year following a
"Change of Control" (see below), Mr. Costello will be entitled to receive a
severance payment equal to 200 percent of his then current base salary. A
"Change in Control" is defined in Mr. Costello's agreement as the acquisition by
any person of 51 percent of more of Greiner's or the Company's then current
outstanding securities having the right to vote at elections of Directors. The
Heartland Transaction did not result in a "Change of Control" under Mr.
Costello's employment agreement.
Kent P. Ainsworth
Mr. Ainsworth executed an evergreen employment agreement with
the Company in May 1991 following his employment as the Company'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. On March 26, 1996, the Committee increased Mr. Ainsworth's annual base
salary, effective March 29, 1996, to $220,000, and approved the payment of a
special bonus to Mr. Ainsworth in the amount of $50,000 in recognition of his
work in connection with the acquisition of GEI. If Mr. Ainsworth's employment is
terminated involuntarily by the Company 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
14
<PAGE>
Mr. Ainsworth voluntarily resigns his employment for specified reasons within
one year following a Change in Control (as defined above in the description of
Mr. Koffel's employment agreement), or if Mr. Ainsworth is terminated for any
reason at any time after a Change of Control, he becomes entitled to a special
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 the
Company's incentive, deferred compensation, bonus, stock and similar plans, to
the extent unvested, will become vested immediately upon a "Change of Control."
The Heartland Transaction resulted in a technical "Change of Control" under Mr.
Ainsworth's employment agreement and the terms of the 1991 Plan. As a result,
the special severance payment will now be payable to Mr. Ainsworth if he
voluntarily resigns his employment for specified reasons before May 10, 1997, or
if he is terminated for any reason at any time during the term of his employment
agreement. In addition, the options previously granted to Mr. Ainsworth in 1994,
1995 and 1996 under the 1991 Plan are now fully vested.
Joseph Masters
Mr. Masters does not have a written employment agreement with
the Company. Mr. Masters's compensation is reviewed and established periodically
by the Compensation/Option Committee. Effective December 18, 1995, Mr. Masters's
annual base salary was increased from $130,000 to $140,000 by the
Compensation/Option Committee. Mr. Masters has a severance agreement with the
Company, executed on November 22, 1993, which provides that if Mr. Masters is
terminated by the Company at any time during the term of the agreement other
than for cause, or if Mr. Masters voluntarily leaves for specified reasons
within one year following a "Change of Control" (as defined above in the
description of Mr. Koffel's employment agreement), he will be entitled to
receive his base salary and participate in any insurance plans maintained by the
Company during a severance period commencing on the date his employment
terminates and ending on the earlier of six months thereafter or his death. The
Heartland Transaction resulted in a technical "Change of Control" under Mr.
Masters's severance agreement. As a result, the special severance payment will
now be payable to Mr. Masters if he voluntarily resigns his employment for
specified reasons before May 10, 1997.
Stockholder Return Charts
The following two charts compare the cumulative total
stockholder returns (including reinvested dividends) from a $100 investment in
Common Stock for (i) the last five fiscal years and (ii) since the date of the
Company's restructuring, compared to the cumulative total return of the Standard
& Poor's 500 index and a weighted peer index. In prior years, the peer index has
included GEI. Since the Company acquired GEI on March 29, 1996, stockholder
returns for GEI are no longer available for the full five-year performance
period, and GEI has been removed from the peer index.
15
<PAGE>
The Company considered possible replacements for GEI as well
as possible additions to the peer group. As a result of this review, the Company
has added three new firms to its peer group: Dames & Moore; International
Technology Corporation; and Roy F. Weston. These new firms are comparable to the
Company in the size and scope of their operations. The peer index is now
comprised of the following companies:
Dames & Moore Emcon Associates
Fluor Daniel GTI Gilbert Associates
Harding Lawson Associates ICF Kaiser International, Inc.
International Technology Corporation Jacobs Engineering Group
Michael Baker Corporation Roy F. Weston
Stone & Webster STV Group
As required by applicable proxy rules, cumulative total
stockholder returns for both the new peer group and the former peer group are
shown in the five-year performance graph. The stockholder returns calculated for
the former peer index include GEI's returns for the first four years of the
performance period.
The cumulative stockholder return comparison has also been
made for the period from February 28, 1990 through December 19, 1996 (the most
recent practicable measurement date before the filing of the Company's Annual
Report on Form 10-K for its fiscal year ended October 31, 1996). In February
1990, the Company completed a major restructuring, which included a 10 for 1
reverse stock split, significant reductions of long term debt and an equity
infusion in the Company. In March 1996, the Company acquired GEI. Based on the
turnaround in performance and the growth in the size of the Company, the Board
of Directors and Management believe that the comparison of cumulative total
stockholder returns since February 1990 forms a more reasonable representation
of the Company's performance and of the relative effectiveness of the current
management team.
16
<PAGE>
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
Comparison of Five Year Cumulative Total Return
New and Former Peer Groups
10/31/91 10/31/92 10/31/93 10/31/94 10/31/95 10/31/96
- --------------------------------------------------------------------------------
New Peer Group $100 $90 $81 $74 $74 $70
Former Peer Group $100 $96 $86 $80 $83 $80
URS Corp. $100 $85 $57 $68 $75 $100
S & P 500 $100 $110 $126 $131 $166 $206
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
<TABLE>
Comparison of Total Return - 2/28/90 to 12/19/96
<CAPTION>
2/28/90 2/28/91 2/29/92 2/28/93 2/28/94 2/28/95 2/29/96 12/19/96
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peer Group $100 $138 $139 $119 $108 $89 $98 $89
URS Corp. $100 $119 $211 $178 $158 $128 $147 $219
S & P 500 $100 $115 $133 $147 $159 $171 $231 $296
</TABLE>
17.
<PAGE>
STOCK OWNERSHIP
<TABLE>
The following table contains information as of January 14,
1997 as to the beneficial ownership of Common Stock of the Company, including
Common Stock obtainable upon the exercise of warrants ("warrant shares") and
upon exercise of stock options exercisable on or prior to March 15, 1997, by (i)
each person owning beneficially more than five percent of the Company's Common
Stock; (ii) each Director and nominee for Director; and (iii) the executive
officers. To the Company's knowledge, the persons named in the table have sole
voting and investment power with respect to all Common Stock shown as
beneficially owned by them, subject to applicable community property laws and
except as otherwise noted.
<CAPTION>
Name and Address Number of Shares Percent of Class (1)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wells Fargo Bank, N.A. 288,810 shares 7.98%
420 Montgomery Street 435,561 warrant shares
San Francisco, CA 94104 -------
724,371
Richard C. Blum & Associates, L.P.
909 Montgomery Street
San Francisco, CA 94133
(directly)(2) 996 shares Less than 1%
(through the following
entities) (3):
BK Capital Partners I, L.P. 104,719 shares 5.62%
403,546 warrant shares
-------
508,265
BK Capital Partners II, L.P. 117,869 shares 5.77%
403,546 warrant shares
-------
521,415
BK Capital Partners III, L.P. 248,738 shares 4.16%
115,299 warrant shares
-------
364,037
BK Capital Partners IV, L.P. 461,195 warrant shares 5.07%
The Common Fund 1,077,980 shares 12.48%
Heartland Advisors, Inc. 2,031,906 shares 23.52%
790 North Milwaukee Street
Milwaukee, WI 53202
Dimensional Fund Advisors, Inc. 550,077 shares 6.37%
1299 Ocean Avenue, 11th Fl.
Santa Monica, CA 90401
18.
<PAGE>
Name and Address Number of Shares Percent of Class (1)
- ------------------------------------------------------------------------------------------------------------
FMR Corp. 663,778 shares 7.68%
82 Devonshire Street
Boston, MA 02109-3614
Richard C. Blum (4) 18,841 shares Less than 1%
Emmet J. Cashin, Jr. (5) 12,300 shares Less than 1%
Robert L. Costello (6) 3,819 shares Less than 1%
Armen Der Marderosian (7) 2,000 shares Less than 1%
Admiral S. Robert Foley,
Jr., USN (Ret.) (8) 12,000 shares Less than 1%
Robert D. Glynn, Jr. (9) 100 shares Less than 1%
Martin M. Koffel (10) 427,000 shares 4.94%
Richard B. Madden (11) 9,000 shares Less than 1%
Richard Q. Praeger (12) 14,211 shares Less than 1%
Irwin L. Rosenstein (13) 103,780 shares Less than 1%
William D. Walsh (14) 25,500 shares Less than 1%
Kent P. Ainsworth (15) 94,300 shares Less than 1%
Joseph Masters (16) 5,401 shares Less than 1%
All Officers and Directors 3,680,722 shares 34.4%
as a group (13 persons)(17)
<FN>
- --------------------------
(1) Percentages are calculated with respect to a holder of warrants or
options exercisable prior to March 15, 1997 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.
(2) Richard C. Blum is the President, Chief Executive Officer and majority
stockholder of RCBA, Inc.
(3) RCBA, Inc. is the sole general partner of RCBA, L.P., which is, in
turn, the sole general partner of BK Capital Partners I, a California
Limited Partnership, BK Capital Partners II, a California Limited
Partnership, BK Capital Partners III Limited Partnership, and BK
Capital Partners IV,
19.
<PAGE>
a California 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.
(4) 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.
(5) Includes 2,300 shares held as beneficiary of the EJC Survivors Trust
and currently exercisable portions of options.
(6) Represents 1,887 shares held directly and 1,932 shares held indirectly
in the Greiner Engineering, Inc. 401(k) Plan.
(7) Represents currently exercisable portions of options.
(8) Includes 10,000 shares held directly and currently exercisable portions
of options.
(9) Represents shares held directly.
(10) Represents currently exercisable portions of options.
(11) Includes 5,000 shares held directly and currently exercisable portions
of options.
(12) Includes 4,211 shares held directly and currently exercisable portions
of options.
(13) Includes 2,114 shares held directly and currently exercisable portions
of options.
(14) Includes 17,500 shares held directly and currently exercisable portions
of options.
(15) Includes 7,500 shares held directly and currently exercisable portions
of options.
(16) Includes 101 shares held directly and currently exercisable portions of
options.
(17) 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.
- --------------------------
</FN>
</TABLE>
20.
<PAGE>
APPROVAL OF THE URS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED AND RESTATED
General
On December 17, 1996, the Board of Directors approved the
amendment and restatement of the Employee Stock Purchase Plan (the "ESP Plan"),
subject to the approval of the Company's stockholders, to make certain
amendments described below. The purposes of the ESP Plan are to give eligible
employees an opportunity to share in the success of the Company by purchasing
common shares at a favorable price and to pay for the purchases solely by means
of payroll deductions, thereby encouraging employees to focus on long-range
objectives, to allow the Company to attract and retain employees with
exceptional qualifications, and to link employees and stockholder interests
through equity ownership. Approximately 2,900 of the Company's employees are
eligible to participate in the ESP Plan. The ESP Plan was originally adopted by
the Board of Directors in May 1985, and was approved by the Company's
stockholders at the 1986 annual meeting of stockholders. The operation of the
ESP Plan was suspended from September 9, 1988 to September 30, 1991. The Board
of Directors amended and restated the ESP Plan on July 23, 1991 and its
operation resumed on October 1, 1991, subject to the approval of the Company's
stockholders, which was obtained at the Company's annual meeting of stockholders
held on March 24, 1992.
Reasons for the Amendments
The ESP Plan initially reserved 300,000 shares for sale, of
which 195,298 shares had already been purchased as of December 1996. The
remaining shares available under the ESP Plan are only sufficient to provide for
anticipated employee stock purchases for the coming year, particularly as the
level of participation has increased significantly following the Company's
acquisition of GEI.
The Amendments
The amendments to the ESP Plan increase the number of shares
available for purchase under the ESP Plan by 250,000 shares, to a total of
550,000 shares. This figure is expected to cover anticipated employee purchases
for the next three years, absent unusual circumstances. In addition, the
amendments update the ESP Plan to current practices and provide for increased
flexibility in administration of the ESP Plan. These amendments: (a) permit
highly compensated officers to participate; (b) revise the format of the ESP
Plan to bifurcate the general terms of the plan itself from the specific terms
of employee offerings, which will permit greater flexibility and discretion in
deciding the terms on which employees may participate without the need to seek
stockholder approval for each future modification; (c) eliminate the 100,000
share per year purchase limit (although other limits remain); and (d) clarify
that not all mergers and other changes of control will terminate the ESP Plan,
and otherwise clarify the consequences of certain corporate events.
Principal Features of the ESP Plan, as Amended
The text of the ESP Plan, as amended, is set forth in Appendix
A to this Proxy Statement. The following summary of the ESP Plan's principal
features does not purport to be complete. It is subject to, and qualified in its
entirety by, the full text of the ESP Plan in Appendix A.
21.
<PAGE>
Administration. The ESP Plan is administered under the
supervision of the Compensation/Option Committee of the Board of Directors (the
"Committee"). The Committee prescribes guidelines and forms for the
implementation and administration of the ESP Plan, interprets the provisions of
the ESP Plan and makes all other substantive decisions regarding the operation
of the ESP Plan.
Participation Periods. The Committee may provide for the grant
of rights to purchase Common Stock of the Company to eligible employees (an
"Offering") on a date or dates to be selected by the Committee. The first
Offering under the amended and restated ESP Plan will begin on July 1, 1997 and
end December 31, 1997. Subsequent six month Offerings are expected to begin on
January 1 and July 1 thereafter.
Eligibility. Rights to purchase stock may be granted under the
ESP Plan only to employees of the Company and its affiliates who have been
employed by the Company or its affiliates for such continuous period preceding
such grant as the Committee may require, which period will not equal or exceed
two years, and whose customary employment with the Company or its affiliates is
at least 20 hours per week and at least five months per calendar year, unless
otherwise determined by the Committee. Officers of the Company are eligible to
participate in Offerings. No rights may be granted under the ESP Plan to any
person who, at the time of the grant, owns stock possessing five percent or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary.
The Committee may provide that if an employee becomes eligible
to participate in the ESP Plan during the course of an Offering, the employee
may receive a right under that Offering. Such right will have the same
characteristics as any rights originally granted under that Offering, except
that (i) the Offering date will be the date such right is granted and (ii) the
Offering period for such right will begin on its Offering date and end
coincident with the end of the Offering, and (iii) the Committee may provide
that if such person first becomes an eligible employee within a specified period
of time before the end of the Offering, he or she will not receive any right
under that Offering.
An eligible employee may be granted rights under the ESP Plan
only if such rights, together with any other rights granted under all such
employee stock purchase plans of the Company or any affiliate of the Company, do
not permit such employee's rights to purchase stock of the Company or any
affiliate to accrue at a rate which exceeds $25,000 of the fair market value of
such stock (determined at the time such rights are granted) for each calendar
year in which such rights are outstanding at any time.
Rights; Purchase Price. On each Offering date, each eligible
employee will be granted the right to purchase the number of shares of Common
Stock of the Company purchasable with a percentage designated by the Committee
not exceeding 10 percent of such employee's earnings (as defined in each
Offering) during the Offering period. In connection with each Offering, the
Committee may specify a maximum number of shares which may be purchased by any
employee during the Offering or on any purchase date, as well as a maximum
aggregate number of shares which may be purchased by all eligible employees. The
purchase price of stock acquired pursuant to rights granted under the ESP Plan
will not be less than the lesser of (i) an amount equal to 85 percent of the
fair market value of the stock on the Offering date, or (ii) an amount equal to
85 percent of the fair market value of the stock on the date such stock is
purchased.
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Transferability. Rights granted under the ESP Plan are
nontransferable except by will or the laws of descent and distribution, or to a
designated beneficiary in the event of a participant's death, and may be
exercised only by the person to whom such rights are granted.
Purchase. On each purchase date, a participant's accumulated
payroll deductions and other additional payments permitted under the Offering
(without any increase for interest) will be applied to the purchase of whole
shares of stock of the Company, up to the maximum number of shares permitted
pursuant to the terms of the ESP Plan, at the purchase price specified in the
Offering. No fractional shares will be issued upon the exercise of rights
granted under the ESP Plan. No rights granted under the ESP Plan may be
exercised to any extent unless the shares subject to exercise are covered by an
effective registration statement pursuant to the Securities Act of 1933, as
amended.
Escrow of Shares. During a period of three months following
the last day of the currently authorized Offering, all shares purchased under
the ESP Plan on such day will be held in escrow by the Company or its designee
as agent for the participants and spouse who own such shares and will not be
transferable or assignable.
Participation, Withdrawal and Termination. An eligible
employee may become a participant in an Offering by delivering a participation
agreement to the Company authorizing payroll deductions of up to the maximum
percentage of such employee's earnings during the purchase period, as specified
by the Committee. Payroll deductions made for a participant will be credited to
an account for such participant under the ESP Plan and deposited with the
general funds of the Company. A participant may reduce, increase or begin
payroll deductions after the beginning of any Offering only as provided for in
the Offering. A participant may make additional payments into his or her account
only if specifically provided for in the Offering and only if the participant
has not had the maximum amount withheld during the purchase period.
A participant may terminate payroll deductions under the ESP
Plan and withdraw from an Offering at any time during a purchase period by
delivering to the Company a notice of withdrawal. Upon such withdrawal, the
Company will distribute to such participant all of his or her accumulated
payroll deductions (reduced to the extent such deductions have been used to
acquire stock for the participant) under the Offering, without interest, and the
participant's interest in that Offering will be automatically terminated. Such
withdrawal will have no effect upon such participant's eligibility to
participate in any other Offerings under the ESP Plan, but the participant will
be required to deliver a new participation agreement in order to participate in
subsequent Offerings.
Rights granted under the ESP Plan will terminate immediately
upon cessation of a participating employee's employment, and the Company will
distribute to such employee all of his or her accumulated payroll deductions
(reduced to the extent such deductions have been used to acquire stock for the
terminated employee) without interest.
Adjustment Provisions. If there is any change in the stock
subject to the ESP Plan or subject to any rights granted under the ESP Plan
(through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration), the
ESP Plan and rights outstanding thereunder will be appropriately adjusted as to
the class and the maximum number of shares subject to the ESP Plan and the
class, number of shares and price per share of stock subject to outstanding
rights.
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In the event of a dissolution or liquidation of the Company, a
merger or consolidation in which the Company is not the surviving corporation, a
reverse merger in which the Company survives but shares of Common Stock
preceding the merger are converted into other property (securities, cash or
otherwise), or the sale of stock of the Company to a single purchaser or single
group of affiliated purchasers after which less than 50 percent of the
outstanding voting shares of the new or continuing corporation are owned by
stockholders of the Company immediately before such transaction, then, as
determined by the Committee, the successor corporation may assume such
outstanding rights or substitute similar rights, such rights may continue in
full force and effect, or participants' accumulated payroll deductions may be
used to purchase Common Stock immediately prior to the transaction described
above and the participants' rights under the ongoing Offering will be
terminated.
Amendment. The Committee may amend the ESP Plan at any time.
However, no amendment will be effective unless approved by the stockholders of
the Company within 12 months before or after its adoption by the Committee if
the amendment would: (i) increase the number of shares reserved for rights; (ii)
modify the provisions as to eligibility for participation to the extent such
modification requires stockholder approval in order for the ESP Plan to satisfy
the requirements of Section 423 of the Internal Revenue Code of 1986, as amended
(the "Code") or to comply with the requirements of Rule 16b-3 promulgated under
the Exchange Act; or (iii) modify the ESP Plan in any other way if such
modification requires stockholder approval in order for the ESP Plan to satisfy
the requirements of Section 423 of the Code or to comply with the requirements
of Rule 16b-3 promulgated under the Exchange Act.
Termination Or Suspension. The Committee may suspend or
terminate the ESP Plan at any time. No rights may be granted under the ESP Plan
while the ESP Plan is suspended or after it is terminated.
Federal Income Tax Information. The ESP Plan is intended to
qualify as an "employee stock purchase plan" under Section 423 of the Code. A
participant will be taxed on amounts withheld for the purchase of shares as if
such amounts were actually received. Other than this, no income will be taxable
to a participant until disposition of the shares acquired, and the method of
taxation will depend upon the holding period of the purchased shares.
If the stock is disposed of at least two years after the
beginning of the Offering period and at least one year after the stock is
transferred to the participant, then the lesser of (a) the excess of the fair
market value of the stock at the time of such disposition over the purchase
price or (b) the excess of the fair market value of the stock as of the
beginning of the Offering period over the exercise price (which for this purpose
is deemed to be 85 percent of the fair market value of the stock as of the
beginning of the Offering period) will be treated as ordinary income. Any
further gain or any loss will be taxed as a long-term capital gain or loss.
Capital gains currently are generally subject to lower tax rates than ordinary
income. The maximum capital gains rate for federal income tax purposes is 28
percent while the maximum ordinary rate is effectively 39.6 percent at the
present time.
If the stock is sold or disposed of before the expiration of
either of the holding periods described above, then the excess of the fair
market value of the stock on the purchase date over the purchase price will be
treated as ordinary income at the time of such disposition, and the Company may,
in the future, be required to withhold income taxes relating to such ordinary
income from other payments made to the participant. The balance of any gain will
be treated as capital gain. Even if the stock is later disposed of for less than
its fair market value on the purchase date, the same amount of ordinary income
is attributed to the participant, and a capital loss is recognized equal to the
difference between the sales
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price and the fair market value of the stock on such purchase date. Any capital
gain or loss will be long- or short-term depending on whether the stock has been
held for more than one year.
There are no federal income tax consequences to the Company by
reason of the grant or exercise of rights under the ESP Plan. The Company is
entitled to a deduction to the extent amounts are taxed as ordinary income to a
participant (subject to the requirement of reasonableness, the provisions of
Section 162(m) of the Code and the satisfaction of a tax reporting obligation).
Required Vote
Approval of the amended and restated ESP Plan requires the
affirmative vote of the majority of shares present in person or represented by
proxy and voting at the meeting. If the amended and restated ESP Plan is not
approved by the stockholders, the ESP Plan will revert to the provisions in
effect prior to December 17, 1996.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDED
AND RESTATED EMPLOYEE STOCK PURCHASE PLAN.
APPROVAL OF AMENDMENTS TO THE URS CORPORATION
1991 STOCK INCENTIVE PLAN, AS AMENDED AND RESTATED
General
On December 17, 1996, the Board of Directors approved the
amendment and restatement of the 1991 Stock Incentive Plan (the "1991 Plan"),
subject to the approval of the Company's stockholders, to make certain
amendments described below. The purposes of the 1991 Plan are to encourage key
employees and consultants of the Company and its subsidiaries to focus on
long-range objectives, to attract and retain key employees and consultants with
exceptional qualifications and to link key employees and consultants to
stockholder interests through equity ownership. Directors and officers of the
Company who are also employees are eligible for awards under the original 1991
Plan. The 1991 Plan was originally adopted by the Board of Directors on January
15, 1991 and approved by the Company's stockholders at the annual meeting of
stockholders held on March 26, 1991. On July 23, 1991, the Board of Directors
adopted amendments to the 1991 Plan, which were approved by the Company's
stockholders at the annual meeting of stockholders held on March 24, 1992, which
provided for a program of nondiscretionary stock option grants to the Company's
non-employee directors and increased the shares available under the 1991 Plan by
500,000 shares.
Reasons for the Amendments
Cumulative grants under the 1991 Plan have consumed
essentially all the 1,560,000 shares available for grants under the 1991 Plan.
The Committee, which administers the 1991 Plan, considered several alternative
long-term incentive vehicles to continue to provide the Company's employees with
the long-term incentive component of their compensation package, including stock
options, performance shares, performance accelerated restricted stock, phantom
stock arrangements, and others. However, the Board of Directors, based upon the
Committee's recommendations, believes that stock options continue to be the
optimal approach to providing appropriate long-term incentives to employees.
Stock options are well understood by employees (unlike some of the alternatives
considered), provide for an appropriate
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alignment between the interests of the employees and the stockholders to
maximize the value of the Company's shares, and do not generate a charge to
Company earnings which would result from the other alternatives considered.
The Amendments
The amendments increase the number of shares available for
grants under the 1991 Plan by 750,000 shares. This figure is expected to cover
anticipated grants to employees for the next three years, absent unusual
circumstances. This increase will bring the total number of shares granted and
available for grants under the 1991 Plan to 2,310,000 shares, or approximately
17 percent of the Company's outstanding shares on a fully-diluted basis. These
amendments also eliminate the existing formula plan which grants each
non-employee Director annually an option to purchase 1,000 shares (see "Approval
of the URS Corporation 1997 Non-Executive Directors Stock Grant Plan" below). In
addition, the amendments update the 1991 Plan to current practices and provide
for the increased flexibility now permitted under recent revisions to the rules
of the Securities and Exchange Commission ("SEC") under Section 16 of the
Exchange Act. These amendments: (a) provide for an administrative committee to
consist of at least two "non-employee directors" instead of the current three
"disinterested directors" in accordance with the new Section 16 rules; (b)
authorize the Committee the discretion to permit the transferability of
non-qualified stock options, as now allowed by the new Section 16 rules; (c)
provide for a limit on option grants of 400,000 shares per optionee per fiscal
year, as a technical change to ensure that option income does not count toward
the $1,000,000 annual deductible compensation limitation of Section 162(m) of
the Code; (d) eliminate awards in the form of stock units, stock appreciation
rights, dividend equivalents and voting rights, which were features of the 1991
Plan as originally adopted; and (e) extend the period during which ISOs can be
granted under the 1991 Plan until December 16, 2006.
Principal Features of the 1991 Plan, as Amended
The text of the 1991 Plan, as amended, is set forth in
Appendix B to this Proxy Statement. The following summary of the principal
features of the 1991 Plan as amended, does not purport to be complete. It is
subject to, and qualified in its entirety by, Appendix B.
Administration. The 1991 Plan is administered by the
Committee, which selects the key employees (including consultants and
non-employee Directors) who will receive awards, determines the amount, vesting
requirements and other conditions of each award, interprets the provisions of
the 1991 Plan and makes all other decisions regarding the operation of the 1991
Plan.
Types of Awards. Awards under the 1991 Plan may take the form
of restricted shares and options. Options may include nonstatutory stock options
("NSOs") as well as incentive stock options ("ISOs") intended to qualify for
special tax treatment. Any award under the 1991 Plan may include one or any
combination of these grants. No person will be eligible to be granted stock
options covering more than 400,000 shares of Common Stock in any fiscal year of
the Company. No payment is required upon receipt of an award, except that the
recipient of restricted shares must pay the par value thereof to the Company.
The total number of restricted shares and options that may be granted under the
1991 Plan is limited to 2,250,000 common shares, plus any unused shares under
certain predecessor stock option plans which have expired or were terminated
upon adoption of the 1991 Plan (an aggregate of approximately 60,000 common
shares), for a total of 2,310,000 common shares. If any restricted shares or
options are forfeited, or if options terminate for any other reason prior to
exercise under the 1991 Plan or the predecessor stock option plans, then they
again become available for awards.
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Restricted Shares. Restricted shares are common shares that
are subject to forfeiture in the event that the applicable vesting conditions
are not satisfied and are nontransferable prior to vesting. Restricted shares
have the same voting and dividend rights as other common shares. When granting
an award, the Committee determines the number of restricted shares to be
included in the award as well as the vesting conditions. The vesting conditions
may be based on the participant's service, his or her individual performance,
the Company's performance or other appropriate criteria. Vesting may be
accelerated in the event of the participant's death, disability or retirement or
in the event of a "Change in Control." The recipient of Restricted Shares may
pay all projected income taxes or withholding taxes relating to the award with
common shares rather than cash.
Terms of Stock Options. The exercise price under ISOs must be
equal to or greater than the fair market value of common shares on the date of
grant; the exercise price under NSOs must be equal to or greater than 50 percent
of the fair market value of common shares on the date of grant. The term of an
ISO cannot exceed ten years. All options are nontransferable prior to the
optionee's death, except that an NSO can be made transferable in the discretion
of the Committee. When granting options, the Committee establishes the vesting
conditions that must be satisfied before the option may be exercised. In
general, the vesting conditions will be based on the optionee's service after
the date of grant. Vesting may be accelerated in the event of the optionee's
death, disability, retirement, attainment of performance goals or in the event
of a "Change in Control." Moreover, the Committee may determine that outstanding
options will become fully vested if it has concluded that there is a reasonable
possibility of a "Change in Control" within six months thereafter. NSOs may be
transferred upon such terms and conditions as the Committee may determine.
The exercise price of an option may be paid in any lawful form
permitted by the Committee, including (without limitation), (i) cash, (ii), the
surrender of common shares already owned for more than six months by the
optionee, (iii) delivery of the optionee's full recourse promissory note, (iv)
the "exercise/sale" and "exercise/pledge" directions described below or (v) any
combination thereof. If exercise/sale directions are given, a sufficient number
of option shares to pay the exercise price and any withholding taxes are issued
directly to a securities broker who, in turn, sells those shares in the open
market. The broker remits to the Company the proceeds from the sale of these
shares, and the optionee receives the remaining options shares. If
exercise/pledge directions are given, the option shares are issued directly to a
securities broker or other lender. The broker or other lender will hold the
shares as security and will extend credit for up to 50 percent of their fair
market value. The loan proceeds will be paid to the Company to the extent
necessary to pay the exercise price and any withholding taxes. Any excess loan
proceeds may be paid to the optionee. If the loan proceeds are insufficient to
cover the exercise price and withholding taxes, the optionee will be required to
pay the deficiency to the Company at the time of exercise. The Committee may
also permit optionees to satisfy their withholding tax obligation upon exercise
of a NSO by surrendering a portion of their option shares to the Company.
Change in Control. For purposes of the 1991 Plan, the term
"Change in Control" means (i) any change in control which would have to be
disclosed in the Company's next proxy statement under the rules of the SEC, (ii)
a change in the composition of the Board of Directors as a result of which fewer
than two-thirds of the incumbent directors are directors who either had been
directors of the Company 24 months prior to such change or were elected or
nominated for election to the Board with the approval of at least a majority of
the directors who had been directors of the Company 24 months prior to such
change and who were still in office at the time of the election or nomination,
or (iii) that any person who by the acquisition or aggregation of securities is
or becomes the beneficial owner, directly or indirectly, of at least 20 percent
of the total voting power of the Company's outstanding securities, except that
any change in relative beneficial ownership by reason of a repurchase by the
Company of its securities will
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be disregarded, as will any increase in the beneficial ownership of the
Company's securities by entities whose investments are managed on a
discretionary basis by RCBA, Inc. resulting from a payment in the Company's
securities of interest in lieu of cash on debt obligations of the Company
outstanding as of January 15, 1991.
Amendment and Termination. The 1991 Plan, as amended, will
remain in effect until it is discontinued by the Board of Directors, except that
ISOs may be granted under the 1991 Plan only until December 16, 2006. The Board
of Directors may amend or terminate the 1991 Plan at any time and for any
reason, subject to the approval of the Company's stockholders only to the extent
required by applicable laws, regulations or rules. The Committee is authorized,
within the provisions of the 1991 Plan, to amend the terms of outstanding
restricted shares, to modify or extend outstanding options or to exchange new
options for outstanding options, including outstanding options with a higher
price than the new options.
Federal Income Tax Information.
Incentive Stock Options. Incentive stock options under the
1991 Plan are intended to be eligible for the favorable federal income tax
treatment accorded "incentive stock options" under the Code.
There generally are no federal income tax consequences to the
optionee or the Company by reason of the grant or exercise of an incentive stock
option. However, the exercise of an incentive stock option may result in the
imposition of or an increase in liability of the optionee for alternative
minimum tax liability.
If an optionee holds stock acquired through exercise of an
incentive stock option for at least two years from the date on which the option
is granted and at least one year from the date on which the shares are
transferred to the optionee upon exercise of the option, any gain or loss on a
disposition of such stock will be a long-term capital gain or loss. Generally,
if the optionee disposes of the stock before the expiration of either of these
holding periods (a "disqualifying disposition"), at the time of disposition, the
optionee will recognize taxable ordinary income equal to the lesser of (i) the
excess of the stock's fair market value on the date of exercise over the
exercise price, or (ii) the optionee's actual gain, if any, on the purchase and
sale. The optionee's additional gain, or any loss, upon the disqualifying
disposition will be a capital gain or loss, which will be long-term or
short-term depending on whether the stock was held for more than one year.
Long-term capital gains currently are generally subject to lower tax rates than
ordinary income. The maximum capital gains rate for federal income tax purposes
is currently 28% while the maximum ordinary income rate is effectively 39.6% at
the present time. Slightly different rules may apply to optionees who acquire
stock subject to certain repurchase options or who are subject to Section 16(b)
of the Exchange Act.
To the extent the optionee recognizes ordinary income by
reason of a disqualifying disposition, the Company will generally be entitled
(subject to the requirement of reasonableness, the provisions of Section 162(m)
of the Code and the satisfaction of a tax reporting obligation) to a
corresponding business expense deduction in the tax year in which the
disqualifying disposition occurs.
Nonstatutory Stock Options. Nonstatutory stock options granted
under the 1991 Plan generally have the following federal income tax
consequences:
There are no tax consequences to the optionee or the Company
by reason of the grant of a nonstatutory stock option. Upon exercise of a
nonstatutory stock option, the optionee normally will
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recognize taxable ordinary income equal to the excess of the stock's fair market
value on the date of exercise over the option exercise price. Generally, with
respect to employees, the Company is required to withhold from regular wages or
supplemental wage payments an amount based on the ordinary income recognized.
Subject to the requirement of reasonableness, the provisions of Section 162(m)
of the Code and the satisfaction of a tax reporting obligation, the Company will
generally be entitled to a business expense deduction equal to the taxable
ordinary income realized by the optionee. Upon disposition of the stock, the
optionee will recognize a capital gain or loss equal to the difference between
the selling price and the sum of the amount paid for such stock plus any amount
recognized as ordinary income upon exercise of the option. Such gain or loss
will be long or short-term depending on whether the stock was held for more than
one year. Slightly different rules may apply to optionees who are subject to
Section 16(b) of the Exchange Act.
Restricted Stock. Restricted stock granted under the 1991 Plan
generally has the following federal income tax consequences:
Upon acquisition of stock under a restricted stock award, the
recipient normally will recognizable taxable ordinary income equal to the excess
of the stock's fair market value over the purchase price, if any. However, to
the extent the stock is subject to certain types of vesting restrictions, the
taxable event will be delayed until the vesting restrictions lapse unless the
recipient elects to be taxed on receipt of the stock. Generally, with respect to
employees, the Company is required to withhold from regular wages or
supplemental wage payments an amount based on the ordinary income recognized.
Subject to the requirement of reasonableness, the provisions of Section 162(m)
of the Code and the satisfaction of a tax reporting obligation, the Company will
generally be entitled to a business expense deduction equal to the taxable
ordinary income realized by the recipient. Upon disposition of the stock, the
recipient will recognize a capital gain or loss equal to the difference between
the selling price and the sum of the amount paid for such stock, if any, plus
any amount recognized as ordinary income upon acquisition (or vesting) of the
stock. Such gain or loss will be long or short-term depending on whether the
stock was held for more than one year from the date ordinary income is measured.
Slightly different rules may apply to persons who are subject to Section 16(b)
of the Exchange Act.
Potential Limitation on Company Deductions. Section 162(m) of
the Code denies a deduction to any publicly held corporation for compensation
paid to certain employees in a taxable year to the extent that compensation
exceeds $1,000,000 for a covered employee. It is possible that compensation
attributable to awards under the 1991 Plan, when combined with all other types
of compensation received by a covered employee from the Company, may cause this
limitation to be exceeded in any particular year. Compensation attributable to
stock options is intended to qualify as "performance-based compensation," which
is disregarded for purposes of the deduction limitation. Stock options are
expected to remain the primary long-term incentive used for executives and key
managers.
Required Vote
Approval of the amended and restated 1991 Plan requires the
affirmative vote of the majority of shares present in person or represented by
proxy and voting at the meeting. If the amended
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and restated 1991 Plan is not approved by the stockholders, the 1991 Plan will
revert to the provisions in effect prior to December 17, 1996.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDED
AND RESTATED 1991 STOCK INCENTIVE PLAN.
APPROVAL OF THE URS CORPORATION
1997 NON-EXECUTIVE DIRECTORS STOCK GRANT PLAN
General
At the request of the Board of Directors, the Board Affairs
Committee, with the assistance of the Company's outside compensation
consultants, recently reviewed its non-employee Director compensation levels in
comparison to those maintained by comparable companies from which the Company
draws non-employee Directors. Based upon such review, the Board Affairs
Committee concluded that the Company's stock-based compensation to its
non-employee Directors was below levels maintained by such companies by
approximately $16,000. Therefore, on December 17, 1996, the Board of Directors
approved the 1997 Non-Executive Directors Stock Equity Plan (the "Equity Plan"),
subject to the approval of the Company's stockholders. The purpose of the Equity
Plan is to identify the pecuniary interests of non-employee Directors with those
of stockholders by awarding stock-based compensation to such Directors and to
bring the Company's non-employee Director remuneration more in line with
competitive levels.
Principal Features of the Equity Plan
The text of the Equity Plan is set forth in Appendix C to this
Proxy Statement. The following summary of the principal features of the Equity
Plan does not purport to be complete. It is subject to, and qualified in its
entirety by, Appendix C.
Administration. The Equity Plan is administered by the Board
of Directors.
Awards. After each annual meeting of stockholders (commencing
with the 1997 Annual Meeting of Stockholders if the Equity Plan is approved by
the Company's stockholders), each non-employee Director who continues to serve
as a Director effective upon and following such annual meeting of stockholders
will receive a stock grant equal to that number of shares of Common Stock
determined by dividing $15,000 by the closing price of the Common Stock on the
date of such annual meeting of stockholders, rounded down to the nearest whole
share. Common Stock awarded under any such stock grant will be fully vested as
of the date of grant, will be registered with the SEC and listed on the New York
Stock Exchange and the Pacific Stock Exchange and will be immediately
marketable. The Company has reserved 55,000 shares of stock for issuance under
the Equity Plan, which is expected to cover anticipated issues to the
non-employee Directors for at least the next three years, absent unusual
circumstances. If the Equity Plan and the amended and restated 1991 Plan are
approved by the Company's stockholders, the Equity Plan would become the sole
stock-based component of the non-employee Director compensation package.
Adjustments Upon Changes In Stock. If any change is made in
the Common Stock subject to the Equity Plan without the receipt of consideration
by the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other
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than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Equity Plan will be appropriately
adjusted as to the number of shares subject to the Equity Plan and the number of
shares subject to each stock grant. Such adjustments will be made by the Board
of Directors, the determination of which will be final, binding and conclusive.
Amendment, Suspension or Termination Of The Plan. The Board of
Directors may amend, suspend or terminate the Equity Plan at any time, subject
to the approval of amendments by stockholders if necessary under Section 16(b)
of the Exchange Act or applicable exchange listing requirements.
New Plan Benefits. The following table sets forth information
regarding the stock awards to be granted under the Equity Plan immediately
following the 1997 Annual Meeting of Stockholders to the persons named therein:
Name and Position Dollar Value Number of Shares
Non-Employee Director Group $135,000 13,171(1)
------------------
(1) This figure is an estimate only based upon the
closing price of the Company's Common Stock on a
recent date ($10.25 on January 31, 1997); the actual
measurement will be the closing price of the Common
Stock on the date of the 1997 Annual Meeting of
Stockholders.
Required Vote
Approval of the Equity Plan requires the affirmative vote of
the majority of shares present in person or represented by proxy and voting at
the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1997
NON-EXECUTIVE DIRECTORS STOCK GRANT PLAN.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected Coopers & Lybrand to serve
as the Company's independent auditors for the 1997 fiscal year. Coopers &
Lybrand have served as the Company's independent auditors since June 1988. The
Board of Directors is submitting its selection of that firm to the stockholders
for ratification in order to ascertain the stockholders' views. Such
ratification will require the affirmative vote of the majority of shares present
in person or represented by proxy and voting at the Meeting. If ratification is
not provided, the Board of Directors will reconsider its selection.
Representatives of Coopers & Lybrand are expected to be
present at the Annual Meeting of Stockholders, will have the opportunity to make
a statement if they desire to do so and are expected to be available to respond
to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF COOPERS & LYBRAND AS THE INDEPENDENT AUDITORS OF THE
COMPANY.
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COMPLIANCE WITH SECTION 16(a) OF SECURITIES EXCHANGE ACT
During fiscal year 1996, the following persons failed to file
on a timely basis reports required under Section 16(a) of the Exchange Act: BK
Capital Partners IV failed to timely file a Form 3 in connection with its
purchase of a warrant to purchase 461,195 shares of Common Stock.
PROPOSALS BY STOCKHOLDERS
Proposals by stockholders of the Company intended to be
presented at the next annual meeting of stockholders must be received by the
Company by October 16, 1997 in order to be considered for inclusion in the
Company's proxy statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors is not aware of any other business
which will come before the Annual Meeting of Stockholders. If any other business
is properly brought before the Annual Meeting of Stockholders, proxies will be
voted thereon in accordance with the judgment of the persons voting the proxies.
FOR THE BOARD OF DIRECTORS
/s/ Kent P. Ainsworth, Secretary
Kent P. Ainsworth, Secretary
San Francisco, California
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APPENDIX A
URS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
Adopted Effective July 1, 1997
Approved By Stockholders _____________, 1997
1. PURPOSE.
(a) The purpose of the Employee Stock Purchase Plan (the "Plan") is to
provide a means by which employees of URS Corporation, a Delaware corporation
(the "Company"), and its Affiliates, as defined in subparagraph 1(b), which are
designated as provided in subparagraph 2(b), may be given an opportunity to
purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of the
Company shall be granted and the provisions of each offering of such rights
(which need not be identical).
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(ii) To designate from time to time which Affiliates of the
Company shall be eligible to participate in the Plan.
(iii) To construe and interpret the Plan and rights granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of
the Company and its Affiliates and to carry out the intent that the Plan be
treated as an "employee stock purchase plan" within the meaning of Section 423
of the Code.
(c) The Board may delegate administration of the Plan to a Committee of
one or more members of the Board. If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, the
powers theretofore possessed by the Board, subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board. The Board may abolish the Committee at any time
and revest in the Board the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 12 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to rights granted
under the Plan shall not exceed in the aggregate five hundred fifty thousand
(550,000) shares (before giving effect to any stock split, stock dividend or the
like) of the Company's common stock (the "Common Stock"). If any right granted
under the Plan shall for any reason terminate without having been exercised, the
Common Stock not purchased under such right shall again become available for the
Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
4. GRANT OF RIGHTS; OFFERING.
The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the Plan to
eligible employees (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee. Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate, which shall comply with the requirements of Section 423(b)(5) of
the Code that all employees granted rights to purchase stock under the Plan
shall have the same rights and privileges. The terms and conditions of an
Offering shall be incorporated by reference into the Plan and treated as part of
the Plan. The provisions of separate Offerings need not be identical, but each
Offering shall include (through incorporation of the provisions of this Plan by
reference in the document comprising the Offering or otherwise) the period
during which the Offering shall be effective, which period shall not exceed
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twenty-seven (27) months beginning with the Offering Date, and the substance of
the provisions contained in paragraphs 5 through 8, inclusive.
5. ELIGIBILITY.
(a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than
two (2) years. In addition, unless otherwise determined by the Board or the
Committee and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights under the
Plan, unless, on the Offering Date, such employee's customary employment with
the Company or such Affiliate is for at least twenty (20) hours per week and at
least five (5) months per calendar year.
(b) The Board or the Committee may provide that, each person who,
during the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering which coincides with the day on which such person becomes an eligible
employee or occurs thereafter, receive a right under that Offering, which right
shall thereafter be deemed to be a part of that Offering. Such right shall have
the same characteristics as any rights originally granted under that Offering,
as described herein, except that:
(i) the date on which such right is granted shall be the
"Offering Date" of such right for all purposes, including determination of the
exercise price of such right;
(ii) the period of the Offering with respect to such right
shall begin on its Offering Date and end coincident with the end of such
Offering; and
(iii) the Board or the Committee may provide that if such
person first becomes an eligible employee within a specified period of time
before the end of the Offering, he or she will not receive any right under that
Offering.
(c) No employee shall be eligible for the grant of any rights under the
Plan if, immediately after any such rights are granted, such employee owns stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or of any Affiliate. For purposes of this
subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any employee, and stock which such employee
may purchase under all outstanding rights and options shall be treated as stock
owned by such employee.
(d) An eligible employee may be granted rights under the Plan only if
such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's
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rights to purchase stock of the Company or any Affiliate to accrue at a rate
which exceeds twenty-five thousand ($25,000) of fair market value of such stock
(determined at the time such rights are granted) for each calendar year in which
such rights are outstanding at any time.
(e) Officers of the Company and any designated Affiliate shall be
eligible to participate in Offerings under the Plan, provided, however, that the
Board may provide in an Offering that certain employees who are highly
compensated employees within the meaning of Section 423(b)(4)(D) of the Code
shall not be eligible to participate.
6. RIGHTS; PURCHASE PRICE.
(a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase up to the
number of shares of Common Stock of the Company purchasable with a percentage
designated by the Board or the Committee not exceeding ten percent (10%) of such
employee's Earnings (as defined by the Board or the Committee in each Offering)
during the period which begins on the Offering Date (or such later date as the
Board or the Committee determines for a particular Offering) and ends on the
date stated in the Offering, which date shall be no later than the end of the
Offering. The Board or the Committee shall establish one or more dates during an
Offering (the "Purchase Date(s)") on which rights granted under the Plan shall
be exercised and purchases of Common Stock carried out in accordance with such
Offering.
(b) In connection with each Offering made under the Plan, the Board or
the Committee may specify a maximum number of shares that may be purchased by
any employee as well as a maximum aggregate number of shares that may be
purchased by all eligible employees pursuant to such Offering. In addition, in
connection with each Offering that contains more than one Purchase Date, the
Board or the Committee may specify a maximum aggregate number of shares which
may be purchased by all eligible employees on any given Purchase Date under the
Offering. If the aggregate purchase of shares upon exercise of rights granted
under the Offering would exceed any such maximum aggregate number, the Board or
the Committee shall make a pro rata allocation of the shares available in as
nearly a uniform manner as shall be practicable and as it shall deem to be
equitable.
(c) The purchase price of stock acquired pursuant to rights granted
under the Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Purchase Date.
7. PARTICIPATION; WITHDRAWAL; TERMINATION.
(a) An eligible employee may become a participant in the Plan pursuant
to an Offering by delivering a participation agreement to the Company within the
time specified in the Offering, in such form as the Company provides. Each such
agreement shall authorize payroll
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deductions of up to the maximum percentage specified by the Board or the
Committee of such employee's Earnings during the Offering (as defined by the
Board or Committee in each Offering). The payroll deductions made for each
participant shall be credited to an account for such participant under the Plan
and shall be deposited with the general funds of the Company. A participant may
reduce (including to zero) or increase such payroll deductions, and an eligible
employee may begin such payroll deductions, after the beginning of any Offering
only as provided for in the Offering. A participant may make additional payments
into his or her account only if specifically provided for in the Offering and
only if the participant has not had the maximum amount withheld during the
Offering.
(b) At any time during an Offering, a participant may terminate his or
her payroll deductions under the Plan and withdraw from the Offering by
delivering to the Company a notice of withdrawal in such form as the Company
provides. Such withdrawal may be elected at any time prior to the end of the
Offering except as provided by the Board or the Committee in the Offering. Upon
such withdrawal from the Offering by a participant, the Company shall distribute
to such participant all of his or her accumulated payroll deductions (reduced to
the extent, if any, such deductions have been used to acquire stock for the
participant) under the Offering, without interest, and such participant's
interest in that Offering shall be automatically terminated. A participant's
withdrawal from an Offering will have no effect upon such participant's
eligibility to participate in any other Offerings under the Plan but such
participant will be required to deliver a new participation agreement in order
to participate in subsequent Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company and any designated Affiliate, for any reason, and the Company
shall distribute to such terminated employee all of his or her accumulated
payroll deductions (reduced to the extent, if any, such deductions have been
used to acquire stock for the terminated employee) under the Offering, without
interest.
(d) Rights granted under the Plan shall not be transferable by a
participant otherwise than by will or the laws of descent and distribution, or
by a beneficiary designation as provided in paragraph 14 and, otherwise during
his or her lifetime, shall be exercisable only by the person to whom such rights
are granted.
8. EXERCISE.
(a) On each Purchase Date specified therefor in the relevant Offering,
each participant's accumulated payroll deductions and other additional payments
specifically provided for in the Offering (without any increase for interest)
will be applied to the purchase of whole shares of stock of the Company, up to
the maximum number of shares permitted pursuant to the terms of the Plan and the
applicable Offering, at the purchase price specified in the Offering. No
fractional shares shall be issued upon the exercise of rights granted under the
Plan. The amount, if any, of accumulated payroll deductions remaining in each
participant's account after the purchase of shares which is less than the amount
required to purchase one share of stock on the final Purchase Date of an
Offering shall be held in each such participant's account for the purchase of
shares under the next Offering under the Plan, unless such participant withdraws
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from such next Offering, as provided in subparagraph 7(b), or is no longer
eligible to be granted rights under the Plan, as provided in paragraph 5, in
which case such amount shall be distributed to the participant after such final
Purchase Date, without interest. The amount, if any, of accumulated payroll
deductions remaining in any participant's account after the purchase of shares
which is equal to the amount required to purchase whole shares of stock on the
final Purchase Date of an Offering shall be distributed in full to the
participant after such Purchase Date, without interest.
(b) No rights granted under the Plan may be exercised to any extent
unless the shares to be issued upon such exercise under the Plan (including
rights granted thereunder) are covered by an effective registration statement
pursuant to the Securities Act of 1933, as amended (the "Securities Act") and
the Plan is in material compliance with all applicable state, foreign and other
securities and other laws applicable to the Plan. If on a Purchase Date in any
Offering hereunder the Plan is not so registered or in such compliance, no
rights granted under the Plan or any Offering shall be exercised on such
Purchase Date, and the Purchase Date shall be delayed until the Plan is subject
to such an effective registration statement and such compliance, except that the
Purchase Date shall not be delayed more than twelve (12) months and the Purchase
Date shall in no event be more than twenty-seven (27) months from the Offering
Date. If on the Purchase Date of any Offering hereunder, as delayed to the
maximum extent permissible, the Plan is not registered and in such compliance,
no rights granted under the Plan or any Offering shall be exercised and all
payroll deductions accumulated during the Offering (reduced to the extent, if
any, such deductions have been used to acquire stock) shall be distributed to
the participants, without interest.
(c) Shares of stock of the Company that are purchased may be registered
in the name of the participant or jointly in the name of the participant and his
or her spouse as joint tenants with right of survivorship or community property.
9. COVENANTS OF THE COMPANY.
(a) During the terms of the rights granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such rights.
(b) The Company shall seek to obtain from each federal, state, foreign
or other regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell shares of stock upon exercise of
the rights granted under the Plan. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such rights unless and until
such authority is obtained.
10. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.
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11. RIGHTS AS A STOCKHOLDER.
A participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until the participant's shareholdings acquired upon
exercise of rights under the Plan are recorded in the books of the Company.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or other transaction
not involving the receipt of consideration by the Company), the Plan and
outstanding rights will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan and the class(es) and number of shares and
price per share of stock subject to outstanding rights. Such adjustments shall
be made by the Board or the Committee, the determination of which shall be
final, binding and conclusive. (The conversion of any convertible securities of
the Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company.")
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) the acquisition by
any person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Company or any
Affiliate of the Company) of the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of
securities of the Company representing at least fifty percent (50%) of the
combined voting power entitled to vote in the election of directors, then, as
determined by the Board in its sole discretion (i) any surviving or acquiring
corporation may assume outstanding rights or substitute similar rights for those
under the Plan, (ii) such rights may continue in full force and effect, or (iii)
participants' accumulated payroll deductions may be used to purchase Common
Stock immediately prior to the transaction described above and the participants'
rights under the ongoing Offering terminated.
13. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) Increase the number of shares reserved for rights under
the Plan;
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(ii) Modify the provisions as to eligibility for participation
in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to obtain employee stock purchase plan
treatment under Section 423 of the Code or to comply with the
requirements of Rule 16b-3); or
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to obtain employee
stock purchase plan treatment under Section 423 of the Code or to
comply with the requirements of Rule 16b-3.
It is expressly contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide eligible employees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee stock purchase plans
and/or to bring the Plan and/or rights granted under it into compliance
therewith.
(b) Subject to paragraph 12, rights granted before amendment of the
Plan shall not be impaired by any amendment of the Plan, except with the consent
of the person to whom such rights were granted, or except as necessary to comply
with any laws or governmental regulations, or except as necessary to ensure that
the Plan and/or rights granted under the Plan comply with the requirements of
Section 423 of the Code.
14. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to the end of an
Offering but prior to delivery to the participant of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death during an Offering.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its sole discretion, may deliver such shares
and/or cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
15. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board in its discretion, may suspend or terminate the Plan at
any time. No rights may be granted under the Plan while the Plan is suspended or
after it is terminated.
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(b) Rights and obligations under any rights granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
as expressly provided in the Plan or with the consent of the person to whom such
rights were granted, or except as necessary to comply with any laws or
governmental regulation, or except as necessary to ensure that the Plan and/or
rights granted under the Plan comply with the requirements of Section 423 of the
Code.
16. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on the date specified by the Board, but
no rights granted under the Plan shall be exercised unless and until the Plan
has been approved by the stockholders of the Company within twelve (12) months
before or after the date the Plan is adopted by the Board or the Committee.
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APPENDIX B
URS CORPORATION
1991 STOCK INCENTIVE PLAN
(AMENDED AND RESTATED EFFECTIVE DECEMBER 17, 1996)
B-1
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TABLE OF CONTENTS
Page
ARTICLE 1. INTRODUCTION............................................ B-5
ARTICLE 2. ADMINISTRATION.......................................... B-5
2.1 The Committee........................................... B-5
2.2 Non-Employee Directors.................................. B-5
2.3 Committee Responsibilities.............................. B-5
ARTICLE 3. LIMITATION ON AWARDS.................................... B-6
ARTICLE 4. ELIGIBILITY............................................. B-6
4.1 General Rules........................................... B-6
4.2 Ten-Percent Stockholders................................ B-6
4.3 Attribution Rules....................................... B-6
4.4 Outstanding Stock....................................... B-6
ARTICLE 5. OPTIONS................................................. B-7
5.1 Stock Option Agreement.................................. B-7
5.2 Number of Shares........................................ B-7
5.3 Exercise Price.......................................... B-7
5.4 Exercisability and Term................................. B-7
5.5 Effect Of Change in Control............................. B-7
5.6 Modification, Extension and Assumption of Award......... B-8
ARTICLE 6. PAYMENT FOR OPTION SHARES............................... B-8
6.1 General Rule............................................ B-8
6.2 Surrender of Stock...................................... B-8
6.3 Exercise/Sale........................................... B-8
6.4 Exercise/Pledge......................................... B-8
6.5 Promissory Note......................................... B-9
6.6 Other Forms of Payment.................................. B-9
ARTICLE 7. RESTRICTED SHARES....................................... B-9
7.1 Time, Amount and Form of Awards......................... B-9
7.2 Payment for Awards...................................... B-9
7.3 Vesting Conditions...................................... B-9
ARTICLE 8. PROTECTION AGAINST DILUTION............................. B-9
8.1 General................................................. B-9
8.2 Reorganizations......................................... B-10
8.3 Reservation of Rights................................... B-10
B-2
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TABLE OF CONTENTS
(continued)
Page
ARTICLE 9. LIMITATION OF RIGHTS.................................... B-10
9.1 Retention Rights........................................ B-10
9.2 Stockholders' Rights.................................... B-10
9.3 Government Regulations.................................. B-10
ARTICLE 10. LIMITATION ON PAYMENTS.................................. B-11
10.1 Basic Rule.............................................. B-11
10.2 Reduction of Payments................................... B-11
10.3 Overpayments and Underpayments.......................... B-11
10.4 Related Corporations.................................... B-12
ARTICLE 11. WITHHOLDING TAXES....................................... B-12
11.1 General................................................. B-12
11.2 Share Withholding....................................... B-12
ARTICLE 12. ASSIGNMENT OR TRANSFER OF AWARD......................... B-13
ARTICLE 13. FUTURE OF THE PLAN...................................... B-13
13.1 Term of the Plan........................................ B-13
13.2 Amendment or Termination................................ B-13
13.3 Effect of Amendment or Termination...................... B-13
ARTICLE 14. DEFINITIONS............................................. B-14
14.1 "Award"................................................. B-14
14.2 "Board"................................................. B-14
14.3 "Change in Control"..................................... B-14
14.4 "Code".................................................. B-14
14.5 "Committee"............................................. B-14
14.6 "Common Share".......................................... B-15
14.7 "Company"............................................... B-15
14.8 "Exchange Act".......................................... B-15
14.9 "Exercise Price"........................................ B-15
14.10 "Fair Market Value"..................................... B-15
14.11 "ISO"................................................... B-15
14.12 "Key Employee".......................................... B-15
14.13 "NSO"................................................... B-15
14.14 "Option"................................................ B-15
14.15 "Optionee".............................................. B-15
14.16 "Outside Director"...................................... B-15
14.17 "Participant"........................................... B-15
14.18 "Plan".................................................. B-15
14.19 "Restricted Share"...................................... B-15
14.20 "Stock Award Agreement"................................. B-15
B-3
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TABLE OF CONTENTS
(continued)
Page
14.21 "Stock Option Agreement"................................ B-15
14.22 "Subsidiary"............................................ B-16
ARTICLE 15. EXECUTION............................................... B-16
B-4
<PAGE>
URS CORPORATION
1991 STOCK INCENTIVE PLAN
Amended and restated effective December 17, 1996
ARTICLE 1
INTRODUCTION
The Plan was amended and restated by the Board on December 17, 1996,
subject to approval by the Company's stockholders at the 1997 annual meeting of
stockholders. The purpose of the Plan is to promote the long-term success of the
Company and the creation of stockholder value by (a) encouraging Key Employees
to focus on critical long-range objectives, (b) encouraging the attraction and
retention of Key Employees with exceptional qualifications and (c) linking Key
Employees directly to stockholder interests through increased stock ownership.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Restricted Shares or Options, which may constitute incentive stock options or
nonstatutory stock options. The Plan shall be governed by, and construed in
accordance with, the laws of the State of California.
ARTICLE 2
ADMINISTRATION
2.1 The Committee. The Plan shall be administered by the
Compensation/Option Committee of the Board. Such Committee shall consist solely
of two or more non-employee directors of the Company, within the meaning of Rule
16b-3 under the Exchange Act, who shall be appointed by the Board (a
"Non-Employee Director"). The members of such Committee may also be "outside
directors" within the meaning of Section 162(m) of the Code, if the Board so
chooses.
2.2 Non-Employee Directors. A member of the Board shall be deemed to be
a Non- Employee Director only if he or she satisfies such requirements as the
Securities and Exchange Commission may establish for Non-Employee Directors
under Rule 16b-3 (or its successor) under the Exchange Act.
2.3 Committee Responsibilities. The Committee shall select the Key
Employees who are to receive Awards under the Plan, determine the number,
vesting requirements and other conditions of such Awards, interpret the Plan,
and make all other decisions relating to the operation of the Plan. The
Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be final
and binding on all persons.
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ARTICLE 3
LIMITATION ON AWARDS
Any Common Shares issued pursuant to the Plan may be authorized but
unissued shares or treasury shares. The aggregate number of Restricted Shares
and Options reserved for awards under the Plan is 2,250,000, plus the number of
Common Shares remaining available for awards under the Company's 1989 Stock
Option and Rights Plan and the Company's 1987 Restricted Stock Plan
(collectively, the "Prior Plans") at the time of the original adoption of this
Plan on January 15, 1991. If any Restricted Shares or Options are forfeited or
if any Options terminate for any other reason before being exercised, then such
Restricted Shares or Options shall again become available for Awards under the
Plan. If any options or restricted shares under the Prior Plans are forfeited or
if any options under the Prior Plans terminate for any other reason before being
exercised, then such options or restricted shares also shall become available
for additional Awards under this Plan. (No additional grants shall be made under
the Prior Plans after January 15, 1991.) In addition, no person shall be
eligible to be granted Options covering more than 400,000 Common Shares in any
fiscal year of the Company. The limitations of this Article 3 shall be subject
to adjustment pursuant to Article 8.
ARTICLE 4
ELIGIBILITY
4.1 General Rules. Only Key Employees (including, without limitation,
independent contractors who are not members of the Board) shall be eligible for
designation as Participants by the Committee. In addition, only Key Employees
who are common-law employees of the Company or a Subsidiary shall be eligible
for the grant of ISOs.
4.2 Ten-Percent Stockholders. A Key Employee who owns more than 10
percent of the total combined voting power of all classes of outstanding stock
of the Company or any of its Subsidiaries shall not be eligible for the grant of
an ISO unless (a) the Exercise Price under such ISO is at least 110 percent of
the Fair Market Value of a Common Share on the date of grant and (b) such ISO by
its terms is not exercisable after the expiration of five years from the date of
grant.
4.3 Attribution Rules. For purposes of Section 4.2, in determining
stock ownership, a Key Employee shall be deemed to own the stock owned, directly
or indirectly, by or for his or her brothers, sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its stockholders, partners or beneficiaries. Stock
with respect to which the Key Employee holds an option shall not be counted.
4.4 Outstanding Stock. For purposes of Section 4.2, "outstanding stock"
shall include all stock actually issued and outstanding immediately after the
grant of the ISO to the Key Employee. "Outstanding stock" shall not include
treasury shares or shares authorized for issuance under outstanding options held
by the Key Employee or by any other person.
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ARTICLE 5
OPTIONS
5.1 Stock Option Agreement. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Agreement. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical. If the
Optionee is a common law employee of the Company or a Subsidiary, the Committee
may designate all or any part of the Option as an ISO.
5.2 Number of Shares. Each Stock Option Agreement shall specify the
number of Shares subject to the Option and shall provide for the adjustment of
such number in accordance with Article 8. The Stock Option Agreement shall also
specify whether the Option is an ISO or an NSO.
5.3 Exercise Price. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price under an ISO shall not be less than 100
percent of the Fair Market Value of a Common Share on the date of grant, except
as otherwise provided in Section 4.2. The Exercise Price under an NSO shall not
be less than 50 percent of the Fair Market Value of a Common Share on the date
of grant. Subject to the preceding two sentences, the Exercise Price under any
Option shall be determined by the Committee. The Exercise Price shall be payable
in accordance with Article 6. Notwithstanding the foregoing, an Option may be
granted with an Exercise Price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.
5.4 Exercisability and Term. Each Stock Option Agreement shall specify
the date when all or any installment of the Option is to become exercisable, and
such date may be made dependent upon the achievement of specified performance
goals. The Stock Option Agreement shall also specify the term of the Option. The
term of an ISO shall in no event exceed 10 years from the date of grant, and
Section 4.2 may require a shorter term. Subject to the preceding sentence, the
Committee shall determine when all or any part of an Option is to become
exercisable and when such Option is to expire. A Stock Option Agreement may
provide for accelerated exercisability in the event of the Optionee's death,
disability, retirement or attainment of performance goals, and may provide for
expiration prior to the end of its term in the event of the termination of the
Optionee's service. NSOs may also be awarded in combination with Restricted
Shares, and such an Award may provide that the NSOs will not be exercisable
unless the related Restricted Shares are forfeited.
5.5 Effect Of Change in Control. The Committee (at its sole discretion)
may determine, at the time of granting an Option or thereafter, that such Option
shall become fully exercisable as to all Common Shares subject to such Option in
the event that a Change in Control occurs with respect to the Company. If the
Committee finds that there is a reasonable possibility that, within the
succeeding six months, a Change in Control will occur with respect
B-7
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to the Company, then the Committee may determine that all outstanding Options
shall become fully exercisable as to all Common Shares subject to such Options.
5.6 Modification, Extension and Assumption of Award. Within the
limitations of the Plan, the Committee may modify, extend or assume outstanding
options or may accept the cancelation of outstanding options (whether granted by
the Company or by another issuer) in return for the grant of new options for the
same or a different number of shares and at the same or a different exercise
price. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, impair his or her rights under such Option.
ARTICLE 6
PAYMENT FOR OPTION SHARES
6.1 General Rule. The entire Exercise Price of Common Shares issued
upon exercise of Awards shall be payable in cash or by check at the time when
such Common Shares are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment
shall be made only pursuant to the express provisions of the applicable Stock
Option Agreement. However, the Committee may specify in the Stock Option
Agreement that payment may be made pursuant to Section 6.2, 6.3, 6.4, 6.5 or
6.6.
(b) In the case of an NSO, the Committee may at any time
accept payment pursuant to Section 6.2, 6.3, 6.4, 6.5 or 6.6.
6.2 Surrender of Stock. To the extent that this Section 6.2 is
applicable, payment for all or any part of the Exercise Price may be made with
Common Shares which have already been owned by the Optionee for more than six
months and which are surrendered to the Company. Such Common Shares shall be
valued at their Fair Market Value on the date when the new Common Shares are
purchased under the Plan. In the event that the Common Shares being surrendered
are Restricted Shares that have not yet become vested, the same restrictions
shall be imposed upon the new Common Shares being purchased.
6.3 Exercise/Sale. To the extent that this Section 6.3 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Common Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
6.4 Exercise/Pledge. To the extent that this Section 6.4 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Common Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or part of
the loan proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
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6.5 Promissory Note. To the extent that this Section 6.5 is applicable,
payment for all or any part of the Exercise Price may be made with a
full-recourse promissory note; provided that (a) the par value of the Common
Shares must be paid in lawful money of the United States of America at the time
when such Common Shares are purchased, (b) the Common Shares are security for
payment of the principal amount of the promissory note and interest thereon and
(c) the interest rate payable under the terms of the promissory note shall not
be less than the minimum rate (if any) required to avoid the imputation of
additional interest under the Code. Subject to the foregoing, the Committee (at
its sole discretion) shall specify the term, interest rate, amortization
requirements (if any) and other provisions of such note.
6.6 Other Forms of Payment. To the extent that this Section 6.6 is
applicable, payment may be made in any other form approved by the Committee,
consistent with applicable laws, regulations and rules.
ARTICLE 7
RESTRICTED SHARES
7.1 Time, Amount and Form of Awards. The Committee may grant Restricted
Shares in an amount determined by the Committee. Restricted Shares may be
awarded in combination with NSOs, and such an Award may provide that the
Restricted Shares will be forfeited in the event that the related NSOs are
exercised.
7.2 Payment for Awards. The recipient of an Award of Restricted Shares,
as a condition to the grant of such Award, shall be required to pay the Company
in cash an amount equal to the par value of such Restricted Shares, which
payment may be in the form of services rendered.
7.3 Vesting Conditions. Each Award of Restricted Shares shall become
vested, in full or in installments, upon satisfaction of the conditions
specified in the Stock Award Agreement. The Committee shall select the vesting
conditions, which may be based upon the Participant's service, the Participant's
performance, the Company's performance or such other criteria as the Committee
may adopt. A Stock Award Agreement may also provide for accelerated vesting in
the event of the Participant's death, disability, retirement or attainment of
performance goals. The Committee (at its sole discretion) may determine, at the
time of making an Award or thereafter, that such Award shall become fully vested
in the event that a Change in Control occurs with respect to the Company.
ARTICLE 8
PROTECTION AGAINST DILUTION
8.1 General. In the event of a subdivision of the outstanding Common
Shares, a declaration of a dividend payable in Common Shares, a declaration of a
dividend payable in a form other than Common Shares in an amount that has a
material effect on the price of Common
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Shares, a combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise) into a lesser number of Common Shares, a
recapitalization, a spinoff or a similar occurrence, the Committee shall make
appropriate adjustments in one or more of (a) the number of Options and
Restricted Shares available for future Awards under Article 3, (b) the number of
Common Shares covered by each outstanding Option or Restricted Shares Award or
(c) the Exercise Price under each outstanding Option or purchase price of each
Restricted Shares Award.
8.2 Reorganizations. In the event that the Company is a party to a
merger or other reorganization, outstanding Options and Restricted Shares shall
be subject to the agreement of merger or reorganization. Such agreement may
provide, without limitation, for the assumption of outstanding Awards by the
surviving corporation or its parent, for their continuation by the Company (if
the Company is a surviving corporation), for accelerated vesting or for
settlement in cash.
8.3 Reservation of Rights. Except as provided in this Article 8, a
Participant shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class. Any issue by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of Common
Shares subject to an Option. The grant of an Award pursuant to the Plan shall
not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
ARTICLE 9
LIMITATION OF RIGHTS
9.1 Retention Rights. Neither the Plan nor any Option granted under the
Plan shall be deemed to give any individual a right to remain an employee,
consultant or director of the Company or a Subsidiary. The Company and its
Subsidiaries reserve the right to terminate the service of any employee,
consultant or director at any time, with or without cause, subject to applicable
laws, the Company's certificate of incorporation and by-laws and a written
employment agreement (if any).
9.2 Stockholders' Rights. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the issuance of a stock certificate for
such Common Shares. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date when such certificate is
issued, except as expressly provided in Article 8.
9.3 Government Regulations. Any other provision of the Plan
notwithstanding, the obligations of the Company with respect to Common Shares to
be issued pursuant to the Plan shall be subject to all applicable laws, rules
and regulations and such approvals by any
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governmental agencies as may be required. The Company reserves the right to
restrict, in whole or in part, the delivery of Common Shares pursuant to any
Award until such time as any legal requirements or regulations have been met
relating to the issuance of such Common Shares or to their registration,
qualification or exemption from registration or qualification under the
Securities Act of 1933, as amended, or any applicable state securities laws.
ARTICLE 10
LIMITATION ON PAYMENTS
10.1 Basic Rule. Any provision of the Plan to the contrary
notwithstanding, in the event that the independent auditors most recently
selected by the Board (the "Auditors") determine that any payment or transfer by
the Company to or for the benefit of a Key Employee, whether paid or payable (or
transferred or transferable) pursuant to the terms of this Plan or otherwise (a
"Payment"), would be nondeductible by the Company for federal income tax
purposes because of the provisions concerning "excess parachute payments" in
section 280G of the Code, then the aggregate present value of all Payments shall
be reduced (but not below zero) to the Reduced Amount; provided that the
Committee, at the time of making an Award under this Plan or at any time
thereafter, may specify in writing that such Award shall not be so reduced and
shall not be subject to this Article 10. For purposes of this Article 10, the
"Reduced Amount" shall be the amount, expressed as a present value, which
maximizes the aggregate present value of the Payments without causing any
Payment to be nondeductible by the Company because of section 280G of the Code.
10.2 Reduction of Payments. If the Auditors determine that any Payment
would be nondeductible by the Company because of section 280G of the Code, then
the Company shall promptly give the Key Employee notice to that effect and a
copy of the detailed calculation thereof and of the Reduced Amount, and the Key
Employee may then elect, in his or her sole discretion, which and how much of
the Payments shall be eliminated or reduced (as long as after such election the
aggregate present value of the Payments equals the Reduced Amount) and shall
advise the Company in writing of his or her election within 10 days of receipt
of notice. If no such election is made by the Key Employee within such 10-day
period, then the Company may elect which and how much of the Payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the Payments equals the Reduced Amount) and shall notify the Key
Employee promptly of such election. For purposes of this Article 10, present
value shall be determined in accordance with section 280G(d)(4) of the Code. All
determinations made by the Auditors under this Article 10 shall be binding upon
the Company and the Key Employee and shall be made within 60 days of the date
when a payment becomes payable or transferable. As promptly as practicable
following such determination and the elections hereunder, the Company shall pay
or transfer to or for the benefit of the Key Employee such amounts as are then
due to him or her under the Plan and shall promptly pay or transfer to or for
the benefit of the Key Employee in the future such amounts as become due to him
or her under the Plan.
10.3 Overpayments and Underpayments. As a result of uncertainty in the
application of section 280G of the Code at the time of an initial determination
by the Auditors hereunder,
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it is possible that Payments will have been made by the Company which should not
have been made (an "Overpayment") or that additional Payments which will not
have been made by the Company could have been made (an "Underpayment"),
consistent in each case with the calculation of the Reduced Amount hereunder. In
the event that the Auditors, based upon the assertion of a deficiency by the
Internal Revenue Service against the Company or the Key Employee which the
Auditors believe has a high probability of success, determine that an
Overpayment has been made, such Overpayment shall be treated for all purposes as
a loan to the Key Employee which he or she shall repay to the Company, together
with interest at the applicable federal rate provided in section 7872(f)(2) of
the Code; provided, however, that no amount shall be payable by the Key Employee
to the Company if and to the extent that such payment would not reduce the
amount which is subject to taxation under section 4999 of the Code. In the event
that the Auditors determine that an Underpayment has occurred, such Underpayment
shall promptly be paid or transferred by the Company to or for the benefit of
the Key Employee, together with interest at the applicable federal rate provided
in section 7872(f)(2) of the Code.
10.4 Related Corporations. For purposes of this Article 10, the term
"Company" shall include affiliated corporations to the extent determined by the
Auditors in accordance with section 280G(d)(5) of the Code.
ARTICLE 11
WITHHOLDING TAXES
11.1 General. To the extent required by applicable federal, state,
local or foreign law, the recipient of any payment or distribution under the
Plan shall make arrangements satisfactory to the Company for the satisfaction of
any withholding tax obligations that arise by reason of the receipt or vesting
of such payment or distribution. The Company shall not be required to issue any
Common Shares or make any cash payment under the Plan until such obligations are
satisfied.
11.2 Share Withholding. The Committee may permit the recipient of any
payment or distribution under the Plan to satisfy all or part of his or her
withholding tax obligations by having the Company withhold a portion of any
Common Shares that otherwise would be issued to him or her or by surrendering a
portion of any Common Shares that previously were issued to him or her. Such
Common Shares shall be valued at their Fair Market Value on the date when taxes
otherwise would be withheld in cash. The payment of withholding taxes by
assigning Common Shares to the Company, if permitted by the Committee, shall be
subject to such restrictions as the Committee may impose, including any
restrictions required by rules of the Securities and Exchange Commission.
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ARTICLE 12
ASSIGNMENT OR TRANSFER OF AWARD
Except as provided in Article 11 and as set forth below, any Award
granted under the Plan shall not be anticipated, assigned, attached, garnished,
optioned, transferred or made subject to any creditor's process, whether
voluntarily, involuntarily or by operation of law. Any act in violation of this
Article 12 shall be void.
This Article 12 shall not preclude a Participant from:
(a) designating a beneficiary who will receive any
undistributed Awards in the event of the Participant's death, nor shall it
preclude a transfer by will or by the laws of descent and distribution;
(b) transferring an NSO upon such terms and conditions as are
set forth in the Stock Option Agreement for such NSO, as the Board or the
Committee shall determine in its discretion; or
(c) transferring or assigning Restricted Shares to (i) the
trustee of a trust that is revocable by such Participant alone, both at the time
of the transfer or assignment and at all times thereafter prior to such
Participant's death, or (ii) the trustee of any other trust to the extent
approved in advance by the Committee in writing. A transfer or assignment of
Restricted Shares from such trustee to any person other than such Participant
shall be permitted only to the extent approved in advance by the Committee in
writing, and Restricted Shares held by such trustee shall be subject to all of
the conditions and restrictions set forth in the Plan and in the applicable
Stock Award Agreement, as if such trustee were a party to such Agreement.
ARTICLE 13
FUTURE OF THE PLAN
13.1 Term of the Plan. The amended and restated Plan, as set forth
herein, shall become effective on December 17, 1996, subject to the approval of
the Company's stockholders. In the event that the stockholders fail to approve
the amendments to the Plan at the 1997 annual meeting or any adjournment
thereof, the Plan shall revert to the provisions in effect immediately before
December 17, 1996. The Plan shall remain in effect until it is terminated under
Section 13.2, except that no ISOs shall be granted after December 16, 2006.
13.2 Amendment or Termination. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules.
13.3 Effect of Amendment or Termination. No Awards shall be granted
under the Plan after the termination thereof. The termination of the Plan, or
any amendment thereof, shall not affect any Option previously granted under the
Plan.
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ARTICLE 14
DEFINITIONS
14.1 "Award" means any award of an Option or a Restricted Share under
the Plan.
14.2 "Board" means the Company's Board of Directors, as constituted
from time to time.
14.3 "Change in Control" means the occurrence of any of the following
events after the date of the adoption of this Plan:
(a) A change in control required to be reported pursuant to
Item 6(e) of Schedule 14A of Regulation 14A under the Exchange Act;
(b) A change in the composition of the Board, as a result of
which fewer than two-thirds of the incumbent directors are directors who either
(i) had been directors of the Company 24 months prior to such change or (ii)
were elected, or nominated for election, to the Board with the affirmative votes
of at least a majority of the directors who had been directors of the Company 24
months prior to such change and who were still in office at the time of the
election or nomination; or
(c) Any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) by the acquisition or aggregation of securities is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 20 percent or more of the combined voting power of the
Company's then outstanding securities ordinarily (and apart from rights accruing
under special circumstances) having the right to vote at elections of directors
(the "Base Capital Stock"); except that:
(i) Any change in the relative beneficial ownership
of the Company's securities by any person resulting solely from a reduction in
the aggregate number of outstanding shares of Base Capital Stock, and any
decrease thereafter in such person's ownership of securities, shall be
disregarded until such person increases in any manner, directly or indirectly,
such person's beneficial ownership of any securities of the Company; and
(ii) Any increase in the aggregate beneficial
ownership of the Company's securities by entities whose investments are managed
on a discretionary basis by Richard C. Blum & Associates, Inc., resulting from a
payment in the Company's securities of interest in lieu of cash on debt
obligations of the Company outstanding as of the date of adoption of this Plan,
shall be disregarded.
14.4 "Code" means the Internal Revenue Code of 1986, as amended.
14.5 "Committee" means the Compensation/Option Committee of the Board,
as described in Article 2.
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14.6 "Common Share" means one share of the common stock of the Company.
14.7 "Company" means URS Corporation, a Delaware corporation.
14.8 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
14.9 "Exercise Price" means the amount for which one Common Share may
be purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.
14.10 "Fair Market Value" shall mean the closing price of a Common
Share on the trading day immediately preceding the day in question.
14.11 "ISO" means an incentive stock option described in section 422(b)
of the Code.
14.12 "Key Employee" means (a) a key common-law employee of the Company
or of a Subsidiary, as determined by the Committee, (b) an Outside Director and
(c) a consultant who provides services to the Company or a Subsidiary as an
independent contractor. Service as an independent contractor shall be considered
employment for all purposes of the Plan.
14.13 "NSO" means an employee stock option not described in sections
422 and 423 of the Code.
14.14 "Option" means an ISO or NSO granted under the Plan and entitling
the holder to purchase Common Shares.
14.15 "Optionee" means a person who holds an Option.
14.16 "Outside Director" shall mean a member of the Board who is not a
common-law employee of the Company or of a Subsidiary.
14.17 "Participant" means a person who holds an Award.
14.18 "Plan" means this URS Corporation 1991 Stock Incentive Plan, as
amended from time to time.
14.19 "Restricted Share" means a Common Share awarded to a Participant
under the Plan.
14.20 "Stock Award Agreement" means the agreement between the Company
and the recipient of a Restricted Share which contains the terms, conditions and
restrictions pertaining to such Restricted Share.
14.21 "Stock Option Agreement" means the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.
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14.22 "Subsidiary" means any corporation, if the Company and/or one or
more other Subsidiaries own not less than 50 percent of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.
ARTICLE 15
EXECUTION
To record the amendment and restatement of the Plan by the Board, the
Company has caused its duly authorized officer to affix the corporate name and
seal hereto.
URS CORPORATION
By___________________________
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<PAGE>
APPENDIX C
URS CORPORATION
Non-Executive Directors Stock Grant Plan
Adopted December 17, 1996
Approved By Stockholders _______________, 1997
1. PURPOSES.
The purpose of the Plan is to compensate Non-Executive Directors in the
form of grants of Common Stock.
2. DEFINITIONS.
(a) "Annual Meeting" means the annual meeting of the Company's
stockholders.
(b) "Board" means the Board of Directors of the Company.
(c) "Company" means URS Corporation, a Delaware corporation.
(d) "Common Stock" means the common stock of the Company.
(e) "Employee" means any person, including any officer or
director, who is a common law employee of the Company, but
shall not mean a person who performs services for the Company
as a consultant.
(f) "Non-Executive Director" means a member of the Board who is
not an Employee.
(g) "Plan" means this URS Corporation Non-Executive Directors
Stock Grant Plan.
(h) "Stock Grant" means any grant of Common Stock under the Plan.
3. ADMINISTRATION.
The Plan shall be administered by the Board.
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4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 6 below relating to
adjustments upon changes in the Common Stock, the Common Stock that may be
issued pursuant to Stock Grants shall not exceed in the aggregate Fifty-Five
Thousand (55,000) shares of Common Stock.
(b) The Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
5. STOCK GRANTS.
(a) After each Annual Meeting, each Non-Executive Director who
continues to serve as a Director effective upon and following such Annual
Meeting shall receive a Stock Grant equal to that number of shares of Common
Stock determined by dividing Fifteen Thousand Dollars and No Cents ($15,000.00)
by the closing price of the Common Stock on the date of such Annual Meeting,
rounded down to the nearest whole share.
(b) Common Stock awarded under any Stock Grant shall be fully vested as
of the date of such Stock Grant. The Company shall direct its transfer agent to
deliver a certificate representing such Common Stock (or electronically transfer
such Common Stock) to each Non- Executive Director promptly following such
Annual Meeting.
6. ADJUSTMENTS UPON CHANGES IN STOCK.
If any change is made in the Common Stock subject to the Plan without
the receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or other transaction
not involving the receipt of consideration by the Company), the Plan will be
appropriately adjusted as to the number of shares subject to the Plan and the
number of shares subject to each Stock Grant. Such adjustments shall be made by
the Board, the determination of which shall be final, binding and conclusive.
(The conversion of any convertible securities of the Company shall not be
treated as a "transaction not involving the receipt of consideration by the
Company".)
7. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 6 above relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary for
the Plan to satisfy the requirements of Rule 16b-3 under the Securities Exchange
Act of 1933, as amended, or any securities exchange listing requirements.
(b) The Board may, in its sole discretion, submit any other amendment
to the Plan for stockholder approval.
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8. TERMINATION OR SUSPENSION OF THE PLAN.
The Board may suspend or terminate the Plan at any time.
9. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on the date the Plan is adopted by the
Board and approved by the stockholders of the Company.
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URS CORPORATION
Proxy Solicited by Board of Directors for Annual Meeting of March 25, 1997
Kent P. Ainsworth and Carol Brummerstedt, or either of them, each with
the power of substitution, are hereby authorized to represent and vote, as
designated below, the shares of the undersigned at the annual meeting of
stockholders of URS Corporation to be held on March 25, 1997, or at any
adjournment of the annual meeting.
The Board of Directors recommends a vote FOR the election of directors and FOR
Items 2 through 5.
1. Election of Directors:
[ ] FOR all nominees listed below (except as marked to the
contrary below):
[ ] WITHHOLD AUTHORITY to vote for nominees listed below:
<TABLE>
(Instruction: To withhold authority for any individual nominee, strike
a line through the nominee's name in the list below)
<CAPTION>
<S> <C> <C>
Richard C. Blum Emmet J. Cashin, Jr. Robert L. Costello
Armen Der Marderosian Admiral S. Robert Foley, Jr., USN, (Ret.) Robert D. Glynn, Jr.
Senator J. Bennett Johnston Martin M. Koffel Richard B. Madden
Richard Q. Praeger Irwin L. Rosenstein William D. Walsh
</TABLE>
(Continued, and to be signed, on reverse side)
1.
<PAGE>
2. Approval of the URS Corporation Employee Stock Purchase Plan,
as amended and restated:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approval of the URS Corporation 1991 Stock Incentive Plan, as
amended and restated:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Approval of the URS Corporation 1997 Non-Executive Directors
Stock Grant Plan:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Ratification of the selection of Coopers & Lybrand as the
Company's independent auditors for fiscal year 1997:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Upon any other matters which might come before the meeting.
Shares voted by this proxy will be voted as directed by the
stockholder. If no such directions are indicated, the proxies will have
authority to vote FOR the election of directors and FOR Items 2 through 5.
Dated ____________________, 1997
_____________________________________
Stockholder's Signature
_____________________________________
Stockholder's Signature
Please sign exactly as name appears on
this proxy. If signing for estates,
trusts, or corporations, title or
capacity should be stated. If shares are
held jointly, each holder should sign.
PLEASE MARK, DATE, SIGN AND RETURN
2.
