Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
WOODWARD-CLYDE GROUP, INC.,
URS CORPORATION,
AND
W-C ACQUISITION CORPORATION
August 18, 1997
5.
TABLE OF CONTENTS
Page
RECITALS ....................................................................................................... 1
AGREEMENT....................................................................................................... 2
ARTICLE 1 THE MERGER.................................................................................... 2
Section 1.1 Merger of Woodward-Clyde into the Subsidiary........................................ 2
Section 1.2 Effective Time of the Merger........................................................ 2
Section 1.3 Effects of the Merger............................................................... 2
Section 1.4 Tax Consequences.................................................................... 3
ARTICLE 2 EFFECT OF MERGER ON CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS.................................................................................. 4
Section 2.1 Conversion of the Woodward-Clyde Common and
Preferred Stock..................................................................... 4
Section 2.2 Dissenting Shares................................................................... 7
Section 2.3 Subsidiary Common Stock............................................................. 7
Section 2.4 Cancellation of Treasury Shares..................................................... 7
Section 2.5 Withholding Tax..................................................................... 7
ARTICLE 3 CLOSING....................................................................................... 8
Section 3.1 Closing; Closing Date............................................................... 8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF WOODWARD-CLYDE.............................................. 8
Section 4.1 Organization........................................................................ 8
Section 4.2 Capitalization...................................................................... 8
Section 4.3 Subsidiaries........................................................................ 9
Section 4.4 Material Investments................................................................ 9
Section 4.5 Authority Relative to this Agreement................................................ 10
Section 4.6 Consents and Approvals; No Violations............................................... 10
Section 4.7 Woodward-Clyde Reports and Financial Statements..................................... 11
Section 4.8 Information Supplied................................................................ 12
Section 4.9 Absence of Material Adverse and Other Changes....................................... 12
Section 4.10 Litigation.......................................................................... 13
Section 4.11 Absence of Undisclosed Liabilities.................................................. 13
Section 4.12 No Default.......................................................................... 13
Section 4.13 Properties, Liens, Etc.............................................................. 14
Section 4.14 Taxes............................................................................... 14
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TABLE OF CONTENTS
(continued)
Page
Section 4.15 Benefit Plans....................................................................... 15
Section 4.16 Employment Matters; Labor Relations................................................. 18
Section 4.17 Intellectual Property............................................................... 19
Section 4.18 Insurance........................................................................... 21
Section 4.19 Compliance with Applicable Law...................................................... 21
Section 4.20 Certain Contracts and Arrangements.................................................. 21
Section 4.21 Prohibited Payments................................................................. 22
Section 4.22 Bank Accounts; Receivables.......................................................... 22
Section 4.23 Related Party Transactions.......................................................... 23
Section 4.24 Powers of Attorney.................................................................. 23
Section 4.25 Environmental Matters............................................................... 23
Section 4.26 Regulatory Matters.................................................................. 24
Section 4.27 Immigration Reform and Control Act.................................................. 25
Section 4.28 Board Approvals; Opinion of Financial Advisor....................................... 25
Section 4.29 Brokers............................................................................. 25
Section 4.30 Disclosure.......................................................................... 25
Section 4.31 Reliance............................................................................ 25
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF URS......................................................... 25
Section 5.1 Organization........................................................................ 26
Section 5.2 Capitalization...................................................................... 26
Section 5.3 Authority Relative to this Agreement................................................ 26
Section 5.4 Consents and Approvals; No Violations............................................... 27
Section 5.5 URS SEC Reports and Financial Statements............................................ 27
Section 5.6 Absence of Material Adverse and Other Changes....................................... 28
Section 5.7 Litigation.......................................................................... 29
Section 5.8 Absence of Undisclosed Liabilities.................................................. 29
Section 5.9 No Default.......................................................................... 29
Section 5.10 Information Supplied. ............................................................. 29
Section 5.11 Board Approvals; Opinion of Financial Advisor....................................... 30
Section 5.12 Brokers............................................................................. 30
Section 5.13 Disclosure.......................................................................... 30
Section 5.14 Financing Commitment Letter......................................................... 30
ARTICLE 6 PRE-CLOSING COVENANTS......................................................................... 31
Section 6.1 Covenants of All Parties............................................................ 31
6.1.1 Advice of Changes................................................................... 31
ii.
TABLE OF CONTENTS
(continued)
Page
6.1.2 Regulatory Approvals................................................................ 31
6.1.3 Confidentiality..................................................................... 31
6.1.4 Best Efforts........................................................................ 31
6.1.5 Financing Arrangements.............................................................. 32
6.1.6 Tax Matters......................................................................... 32
Section 6.2 Covenants of Woodward-Clyde......................................................... 32
6.2.1 Conduct of Business Pending Merger.................................................. 32
6.2.2 Stockholders' Meeting; Proxy Statement.............................................. 34
6.2.3 Acquisition Proposals............................................................... 35
6.2.4 Maintenance of Business............................................................. 36
6.2.5 Access.............................................................................. 36
6.2.6 Liability Insurance................................................................. 36
6.2.7 Affiliate Agreements................................................................ 36
6.2.8 Comfort Letter...................................................................... 36
6.2.9 FIRPTA Matters...................................................................... 37
6.2.10 Employment and Noncompetition Agreements............................................ 37
Section 6.3 Covenants of URS.................................................................... 37
6.3.1 Stockholders' Meeting; Proxy Statement.............................................. 37
6.3.2 Registration Statement.............................................................. 37
6.3.3 Listing Agreement................................................................... 37
6.3.4 Conduct of Business; Consultation................................................... 37
6.3.5 Access.............................................................................. 38
ARTICLE 7 CONDITIONS TO CONSUMMATION OF THE MERGER...................................................... 38
Section 7.1 Conditions to Obligations of Woodward-Clyde......................................... 38
7.1.1 Representations and Warranties True at Closing...................................... 38
7.1.2 Covenants Performed................................................................. 38
7.1.3 Certificate......................................................................... 38
7.1.4 Stockholder Approvals............................................................... 38
7.1.5 Opinion of Counsel.................................................................. 39
7.1.6 Tax Opinion......................................................................... 39
7.1.7 Listing............................................................................. 40
7.1.8 Form S-4............................................................................ 40
7.1.9 Merger Documents. ................................................................. 40
7.1.10 Material Adverse Changes............................................................ 40
7.1.11 HSR Filing.......................................................................... 40
iii.
TABLE OF CONTENTS
(continued)
Page
Section 7.2 Conditions to Obligations of URS and the Subsidiary................................. 40
7.2.1 Representations and Warranties True at Closing...................................... 40
7.2.2 Covenants Performed................................................................. 40
7.2.3 Certificate......................................................................... 40
7.2.4 Stockholder Approvals............................................................... 40
7.2.5 Opinion of Counsel.................................................................. 40
7.2.6 Government Contracts Opinion........................................................ 41
7.2.7 Tax Opinion......................................................................... 41
7.2.8 Listing............................................................................. 41
7.2.9 Agreements.......................................................................... 42
7.2.10 Form S-4............................................................................ 42
7.2.11 Merger Documents.................................................................... 42
7.2.12 Material Adverse Changes............................................................ 42
7.2.13 HSR Filing.......................................................................... 42
7.2.14 Consents. ......................................................................... 42
7.2.15 No Litigation....................................................................... 42
7.2.16 Financing Arrangements.............................................................. 42
ARTICLE 8 ADDITIONAL AGREEMENTS......................................................................... 42
Section 8.1 Public Announcements................................................................ 42
Section 8.2 Confidentiality..................................................................... 43
Section 8.3 Additional Agreements............................................................... 43
Section 8.4 Non-Liability of Agents and Stockholders............................................ 43
Section 8.5 Woodward-Clyde Capital Accumulation (Retirement) Plan............................... 43
Section 8.6 Woodward-Clyde Annual Bonus Plan.................................................... 43
8.6.1 Bonus Pool.......................................................................... 43
8.6.2 Bonus Pool Allocation............................................................... 44
Section 8.7 URS Board of Directors.............................................................. 44
ARTICLE 9 TERMINATION................................................................................... 45
Section 9.1 Termination......................................................................... 45
Section 9.2 Effect of Termination and Abandonment............................................... 46
Section 9.3 Amendment........................................................................... 46
Section 9.4 Extension; Waiver................................................................... 46
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TABLE OF CONTENTS
(continued)
Page
ARTICLE 10 MISCELLANEOUS................................................................................. 46
Section 10.1 Survival of Representations and Warranties.......................................... 46
Section 10.2 Entire Agreement; Modification; Waiver.............................................. 47
Section 10.3 Counterparts........................................................................ 47
Section 10.4 Assignment.......................................................................... 47
Section 10.5 Fees and Expenses................................................................... 47
Section 10.6 Notices............................................................................. 47
Section 10.7 Governing Law....................................................................... 48
Section 10.8 Further Action...................................................................... 48
Section 10.9 No Third Party Beneficiary.......................................................... 48
Section 10.10 Effect of Headings.................................................................. 48
Section 10.11 Severability........................................................................ 49
v.
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), is entered into as
of August 18, 1997, by and among WOODWARD-CLYDE GROUP, INC., a Delaware
corporation ("Woodward-Clyde"), URS CORPORATION, a Delaware corporation ("URS"),
and W-C ACQUISITION CORPORATION, a Delaware corporation (the "Subsidiary").
Woodward-Clyde is sometimes referred to herein as the "Surviving Corporation"
and Woodward-Clyde and the Subsidiary are sometimes collectively referred to
herein as the "Constituent Corporations."
RECITALS
A. Woodward-Clyde is a corporation duly organized and existing under
the laws of the State of Delaware, having as of the date hereof authorized
capital stock consisting of (i) 4,922,625 shares of common stock, par value
$0.01 per share (the "Woodward-Clyde Common Stock"), of which as of the date
hereof, 1,964,175 shares are issued and outstanding, no shares are issued and
held in treasury, and no shares are reserved for issuance, and (ii) 77,375
shares of preferred stock, par value $0.01 per share, of which as of the date
hereof 44,898 shares are issued and outstanding, 32,477 shares are issued and
held in treasury, and no shares are reserved for issuance (the "Woodward-Clyde
Preferred Stock" and, together with the Woodward-Clyde Common Stock, the
"Woodward-Clyde Stock").
B. URS is a corporation duly organized and existing under the laws of
the State of Delaware, having as of the date hereof authorized capital stock
consisting of (i) 20,000,000 shares of common stock, par value $0.01 per share
(the "URS Common Stock"), of which as of the date hereof, 10,561,263 are issued
and outstanding, 51,902 are issued and held in treasury, and 2,463,043 are
reserved for issuance, and (ii) 1,000,000 shares of preferred stock, par value
$1.00 per share, of which no shares are issued and outstanding.
C. The Subsidiary is a corporation duly organized and existing under
the laws of the State of Delaware, having as of the date hereof authorized
capital stock consisting of 100 shares of common stock, par value $1.00 per
share (the "Subsidiary Common Stock"), all of which have been issued to, and are
owned by, URS.
D. URS, Woodward-Clyde and the Subsidiary have determined that it is
advisable that Woodward-Clyde be merged with and into the Subsidiary on the
terms and conditions set forth herein and pursuant to the applicable statutes
and regulations (the "Merger").
E. The Merger is intended to qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as it
may be amended from time to time (the "Code").
F. The respective boards of directors of Woodward-Clyde, URS and the
Subsidiary have authorized and approved the execution, delivery and the
performance of this Agreement and the transactions contemplated hereby, and the
boards of directors of
1.
Woodward-Clyde and URS have directed that this Agreement be submitted to the
respective stockholders of Woodward-Clyde and URS for consideration of and vote
upon the approval of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, and subject to the terms and conditions hereof,
and intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
THE MERGER
Section 1.1 Merger of Woodward-Clyde into the Subsidiary. Upon the
terms and subject to the conditions set forth in this Agreement, and in
accordance with the Delaware General Corporation Law (the "Delaware Law"), at
the Effective Time of the Merger (as defined in Section 1.2 below),
Woodward-Clyde shall be merged with and into the Subsidiary, and the separate
existence of Woodward-Clyde shall thereupon cease, and the Subsidiary shall
continue its corporate existence as the surviving corporation of the Merger
under the laws of the State of Delaware under the name of Woodward-Clyde Group,
Inc. (the "Surviving Corporation"), and the Subsidiary shall succeed to and
assume all the rights and obligations of Woodward-Clyde in accordance with the
Delaware Law.
Section 1.2 Effective Time of the Merger. Subject to the provisions of
this Agreement, as soon as practicable after the Closing Date, the parties shall
file articles of merger, certificate of merger or other appropriate documents
(in any such case, the "Merger Documents"), executed in accordance with the
relevant provisions of the Delaware Law and shall make all other filings or
recordings required under the Delaware Law. The Merger shall become effective at
such time as the Merger Documents are duly filed with the Secretary of State of
the State of Delaware, or at such other time as the parties hereto shall agree
should be specified in the Merger Documents (the "Effective Time of the
Merger").
Section 1.3 Effects of the Merger. At the Effective Time of the Merger:
(a) the separate corporate existence of Woodward-Clyde shall
cease and Woodward-Clyde shall be merged with and into the Subsidiary, which
shall be the Surviving Corporation, and all of the assets of Woodward-Clyde
shall become the property of the
2.
Subsidiary as the Surviving Corporation of the Merger, subject to the
liabilities of Woodward-Clyde as of the Effective Time of the Merger;
(b) the Certificate of Incorporation of the Subsidiary, as in
effect immediately prior to the Effective Time of the Merger and as amended to
reflect the new corporate name of "Woodward-Clyde Group, Inc.", shall be the
Certificate of Incorporation of the Surviving Corporation, and may be amended
thereafter as provided by law;
(c) the Bylaws of the Subsidiary, as in effect immediately
prior to the Effective Time of the Merger, shall be the Bylaws of the Surviving
Corporation, and may be amended thereafter in accordance with their terms and as
provided by law;
(d) the directors of the Subsidiary immediately prior to the
Effective Time of the Merger shall be the directors of the Surviving
Corporation, each of such directors to hold office, subject to the applicable
provisions of the Certificate of Incorporation and Bylaws of the Surviving
Corporation, until the next annual stockholders' meeting of the Surviving
Corporation and until their successors are elected and duly qualified; if at the
Effective Time of the Merger, any of the foregoing persons shall for any reason
be unwilling or unable to serve, the resulting vacancy shall be filled as
provided in such Bylaws;
(e) the officers of Woodward-Clyde immediately prior to the
Effective Time of the Merger shall be the officers of the Surviving Corporation,
each of such officers to hold office, subject to the applicable provisions of
the Certificate of Incorporation and Bylaws of the Surviving Corporation, at the
pleasure of the board of directors of the Surviving Corporation and until their
successors are elected and duly qualified; and
(f) the Surviving Corporation shall possess all the rights,
privileges, immunities, powers and purposes of each of the Constituent
Corporations; and all the property, real, personal or mixed, including causes of
action and every other asset of each of the Constituent Corporations, shall vest
in the Surviving Corporation without further act or deed. The Surviving
Corporation shall be responsible and liable for all liabilities and obligations
of each of the Constituent Corporations. No liability or obligation due or to
become due, claim or demand for any cause existing against either of the
Constituent Corporations, or any stockholder, officer or director thereof, shall
be released or impaired by the Merger. No action or proceeding, whether civil or
criminal, then pending by or against the Constituent Corporations, or any
stockholder, officer or director thereof, shall abate or be discontinued by the
Merger, but may be enforced, prosecuted, settled or compromised as if the Merger
had not occurred, or the Surviving Corporation may be substituted in such action
or special proceeding in place of the Constituent Corporations.
3.
Section 1.4 Tax Consequences. For federal income tax purposes, the
Merger is intended to constitute a reorganization within the meaning of Section
368 of the Code. The parties to this Agreement hereby adopt this Agreement as a
"plan of reorganization" within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the United States Treasury Regulations. None of Woodward-Clyde,
URS or Subsidiary will take a position on a tax return inconsistent with this
Section 1.4.
ARTICLE 2
EFFECT OF MERGER ON CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
Section 2.1 Conversion of the Woodward-Clyde Common and Preferred
Stock.
(a) Conversion; Merger Consideration. At the Effective Time of
the Merger, each share of the Woodward-Clyde Stock issued and outstanding
immediately prior to the Effective Time of the Merger shall, by virtue of the
Merger, and without any action on the part of the holder thereof, be converted
as follows:
(i) the shares of Woodward-Clyde Preferred Stock shall
be converted into the right to receive $8,306,130 in the aggregate in
cash, to be allocated between such shares in such manner as may be
determined by the trustees of the Retirement Plan (as defined in
Section 8.5 below), all of which shall be payable upon the surrender of
the certificate(s) formerly representing such share of Woodward-Clyde
Preferred Stock; and
(ii) each share of Woodward-Clyde Common Stock shall be
converted into the right to receive (a) the Applicable Common Multiple
(as defined below) of URS Common Stock, and (b) the Applicable Common
Cash Component (as defined below) in cash, all of which shall be
payable upon the surrender of the certificate(s) formerly representing
such share of Woodward-Clyde Common Stock.
For purposes of this Agreement:
the "Applicable Common Multiple" shall be the multiple: (A) having a
numerator equal to $65 million divided by the average closing price of
the URS Common Stock on the New York Stock Exchange over the last
twenty (20) trading days ending two (2) trading days prior to the
Closing Date (the "URS Average Closing Price"), but in no event less
than $12.50 or greater than $16.07, and (B) having a denominator equal
4.
to the aggregate number of shares of Woodward-Clyde Common Stock issued
and outstanding immediately prior to the Effective Time of the Merger;
and
The "Applicable Common Cash Component" shall mean the amount determined
by dividing (A) a numerator equal to $26,693,870, plus an amount equal
to the excess, if any, of $65 million over the product of the
Applicable Common Multiple, the aggregate number of shares of
Woodward-Clyde Common Stock issued and outstanding immediately prior to
the Effective Time of the Merger and the URS Average Closing Price, by
(B) a denominator equal to the aggregate number of shares of
Woodward-Clyde Common Stock issued and outstanding immediately prior to
the Effective Time of the Merger.
The cash and the URS Common Stock so deliverable is hereinafter
collectively referred to as the "Merger Consideration."
(b) Fractional Shares. No fractional shares of the URS Common
Stock will be issued as a result of the Merger. In lieu of the issuance of any
fractional shares of the URS Common Stock, holders of shares of the
Woodward-Clyde Stock who would otherwise have been entitled to receive a
fraction of a share of the URS Common Stock shall be entitled to receive, from
URS, an amount of cash, without interest, equal to the closing price of the URS
Common Stock as reported on the New York Stock Exchange on the trading day
immediately preceding the Closing Date as listed in The Wall Street Journal,
multiplied by the fraction of a share of the URS Common Stock to which such
holder would otherwise have been entitled.
(c) Surrender of Certificates and Receipt of Consideration.
(1) Appointment of Exchange Agent; Exchange Fund. As
of the Effective Time of the Merger, URS shall deposit, or shall cause to be
deposited with an exchange agent selected by URS and reasonably satisfactory to
Woodward-Clyde (the "Exchange Agent"), for the benefit of holders of the
Woodward-Clyde Stock, for exchange in accordance with this Article 2, (i)
certificates representing the number of shares of the URS Common Stock issuable
as part of the Merger Consideration, and (ii) cash in an amount equal to the
aggregate cash component of the Merger Consideration, and (iii) cash to be paid
in lieu of the issuance of fractional shares (such cash and certificates for the
shares of URS Common Stock are hereinafter referred to collectively as the
"Exchange Fund").
(2) Notice to Woodward-Clyde Stockholders. As soon
as reasonably practicable after the Effective Time of the Merger, URS shall
cause the Exchange
5.
Agent to mail to each holder of record of a certificate or certificates
representing the Woodward-Clyde Stock (A) a letter of transmittal which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates for shares of the Woodward-Clyde Stock shall pass, only upon
delivery of the certificates for the shares of the Woodward-Clyde Stock to the
Exchange Agent, and shall be in such form and have such other provisions as URS
may reasonably specify, and (B) instructions for use in effecting the surrender
of the certificates for the shares of the Woodward-Clyde Stock in exchange for
the Merger Consideration.
(3) Surrender of Woodward-Clyde Stock Certificates.
Upon surrender of a certificate for shares of the Woodward-Clyde Stock (a
"Woodward-Clyde Stock Certificate") for cancellation to the Exchange Agent or to
such other agent or agents as may be appointed by URS, together with such letter
of transmittal, duly executed and completed in accordance with the instructions
thereto, the holder thereof shall be entitled to receive in exchange therefor
the number of whole shares of the URS Common Stock to which the holder of the
Woodward-Clyde Stock is entitled pursuant to this Article 2 plus that portion of
the cash in the Exchange Fund which such holder has the right to receive
pursuant to the provisions of this Section 2.1, after giving effect to any
required withholding tax, and the Woodward-Clyde Stock Certificate for the
shares of the Woodward-Clyde Stock so surrendered shall forthwith be canceled.
(4) Limitations. Notwithstanding any other provision
of this Agreement, until holders of Woodward-Clyde Stock Certificates
representing shares of the Woodward-Clyde Stock have surrendered them for
exchange as provided herein, (1) no dividends or other distributions shall be
paid with respect to any shares represented by such Certificates and no payment
for fractional shares shall be made, and (2) without regard to when such
Woodward-Clyde Stock Certificates are surrendered for exchange as provided
herein, no interest shall be paid on any dividends or other distributions or any
payment for fractional shares. Upon surrender of a Woodward-Clyde Stock
Certificate, there shall be paid to the holder of such Woodward-Clyde Stock
Certificate the amount of any dividends or other distributions which theretofore
became payable, but which were not paid by reason of the preceding sentence,
with respect to the number of whole shares of URS Common Stock represented by
the Woodward-Clyde Stock Certificate or Certificates issued upon such surrender.
If any certificate for URS Common Stock is to be issued in a name other than in
which the Woodward-Clyde Stock Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the person requesting
such exchange pay any transfer or other taxes required by reason of the issuance
of certificates for such shares of URS Common Stock in a name other than that of
the registered holder of the Woodward-Clyde Stock Certificate surrendered, or
establish to the satisfaction of Woodward-Clyde that
6.
such tax has been paid or is not applicable. Certificates of URS Common Stock
issued to holders of Woodward-Clyde Stock issued under a Woodward-Clyde
restricted stock plan shall bear legends substantially similar to the legends
presently on the Woodward-Clyde Stock Certificates and as required by applicable
law.
(5) Payment. The Exchange Agent shall within fifteen
(15) business days of receipt of such Woodward-Clyde Stock Certificate pay the
holder of such certificate, in immediately available funds, the amount of cash
into which the shares theretofore represented by such certificate shall have
been converted pursuant to Section 2.1, and the Woodward-Clyde Stock Certificate
so surrendered shall be canceled. In the event of a transfer of ownership of
shares of Woodward-Clyde Stock that is not registered in the transfer records of
Woodward-Clyde, payment may be made to a person other than the person in whose
name the certificate so surrendered is registered, if such certificate shall be
properly endorsed or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required by reason
of the payment to a person other than the registered holder of such
Woodward-Clyde Stock Certificate or establish to the satisfaction of the
Woodward-Clyde that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.1, each Woodward-Clyde Stock
Certificate shall be deemed at any time after the Effective Time of the Merger
to represent only the right to receive upon such surrender the amount of the
Merger Consideration, without interest, into which the shares theretofore
represented by such Woodward-Clyde Stock Certificate shall be converted pursuant
to this Section 2.1. No interest will be paid or will accrue on the cash payable
upon the surrender of any Woodward-Clyde Stock Certificate.
(d) Cancellation of the Woodward-Clyde Stock; Closing of Stock
Transfer Books. At the Effective Time of the Merger, all of the authorized and
outstanding shares of the Woodward-Clyde Stock shall be canceled and cease to
represent any interest in Woodward-Clyde and such holders shall cease to have
any rights of a stockholder of Woodward-Clyde. The stock transfer books of
Woodward-Clyde shall be closed at the Effective Time of the Merger, and no
further transfers of Woodward-Clyde Stock will be made on such stock transfer
books. From and after the Effective Time of the Merger, the holders of shares of
the Woodward-Clyde Stock outstanding immediately prior to the Effective Time of
the Merger as such holders shall be entitled to receive only the Merger
Consideration. From the Effective Time of the Merger, the holders of the shares
of the Woodward-Clyde Stock which shall be converted into the URS Common Stock
pursuant to Section 2.1(a) shall have all of the rights of holders of the number
of shares of the URS Common Stock into which such Woodward-Clyde Stock has been
converted.
7.
Section 2.2 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Woodward-Clyde Stock that are issued and
outstanding immediately prior to the Effective Time of the Merger and that are
held by stockholders who have not voted such shares in favor of the Merger and
who have delivered a written demand for appraisal of such shares in the manner
provided in Section 262 of the Delaware Law ("Dissenting Shares") shall not be
canceled and converted into shares of URS Common Stock in accordance with
Section 2.1 above unless and until such holder shall have failed to perfect, or
shall have effectively withdrawn or lost, such holder's right to appraisal and
payment under the Delaware Law. If such stockholder shall have so failed to
perfect, or shall have effectively withdrawn or lost such right, such holder's
shares of Woodward-Clyde Stock shall thereupon be deemed to have been canceled
and converted as described in Section 2.1 at the Effective Time of the Merger,
and each such share shall represent solely the right to receive shares of URS
Common Stock and cash in accordance with Section 2.1. Woodward-Clyde shall give
URS prompt notice of any demands received by Woodward-Clyde for appraisal of its
shares, and, prior to the Effective Time of the Merger, URS shall have the right
to participate in all negotiations and proceedings with respect to such demands.
Prior to the Effective Time of the Merger, Woodward-Clyde shall not, except with
the prior written consent of URS, make any payment with respect to, or settle or
offer to settle, any such demands. From and after the Effective Time of the
Merger, no stockholder of Woodward-Clyde who has demanded appraisal rights as
provided in Section 262(d) of the Delaware Law shall be entitled to vote such
holder's shares of Woodward-Clyde Stock for any purpose or to receive payment of
dividends or other distributions with respect to such holder's shares (except
dividends and other distributions payable to stockholders of record at a date
which is prior to the Effective Time of the Merger).
Section 2.3 Subsidiary Common Stock. At the Effective Time of the
Merger, each share of the Subsidiary Common Stock outstanding immediately prior
to the Effective Time of the Merger shall remain issued and outstanding.
Section 2.4 Cancellation of Treasury Shares. Any share of the Woodward-
Clyde Stock held in the treasury of Woodward-Clyde at the Effective Time of the
Merger shall be canceled and retired at the Effective Time of the Merger and no
shares shall be issuable with respect thereto.
Section 2.5 Withholding Tax. The right of any stockholder to receive
the Merger Consideration shall be subject to and reduced by the amount of any
required tax withholding obligation.
8.
ARTICLE 3
CLOSING
Section 3.1 Closing; Closing Date. Unless this Merger Agreement shall
have been terminated and the Merger abandoned pursuant to the provisions of
Article 9, a closing ("Closing") shall take place at the offices of Cooley
Godward LLP, One Maritime Plaza, 20th Floor, San Francisco, CA 94111-3580 at
10:00 a.m., California time, on the business day following the later of the
approval of the Woodward-Clyde stockholders as contemplated by Section 6.2.2 and
the approval of the URS stockholders as contemplated by Section 6.3.1, or at
such other time and place as may be agreed upon in writing by the parties hereto
(the "Closing Date").
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF WOODWARD-CLYDE
Except as otherwise disclosed to URS in a letter delivered to it prior
to the execution hereof (which letter shall contain appropriate references to
identify the representations and warranties herein to which the information in
such letter relates) (the "Woodward-Clyde Disclosure Letter"), Woodward-Clyde
represents and warrants to URS and the Subsidiary as follows:
Section 4.1 Organization. Each of Woodward-Clyde and the Woodward-Clyde
Subsidiaries (as hereinafter defined) is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own, lease,
and operate its properties, and to carry on its business as now being conducted,
except where the failure to be so organized, existing, and in good standing or
to have such power and authority would not have a Woodward-Clyde Material
Adverse Effect (as defined below). Each of Woodward-Clyde and the Woodward-
Clyde Subsidiaries is duly qualified or licensed and in good standing to do
business in each jurisdiction in which the property owned, leased, or operated
by it or the nature of the business conducted by it makes such qualification
necessary, except in any such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not have a Woodward-Clyde
Material Adverse Effect (defined below). For purposes of this Agreement: (a)
"Woodward-Clyde Material Adverse Effect" means, when used in connection with
Woodward-Clyde, any change or effect that is materially adverse to the business,
financial condition, results of operations, or assets of Woodward-Clyde and the
Woodward-Clyde Subsidiaries taken as a whole, other than changes or effects
resulting from (i) changes
9.
attributable to conditions affecting the engineering business generally, (ii)
changes in general economic conditions, or (iii) changes attributable to the
announcement or pendency of the Merger.
Section 4.2 Capitalization. The authorized capital stock of
Woodward-Clyde consists of 4,922,625 shares of Woodward-Clyde Common Stock, par
value $0.01 per share, and 77,375 shares of preferred stock, par value $0.01 per
share (the "Woodward-Clyde Preferred Stock"). As of the date hereof, (i)
1,964,175 shares of Woodward-Clyde Common Stock are issued and outstanding, (ii)
no shares of Woodward-Clyde Common Stock are held in treasury, (iii) 44,898
shares of Woodward-Clyde Preferred Stock are issued and outstanding, and (iv)
32,477 shares of Woodward-Clyde Preferred Stock are held in treasury. All of the
issued and outstanding shares of Woodward-Clyde Stock are validly issued, fully
paid and nonassessable and free of preemptive rights. Except as set forth above
or as specified in Section 4.2 of the Woodward-Clyde Disclosure Letter or as
disclosed in the notes to the Woodward-Clyde Financial Statements (as defined in
Section 4.7 below) for the period ended December 31, 1996, as of the date of
this Agreement there are no shares of Woodward-Clyde capital stock of any other
class issued or outstanding or any options, warrants, subscriptions, calls,
rights, convertible securities or other agreements or commitments obligating
Woodward-Clyde to issue, transfer, sell, redeem, repurchase or otherwise acquire
any shares of its capital stock or securities. Except as provided in this
Agreement or as set forth in Section 4.2 of the Woodward-Clyde Disclosure
Letter, after the Effective Time of the Merger, Woodward-Clyde will have no
obligation to issue, transfer or sell any shares of its capital stock pursuant
to any employee benefit plan or otherwise.
Section 4.3 Subsidiaries. Section 4.3 of the Woodward-Clyde Disclosure
Letter identifies each corporation or other entity of which Woodward-Clyde,
directly or indirectly, owns or controls voting securities or other interests
which are sufficient to elect a majority of the board of directors or others
performing similar functions of such corporation or other entity (a
"Woodward-Clyde Subsidiary") and sets forth for each Woodward-Clyde Subsidiary:
(i) its name and jurisdiction of incorporation or organization; (ii) its
authorized capital stock; and (iii) the number of issued and outstanding shares
of capital stock. Woodward-Clyde owns directly or indirectly each of the
outstanding shares of capital stock (or other ownership interests having by
their terms ordinary voting power to elect a majority of directors or others
performing similar functions with respect to such Woodward-Clyde Subsidiary) of
each of the Woodward-Clyde Subsidiaries. Each of the outstanding shares of
capital stock of each of the Woodward-Clyde Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable. Each of the outstanding shares of
capital stock of each Woodward-Clyde Subsidiary is owned, directly or
indirectly, by Woodward-Clyde, free and clear of all liens, pledges, security
interests, claims, or other encumbrances of any nature
10.
whatsoever ("Liens"). There are not now, and at Closing there will not be, (a)
any issued or outstanding securities convertible into or exchangeable for, or
any options, warrants, calls, subscriptions or other rights (preemptive or
otherwise) to acquire, any shares of capital stock of any of the Woodward-Clyde
Subsidiaries; or (b) any agreements or contractual commitments obligating
Woodward-Clyde, or restricting Woodward-Clyde's rights, to transfer, sell, or
vote, the capital stock of the Woodward-Clyde Subsidiaries owned by it, directly
or indirectly.
Section 4.4 Material Investments. Except as set forth in Section 4.4 of
the Woodward-Clyde Disclosure Letter, Woodward-Clyde does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation (other than a Woodward-Clyde Subsidiary), partnership, joint venture
or other business association or entity that is material to Woodward-Clyde. With
respect to those entities indicated on Section 4.4 of the Woodward-Clyde
Disclosure Letter, Woodward-Clyde has heretofore delivered to URS financial
statements (audited to the extent available) and interim unaudited financial
statements of each of such entities (through the most recently concluded fiscal
quarter for each of such persons) and, to the best knowledge of Woodward-Clyde,
such financial statements fairly present, in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis (except as may be
indicated in the notes thereto or in Section 4.4 of the Woodward-Clyde
Disclosure Letter), the financial condition of each thereof as at and the
results of operations for the periods so indicated (subject to normal year-end
adjustments in the case of the interim unaudited financial statements), and
Woodward-Clyde's disclosures with respect to its investment in each such
entities otherwise included in the Woodward-Clyde Reports (as defined below) do
not contain any untrue statements of material fact or omit to state any material
fact required to be stated therein or which are necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except as set forth in Section 4.4 of the Woodward-Clyde
Disclosure Letter, Woodward-Clyde (or, as indicated thereon, a Woodward-Clyde
Subsidiary) has good and marketable title to the securities evidencing its
investment in the entities indicated in Section 4.4 of the Woodward-Clyde
Disclosure Letter, and such securities have been validly issued and are fully
paid and nonassessable and are held by Woodward-Clyde or a Woodward-Clyde
Subsidiary free and clear of any Lien, restraint on alienation, or any other
restriction with respect of the transferability or assignability thereof (other
than restrictions on transfer imposed by Federal or state securities laws).
Section 4.5 Authority Relative to this Agreement. Woodward-Clyde has
all requisite corporate power and authority to enter into this Agreement and
subject, in the case
11.
of this Agreement, to approval of this Agreement by the stockholders of
Woodward-Clyde and to the consents and approvals set forth in Section 4.6 below,
to consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Woodward-Clyde and the consummation by
Woodward-Clyde of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Woodward-Clyde, including the
unanimous approval of the Board of Directors of Woodward-Clyde, and no other
corporate proceedings on the part of Woodward-Clyde are necessary to authorize
this Agreement or the transactions contemplated hereby except for approval by
the stockholders of Woodward-Clyde. This Agreement has been duly and validly
executed and delivered by Woodward-Clyde and constitutes a valid and binding
agreement of Woodward-Clyde, enforceable against Woodward-Clyde in accordance
with its terms, except that such enforceability may be subject to (i)
bankruptcy, insolvency, reorganization or other similar laws relating to
enforcement of creditors' rights generally, and (ii) general equitable
principles.
Section 4.6 Consents and Approvals; No Violations. Except for
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (the HSR Act, Securities Act and Exchange Act, collectively, the
"Governmental Requirements"), state securities or blue sky laws, state and local
laws and regulations relating to licensing, and the filing of the Documents of
Merger as required by the Delaware Law, no filing with, and no permit,
authorization, consent or approval of, any court or tribunal or administrative,
governmental or regulatory body, agency or authority ("Government Entity") is
necessary for the execution, delivery and performance of this Agreement by
Woodward-Clyde for the consummation by Woodward-Clyde of the transactions
contemplated by this Agreement. Neither the execution, delivery nor performance
of this Agreement by Woodward-Clyde, nor the consummation by Woodward-Clyde of
the transactions contemplated hereby, nor compliance by Woodward-Clyde with any
of the provisions hereof, will (i) conflict with or result in any breach of any
provisions of the Certificate of Incorporation or Bylaws of Woodward-Clyde or
the articles or certificate of incorporation, as the case may be, or Bylaws of
any of the Woodward-Clyde Subsidiaries, (ii) except as set forth in Section
4.6(ii) of the Woodward-Clyde Disclosure Letter, result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation, acceleration,
vesting, payment, exercise, suspension or revocation) under, any of the terms,
conditions or provisions of any note, bond, mortgage, deed of trust, security
interest, indenture, license, contract, agreement, plan or other instrument or
obligation to which Woodward-Clyde or any of the Woodward-Clyde Subsidiaries is
a party or by which any of them or any of their properties or assets may be
bound or affected,
12.
(iii) except as set forth in Section 4.6(iii) of the Woodward-Clyde Disclosure
Letter, violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Woodward-Clyde, any Woodward-Clyde Subsidiary or any of their
properties or assets, (iv) except as set forth in Schedule 4.6(iv) of the
Woodward-Clyde Disclosure Letter, result in the creation or imposition of any
Lien on any asset of Woodward-Clyde or any Woodward-Clyde Subsidiary, or (v)
except as set forth in Section 4.6(v) of the Woodward-Clyde Disclosure Letter,
cause the suspension or revocation of any certificates of need, accreditation,
registrations, licenses, permits and other consents or approvals of governmental
agencies or accreditation organizations, except in the case of clauses (ii),
(iii), (iv) and (v) for violations, breaches, defaults, terminations,
cancellations, accelerations, creations, impositions, suspensions or revocations
which would not individually or in the aggregate have a Woodward-Clyde Material
Adverse Effect.
Section 4.7 Woodward-Clyde Reports and Financial Statements. Woodward-
Clyde has delivered or made available to URS true and complete copies of each
financial report delivered to its lenders, and each proxy statement or annual
information statement, including, without limitation, its Annual Reports to
Stockholders, delivered to its stockholders, at any time since January 1, 1992
(collectively, the "Woodward-Clyde Reports"). Except as set forth in Section 4.7
of the Woodward-Clyde Disclosure Letter, as of the respective dates of such
Woodward-Clyde Reports, each of the Woodward-Clyde Reports did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Each of the
audited consolidated financial statements of Woodward-Clyde (including any
related notes and schedules) included in the Woodward-Clyde Reports for each of
the five fiscal years ended December 31, 1992, 1993, 1994, 1995 and 1996, and
each of the interim unaudited financial statements of Woodward-Clyde (including
any related notes and schedules) for each of the interim periods in the year
ended December 31, 1996 and for all interim periods subsequent thereto
(collectively, the "Woodward-Clyde Financial Statements"), fairly present, in
conformity with GAAP applied on a consistent basis (except as may be indicated
in the notes thereto), the consolidated financial position of Woodward-Clyde and
the Woodward-Clyde Subsidiaries as of its date and the consolidated results of
operations and cash flows for the period then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements). There
has been no change in Woodward-Clyde's accounting policies or the methods of
making accounting estimates or changes in estimates that are material to the
Woodward-Clyde Financial Statements, except as described in the notes thereto.
13.
Section 4.8 Information Supplied. None of the information supplied or
to be supplied by Woodward-Clyde or the Woodward-Clyde Subsidiaries, auditors,
attorneys, financial advisors, or other consultants or advisors for inclusion in
(a) the registration statement on Form S-4, and any amendment thereto, to be
filed under the Securities Act with the Securities and Exchange Commission (the
"SEC") by URS in connection with the issuance of the URS Common Stock in or as a
result of the Merger (the "Form S-4"), or (b) the joint proxy statement and any
amendment or supplement thereto to be distributed in connection with the
meetings of the stockholders of Woodward-Clyde and URS to vote upon this
Agreement and the transactions contemplated hereby (the "Proxy Statement" and,
together with the Form S-4, the "Proxy Statement/Form S-4"), will: (i) in the
case of the Proxy Statement and any amendment or supplement thereto, (1) at the
time of the mailing of the Proxy Statement and any amendments or supplements
thereto, and (2) at the time of Woodward-Clyde's meeting of stockholders, and
(ii) in the case of the Form S-4, as amended or supplemented, (x) at the time it
becomes effective, (y) at the time of any post-effective amendment thereto, and
(z) at the time of the meeting of the stockholders of Woodward-Clyde, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Woodward-Clyde agrees to correct as promptly as practicable any such
information provided by it that shall have become false or misleading in any
material respect and to take all steps necessary to enable URS to file with the
SEC and have declared effective or cleared by the SEC any amendment or
supplement to the Proxy Statement so as to correct the same and to cause the
Proxy Statement as so corrected to be disseminated to the Woodward-Clyde and URS
stockholders to the extent required by applicable law. The Proxy Statement/Form
S-4 as it relates to Woodward-Clyde and its Subsidiaries will comply as to form
in all material respects with the provisions of all applicable laws, including
the provisions of the Exchange Act and the rules and regulations of the SEC
thereunder, except that no representation is made by Woodward-Clyde with respect
to information supplied by URS specifically for inclusion therein.
Section 4.9 Absence of Material Adverse and Other Changes. Except as
contemplated by this Agreement, and except as set forth in Section 4.9 of the
Woodward-Clyde Disclosure Letter, since December 31, 1996, Woodward-Clyde and
the Woodward-Clyde Subsidiaries have conducted their business in the ordinary
course, consistent with past practices, and there has not been: (a) any event or
occurrence that has resulted in a Woodward-Clyde Material Adverse Effect, or any
development or combination of developments of which Woodward-Clyde has knowledge
that is reasonably likely, in Woodward-Clyde's commercially reasonable judgment,
to result in a Woodward-Clyde Material Adverse Effect, (b) any declaration,
setting aside or payment of any dividend or
14.
other capital distributions in respect of any of its capital stock, except for
regular cash dividends to holders of Woodward-Clyde Common Stock in amounts and
at times consistent with prior practice, or any redemption or repurchase or
other acquisition of any shares of its capital stock, (c) any increase in the
regular compensation of any of the officers or employees of Woodward-Clyde or
the Woodward-Clyde Subsidiaries, except such increases as have been granted in
the ordinary course of business in accordance with its customary practices
(which shall include normal periodic performance reviews, promotions and related
compensation increases), (d) any incurrence, assumption or guarantee by
Woodward-Clyde or any of the Woodward-Clyde Subsidiaries of any indebtedness for
borrowed money other than in the ordinary course of business consistent with
past practices, (e) any transaction or commitment made, or any contract or
agreement entered into, by Woodward-Clyde or any of the Woodward-Clyde
Subsidiaries (including the acquisition or disposition of any assets) or any
relinquishment by Woodward-Clyde or any of the Woodward-Clyde Subsidiaries of
any contract or other right, in either case, material to Woodward-Clyde's
business taken as a whole, other than transactions and commitments in the
ordinary course of business consistent with past practices and those
contemplated by this Agreement, (f) any change in any method of accounting or
accounting practice by Woodward-Clyde or any of the Woodward-Clyde Subsidiaries,
except for any such change after the date hereof required by reason of a
mandatory concurrent change in GAAP, (g) any loss or damage to the properties or
assets of Woodward-Clyde or the Woodward-Clyde Subsidiaries which has resulted
or is reasonably likely to result in a Woodward-Clyde Material Adverse Effect,
or (h) any agreement or any commitment to take any of the actions described in
this Section 4.9.
Section 4.10 Litigation. Except for litigation disclosed in the notes
to the financial statements included in the Woodward-Clyde Reports or as set
forth in Section 4.10 of the Woodward-Clyde Disclosure Letter, there is no suit,
action or proceeding (whether at law or equity, before or by any Federal, state
or foreign court, tribunal, commission, board, agency or instrumentality, or
before any arbitrator) pending or, to the best knowledge of Woodward-Clyde,
threatened against or affecting Woodward-Clyde or any of the Woodward-Clyde
Subsidiaries, the outcome of which, in the reasonable judgment of
Woodward-Clyde, is likely individually or in the aggregate to have a
Woodward-Clyde Material Adverse Effect, or which challenges the validity of this
Agreement or seeks to prevent, enjoin, materially alter or materially delay the
transactions contemplated hereby, nor is there any judgment, decree, injunction,
rule or order of any court, governmental department, commission, agency,
instrumentality or arbitrator outstanding against Woodward-Clyde or any of the
Woodward-Clyde Subsidiaries having, or which, insofar as can reasonably be
foreseen, in the future may have, any such effect.
15.
Section 4.11 Absence of Undisclosed Liabilities. Except for liabilities
or obligations which are accrued or reserved against in the Woodward-Clyde
Financial Statements (or reflected in the notes thereto) or which were incurred
after December 31, 1996 in the ordinary course of business and consistent with
past practices or in connection with the transactions contemplated by this
Agreement, Woodward-Clyde and the Woodward-Clyde Subsidiaries do not have any
liabilities or obligations (whether absolute, accrued, contingent or otherwise)
of a nature required by GAAP to be reflected in a consolidated balance sheet (or
reflected in the notes thereto).
Section 4.12 No Default. Except as set forth in Section 4.12 of the
Woodward-Clyde Disclosure Letter, neither Woodward-Clyde nor any of the
Woodward-Clyde Subsidiaries is in violation or breach of, or default under (and
to the best knowledge of Woodward-Clyde no event has occurred which with notice
or the lapse of time or both would constitute a violation or breach of, or
default under) any term, condition or provision of (a) its Certificate or
Articles of Incorporation, as the case may be, or Bylaws, (b) any note, bond,
mortgage, deed of trust, security interest, indenture, license, contract,
agreement, plan, lease, commitment or other instrument or obligation to which
Woodward-Clyde or any of the Woodward-Clyde Subsidiaries is a party or by which
any of them or any of their properties or assets may be bound or affected, (c)
any order, writ, injunction, decree, statute, rule or regulation applicable to
Woodward-Clyde or any of the Woodward-Clyde Subsidiaries or any of their
properties or assets, or (d) any certificate of need, accreditation,
registration, license, permit and other consent or approval of governmental
agencies or accreditation organization, except in the case of clauses (b), (c)
and (d) above for violations, breaches or defaults which would not individually
or in the aggregate have a Woodward-Clyde Material Adverse Effect.
Section 4.13 Properties, Liens, Etc. Woodward-Clyde and the
Woodward-Clyde Subsidiaries own all of their tangible and intangible property,
real and personal, free and clear of any Liens, except for statutory mechanics'
and materialmens' liens, liens for current taxes not yet delinquent, and liens
and encumbrances which do not confer upon the secured parties rights to property
which, if exercised upon default, would have a Woodward-Clyde Material Adverse
Effect. All plants, structures and material equipment owned or leased by
Woodward-Clyde or the Woodward-Clyde Subsidiaries and used in the operation of
their business are in satisfactory condition and repair for the requirements of
such business as presently conducted. Neither Woodward-Clyde nor any of the
Woodward-Clyde Subsidiaries have received notice, or have knowledge of, any
pending, threatened or contemplated condemnation proceeding, or of any sale or
other disposition in lieu of condemnation, affecting any real property owned or
leased by Woodward-Clyde or any of the Woodward-Clyde Subsidiaries.
16.
Section 4.14 Taxes. Except as set forth in Section 4.14 of the
Woodward-Clyde Disclosure Letter:
(a) Woodward-Clyde and each of the Woodward-Clyde Subsidiaries
(i) has timely filed (or has had timely filed on its behalf) all material Tax
Returns (as defined below) required by applicable law to be filed by any of them
whose due dates fall on or prior to the date of this Agreement, and will cause
to be timely filed all required material Tax Returns whose due dates fall on or
before the Closing Date, and all such Tax Returns and amendments thereto are or
will be true, complete, and correct in all material respects, (ii) has paid (or
has had paid on its behalf) all Taxes due or has properly accrued or reserved
for all such Taxes covered by such reports and (iii) has properly accrued for
all Taxes for periods subsequent to the periods covered by such Tax Returns.
(b) There are no material liens for Taxes upon the assets of
Woodward-Clyde or any of the Woodward-Clyde Subsidiaries, except liens for Taxes
not yet due.
(c) There are no material deficiencies or adjustments for
Taxes that have been proposed or assessed by any Tax Authority (as defined
below) against Woodward-Clyde or any of the Woodward-Clyde Subsidiaries and
which remain unpaid.
(d) The Federal income tax returns of Woodward-Clyde and each
of the Woodward-Clyde Subsidiaries have been examined by the Internal Revenue
Service for all past taxable years and periods to and including the years set
forth in Section 4.14 of the Woodward-Clyde Disclosure Letter, and all material
deficiencies finally assessed as a result of such examinations have been paid.
Section 4.14 of the Woodward-Clyde Disclosure Letter sets forth (i) all taxable
years and periods of Woodward-Clyde and the Woodward-Clyde Subsidiaries that are
presently under Audit (as defined below) or in respect of which Woodward-Clyde
or any of the Woodward-Clyde Subsidiaries has been notified in writing by the
relevant Tax Authority that it will be Audited, (ii) the taxable years of
Woodward-Clyde and the Woodward-Clyde Subsidiaries in respect of which the
statutory period of limitations for the assessment of Federal, state and local
income or franchise Taxes has expired, and (iii) all waivers extending the
statutory period of limitation applicable to any material Tax Return filed by
Woodward-Clyde or any of the Woodward-Clyde Subsidiaries for any taxable period
ending prior to the date of this Agreement.
(e) Prior to the date hereof, Woodward-Clyde and the
Woodward-Clyde Subsidiaries have disclosed all material Tax sharing, Tax
indemnity, or similar agreements to which Woodward-Clyde or any of the
Woodward-Clyde Subsidiaries is a party, is bound by, or has any obligation or
liability for Taxes.
17.
(f) As used in this Agreement, (i) "Audit" shall mean any
audit, assessment of Taxes, other examination by any Tax Authority, proceeding
or appeal of such proceeding relating to Taxes, (ii) "Taxes" shall mean all
Federal, state, local and foreign taxes, and other assessments of a similar
nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto, (iii) "Tax
Authority" shall mean the Internal Revenue Service and any other domestic or
foreign governmental authority responsible for the administration of any Taxes,
and (iv) "Tax Returns" shall mean all Federal, state, local and foreign tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax Return relating to Taxes.
Section 4.15 Benefit Plans.
(a) Section 4.15 of the Woodward-Clyde Disclosure Letter lists
each Woodward-Clyde Plan (as defined below). With respect to each of the
Woodward-Clyde Plans, Woodward-Clyde has heretofore delivered or made available
to URS true and complete copies of each of the following documents: (i) a copy
of each written plan (including all amendments thereto) or a description of each
unwritten plan; (ii) a copy of the annual report, if required under ERISA, with
respect to each Woodward-Clyde Plan for the last three years; (iii) a copy of
the actuarial report, if required under ERISA, with respect to each
Woodward-Clyde Plan for the last three years and any interim actuarial reports
or calculations provided by the actuary since the date of the most recent annual
actuarial report; (iv) the most recent summary plan description and all
succeeding summaries of material modifications for each Woodward-Clyde Plan for
which a summary plan description is required; (v) if the Woodward-Clyde Plan is
funded through a trust or any third party funding vehicle, a copy of the trust
or other funding agreement (including all amendments thereto) and the latest
financial statements thereof; and (vi) the most recent determination letter
issued with respect to each Qualified Woodward-Clyde Plan. Each of the Woodward-
Clyde Plans has been operated and administered in all material respects in
accordance with their terms and with all applicable laws, including Federal and
state securities laws. Each Woodward-Clyde Plan intended to be qualified under
Section 401(a) of the Code is so qualified and has received a favorable
determination letter from the Internal Revenue Service with respect to such
qualification, its related trust has been determined to be exempt from taxation
under Section 501(a) of the Code and nothing has occurred since the date of such
letter that would adversely affect such qualification or exemption.
(b) Section 4.15 of the Woodward-Clyde Disclosure Letter lists
each Woodward-Clyde Benefit Arrangement which provides, or is expected to
provide, for aggregate payments of in excess of $100,000 in any calendar year.
With respect to each of
18.
the Woodward-Clyde Benefit Arrangements, Woodward-Clyde has heretofore delivered
to or made available to URS true and complete copies of each written plan
(including all amendments thereto) or a description of each unwritten plan. Each
Woodward-Clyde Benefit Arrangement has been maintained in substantial compliance
with its terms and with the requirements prescribed by any and all statutes,
orders, rules, and regulations, including, without limitation, ERISA and the
Code, that are applicable to such Woodward-Clyde Benefit Arrangement, including
Federal and state securities laws.
(c) Neither Woodward-Clyde nor the Woodward-Clyde Subsidiaries
nor any of their ERISA Affiliates has been involved in any transaction, taken
any action, or failed to take any action relating to a Woodward-Clyde Benefit
Arrangement that could cause Woodward-Clyde or the Woodward-Clyde Subsidiaries
to be subject to any liability that would likely cause a Woodward-Clyde Material
Adverse Effect. No fiduciary of any Woodward-Clyde Plan or Woodward-Clyde
Benefit Arrangement has taken any action that would result in such fiduciary
being liable for the payment of damages under ERISA Section 409 and that would
result in any material liability for Woodward-Clyde, the Woodward-Clyde
Subsidiaries or URS.
(d) Except with respect to contributions to Woodward-Clyde
Plans under Section 412 of the Code that are current and not past due, neither
Woodward-Clyde nor the Woodward-Clyde Subsidiaries has incurred (directly or
indirectly) prior to the Closing any current obligation to pay (i) any liability
under Title IV of ERISA or (ii) any liability under Section 412 of the Code that
remains unpaid at the date of signing of this Agreement. There is no "unfunded
pension liability," i.e., excess of the value of benefits earned to date over
assets, with respect to Employee Benefit Plans subject to Title IV of ERISA. All
premiums owed to the Pension Benefit Guaranty Corporation with respect to any
Employee Benefit Plan subject to Title IV have been paid.
(e) None of Woodward-Clyde, the Woodward-Clyde Subsidiaries,
or their ERISA Affiliates is making or accruing an obligation to make
contributions or has, on or after January 1, 1980, made or accrued an obligation
to make contributions to a "multiemployer plan" as defined in Section 4001(a)(3)
of ERISA.
(f) Full payment has been made of all amounts that
Woodward-Clyde and the Woodward-Clyde Subsidiaries are required to pay as
contributions to the Employee Benefit Plans as of the last day of the most
recent fiscal year of each of the plans ended prior to the date of this
Agreement.
19.
(g) No Woodward-Clyde Plan or Woodward-Clyde Benefit
Arrangement provides or ever provided benefits, including without limitation,
death or medical benefits (whether or not insured and whether or not funded),
with respect to current or former employees of Woodward-Clyde and the
Woodward-Clyde Subsidiaries beyond their retirement or other termination of
service (other than (i) coverage mandated by applicable law, (ii) death
benefits, or retirement benefits under any "employee pension benefit plan," as
that term is defined in Section 3(2) of ERISA, (iii) deferred compensation
benefits accrued as liabilities on the books of Woodward-Clyde and disclosed
heretofore to URS, or (iv) benefits the full cost of which are borne by the
current or former employee (or his or her beneficiary)). The consummation of the
transactions contemplated hereby will not (i) entitle any current or former
employee of Woodward-Clyde or the Woodward-Clyde Subsidiaries to severance pay,
unemployment compensation or any similar payment, or (ii) accelerate the time of
payment or vesting, or increase the amount of any compensation due to any such
employee or former employee.
(h) With respect to Woodward-Clyde Plans and Woodward-Clyde
Benefit Arrangements, all reports, forms, and other documents required to be
filed with any governmental authority or distributed to plan participants
(including, without limitation, summary plan descriptions, Forms 5500, and
summary annual reports) have been timely filed (if applicable) and distributed
(if applicable) and were accurate.
(i) There are no pending, threatened, or anticipated claims
(other than routine claims for benefits) by, on behalf of, or against any
Woodward-Clyde Plans or Woodward-Clyde Benefit Arrangements. No Woodward-Clyde
Plans or Woodward-Clyde Benefit Arrangements are presently under audit or
examination (nor has notice been received of a potential audit) by the Internal
Revenue Service, the Department of Labor, or PBGC, nor are there any matters
pending with respect to any Woodward-Clyde Plan with the Internal Revenue
Service under its Voluntary Compliance Resolution program, its Closing Agreement
Program, or other similar programs.
(j) No "prohibited transaction," as such term is defined in
Code Section 4975 and ERISA Section 406, has occurred with respect to any
Woodward-Clyde Plan or Woodward-Clyde Benefit Arrangement that could subject
such plan, any fiduciary thereof, Woodward-Clyde, the Woodward-Clyde
Subsidiaries or URS to a material penalty for such prohibited transaction
imposed by ERISA Section 502 or a material tax imposed by Code Section 4975.
20.
(k) Any bonding required by applicable provisions of ERISA
with respect to any Woodward-Clyde Plan or Woodward-Clyde Benefit Arrangement
has been obtained and is in full force and effect.
(l) For purposes of this Section 4.15:
(1) "Woodward-Clyde Benefit Arrangement" means each
employment, severance, or other similar contract, arrangement, or policy and
each plan or arrangement (written or oral, formal or informal) providing for
insurance coverage (including any self-insured arrangements), cafeteria benefits
under Section 125 of the Code, fringe benefits (including but not limited to
paid holidays, personal leave, employee discount, educational benefit, or
similar programs), workers' benefits, vacation benefits, severance benefits,
disability benefits, death benefits, retirement benefits, deferred compensation,
profit-sharing, bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or postretirement
insurance or health benefits, compensation or benefits that (i) is not a
Woodward-Clyde Plan, (ii) is or has been entered into, maintained, or
contributed to by Woodward-Clyde or its ERISA Affiliates, and (iii) covers, or
within the last five years covered and under which Woodward-Clyde or its ERISA
Affiliates has further or continuing obligations to, any employee of
Woodward-Clyde or any Woodward-Clyde Subsidiary.
(2) "Woodward-Clyde Plan" means any Employee Benefit
Plan or "multiemployer plan" as defined in Section 4001(a)(3) of ERISA (a)
maintained or contributed to by or on behalf of Woodward-Clyde or any
Woodward-Clyde Subsidiary, whether currently or within the six years prior to
the Closing Date, or (b) in which any employee of Woodward-Clyde or any
Woodward-Clyde Subsidiary has participated, as an employee of Woodward-Clyde or
any Woodward-Clyde Subsidiary, within the six years prior to the Closing Date,
or under which any such employee has accrued and remains entitled to any
benefit.
(3) "Employee Benefit Plan" means any deferred
compensation, retirement, severance, health, or other plan or program
constituting an "employee benefit plan" as defined in Section 3(3) of ERISA
maintained or previously maintained for current or former employees of
Woodward-Clyde or the Woodward-Clyde Subsidiaries, or any ERISA Affiliate of
Woodward-Clyde or the Woodward-Clyde Subsidiaries or in which any such employees
participate or participated, other than a Multiemployer Plan.
21.
(4) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and all regulations and published
interpretations promulgated thereunder, as in effect from time to time.
(5) "ERISA Affiliate" means each person (as defined
in Section 3(9) of ERISA) that, together with Woodward-Clyde or a Woodward-Clyde
Subsidiary, would be treated as a single employer under Section 4001(b) of ERISA
or that would be deemed to be a member of the same "controlled group" within the
meaning of Section 414(b), (c), (m), and (o) of the Code (provided, however,
that when the subject of the provision is a Multiemployer Plan only subsections
(b) and (c) of Section 414 shall be taken into account).
Section 4.16 Employment Matters; Labor Relations.
(a) Section 4.16 of the Woodward-Clyde Disclosure Letter sets
forth a true and complete list of the names, classifications, dates of hire and
base compensation for the year ending December 31, 1996, of each employee of
Woodward-Clyde and the Woodward-Clyde Subsidiaries whose base compensation
exceeds $100,000 per annum.
(b) With respect to current or former employees of
Woodward-Clyde and the Woodward-Clyde Subsidiaries,
(i) Each of Woodward-Clyde and the Woodward-Clyde
Subsidiaries is in substantial compliance with all applicable laws respecting
employment and employment practices, and occupational safety and health, except
for such violations, if any, that in the aggregate have not had and would not
have a Woodward-Clyde Material Adverse Effect. There is no charge or compliance
action pending or threatened against or with respect to Woodward-Clyde or any of
the Woodward-Clyde Subsidiaries before the Equal Employment Opportunity
Commission or any state, local, or foreign agency responsible for the prevention
of unlawful employment practices as to which there is a reasonable likelihood of
adverse determination. None of Woodward-Clyde nor any of the Woodward-Clyde
Subsidiaries has received notice of the intent of any Federal, state, local or
foreign agency responsible for the enforcement of labor or employment laws to
conduct an investigation, and, to Woodward-Clyde's knowledge, no such
investigation is in progress.
(ii) The employees of Woodward-Clyde and the
Woodward-Clyde Subsidiaries are not represented by any labor union, nor are
there any collective bargaining agreements or any other types of agreements with
labor unions otherwise in effect with respect to such employees, nor are any
collective bargaining agreements currently being
22.
negotiated, and, to Woodward-Clyde's knowledge, no union organizational campaign
is in progress. None of Woodward-Clyde or the Woodward-Clyde Subsidiaries is
engaged in any unfair labor practices as defined in the National Labor Relations
Act or other applicable law, ordinance, or regulation. There is no unfair labor
practice charge or complaint against any of Woodward-Clyde or the Woodward-Clyde
Subsidiaries pending or, to Woodward-Clyde's knowledge, threatened before the
National Labor Relations Board. There is no labor strike, lockout, slow-down or
work stoppage pending or threatened against Woodward-Clyde or any of the
Woodward-Clyde Subsidiaries. None of Woodward-Clyde and the Woodward-Clyde
Subsidiaries has experienced any significant work stoppage or been party to any
proceedings before the National Labor Relations Board for the past three years.
Section 4.17 Intellectual Property.
(a) Except as set forth in Section 4.17 of the Woodward-Clyde
Disclosure Letter, and except to the extent that the inaccuracy of any of the
following (or the circumstances giving rise to such inaccuracy), individually
and in the aggregate, would not have a Woodward-Clyde Material Adverse Effect:
(i) Woodward-Clyde and the Woodward-Clyde Subsidiaries
own, or are licensed or otherwise have the right to use (in each case, clear of
any lien or encumbrance of any kind) all Intellectual Property (as defined
below) that in any material respect is used or proposed to be used in the
business of Woodward-Clyde and the Woodward-Clyde Subsidiaries.
(ii) No claims are pending, or to the knowledge of
Woodward- Clyde, threatened that Woodward-Clyde or any of the Woodward-Clyde
Subsidiaries is infringing on or otherwise violating the rights of any person
with regard to any Intellectual Property owned by and/or licensed to
Woodward-Clyde or the Woodward-Clyde Subsidiaries.
(iii) To the knowledge of Woodward-Clyde, no person is
infringing on or otherwise violating any right of Woodward-Clyde or any
Woodward-Clyde Subsidiary with respect to any Intellectual Property owned by
and/or licensed to Woodward-Clyde or the Woodward-Clyde Subsidiaries, provided,
that the foregoing representation is qualified to the extent of publicly known
problems of general applicability with respect to software piracy and copyright
protection.
(iv) None of the former or current members of
management or key personnel of Woodward-Clyde or any Woodward-Clyde Subsidiary,
including all former and
23.
current employees, agents, consultants and contractors who have contributed to
or participated in the conception and development of designs, computer software
or other Intellectual Property of Woodward-Clyde or the Woodward-Clyde
Subsidiaries, has asserted in writing any claim against Woodward-Clyde or any of
the Woodward-Clyde Subsidiaries in connection with the involvement of such
persons in the conception and development of any design, computer software or
other Intellectual Property, and no such claim, to the knowledge of
Woodward-Clyde, has been threatened.
(v) The execution and delivery of this Agreement,
compliance with its terms and the consummation of the transactions contemplated
hereby do not and will not conflict with or result in any violation or default
(with or without notice or the lapse of time) or give rise to any right, license
or encumbrance relating to the Intellectual Property, or any right of
termination, cancellation, or acceleration of any material Intellectual Property
right or obligation.
(b) For purposes of this Agreement, "Intellectual Property"
means (i) trademarks (registered on unregistered), service marks, brand names,
certification marks, trade dress, assumed names, trade names and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; (ii) inventions, discoveries and ideas,
whether patented, patentable or not in any jurisdiction; (iii) nonpublic
information, trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any person; (iv) writings
and other works, whether copyrighted, copyrightable or not in any jurisdiction;
(v) registration or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; (vi) any similar
intellectual property or proprietary rights and computer programs and software
(including source code, object code and data); (vii) licenses, immunities,
covenants not to sue and the like relating to the foregoing; and (viii) any
claims or causes of action arising out of or related to any infringement or
misappropriation of any of the foregoing.
(c) Except for the name "Woodward-Clyde" and the
Woodward-Clyde logo, there are no (i) material domestic and foreign registered
trademarks, registered copyrights and patents, and applications for registration
of any of the foregoing owned by Woodward-Clyde or any Woodward-Clyde
Subsidiary; (ii) material trade names, service marks, service names, logos and
assumed names which are owned by Woodward-Clyde or any of the Woodward-Clyde
Subsidiaries, as the case may be, and that are used or proposed to be used in
the business of Woodward-Clyde and the Woodward-Clyde Subsidiaries as currently
conducted; or (iii) material licenses and other agreements to which Woodward-
24.
Clyde or any Woodward-Clyde Subsidiary is a party and pursuant to which
Woodward-Clyde is authorized to use any Intellectual Property. To the knowledge
of Woodward-Clyde, all registered Intellectual Property of Woodward-Clyde has
been validly issued or registered and is subsisting. Neither Woodward-Clyde nor
the Woodward-Clyde Subsidiaries have taken or omitted to take any act which act
or omission might have the effect of waiving or impairing any of the rights of
Woodward-Clyde to practice and enforce any patent, or to use and enforce any
trademark or copyright listed on Section 4.17 of the Woodward-Clyde Disclosure
Letter.
Section 4.18 Insurance. Section 4.18 of the Woodward-Clyde Disclosure
Letter contains a complete and correct list and accurate summary description of
all insurance policies and material completion bonds (including, without
limitation, professional liability coverage) maintained by or on behalf of or
covering Woodward-Clyde and the Woodward-Clyde Subsidiaries, their assets or
operations, or the conduct of their business. Woodward-Clyde has made available
to URS complete and correct copies of all the declaration sheets or binders (if
declaration sheets are not yet issued) relating to such policies and bonds.
Except as noted on Section 4.18 of the Woodward-Clyde Disclosure Letter, all
such policies and bonds are in full force and effect, no notices of cancellation
or nonrenewal have been received with respect thereto, and all premiums due
thereon have been paid. Woodward-Clyde and the Woodward-Clyde Subsidiaries have
complied in all material respects with the provisions of such policies and
bonds.
Section 4.19 Compliance with Applicable Law. Woodward-Clyde and the
Woodward-Clyde Subsidiaries are not in violation of, and to Woodward-Clyde's
knowledge, are neither under investigation with respect to nor have been
threatened to be charged with or given notice of any violation of, any
applicable laws, ordinances, rules and regulations of any court, administrative
agency or commission or other governmental authority or instrumentality, whether
domestic or foreign (each a "Governmental Entity") applicable to Woodward-Clyde
or any Woodward-Clyde Subsidiary, except for such violations, if any, that, in
the aggregate, have not had and would not, in the reasonable judgment of
Woodward-Clyde, be likely to have a Woodward-Clyde Material Adverse Effect.
Section 4.20 Certain Contracts and Arrangements. Section 4.20 of the
Woodward-Clyde Disclosure Letter lists all of the following agreements to which
Woodward-Clyde or any of the Woodward-Clyde Subsidiaries is a party ("Material
Agreements"):
(a) Each partnership, joint venture or other similar agreement
or arrangement to which Woodward-Clyde or any Woodward-Clyde Subsidiary is a
party that
25.
has involved or is expected to involve an annual sharing of revenues of
$5,000,000 or more to other persons;
(b) Each lease for real or personal property in which the
amount of payments which Woodward-Clyde or a Woodward-Clyde Subsidiary is
required to make on an annual basis is $500,000 or more;
(c) Each agreement of Woodward-Clyde and the Woodward-Clyde
Subsidiaries relating to indebtedness for borrowed money (whether incurred,
assumed, guaranteed or secured by any asset) in an aggregate outstanding
principal amount of $1,000,000 or more;
(d) Each other agreement, license or franchise which has not
been terminated or performed in its entirety and not renewed which may be, by
its terms, terminated, impaired or adversely affected by reason of the execution
of this Agreement, the closing of the Merger, or the consummation of the
transactions contemplated hereby or thereby, and the loss of which would,
individually or in the aggregate with other such agreements, licenses, or
franchises, have a Woodward-Clyde Material Adverse Effect;
(e) Each agreement of Woodward-Clyde or the Woodward-Clyde
Subsidiaries with or for the benefit of any affiliate of Woodward-Clyde (other
than any Woodward-Clyde Subsidiary) with annual payments of $50,000 or more;
(f) Each contract containing covenants purporting to
materially limit the freedom of Woodward-Clyde or any Woodward-Clyde Subsidiary
to compete in any line of business or in any geographic area; and
All Material Agreements are valid, binding and enforceable in accordance with
their terms and none of Woodward-Clyde or the Woodward-Clyde Subsidiaries nor,
to the knowledge of Woodward-Clyde, any other party thereto, is in default under
any of such agreements, nor, to the knowledge of Woodward-Clyde, has any event
or circumstance occurred that, with notice or lapse of time or both, would
constitute any event of default by Woodward-Clyde or the Woodward-Clyde
Subsidiaries or any other party thereto other than with respect to any of the
foregoing such defaults, if any, that would not, individually or in the
aggregate, have a Woodward-Clyde Material Adverse Effect. To Woodward-Clyde's
knowledge, none of the parties to the contracts identified in this Section have
terminated, or have expressed an intent to reduce materially or terminate
presently or in the future, such contracts.
26.
Section 4.21 Prohibited Payments. Woodward-Clyde has not, with respect
to the opportunities, business or operation of Woodward-Clyde, (a) entered into
any understanding agreement or arrangement, written or oral, under or pursuant
to which bribes, kickbacks, rebates, payoffs or other forms of illegal payments
have been or will be made, provided for or suffered, either directly or
indirectly, through agents, brokers or other intermediaries, (b) made any
illegal payment or contribution of moneys, services or property to any political
party, candidate or elected official, directly or indirectly, for any purpose or
(c) directly or indirectly engaged in any activity prohibited by the Foreign
Corrupt Practices Act of 1977.
Section 4.22 Bank Accounts; Receivables.
(a) Part 4.22(a) of the Woodward-Clyde Disclosure Letter
provides accurate information with respect to each account maintained by or for
the benefit of the Company at any bank or other financial institution.
(b) Except as set forth in Part 4.22(b) of the Woodward-Clyde
Disclosure Letter, all existing accounts receivable of Woodward-Clyde (including
those accounts receivable reflected on the unaudited interim balance sheet as of
June 30, 1997 that have not yet been collected and those accounts receivable
that have arisen since such date and have not yet been collected) represent
valid obligations of customers of Woodward-Clyde arising from bona fide
transactions entered into in the ordinary course of business.
Section 4.23 Related Party Transactions. Except as set forth in Part
4.23 of the Woodward-Clyde Disclosure Letter: (a) no Related Party has, and no
Related Party has at any time since January 1, 1992 had, any direct or indirect
interest in any material asset used in or otherwise relating to the business of
Woodward-Clyde; (b) no Related Party is, or has at any time since January 1,
1992 been, indebted to Woodward-Clyde; (c) since January 1, 1992, no Related
Party has entered into, or has had any direct or indirect financial interest in,
any material Contract, transaction or business dealing involving Woodward-Clyde;
(d) no Related Party is competing, or has at any time since January 1, 1992
competed, directly or indirectly, with Woodward-Clyde; and (e) no Related Party
has any claim or right against Woodward-Clyde (other than rights to receive
compensation for services performed as an employee of Woodward-Clyde). For
purposes of the Section 4.23 each of the following shall be deemed to be a
"Related Party": (i) each individual who is, or who has at any time since
January 1, 1992 been, an officer or director of Woodward-Clyde; (ii) each member
of the immediate family of each of the individuals referred to in clause (i)
above; and (iii) any corporation, partnership, company, trust or other entity
(other than Woodward Clyde) in which any one of the individuals referred to in
clauses (i) and (ii) above holds (or in which
27.
more than one of such individuals collectively hold), beneficially or otherwise,
a material voting, proprietary or equity interest.
Section 4.24 Powers of Attorney. Woodward-Clyde has not given a power
of attorney, except for revocable powers of attorney routinely granted in the
ordinary course of business which related to routine representations before
governmental agencies or given in connection with the qualification to conduct
business in other jurisdictions.
Section 4.25 Environmental Matters.
(a) (i) Woodward-Clyde and each of the Woodward-Clyde
Subsidiaries hold, and are in substantial compliance with, all Environmental
Permits, and with all applicable Environmental Laws, except where the failure to
hold such permits or to be in compliance would not have a Woodward-Clyde
Material Adverse Effect.
(ii) Neither Woodward-Clyde nor any of the Woodward-Clyde
Subsidiaries has received any written request for information, or has been
notified that it is a potentially responsible party, under the Federal
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, or any similar state law with respect to any on-site or off-site
location.
(iii) No notice, notification, demand, request for
information, citation, summons, complaint or order has been issued, no complaint
has been filed, no penalty has been assessed and no investigation or review
(collectively, "Environmental Notices") is pending, or to Woodward-Clyde's
knowledge, threatened by any governmental entity or other person with respect to
any (1) alleged violation by Woodward-Clyde or any of the Woodward-Clyde
Subsidiaries of any Environmental Law or liability thereunder or (2) alleged
failure by Woodward-Clyde or any of the Woodward-Clyde Subsidiaries to have any
Environmental Permit, except, in each case, for Environmental Notices that would
not have a Woodward-Clyde Material Adverse Effect.
(iv) To Woodward-Clyde's knowledge, there have been no
discharges, emissions or releases of Hazardous Substances by Woodward-Clyde
which are or were reportable under Environmental Laws, other than such
discharges, emissions or releases that would not have a Woodward-Clyde Material
Adverse Effect.
(b) There has been no material environmental investigation of
Woodward-Clyde, study, audit, test, review or other analysis (including any
Phase I environmental assessments) conducted of which Woodward-Clyde has
knowledge in relation to any real
28.
property or lease of Woodward-Clyde or any Woodward-Clyde Subsidiary which has
not been delivered to URS prior to the date hereof. Neither Woodward-Clyde nor
any of the Woodward-Clyde Subsidiaries is subject to any judgment, decree or
order relating to compliance with, or the cleanup of regulated substances under,
any applicable Environmental Law.
(c) For purposes of this Agreement: (i) the term
"Environmental Laws" means any and all applicable Federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, judicial orders, decrees, codes, injunctions, permits, consent
decrees, consent orders and governmental restrictions, now in effect, relating
to human health, the environment or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or wastes into the environment,
including without limitation ambient air, surface water, ground water or land,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
Hazardous Substances or wastes or the clean-up or other remediation thereof;
(ii) the term "Environmental Permits" means all permits licenses,
authorizations, certificates and approvals of governmental authorities relating
to or required by Environmental Laws and necessary or proper for the business of
Woodward-Clyde and the Woodward-Clyde Subsidiaries as currently conducted; and
(iii) "Hazardous Substance" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics, including, without limitation, any substance
regulated under Environmental Laws.
Section 4.26 Regulatory Matters. Woodward-Clyde has filed or otherwise
provided all reports, data, other information and applications which are
required to be filed with or otherwise provided to the U.S. Environmental
Protection Agency (the "EPA"), the U.S. Occupational Safety and Health
Administration ("OSHA"), and any other Federal, state, local or foreign
governmental authorities with jurisdiction and all regulatory approvals in
respect thereof are in full force and effect on the date hereof, the failure to
file or provide which or obtain which would, in the aggregate, result in a
Woodward-Clyde Material Adverse Effect.
Section 4.27 Immigration Reform and Control Act.
(a) Woodward-Clyde has fully complied with the verification
requirements and the recordkeeping requirements of the Immigration Reform and
Control Act of 1986 ("IRCA").
29.
(b) To the best knowledge and belief of Woodward-Clyde, the
information and documents on which Woodward-Clyde relied in complying with IRCA
are true and correct.
(c) To the best knowledge and belief of Woodward-Clyde, there
have not been any discrimination complaints filed against Woodward-Clyde
pursuant to IRCA.
Section 4.28 Board Approvals; Opinion of Financial Advisor. The Board
of Directors of Woodward-Clyde (at a meeting duly called and held or pursuant to
valid written consent) has unanimously determined that the transactions
contemplated hereby are fair to and in the best interests of Woodward-Clyde and
its stockholders. The Board of Directors of Woodward-Clyde has received the
opinion of Oppenheimer & Co., Inc. ("OC"), Woodward-Clyde's financial advisor,
substantially to the effect that the Merger Consideration to be paid to holders
of the Woodward-Clyde Stock in the Merger is fair to such stockholders from a
financial point of view.
Section 4.29 Brokers. No broker, finder or investment banker (other
than OC) is entitled to any brokerage, finder's fee or commission payable by
Woodward-Clyde in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Woodward-Clyde.
Section 4.30 Disclosure. No representation or warranty by
Woodward-Clyde in this Agreement, the schedules hereto or any certificates
delivered pursuant to the terms hereof, contains or will contain an untrue
statement of material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading.
Section 4.31 Reliance. The foregoing representations and warranties are
made by Woodward-Clyde with the knowledge and expectation that URS is placing
reliance thereon.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF URS
Except as otherwise disclosed to Woodward-Clyde in a letter delivered
to it prior to the execution hereof (which letter shall contain appropriate
references to identify the representations and warranties herein to which the
information in such letter relates) (the "URS Disclosure Letter"), URS and the
Subsidiary represent and warrant to Woodward-Clyde as follows:
30.
Section 5.1 Organization. Each of URS and the Subsidiary is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to own, lease, and operate its properties, and to carry on
its business as now being conducted, except where the failure to be so
organized, existing, and in good standing or to have such power and authority
would not have a URS Material Adverse Effect. Each of URS and the Subsidiary is
duly qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased, or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except in any such jurisdictions where the failure to be so duly qualified or
licensed and in good standing would not have a URS Material Adverse Effect. For
purposes of this Agreement, "URS Material Adverse Effect" means, when used in
connection with URS, any change or effect that is materially adverse to the
business, financial condition, results of operations or assets of URS and its
Subsidiaries taken as a whole, other than changes or effects resulting from (i)
changes attributable to conditions affecting the engineering business generally,
(ii) changes in general economic conditions, or (iii) changes attributable to
the announcement or pendency of the Merger.
Section 5.2 Capitalization. The authorized capital stock of URS
consists of 20,000,000 shares of URS Common Stock, par value $0.01 per share,
and 1,000,000 shares of preferred stock, par value $1.00 per share (the "URS
Preferred Stock"). As of the date hereof, (i) 10,561,263 shares of URS Common
Stock are issued and outstanding, (ii) options to acquire 1,623,938 shares of
URS Common Stock are outstanding under all stock option plans and agreements of
URS, (iii) 2,463,043 shares of URS Common Stock (including shares of URS Common
Stock issuable upon exercise of the options identified in clause (ii) above) are
reserved for issuance pursuant to all employee and director plans of URS, and
(iv) there are no shares of URS Preferred Stock outstanding. All of the issued
and outstanding shares of URS Common Stock are validly issued, fully paid and
nonassessable and free of preemptive rights, and are listed on the New York
Stock Exchange and the Pacific Exchange. All of the URS Common Stock reserved
for issuance in exchange for the shares of the Woodward-Clyde Stock at the
Effective Time of the Merger in accordance with this Agreement will be, when so
issued, duly authorized, validly issued, fully paid and nonassessable and free
of preemptive rights, and are listed on the New York Stock Exchange and the
Pacific Exchange. The authorized capital stock of the Subsidiary consists of 100
shares of the Subsidiary Common Stock, par value $1.00 per share, all of which
shares are validly issued and outstanding, fully paid and nonassessable and are
owned by URS. Except as set forth above or as specified in Section 5.2 of the
URS Disclosure Letter, as of the date of this Agreement there are no shares of
capital stock of URS issued or outstanding or any options, warrants,
subscriptions, calls, rights, convertible securities or other agreements or
commitments obligating URS to issue, transfer, sell, redeem, repurchase or
otherwise acquire
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any shares of its capital stock or securities. Except as provided in this
Agreement or as set forth in Section 5.2 of the URS Disclosure Letter, after the
Effective Time of the Merger, URS will have no obligation to issue, transfer or
sell any shares of its capital stock pursuant to any employee benefit plan or
otherwise.
Section 5.3 Authority Relative to this Agreement. Each of URS and the
Subsidiary has all requisite corporate power and authority to enter into this
Agreement and subject, in the case of this Agreement, to the consents and
approvals set forth in Section 5.4 below, to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by URS and the Subsidiary and the consummation by URS and the Subsidiary of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of URS and the Subsidiary, including the unanimous
approval of their respective Boards of Directors, and no other corporate
proceedings on the part of URS or the Subsidiary are necessary to authorize this
Agreement or the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by URS and the Subsidiary and constitutes a
valid and binding agreement of each of them, enforceable against each of them in
accordance with its terms, except that such enforceability may be subject to (i)
bankruptcy, insolvency, reorganization or other similar laws relating to
enforcement of creditors' rights generally, and (ii) general equitable
principles.
Section 5.4 Consents and Approvals; No Violations. Except for the
applicable requirements of the Governmental Requirements, state securities or
blue sky laws, state and local laws and regulations relating to licensing, and
the filing of the Documents of Merger as required by the Delaware Law, no filing
with, and no permit, authorization, consent or approval of, any Government
Entity is necessary for the execution, delivery and performance of this
Agreement by URS and the Subsidiary or for the consummation by URS and the
Subsidiary of the transactions contemplated by this Agreement. Neither the
execution, delivery nor performance of this Agreement by URS and the Subsidiary,
nor the consummation by URS and the Subsidiary of the transactions contemplated
hereby, nor compliance by URS and the Subsidiary with any of the provisions
hereof, will (i) conflict with or result in any breach of any provisions of the
Certificate of Incorporation or By-Laws of URS or the Subsidiary or the Articles
or Certificate of Incorporation, as the case may be, or By-Laws of any of the
URS Subsidiaries, (ii) except as set forth in Section 5.4(ii) of the URS
Disclosure Letter, result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, acceleration, vesting, payment, exercise,
suspension or revocation) under, any of the terms, conditions or provisions of
any note, bond, mortgage, deed of trust, security interest, indenture, license,
contract, agreement, plan or other instrument or obligation to which URS or any
of the URS Subsidiaries is a party or by which any of them or any of
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their properties or assets may be bound or affected, (iii) except as set forth
in Section 5.4(iii) of the URS Disclosure Letter, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to URS, any URS
Subsidiary or any of their properties or assets, (iv) except as set forth in
Section 5.4(iv) of the URS Disclosure Letter, result in the creation or
imposition of any Lien on any asset of URS or any URS Subsidiary, or (v) except
as set forth in Section 5.4(v) of the URS Disclosure Letter, cause the
suspension or revocation of any certificates of need, accreditation,
registrations, licenses, permits and other consents or approvals of governmental
agencies or accreditation organizations, except in the case of clauses (ii),
(iii), (iv) and (v) for violations, breaches, defaults, terminations,
cancellations, accelerations, creations, impositions, suspensions or revocations
which would not individually or in the aggregate have a URS Material Adverse
Effect.
Section 5.5 URS SEC Reports and Financial Statements. URS has delivered
to Woodward-Clyde true and complete copies of each registration statement,
report and proxy or information statement, including, without limitation, its
Annual Reports to Stockholders incorporated in material part by reference in
certain of such reports, in the form (including exhibits and any amendments
thereto) required to be filed with SEC since January 1, 1992 (collectively, the
"URS SEC Reports"). Except as set forth in Section 5.5 of the URS Disclosure
Letter, as of the respective dates such URS SEC Reports were filed or, if any
such URS SEC Reports were amended, as of the date such amendment was filed, each
of the URS SEC Reports (i) complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act, and the rules and
regulations promulgated thereunder, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Each of the
audited consolidated financial statements and unaudited consolidated interim
financial statements of URS (including any related notes and schedules) included
(or incorporated by reference) in its Annual Reports on Form 10-K for each of
the five fiscal years ended October 31, 1992, 1993, 1994, 1995 and 1996, when
filed, and Quarterly Reports on Form 10-Q for all interim periods subsequent
thereto (the "URS Financial Statements") fairly present, in conformity with GAAP
applied on a consistent basis (except as may be indicated in the notes thereto),
the consolidated financial position of URS and the URS Subsidiaries as of its
date and the consolidated results of operations and cash flows for the period
then ended (subject to normal year-end adjustments in the case of any unaudited
interim financial statements). There has been no change in URS's accounting
policies or methods of making accounting estimates or changes in estimates that
are material to the URS Financial Statements, except as described in the notes
thereto.
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Section 5.6 Absence of Material Adverse and Other Changes. Except as
contemplated by this Agreement, and except as set forth in Section 5.6 of the
URS Disclosure Letter, since December 31, 1996, URS and the URS Subsidiaries
have conducted their business in the ordinary course, consistent with past
practices, and there has not been: (a) any event or occurrence that has resulted
in a URS Material Adverse Effect, or any development or combination of
developments of which URS has knowledge that is reasonably likely, in URS's
commercially reasonable judgment, to result in a URS Material Adverse Effect,
(b) any declaration, setting aside or payment of any dividend or other capital
distributions in respect of any of its capital stock or any redemption or
repurchase or other acquisition of any shares of its capital stock, (c) any
increase in the regular compensation of any of the officers or employees of URS
or the URS Subsidiaries, except such increases as have been granted in the
ordinary course of business in accordance with its customary practices (which
shall include normal periodic performance reviews, promotions and related
compensation increases), (d) any incurrence, assumption or guarantee by URS or
any of the URS Subsidiaries of any indebtedness for borrowed money other than in
the ordinary course of business consistent with past practices, (e) any
transaction or commitment made, or any contract or agreement entered into, by
URS or any of the URS Subsidiaries (including the acquisition or disposition of
any assets) or any relinquishment by URS or any of the URS Subsidiaries of any
contract or other right, in either case, material to URS's business taken as a
whole, other than transactions and commitments in the ordinary course of
business consistent with past practices and those contemplated by this
Agreement, (f) any change in any method of accounting or accounting practice by
URS or any of the URS Subsidiaries, except for any such change after the date
hereof required by reason of a mandatory concurrent change in GAAP, (g) any loss
or damage to the properties or assets of URS or the URS Subsidiaries which has
resulted or is reasonably likely to result in a URS Material Adverse Effect, or
(h) any agreement or any commitment to take any of the actions described in this
Section 5.6.
Section 5.7 Litigation. Except for litigation disclosed in the notes to
the financial statements included in the URS SEC Reports or as set forth in
Section 5.7 of the URS Disclosure Letter, there is no suit, action or proceeding
(whether at law or equity, before or by any Federal, state or foreign court,
tribunal, commission, board, agency or instrumentality, or before any
arbitrator) pending or, to the best knowledge of URS, threatened against or
affecting URS or any of the URS Subsidiaries, the outcome of which, in the
reasonable judgment of URS, is likely individually or in the aggregate to have a
URS Material Adverse Effect, or which challenges the validity of this Agreement
or seeks to prevent, enjoin, materially alter or materially delay the
transactions contemplated hereby, nor is there any judgment, decree, injunction,
rule or order of any court, governmental department, commission, agency,
instrumentality or arbitrator outstanding against URS or
34.
any of the URS Subsidiaries having, or which, insofar as can reasonably be
foreseen, in the future may have, any such effect.
Section 5.8 Absence of Undisclosed Liabilities. Except for liabilities
or obligations which are accrued or reserved against in the URS Financial
Statements (or reflected in the notes thereto) or which were incurred after
December 31, 1996 in the ordinary course of business and consistent with past
practices or in connection with the transactions contemplated by this Agreement,
URS and the URS Subsidiaries do not have any liabilities or obligations (whether
absolute, accrued, contingent or otherwise) of a nature required by GAAP to be
reflected in a consolidated balance sheet (or reflected in the notes thereto).
Section 5.9 No Default. Except as set forth in Section 5.9 of the URS
Disclosure Letter, neither URS nor any of the URS Subsidiaries is in violation
or breach of, or default under (and to the best knowledge of URS no event has
occurred which with notice or the lapse of time or both would constitute a
violation or breach of, or default under) any term, condition or provision of
(a) its Certificate or Articles of Incorporation, as the case may be, or Bylaws,
(b) any note, bond, mortgage, deed of trust, security interest, indenture,
license, contract, agreement, plan, lease, commitment or other instrument or
obligation to which URS or any of the URS Subsidiaries is a party or by which
any of them or any of their properties or assets may be bound or affected, (c)
any order, writ, injunction, decree, statute, rule or regulation applicable to
URS or any of the URS Subsidiaries or any of their properties or assets, or (d)
any certificate of need, accreditation, registration, license, permit and other
consent or approval of governmental agencies or accreditation organization,
except in the case of clauses (b), (c) and (d) above for violations, breaches or
defaults which would not individually or in the aggregate have a URS Material
Adverse Effect.
Section 5.10 Information Supplied. None of the information supplied or
to be supplied by URS, the URS Subsidiaries, auditors, attorneys, financial
advisors, other consultants or advisors or the Subsidiary for inclusion in the
Form S-4 or the Proxy Statement/Form S-4, will, in the case of the Proxy
Statement and any amendment or supplement thereto, at the time of the mailing of
the Proxy Statement and any amendment or supplement thereto, and at the time of
any meetings of stockholders of Woodward-Clyde and URS to vote upon this
Agreement and the transactions contemplated hereby, or in the case of the Form
S-4, as amended or supplemented, at the time it becomes effective and at the
time of any post-effective amendment thereto contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they are made, not misleading or necessary to correct any statement in any
earlier filing with the SEC of such Proxy
35.
Statement/Form S-4 or any amendment or supplement thereto or any earlier
communication (including the Proxy Statement/Form S-4) to stockholders of
Woodward-Clyde or URS with respect to the transactions contemplated by this
Agreement. The Form S-4 and the Proxy Statement/Form S-4 as it relates to URS
and its Subsidiaries will comply as to form in all material respects with the
provisions of all applicable laws including the provisions of the Securities Act
and the Exchange Act and the rules and regulations of the SEC thereunder, except
that no representation is made by URS with respect to information supplied by
Woodward-Clyde specifically for inclusion therein.
Section 5.11 Board Approvals; Opinion of Financial Advisor. The Boards
of Directors of URS and the Subsidiary (at meetings duly called and held or
pursuant to valid written consents) have unanimously determined that the
transactions contemplated hereby are fair to and in the best interests of URS
and the Subsidiary and the stockholders of URS. The Board of Directors of URS
have received the opinion, dated the date of this Agreement, of Smith Barney
Inc. ("SB"), URS's financial advisor, substantially to the effect that, as of
such date, the Merger Consideration is fair to URS from a financial point of
view.
Section 5.12 Brokers. No broker, finder or investment banker (other
than SB) is entitled to any brokerage, finder's fee or commission payable by URS
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of URS.
Section 5.13 Disclosure. No representation or warranty by URS in this
Agreement, the schedules hereto or any certificates delivered pursuant to the
terms hereof, contains or will contain an untrue statement of material fact, or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances in which they were
made, not misleading.
Section 5.14 Financing Commitment Letter. URS has delivered to
Woodward-Clyde a true and correct copy of a commitment letter from Wells Fargo
Bank, National Association, in the form of a letter dated July 7, 1997 and a
letter dated August 13, 1997 with a Summary of Terms and Conditions attached,
relating to the financing necessary to fund the cash component of the Merger
consideration and refinance the outstanding indebtedness of URS and
Woodward-Clyde and provide a working capital facility following the Closing Date
(the "Commitment Letter"). The Commitment Letter has not been amended or
rescinded, and remains in full force and effect in accordance with its terms as
of the date of this Agreement.
36.
ARTICLE 6
PRE-CLOSING COVENANTS
Section 6.1 Covenants of All Parties. During the period from the date
of this Agreement until the earlier of the termination of this Agreement or the
Effective Time of the Merger, each of the parties hereto covenants and agrees as
follows;
6.1.1 Advice of Changes. Each party shall promptly advise each
of the other parties in writing of (i) any event, condition, fact or
circumstance occurring or existing prior to, on or subsequent to the date of
this Agreement that would render any representation or warranty of such party
contained in this Agreement, if made on or as of the date of such event or the
Closing Date, untrue or inaccurate in any material respect, (ii) any breach of
any covenant or obligation of such party arising under this Agreement, and (iii)
any event, condition, fact or circumstance that would make the timely
satisfaction of any of the conditions set forth in Article 7 impossible or
unlikely.
6.1.2 Regulatory Approvals. Each party shall execute and file,
or join in the execution and filing, of any application or other document that
may be necessary in order to obtain the authorization, approval or consent of
any governmental body, Federal, state or local or foreign, which may be
reasonably required, or which the other party may reasonably request, in
connection with the consummation of the transactions contemplated by this
Agreement, including, without limitation, filings under the HSR Act. Each party
shall use its best efforts to obtain all such authorizations, approvals and
consents.
6.1.3 Confidentiality. Each party shall hold in confidence all
nonpublic information until such time as such information is otherwise publicly
available and, if this Agreement is terminated, each party will deliver to the
other all documents, work papers and other materials (including copies) obtained
by such party or on its behalf from the other party as a result of this
Agreement or in connection herewith, whether so obtained before or after the
execution hereof. Each party shall continue to abide by the terms of the
confidentiality agreement between URS and Woodward-Clyde in effect as of the
date hereof (the "Confidentiality Agreement").
6.1.4 Best Efforts. Upon the terms and subject to the
conditions herein provided, each of the parties hereto agrees to use its best
efforts to take or cause to be taken all actions, to do or cause to be done, and
to assist and cooperate with the other party hereto in doing, all things
necessary, proper or advisable under applicable laws and regulations, to
consummate and make effective, in the most expeditious manner practicable, the
transactions
37.
contemplated by this Agreement, including (i) using all reasonable efforts to
obtain all necessary waivers, consents and approvals from third parties, (ii)
defending any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby and thereby, and (iii) executing and delivering
such instruments, and taking such other actions as the other party hereto may
reasonably require in order to cause the conditions set forth in Article 7 to be
satisfied on a timely basis and otherwise carry out the intent of this
Agreement.
6.1.5 Financing Arrangements. The parties hereto shall take
all actions as may be reasonably necessary to fulfill the covenants and
conditions set forth in the Commitment Letter to obtain the consent of the
Lenders to the Merger and the financing necessary to fund the cash component of
the Merger Consideration.
6.1.6 Tax Matters. Prior to filing the Form S-4 with the SEC,
and again prior to the Closing, Woodward-Clyde and URS shall execute and deliver
to Cooley Godward llp and to Bronson, Bronson & McKinnon LLP, tax representation
letters in such form as such firms may reasonably request for use in connection
with the legal opinions required in connection with the filing of the Proxy
Statement/Form S-4 with the SEC and as contemplated by Sections 7.1.6 and 7.2.7.
Section 6.2 Covenants of Woodward-Clyde. During the period from the
date of this Agreement until the earlier of the termination of this Agreement or
the Effective Time of the Merger, Woodward-Clyde agrees (except as expressly
contemplated by this Agreement or with the prior written consent of URS) that:
6.2.1 Conduct of Business Pending Merger.
(a) Ordinary Course. Woodward-Clyde and the
Woodward-Clyde Subsidiaries shall carry on their respective businesses in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted and, to the extent consistent with such businesses, use all
reasonable efforts to preserve intact their present business organizations, keep
available the services of their present officers and employees, and preserve
their relationships with customers, suppliers and others having business
dealings with Woodward-Clyde and the Woodward-Clyde Subsidiaries. Woodward-Clyde
shall promptly notify URS of any event or occurrence or emergency not in the
ordinary course of business of Woodward-Clyde or the Woodward-Clyde Subsidiaries
which could result in a Woodward-Clyde Material Adverse Effect. Neither
Woodward-Clyde nor any of the Woodward-Clyde Subsidiaries shall (except with the
prior written consent of URS):
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(i) grant any options, warrants, restricted
stock, stock bonus or other awards under any stock option or employee benefit
plan or otherwise, or authorize cash payments in exchange for any options,
restricted stock, stock bonus or other awards granted under any of such plans;
(ii) grant any severance or termination pay
to any officer or director or, except in the ordinary course of business
consistent with past practices, to any employee of Woodward-Clyde or any
Woodward-Clyde Subsidiary;
(iii) except in the ordinary course of
business consistent with past practices and other than transfers between or
among Woodward-Clyde and any Woodward-Clyde Subsidiary, transfer to any person
or entity any rights to the Woodward-Clyde Intellectual Property Rights;
(iv) commence a lawsuit other than: (1) for
the routine collection of bills; (2) in such cases where Woodward-Clyde in good
faith determines that failure to commence suit would result in a material
impairment of a valuable aspect of Woodward-Clyde's business, provided
Woodward-Clyde consults with URS prior to filing such suit; or (3) for a breach
of this Agreement; and
(v) enter into one or more leases which
extend for a period of two years beyond the date of this Agreement and which
obligate the Company to pay aggregate gross rent in excess of $500,000.
(b) Dividends; Changes in Stock. Woodward-Clyde
shall not, and it shall not permit any of the Woodward-Clyde Subsidiaries to,
(i) declare or pay any dividends on or make other capital distributions in
respect of any of its capital stock, except for intercompany dividends at times
consistent with prior practice, (ii) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) repurchase, redeem or otherwise acquire, any shares of
its capital stock.
(c) Issuances of Securities. Woodward-Clyde shall
not, and it shall not permit any of the Woodward-Clyde Subsidiaries to, issue,
deliver or sell, or authorize or propose the issuance, delivery or sale of, any
shares of its capital stock or any securities convertible into such shares, or
any rights, warrants, calls, subscriptions or options to acquire, any such
shares or convertible securities, or any other ownership interests in such
capital stock.
39.
(d) Governing Documents. Woodward-Clyde shall not,
nor shall it cause or permit any of the Woodward-Clyde Subsidiaries to, amend
its articles or certificate of incorporation or by-laws.
(e) No Acquisitions. Woodward-Clyde shall not, and
it shall not permit any of the Woodward-Clyde Subsidiaries to acquire, or agree
to acquire by merging or consolidating with, or by purchasing a substantial
equity interest in or substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof.
(f) No Dispositions. Other than sales or licenses of
products or technology in the ordinary course of business consistent with prior
practice, Woodward-Clyde shall not, and it shall not permit any of the
Woodward-Clyde Subsidiaries to, sell, lease, license, encumber or otherwise
dispose of, any of its assets, except for such dispositions in the ordinary
course of business or in amounts which are not material, in the aggregate, to
the business of Woodward-Clyde.
(g) Indebtedness. Woodward-Clyde shall not, and
shall not permit any of the Woodward-Clyde Subsidiaries to, incur any
indebtedness for borrowed money or guarantee any such indebtedness or sell any
debt securities or warrants or rights to acquire any debt securities of
Woodward-Clyde or any of the Woodward-Clyde Subsidiaries or guarantee any debt
securities of others, except in the ordinary course of business consistent with
past practices.
(h) Plans; Compensation. Except as otherwise
provided in this Agreement, Woodward-Clyde shall not, and shall not permit any
of the Woodward-Clyde Subsidiaries to, adopt or amend in any material respect
any Woodward-Clyde Plan or pay any pension or retirement allowance not required
by any existing Woodward-Clyde Plan. Woodward-Clyde shall not and shall not
permit any Woodward-Clyde Subsidiary to, enter into any employment contracts,
pay any special bonuses or special remuneration to officers, directors or
employees, or increase the salaries, wage rates or fringe benefits of (i) any of
its officers or employees whose compensation exceeded $100,000 during the fiscal
year ending December 31, 1996, or (ii) any of its other officers and employees
other than pursuant to scheduled reviews under Woodward-Clyde's or the
Woodward-Clyde Subsidiary's normal compensation review cycle, in all cases
consistent with existing policies and past practice.
(i) Tax Matters. Woodward-Clyde shall not make any
tax election that would have a Woodward-Clyde Material Adverse Effect or settle
or compromise
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any income tax liability of Woodward-Clyde or any of the Woodward-Clyde
Subsidiaries that would have a Woodward-Clyde Material Adverse Effect.
(j) Discharge of Liabilities. Woodward-Clyde shall
not, and it shall not permit any of the Woodward-Clyde Subsidiaries to, pay,
discharge, settle or satisfy any claims, liabilities or obligations, except in
the ordinary course of business or in amounts which are not material,
individually or in the aggregate, to the business of Woodward-Clyde, provided
that nothing herein shall prevent Woodward-Clyde from settling the litigation
filed on March 13, 1996, by Woodward-Clyde in the Denver District Court relating
to the acquisition by Woodward-Clyde in April 1995 of Geo-Con, Inc. and all
claims and counterclaims relating to or arising out of such acquisition
(collectively, the "GeoCon Litigation") prior to the Closing provided that such
settlement does not require any payments by Woodward-Clyde or any Woodward-Clyde
Subsidiary to any third party and does not impose any continuing cost or
obligation on Woodward-Clyde or any Woodward-Clyde Subsidiary (other than terms
and conditions typical of standard settlement agreements).
(k) Material Agreements. Except in the ordinary
course of business, neither Woodward-Clyde nor any of the Woodward-Clyde
Subsidiaries shall modify, amend, or terminate any Material Agreement or waive,
release or assign any material rights or claims under such Material Agreement.
(l) Agreement. Neither Woodward-Clyde nor any of the
Woodward-Clyde Subsidiaries shall agree or commit to do any of the actions
described in this Section 6.2.1.
6.2.2 Stockholders' Meeting; Proxy Statement. Woodward-Clyde
shall hold a meeting of its stockholders at the earliest practicable date to
submit this Agreement and related matters for their consideration and approval,
which approval shall be recommended by Woodward-Clyde's Board of Directors
(subject to the fiduciary obligations of its directors and officers).
Woodward-Clyde shall send to its stockholders, for the purpose of considering
and voting upon the Merger, a Proxy Statement satisfying all requirements of
applicable state and Federal laws, shall use its best efforts to obtain approval
of this Agreement and the Merger by the requisite stockholder vote (subject to
the fiduciary obligations of its directors and officers), and shall be solely
responsible for any statement, information or omission in the Proxy Statement
relating to it or its affiliates.
6.2.3 Acquisition Proposals. From the date hereof until the
earlier of the termination of this Agreement or the consummation of the Merger,
Woodward-Clyde and the Woodward-Clyde Subsidiaries will not, and will cause
their respective officers, directors,
41.
employees, agents and representatives not to, directly or indirectly, encourage,
solicit, accept, initiate or conduct discussions or negotiations with, provide
any information to, or enter into any agreement with, any corporation,
partnership, limited liability company, person or other entity or group
concerning the acquisition of all or a substantial part of the assets, business
or capital stock of Woodward-Clyde, whether through purchase, merger,
consolidation, exchange or any other business combination (each of the
foregoing, an "Acquisition Proposal"). Notwithstanding anything to the contrary
in the preceding sentence, nothing herein shall prevent Woodward-Clyde and its
officers and directors, from considering, discussing, negotiating, responding to
and accepting unsolicited firm offers for any such transaction from persons
other than URS if and to the extent that, in the written opinion of
Woodward-Clyde's outside counsel, failure to do so would be reasonably likely to
constitute a violation of applicable law or a breach of the fiduciary duties of
Woodward-Clyde's directors to Woodward-Clyde's stockholders. Woodward-Clyde
shall immediately provide written notice to URS of the terms and other details
of any such unsolicited inquiry or proposal relating to an Acquisition Proposal.
In the event that Woodward-Clyde or any of its officers or directors enters into
any discussions for any reason or negotiations relating to any such Acquisition
Proposal from any person other than URS, Woodward-Clyde shall immediately
reimburse URS for all expenses and costs incurred by URS in connection with the
transactions contemplated by this Agreement up to an aggregate maximum of
$500,000, whether or not Woodward-Clyde ultimately responds favorably to,
accepts or enters into any letter of intent, understanding or other agreement
relating to such Acquisition Proposal. In addition, in the event that
Woodward-Clyde or any of its officers or directors shall enter into any letter
of intent, understanding or other agreement with a party other than URS relating
to the acquisition of all or a substantial part of the assets, business or
capital stock of Woodward-Clyde, whether through purchase, merger,
consolidation, exchange or any other business combination, either in violation
of the no-shop agreement set forth in this Section or within nine (9) months
after termination of this Agreement for any reason, then immediately upon
entering into such letter of intent, understanding or other agreement,
Woodward-Clyde shall pay to URS a termination fee in the amount of $3.5 million,
less the aggregate amount of the URS expenses and costs previously reimbursed to
URS pursuant to the preceding sentence (the "Termination Fee"); provided,
however, that such Termination Fee shall not be payable if, prior to the entry
by Woodward-Clyde into such letter of intent, understanding or other agreement,
URS has unilaterally declined to close the Merger, or the parties have agreed to
terminate this Agreement by mutual written consent under Section 9.1.1 of this
Agreement, or this Agreement has been properly terminated by Woodward-Clyde
(without any breach of its obligations under this Agreement) pursuant to
Sections 9.1.2(ii), 9.1.5 or 9.1.6. The parties acknowledge and agree that the
expense reimbursement obligation and Termination Fee described in this Section
shall be the exclusive remedy to URS in the event of a breach by Woodward-Clyde
of this Section 6.2.3, and, in any such event, URS shall be
42.
entitled, in addition to receiving such payments, to equitable remedies,
including, without limitation, specific performance and enjoining of any actions
determined to be in breach of this Agreement; provided that such exclusive
remedy limitation applicable to breach of this Section 6.2.3 shall not prevent
URS from pursuing any and all remedies available to it, including without
limitation seeking actual and consequential damages and equitable remedies, for
breach by Woodward-Clyde of any other provision of this Agreement.
6.2.4 Maintenance of Business. Woodward-Clyde will use its
best efforts to carry on and preserve its business and its relationships with
clients, customers, suppliers, employees and others in substantially the same
manner as it has prior to the date hereof. If the executive management of
Woodward-Clyde becomes aware of a material deterioration in the relationship
with any significant client, customer, supplier or key employee, it will
promptly bring such information to the attention of URS in writing and, if
requested by URS, will use its best efforts to restore the relationship.
6.2.5 Access. Woodward-Clyde shall afford to URS and to URS's
financial advisors, legal counsel, accountants, financing sources and other
authorized representatives access during normal business hours to all of its
books, records, properties, offices and personnel.
6.2.6 Liability Insurance. On or before the Closing Date,
Woodward-Clyde shall procure (subject to the approval of URS) continuing
directors' and officers' liability coverage (tail coverage) for directors and
officers of Woodward-Clyde who have served as directors and officers of
Woodward-Clyde or its affiliates (the "Woodward-Clyde D & O Policy"), prior to
the Effective Time of the Merger, with respect to acts or failures to act prior
to the Effective Time of the Merger. Said policy shall have a term of not less
than three (3) years after the Closing Date.
6.2.7 Affiliate Agreements. Woodward-Clyde shall use its best
efforts to deliver to URS, prior to the date the preliminary Proxy Statement is
mailed to the SEC, an agreement or agreements, in form and substance reasonably
satisfactory to URS, signed by each officer, director, holder of more than 1% of
the outstanding Woodward-Clyde Common Stock or Woodward-Clyde Preferred Stock
and each other person who may be deemed to be an "affiliate" of Woodward-Clyde
as defined in the Securities Act, providing a "continuity of interest"
representation in a manner sufficient to satisfy the requirements of the Code
regarding the tax-free nature of the Merger and acknowledging the restrictions
on transfer of the URS Common Stock to be received by them pursuant to the
Merger under Rules 144 and 145 promulgated under the Securities Act.
43.
6.2.8 Comfort Letter. Woodward-Clyde shall deliver to URS a
comfort letter, dated a date not more than two (2) business days before the date
upon which the Form S-4 becomes effective, from Ernst & Young, independent
public accountants for Woodward-Clyde, in form and substance reasonable
satisfactory to URS, covering such matters as are normally covered in a comfort
letter delivered in connection with a registration statement on Form S-4
covering transactions similar to the Merger.
6.2.9 FIRPTA Matters. At the Closing, Woodward-Clyde shall
deliver (a) to URS a statement (in form reasonable acceptable to URS) conforming
to the requirements of Section 1.897-2(h)(1)(i) of the United States Treasury
Regulations, and (b) to the Internal Revenue Service the notification required
under Section 1.897-2(h)(2) of such Regulations.
6.2.10 Employment and Noncompetition Agreements.
Woodward-Clyde shall use its best efforts to cause such of its key employees as
may be identified in advance by URS to execute and deliver Employment and
Noncompetition Agreements in such form and substance as may be reasonably
requested by URS.
Section 6.3 Covenants of URS. During the period from the date of this
Agreement until the earlier of the termination of this Agreement or the
Effective Time of the Merger, URS and the Subsidiary agree (except as expressly
contemplated by this Agreement or with the prior written consent of
Woodward-Clyde) that:
6.3.1 Stockholders' Meeting; Proxy Statement. URS shall hold a
meeting of its stockholders at the earliest practicable date to submit the
Agreement and related matters for their consideration and approval, which
approval shall be recommended by URS's Board of Directors (subject to the
fiduciary obligations of its directors and officers). URS shall send its
stockholders, for purposes of considering and voting upon the Merger, a Proxy
Statement satisfying all the requirements of applicable state and Federal laws,
shall use its best efforts to obtain approval of this Agreement and the Merger
by the requisite stockholder vote, and shall be solely responsible for any
statement, information or omission in the Proxy Statement relating to it or its
affiliates.
6.3.2 Registration Statement. The URS Common Stock to be
issued in the Merger shall be registered under the Securities Act on Form S-4.
As promptly as practicable after the date hereof, URS shall prepare and file
with the SEC the Form S-4 and any other documents required by the Securities Act
in connection with the Merger. URS shall use its best efforts to have the Form
S-4 declared effective as promptly as practicable after such filing. URS shall
also take any action required to be taken under any applicable state
44.
securities or "blue sky" laws in connection with the issuance of the URS Common
Stock in connection with the Merger.
6.3.3 Listing Agreement. As promptly as practicable after the
date hereof, URS shall prepare and submit to each of the New York Stock Exchange
and the Pacific Exchange a listing application covering the shares of the URS
Common Stock to be issued in connection with the Merger. URS shall use its best
efforts to obtain, prior to the Effective Time of the Merger, approval for the
listing of such URS Common Stock, subject to official notice of issuance.
6.3.4 Conduct of Business; Consultation. URS and the URS
Subsidiaries will carry on their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted and, to
the extent consistent with such businesses, use all reasonable efforts to
preserve intact their present business organizations and their relationships
with clients, customers, suppliers and employees. URS will promptly notify
Woodward-Clyde of any event or occurrence or emergency not in the ordinary
course of business which could result in a URS Material Adverse Effect. In the
event URS is considering any material transaction or series of related
transactions involving the acquisition or disposition of assets with a value or
for consideration in excess of $20 million, it will first consult with the
executive management of Woodward-Clyde regarding such transaction(s), provided
that the approval of Woodward-Clyde shall not be required for any such
transaction(s) (except as indicated in the following sentence). Without the
prior approval of Woodward-Clyde, prior to the Closing Date, URS shall not
consummate, or enter into any binding agreement or other commitment to
consummate, any transaction or series of related transactions that would (i)
result in the acquisition of assets or a business for total consideration in
excess of $50 million or requiring the issuance of URS Common Stock in excess of
20% of the shares outstanding at that time, (ii) result in the disposition of
assets or any business for total consideration in excess of $100 million, or
(iii) otherwise require the prior approval of the stockholders of URS.
6.3.5 Access. URS shall afford to Woodward-Clyde and to
Woodward-Clyde's financial advisors, legal counsel and other authorized
representatives such access during normal business hours to its books, records,
properties, offices and personnel as Woodward-Clyde may reasonably request in
connection with the transactions contemplated by this Agreement.
ARTICLE 7
CONDITIONS TO CONSUMMATION OF THE MERGER
45.
Section 7.1 Conditions to Obligations of Woodward-Clyde. The
obligations of Woodward-Clyde to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the Merger of the following
conditions:
7.1.1 Representations and Warranties True at Closing. The
representations and warranties contained in this Agreement of URS and the
Subsidiary shall be deemed to have been made again at and as of the Closing with
respect to the stated facts then existing and shall be true in all material
respects.
7.1.2 Covenants Performed. All of the obligations of URS and
the Subsidiary to be performed at or before the Closing pursuant to the terms of
this Agreement shall be been duly performed.
7.1.3 Certificate. At the Closing, Woodward-Clyde shall have
received a Certificate signed by the President of each of URS and the Subsidiary
to the effect that each of the conditions set forth in Section 7.1.1 and 7.1.2
have been satisfied.
7.1.4 Stockholder Approvals. This Agreement and the Merger
shall have been duly approved by the affirmative vote of at least (a) 70% of the
shares of Woodward-Clyde Common Stock entitled to vote with respect thereto, (b)
a majority of the shares of Woodward-Clyde Preferred Stock entitled to vote with
respect thereto, and (c) a majority of the shares of URS Common Stock entitled
to vote with respect thereto (collectively, the "Stockholder Approvals").
7.1.5 Opinion of Counsel. Cooley Godward llp, counsel to URS,
shall have issued an opinion of counsel to Woodward-Clyde, dated the Closing
Date, in form and substance reasonably satisfactory to Woodward-Clyde, to the
effect that:
(i) URS and the Subsidiary are corporations validly
existing and in good standing under the laws of the State of Delaware and have
all requisite corporate power to own, operate and lease their properties and to
carry on their businesses as it is now being conducted;
(ii) URS and the Subsidiary have full corporate
power to enter into this Agreement and to carry out the transactions provided
for herein;
(iii) All corporate action required to be taken on
the part of URS and the Subsidiary to authorize them to execute and deliver this
Agreement and to consummate the transactions contemplated hereby have been duly
and validly taken.
46.
(iv) This Agreement has been duly and validly
authorized, executed and delivered by URS and the Subsidiary and, assuming due
authorization, execution, delivery and performance by each of the other parties
hereto, constitutes the valid and binding obligations of URS and the Subsidiary,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy or other laws relating to or affecting creditors' rights
generally and by equitable principles; and
(v) The shares of URS Common Stock issuable in
connection with the Merger have been duly and validly authorized and, upon
issuance, such shares will be fully paid and nonassessable.
In giving such opinions, such counsel shall be entitled to rely upon
certificates of officers of URS or any of its subsidiaries and public officials
with respect to factual matters upon which their opinions may be based, provided
that the extent of such reliance is set forth in such opinion and such opinion
states that it is reasonable for Woodward-Clyde to rely thereon.
7.1.6 Tax Opinion. Woodward-Clyde shall have received a legal
opinion of Bronson, Bronson & McKinnon LLP (or, if Bronson, Bronson & McKinnon
LLP for any reason does not render such legal opinion, a legal opinion of Cooley
Godward llp), dated as of the Closing Date, to the effect that the Merger will
constitute a reorganization within the meaning of Section 368 of the Code (it
being understood that, in rendering such opinion, such counsel may rely upon the
tax representation letters referred to in Section 6.1.6 and the continuity of
interest representations contained in the Affiliate Agreements referred to in
Section 6.2.7.); provided that, in the event that the aggregate amount of the
Applicable Common Cash Component exceeds 50% of the total value of the aggregate
Merger Consideration determined as of the Closing Date, then this condition
shall be deemed to have been waived with no further action on the part of
Woodward-Clyde.
7.1.7 Listing. The shares of URS Common Stock to be issued in
the Merger shall have been approved for listing (subject to notice of issuance)
on the New York Stock Exchange and the Pacific Exchange.
7.1.8 Form S-4. The Form S-4 pertaining to the URS Common
Stock to be issued in connection with the Merger shall have become effective
under the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order.
7.1.9 Merger Documents. The Merger Documents shall have been
filed with the Secretary of State of the State of Delaware, as required by law.
47.
7.1.10 Material Adverse Changes. There shall have been no URS
Material Adverse Effect between the date of this Agreement and the date of the
Closing.
7.1.11 HSR Filing. Any waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated, and no action shall have been instituted by the Department of
Justice or Federal Trade Commission challenging or seeking to enjoin the
consummation of the transaction contemplated by this Agreement, which action
shall not have been withdrawn or terminated.
Section 7.2 Conditions to Obligations of URS and the Subsidiary. The
obligations of URS and the Subsidiary to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the Merger of the
following conditions:
7.2.1 Representations and Warranties True at Closing. The
representations and warranties contained in this Agreement of Woodward-Clyde
shall be deemed to have been made again at and as of the Closing with respect to
the stated facts then existing and shall be true in all material respects.
7.2.2 Covenants Performed. All of the obligations of
Woodward-Clyde to be performed at or before the Closing pursuant to the terms of
this Agreement shall be been duly performed.
7.2.3 Certificate. At the Closing, URS and the Subsidiary
shall have received a Certificate signed by the President of Woodward-Clyde to
the effect that each of the conditions set forth in Section 7.2.1 and 7.2.2 have
been satisfied.
7.2.4 Stockholder Approvals. The Stockholder Approvals shall
have been obtained; and the Woodward-Clyde Group, Inc. Shareholders' Agreement
(the "Shareholders' Agreement") shall have been effectively amended or
terminated in such manner as may be necessary or appropriate to consummate the
Merger without further liability or cost to URS thereunder following the Closing
Date.
7.2.5 Opinion of Counsel. Bronson, Bronson & McKinnon LLP,
counsel to Woodward-Clyde, shall have issued an opinion of counsel to URS, dated
the Closing Date, in form and substance reasonably satisfactory to URS, to the
effect that:
(i) Woodward-Clyde is a corporation validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power to
48.
own, operate and lease its properties and to carry on its business as it is now
being conducted;
(ii) Woodward-Clyde has full corporate power to
enter into this Agreement and to carry out the transactions provided for herein;
(iii) All corporate action required to be taken on
the part of Woodward-Clyde to authorize it to execute and deliver this Agreement
and to consummate the transactions contemplated hereby have been duly and
validly taken; and
(iv) This Agreement has been duly and validly
authorized, executed and delivered by Woodward-Clyde and, assuming due
authorization, execution, delivery and performance by each of the other parties
hereto, constitutes the valid and binding obligation of Woodward-Clyde,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy or other laws relating to or affecting creditors' rights
generally and by equitable principles.
In giving such opinions, such counsel shall be entitled to rely upon
certificates of officers of Woodward-Clyde or any of its subsidiaries and public
officials with respect to factual matters upon which their opinions may be
based, provided that the extent of such reliance is set forth in such opinion
and such opinion states that it is reasonable for URS to rely thereon.
7.2.6 Government Contracts Opinion. URS shall have received a
legal opinion of a reputable law firm (reasonably acceptable to URS) experienced
in government contracts matters, reasonably satisfactory in form and content to
URS, to the effect that the execution, delivery and performance of this
Agreement and the consummation of the Merger and the other transactions
contemplated by this Agreement do not and will not contravene, conflict with or
result in a violation of, or give any Governmental Body the right to exercise
any remedy or to obtain any relief under, any Government Contract to which
Woodward-Clyde or any Woodward-Clyde Subsidiary is a party or under which the
Woodward-Clyde or any Woodward-Clyde Subsidiary has any rights or obligations.
7.2.7 Tax Opinion. URS shall have received a legal opinion of
Cooley Godward llp, dated as of the Closing Date, to the effect that the Merger
will constitute a reorganization within the meaning of Section 368 of the Code
(it being understood that, in rendering such opinion, such counsel may rely upon
the tax representation letters referred to in Section 6.1.6 and the continuity
of interest representations contained in the Affiliate Agreements referred to in
Section 6.2.7.)
49.
7.2.8 Listing. The shares of URS Common Stock to be issued in
the Merger shall have been approved for listing (subject to notice of issuance)
on the New York Stock Exchange and the Pacific Exchange.
7.2.9 Agreements. URS shall have received duly executed copies
of the Affiliate Agreements contemplated by Section 6.2.7 and the Employment and
Noncompetition Agreements contemplated by Section 6.2.10.
7.2.10 Form S-4. The Form S-4 pertaining to the URS Common
Stock to be issued in connection with the Merger shall have become effective
under the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order.
7.2.11 Merger Documents. The Merger Documents shall have been
filed with the Secretary of State of the State of Delaware, as required by law.
7.2.12 Material Adverse Changes. There shall have been no
Woodward- Clyde Material Adverse Effect between the date of this Agreement and
the date of the Closing.
7.2.13 HSR Filing. Any waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated, and no action shall have been instituted by the Department of
Justice or Federal Trade Commission challenging or seeking to enjoin the
consummation of the transaction contemplated by this Agreement, which action
shall not have been withdrawn or terminated.
7.2.14 Consents. Other than the filing of the Merger Documents
as contemplated in Section 1.2, the parties shall have made such filings, and
obtained all consents of Governmental Entities, required to consummate the
transactions contemplated hereby.
7.2.15 No Litigation. There shall not be pending any action,
proceeding or other application before any court or Government Entity brought by
any Government Entity (i) challenging or seeking to restrain or prohibit the
consummation of the transactions contemplated by this Agreement, or seeking to
obtain any material damages, or (ii) seeking to prohibit or impose any material
limitations on URS's ownership or operation of all or any portion of the
combined business of URS and Woodward-Clyde.
7.2.16 Financing Arrangements. The conditions set forth in the
Commitment Letter shall have been satisfied.
50.
ARTICLE 8
ADDITIONAL AGREEMENTS
Section 8.1 Public Announcements. URS, the Subsidiary and
Woodward-Clyde agree that they will not issue any press release or otherwise
make any public statement or respond to any press inquiry with respect to this
Agreement or the transactions contemplated hereby without the prior approval of
the other party (which approval will not be unreasonably withheld), except as
may be required by applicable law.
Section 8.2 Confidentiality. No party to this Agreement shall use or
disclose any non-public information obtained from another party for any purpose
unrelated to the Merger, and, if this Agreement is terminated for any reason
whatsoever, each party shall return to the other all originals and copies of all
documents and papers containing all information furnished to such party pursuant
to this Agreement, or during the negotiations which preceded this Agreement, and
shall neither use nor disclose any such information except to the extent that
such information is available to the public, is rightfully obtained from third
parties, or is independently developed.
Section 8.3 Additional Agreements. In case at any time after the
Effective Time of the Merger any further action is reasonably necessary or
desirable to vest the Surviving Corporation with full title to all properties,
assets, rights, approvals, immunities and franchises of either of the
constituent corporations, the proper officers and directors of each corporation
which is a party to this Agreement shall take all such necessary corporate
action.
Section 8.4 Non-Liability of Agents and Stockholders. No stockholder,
director, officer or employee of any party hereto shall be individually liable
for any breach of the representations, warranties or covenants of any party
hereto contained herein in the absence of fraud or willful misconduct on the
part of such stockholder, director, officer or employee.
Section 8.5 Woodward-Clyde Capital Accumulation (Retirement) Plan; GCH
Acquisition Corp. Retirement Program. Woodward-Clyde will take and cause to be
taken any and all actions necessary or appropriate, including any necessary or
appropriate plan amendments, (i) to suspend any obligation to contribute shares
of Woodward-Clyde Stock to, or to redeem shares of Woodward-Clyde Stock from,
the Woodward-Clyde Capital Accumulation (Retirement) Plan (the "Retirement
Plan") during the period from the date of this Agreement to the Effective Time
of the Merger, (ii) to either, at the option of URS, terminate the Retirement
Plan and/or the GCH Acquisition Corp. Retirement Program (the
51.
"GCH Plan") one day prior to the Effective Time of the Merger and/or merge the
Retirement Plan and the CGH Plan with and into the URS 401(k) Retirement Plan
from the Effective Time of the Merger, and (iii) to eliminate any options
available to the Retirement Plan, the CGH Plan or their participants to purchase
employer securities with assets held in the Retirement Plan or the GCH Plan from
and after the Effective Time of the Merger.
Section 8.6 Woodward-Clyde Annual Bonus Plan. Following the Closing,
URS will cause to be completed an audit of the consolidated financial statements
of Woodward-Clyde for the period beginning on January 1, 1997 and ending on the
Closing Date (the "Bonus Period"), which will be prepared in accordance with
GAAP applied on a consistent basis with the Woodward-Clyde Financial Statements
(the "Woodward-Clyde Interim Financial Statements"). Promptly following the
completion of such audit, URS will cause the Surviving Corporation to pay
bonuses to the former employees of Woodward-Clyde in a manner consistent with
prior practices, but prorated for the Bonus Period, as follows:
8.6.1 Bonus Pool. The aggregate amount of the bonus pool (the
"Bonus Pool") shall equal the "Annualization Ratio" multiplied by the greater of
either (i) $500,000 or (ii) 50% of the excess, if any, of Annualized 1997 Profit
over $8,000,000. "Annualized 1997 Profit" shall mean the product of (A) the net
income of Woodward-Clyde for the Bonus Period, as reported in the Woodward-Clyde
Interim Financial Statements, as adjusted (i) before any deduction for taxes
(ii) before any deduction for any bonuses to be paid pursuant to this Section
8.6, (iii) before the addition of any net income attributable to settlement of
the GeoCon Litigation, (iv) before the deduction of any litigation expenses
attributable to the GeoCon Litigation up to the amount of the proceeds of any
settlement of the GeoCon Litigation, and (v) before deduction of the fees and
expenses of OC and legal expenses, loan pre-payment charges and other external
expenses incurred by Woodward-Clyde in connection with the negotiation,
execution and delivery of this Agreement and consummation of the transactions
contemplated hereby, divided by (B) the Annualization Ratio. "Annualization
Ratio" means the ratio determined by dividing the number of actual days in the
Bonus Period by 365.
8.6.2 Bonus Pool Allocation. On or before the Closing Date,
Woodward-Clyde shall appoint a committee of Woodward-Clyde officers (the
"Allocation Committee") which will have responsibility for allocating the
amounts available in the Bonus Pool. The Allocation Committee shall allocate
bonuses among those individuals who were employed by Woodward-Clyde on the
Closing Date based upon its evaluation of the relative contributions of such
employees to Woodward-Clyde during the ten month period ending October 31, 1997,
and in a manner consistent with the past annual bonus plan allocation practices
of Woodward-Clyde. The final bonus allocations determined by the Allocation
Committee shall
52.
be subject to the final approval of the Chief Executive Officer of URS, which
shall not be unreasonably withheld.
Section 8.7 URS Board of Directors. On or before the Closing Date, URS
will cause the authorized number of directors serving on its Board of Directors
to be increased by two (2), and will cause Messrs. Frank S. Waller ("Waller")
and Jean-Yves Perez ("Perez"), or in the event either of them is unable to
serve, Mr. Robert K. Wilson ("Wilson"), to be appointed to the vacancies created
effective as of the Effective Time of the Merger. Subsequent to the Closing
Date, URS will take such actions as may be reasonably necessary to nominate
Waller and Perez (or, in the event that either or both of them is unable to
serve or has ceased to be an employee of URS or any of its Subsidiaries, Wilson)
for reelection, and to vote any proxies obtained on behalf of the URS Board of
Directors for their reelection, at any meeting of the URS stockholders at which
directors are to be elected or in connection with any action to be taken by
written consent by the URS stockholders for the election of directors, until the
second anniversary of the Closing Date. In the event that either Waller or Perez
(or Wilson if he is then serving as a director of URS) ceases to be employed by
URS or any of its Subsidiaries within such two year period, then he shall resign
his position as a director concurrent with such termination of employment.
53.
ARTICLE 9
TERMINATION
Section 9.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time of the Merger, whether before or after the
Stockholder Approvals have been obtained:
9.1.1 by mutual written consent of URS and Woodward-Clyde;
9.1.2 by either Woodward-Clyde or URS if (i) the Stockholder
Approvals shall not have been obtained at duly called meetings of the
stockholders of Woodward-Clyde and URS or any adjournment thereof; (ii) a
Governmental Entity of competent jurisdiction shall have issued an order, decree
or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and nonappealable;
or (iii) the Merger shall not have been consummated before December 31, 1997
(provided that the terminating party is not then in material breach of any
representation, warranty, covenant or agreement contained in this Agreement);
9.1.3 By URS if there has been a breach by Woodward-Clyde of
any representation, warranty, covenant or other agreement in this Agreement
which has a Woodward-Clyde Material Adverse Effect, and such breach has not been
cured, or Woodward-Clyde has not commenced reasonable efforts to cure such
breach, within thirty (30) days after written notice of such breach is given by
URS to Woodward-Clyde;
9.1.4 By URS if Woodward-Clyde shall enter into any
discussions, negotiations or any letter of intent, understanding or other
agreement relating to an Acquisition Proposal, provided that no such termination
shall affect the rights of URS to reimbursement of expenses and the Termination
Fee as provided in Section 6.2.3; or
9.1.5 By Woodward-Clyde if there has been a breach by URS or
the Subsidiary of any material representation, warranty, covenant or other
agreement, and such breach has not been cured, or URS and the Subsidiary have
not commenced reasonable efforts to cure such breach, within thirty (30) days
after written notice of such breach is given by Woodward-Clyde to URS. In the
event of a breach by URS of the covenant set forth in the last sentence of
Section 6.3.4, then termination of this Agreement under this Section 9.1.5 shall
be the sole remedy of Woodward-Clyde with respect to such breach.
54.
9.1.6 By Woodward-Clyde if any of the conditions set forth in
Section 7.1 hereof shall not have been fulfilled on or prior to the date
specified for fulfillment thereof, or shall have become impossible to fulfill
for reasons beyond the control of Woodward-Clyde, and such condition shall not
have been waived.
9.1.7 By URS if any of the conditions set forth in Section 7.2
hereof shall not have been fulfilled on or prior to the date specified for
fulfillment thereof, or shall have become impossible to fulfill for reasons
beyond the control of URS, and such condition shall not have been waived.
Where action is taken to terminate this Agreement pursuant to this
Section 9.1, it shall be sufficient for such action to be authorized by the
Board of Directors of the party taking such action without any requirement to
submit such action to the stockholders of such party.
Section 9.2 Effect of Termination and Abandonment. In the event of
termination of the Agreement by either Woodward-Clyde or URS as provided in
Section 9.1, this Agreement shall forthwith become void and have no effect, and
there shall be no liability or obligation on the part of Woodward-Clyde, URS or
the Subsidiary, or their respective officers and directors, except that (i) the
provisions of Section 6.2.3, this Section 9.2, and the Confidentiality Agreement
shall survive any such termination, and (ii) no party whose breach of its
representations, warranties, covenants or agreements set forth in this Agreement
was the basis of the other party's termination of this Agreement shall be
relieved from liability for damages occasioned by such breach, including any
expenses incurred by the other party in connection with this Agreement and the
transactions contemplated hereby.
Section 9.3 Amendment. This Agreement may be amended by the parties
hereto, by action taken by their respective Boards of Directors at any time
before or after the Stockholder Approvals, but after the respective Stockholder
Approvals, no amendment shall be made which by law requires the further approval
of such stockholders without obtaining such approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 9.4 Extension; Waiver. At any time prior to the Effective Time
of the Merger, any party hereto, by action taken by its Board of Directors may,
to the extent legally allowed, (a) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements, covenants, or conditions for the benefit of such party
55.
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement shall not constitute a waiver of
these rights.
ARTICLE 10
MISCELLANEOUS
Section 10.1 Survival of Representations and Warranties. No
representations or warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive beyond the Effective Time of the
Merger. This Section 10.1 shall not limit any covenant or agreement after the
Effective Time of the Merger.
Section 10.2 Entire Agreement; Modification; Waiver. This Agreement
constitutes the entire agreement among the parties pertaining to the subject
matter contained herein and supersedes all prior and contemporaneous agreements,
representations and undertakings of the parties. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by all
the parties. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by any party making the waiver.
Section 10.3 Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed in
original, but all of which together shall constitute one and the same
instrument.
Section 10.4 Assignment. This Agreement shall be binding on, and shall
inure to the benefit of, the parties to it and their respective heirs, legal
representatives, successors and assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties hereto.
Section 10.5 Fees and Expenses. Except as otherwise expressly provided,
each of the parties shall pay their own fees, costs and expenses (including,
without limitation, legal and accounting expenses) incurred, or to be incurred,
by them in negotiating and preparing this Agreement and in closing and carrying
out the transactions contemplated by this Agreement.
56.
Section 10.6 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally or by facsimile
on the party to whom notice is to be given, or on the fifth day after mailing,
if mailed to the party on whom notice is to be given, by registered or certified
mail, postage prepaid, and properly addressed as follows:
If to URS and the Subsidiary:
URS Corporation 100
California Street, Suite
500 San Francisco, CA 94111-5239
Attn: Kent P. Ainsworth
Facsimile: (415) 398-1905
Confirmation: (415) 774-2700
with a copy to:
Cooley Godward llp
One Maritime Plaza, 20th Floor
San Francisco, CA 94111-3580
Attn: Samuel M. Livermore, Esq.
Facsimile: (415) 951-3699
Confirmation: (415) 693-2000
If to Woodward-Clyde:
Woodward-Clyde Group, Inc.
4582 S. Ulster Street, Suite 600
Denver, CO 80237
Attn: Robert K. Wilson
Facsimile: (303) 740-2650
Confirmation: (303) 740-2600
57.
with a copy to:
Bronson, Bronson & McKinnon LLP
505 Montgomery Street
San Francisco, CA 94111-2514
Attn: Paul J. Sanner, Esq.
Facsimile: (415) 982-1397
Confirmation: (415) 986-4200
Any party may change its address for purposes of this Section by giving the
other party written notice of the new address in the manner set forth above.
Section 10.7 Governing Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of California, without
giving effect to provisions thereof relating to conflicts of law.
Section 10.8 Further Action. Each of the parties hereto shall use such
party's best efforts to take such action as may be necessary or reasonably
requested by the other party hereto to carry out and consummate the transactions
contemplated by this Agreement.
Section 10.9 No Third Party Beneficiary. Nothing herein is intended to
create rights in any third party.
Section 10.10 Effect of Headings. The subject headings of the Articles
and Sections of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions.
Section 10.11 Severability. If any term of this Agreement or
application thereof shall be invalid or unenforceable, the remainder of this
Agreement shall remain in full force and effect.
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58.
In Witness Whereof, the parties to this Agreement have duly executed it
on the day and year first above written.
WOODWARD-CLYDE: WOODWARD-CLYDE GROUP, INC.
By:/s/Robert K. Wilson
----------------------
Name: Robert K. Wilson
Title: Executive Vice President and
Chief Financial Officer
URS: URS CORPORATION
By:/s/Kent. P. Ainsworth
----------------------
Name: Kent. P. Ainsworth
Title: Executive Vice President and
Chief Financial Officer
THE SUBSIDIARY: W-C ACQUISITION CORPORATION
By:/s/Kent. P. Ainsworth
----------------------
Name: Kent. P. Ainsworth
Title: Vice President and
Chief Financial Officer
59.
ACKNOWLEDGMENT
OF THE GENERAL TRUSTEES OF THE
WOODWARD-CLYDE CAPITAL ACCUMULATION (RETIREMENT PLAN)
The undersigned, constituting all the General Trustees of the Woodward-Clyde
Capital Accumulation (Retirement) Plan (the "Retirement Plan"), hereby
acknowledge that they have received and reviewed the foregoing Agreement and
Plan of Merger Among Woodward-Clyde Group, Inc., URS Corporation and W-C
Acquisition Corporation (the "Agreement"), and hereby approve, accept and agree
to the terms of the Agreement and the merger contemplated thereby insofar as
they relate, directly or indirectly, to the Retirement Plan or to the shares of
Woodward-Clyde Stock held by the Retirement Plan.
/s/Richard L. Fuller
- --------------------
name: Richard L. Fuller
/s/Frank S. Waller
- ------------------
name: Frank S. Waller
/s/James R. Obermeyer
- ---------------------
name: James R. Obermeyer
60.