URS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT (the "Agreement") is
entered into this 13th day of July, 1999 (the "Effective Date") between MARTIN
M. KOFFEL ("Executive") and URS CORPORATION (the "Company"). This Agreement is
intended to provide Executive with a supplemental retirement benefit in addition
to the benefit that Executive will be eligible to receive following the
termination of his employment with the Company under the URS Corporation 401(k)
Retirement Plan. This Agreement is not intended to meet the qualification
requirements under Section 401 of the Code. Certain capitalized terms used in
this Agreement are defined in Article 8.
The Company and Executive hereby agree as follows:
ARTICLE 1
SCOPE OF AND CONSIDERATION FOR THIS AGREEMENT
1.1 Executive is currently employed by the Company.
1.2 The Company and Executive wish to set forth the supplemental
retirement benefit that Executive or his Beneficiary will be eligible to receive
following his termination of employment with the Company.
1.3 The duties and obligations of the Company to Executive under this
Agreement shall be in consideration for Executive's past services to the Company
and Executive's continued employment with the Company.
1.4 This Agreement shall supersede any other agreement with the Company
relating to supplemental executive retirement benefits to be received by
Executive upon his termination of employment with the Company. This Agreement is
not intended to supersede any other agreement into which Executive and the
Company have entered including, but not limited to, employment agreements, stock
option agreements, and deferred compensation agreements.
ARTICLE 2
AMOUNT OF BENEFIT
Executive shall be eligible to receive a benefit under this Agreement
following his termination of employment with the Company (the "Benefit"). The
Benefit shall be an annual amount, payable for the life of the Executive with a
guarantee of payments for at least ten (10) years, equal to (a) a percentage of
Executive's Final Average Compensation, which percentage shall be determined
based on Executive's age at his termination of employment as set forth in the
following table (with interpolation of percentages for ages between those whole
years specified based on the number of complete weeks beyond a specified whole
year divided by 52), reduced
1.
by (b) the annual Social Security benefit to which Executive is entitled at the
time of earliest eligibility:
Executive's Age at Termination of Employment Applicable Percentage
65 or older 50%
64 40%
63 30%
62 20%
61 or younger 10%
If Executive's employment with the Company is terminated (a) by the Company or
Executive for any reason within thirteen (13) months following a Change in
Control or (b) by the Company for any reason following the occurrence of a
Potential Change in Control and within six (6) months prior to the occurrence of
a Change in Control, Executive's Benefit shall be calculated as if Executive's
age at termination of employment were his actual age plus an additional three
(3) years. If Executive terminates employment with the Company after attaining
age sixty-five (65), the Benefit shall be the greater of (a) the Benefit
computed as of the date of Executive's termination of employment with the
Company or (b) the Actuarial Equivalent (to reflect later commencement) of the
Benefit computed as if it commenced as of the first day of the month coinciding
with or next following the date of Executive's sixty-fifth (65th) birthday.
ARTICLE 3
TIMING OF BENEFIT PAYMENT
Payment of the Benefit shall commence on the first day of the month
following the month in which occurs the Executive's termination of employment
with the Company; provided, however, that Executive may, upon executing this
Agreement or thereafter, elect such later date upon which Executive's Benefit
payments shall commence following termination of his employment. Such election
of a Benefit payment commencement date shall be irrevocable; provided, however,
that Executive may change his election of a Benefit payment commencement date if
the election to change the Benefit payment commencement date is made at least
one (1) year prior to the date that Benefit payments actually commence to
Executive. If Executive elects a change in the commencement date of Benefit
payments and such election is made less than one (1) year prior to the date that
Benefit payments actually commence to Executive, then such election change shall
not be effective until one (1) year from the date the election change is made,
and Benefit payments scheduled to be made during such 1-year period shall be
paid on schedule. If Executive does not elect a Benefit commencement date prior
to his termination of employment with the Company, he shall be deemed to have
elected to begin receiving Benefit payments on the first day of the month
following the month in which his employment with the Company terminates.
2.
ARTICLE 4
FORM OF BENEFIT PAYMENT
4.1 Executive shall, upon executing this Agreement or thereafter, elect
the form in which his Benefit shall be distributed. Such election of a
distribution form shall be irrevocable; provided, however, that Executive may
change his election of a distribution form if such election is made no later
than one (1) year prior to the date that Benefit payments actually commence to
Executive. If Executive elects a change in the distribution form of his Benefit
and such election is made less than one (1) year prior to the date that Benefit
payments actually commence to Executive, then such election change shall be
ineffective, and the Benefit shall be distributed according to Executive's
immediately prior election. If Executive does not elect a distribution form
prior to becoming eligible to receive a Benefit under this Agreement, he shall
be deemed to have elected the normal form of Benefit pursuant to Section 4.2(a).
4.2 Executive may elect a distribution form for his Benefit from among
the following forms:
(a) The normal form of Benefit is a life annuity with a ten
(10) year term certain. This form of Benefit shall be paid in equal monthly
installments for the longer of the life of Executive or ten (10) years.
(b) The following optional forms of Benefit shall each be
calculated to be the Actuarial Equivalent of the normal form of Benefit:
(i) A joint and survivor annuity shall be paid in
equal monthly installments for the life of Executive, and after Executive's
death, a fifty percent (50%) continuation of such installments shall be paid to
Executive's Beneficiary for the life of such Beneficiary.
(ii) A single lump sum payment to Executive.
ARTICLE 5
DEATH OF EXECUTIVE
5.1 If Executive should die prior to the commencement of Benefit
payments, Executive's Beneficiary shall be entitled to receive a death benefit
in the form of an annuity for the life of such Beneficiary. Such life annuity
shall be payable in equal monthly installments, the Actuarial Equivalent value
of which shall be equal to the value of the lump sum Benefit, if any, Executive
would have received pursuant to Section 4.2(b)(ii) above if he had terminated
his employment with the Company on the day before his death and had received
such Benefit on such day; provided, however, that if the Beneficiary is the
Executive's estate, such death benefit shall be paid in the form of a single
lump sum. The foregoing death benefit shall be paid, or commence to be paid,
within thirty (30) days following Executive's death.
5.2 If Executive should die after commencing to receive Benefit
payments in the form of a life annuity with a ten (10) year term certain,
Executive's Beneficiary shall be entitled to
3.
receive a death benefit equal to the value of the remaining ten (10) year term
certain payments. Such Benefit will be paid in monthly installments for the
remainder of the ten (10) year life term; provided, however, that if the
Beneficiary is the Executive's estate, the Actuarial Equivalent of the Benefit
shall be paid in the form of a single lump sum. The foregoing death benefit
shall be paid, or commence to be paid, within thirty (30) days following
Executive's death.
ARTICLE 6
POST-RETIREMENT HEALTH INSURANCE COVERAGE
Following the later of (i) Executive's termination of employment or
(ii) the expiration of any extended period of Company-paid health insurance
coverage provided for in Executive's employment agreement with the Company,
Executive shall be entitled, at his expense but at the Company's group rates, to
continue participation in the health insurance programs maintained by the
Company. During Executive's life, such coverage shall be extended to Executive
and his dependents who qualify as such under the terms of the Company's health
insurance programs. Following Executive's death, such coverage shall continue to
be available to Executive's surviving spouse, at her expense but at the
Company's group rates, for her lifetime. To the extent that the Company finds it
impossible to cover Executive or his surviving spouse or dependents under its
health insurance programs, the Company shall arrange for Executive or his
surviving spouse, at their expense but at a rate equivalent to the Company's
group rates, to be provided with an individual policy providing substantially
the same level of coverage as the Company's health insurance programs.
ARTICLE 7
FUNDING
Benefits payable under this Agreement shall be "unfunded," as that term
is used in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(a)(6) of ERISA with
respect to unfunded plans maintained primarily for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees, and the Company shall administer this Agreement in a manner that will
ensure that benefits are unfunded and that Executive will not be considered to
have received a taxable economic benefit prior to the time at which benefits are
actually payable hereunder. Accordingly, the Company shall not be required to
segregate or earmark any of its assets for the benefit of Executive or his
spouse or other Beneficiary, and each such person shall have only a contractual
right against the Company for benefits hereunder. The rights and interests of
Executive under this Agreement shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge or encumbrance by
Executive or any person claiming under or through Executive, nor shall they be
subject to the debts, contracts, liabilities or torts of Executive or anyone
else prior to payment. Notwithstanding the foregoing, the Company, in its sole
discretion, may establish a grantor ("rabbi") trust for the purpose of providing
benefits under this Agreement; provided, however, that the establishment of such
a trust will not render this Agreement other than "unfunded" as that term is
used in Sections 201(2), 301(a)(3), 401(a)(1), and 402(a)(6) of ERISA, and
provided, further, however, that in the event of a Change in Control and not
later than thirty (30) days thereafter, the Company shall deposit in such a
rabbi trust, the form of which is attached hereto as Exhibit A and whose assets
shall be used exclusively and irrevocably to provide benefits to Executive
(subject, however, to
4.
the claims of the general creditors of the Company) pursuant to this Agreement,
an amount of cash or marketable securities (other than securities issued by the
Company or any of its affiliates, or by any person who becomes an affiliate of
the Company as a result of a Change in Control or any of such person's
affiliates) equal in value to the lump sum payment that would be payable to
Executive if, on the effective date of such Change in Control, he were to
terminate employment with the Company having attained age 65.
ARTICLE 8
DEFINITIONS
For purposes of this Agreement, the following terms are defined as
follows:
8.1 "Actuarial Equivalent" shall mean a form of Benefit (including a
lump sum payment) differing in time or manner of payment from the normal form of
Benefit set forth in Section 4.2(a) but having the same present value when
computed using the following actuarial assumptions:
Mortality Table: the table specified in Section
417(e)(3)(A)(ii)(I) of the Code.
Interest Rate: the annual rate of interest on 30-year Treasury
securities for the month preceding the date Benefit payments
commence.
However, for purposes of clause (b) of the final sentence of Article 2, only the
Interest Rate (and not the Mortality Table) shall apply.
8.2 "Board" shall mean the Board of Directors of URS Corporation or of
a successor to URS Corporation, as described in Section 11.9.
8.3 "Beneficiary" shall mean the beneficiary designated by Executive to
receive benefits under this Agreement after Executive's death. If Executive
designates no Beneficiary, or if the designated Beneficiary does not survive
Executive, the Beneficiary shall be Executive's surviving spouse or, if none,
Executive's estate.
8.4 "Change in Control" shall mean the occurrence of any of the
following events after the Effective Date:
(a) A change in control required to be reported pursuant to
Item 6(e) of Schedule 14A of Regulation 14A under the Exchange Act;
(b) A change in the composition of the Board, as a result of
which fewer than two-thirds of the directors are directors who either (i) had
been directors of the Company twenty-four (24) months prior to such change or
(ii) were elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the directors who had been directors of the
Company twenty-four (24) months prior to such change and who were still in
office at the time of the election or nomination (the directors described in the
foregoing clauses (i) and (ii) hereinafter referred to as "Incumbent
Directors"); or
5.
(c) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) by the acquisition or aggregation of securities is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing twenty percent (20%) or more of the combined voting power
of the Company's then-outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at elections of
directors (the "Base Capital Stock"); except that:
(i) the beneficial ownership by a person of twenty
percent (20%) or more, but less than a majority, of the Base Capital Stock in
the ordinary course of such person's business and not with the purpose or effect
of changing or influencing the control of the Company, and otherwise in a
situation where the person is eligible to file a short-form statement on
Schedule 13G under Rule 13d-1 under the Exchange Act with respect to such
beneficial ownership, shall be disregarded;
(ii) any change in the relative beneficial ownership
of the Company's securities by any person resulting solely from a reduction in
the aggregate number of outstanding shares of Base Capital Stock, and any
decrease thereafter in such person's ownership of securities, shall be
disregarded until such person increases in any manner, directly or indirectly,
such person's beneficial ownership of any securities of the Company; and
(iii) the beneficial ownership by Richard C. Blum &
Associates, Inc. ("RCBA") or any person "affiliated" (within the meaning of the
Exchange Act) with RCBA (collectively, the "RCBA Group") of (w) shares of the
Company's Series B Preferred Stock (x) additional shares of Series B Preferred
Stock issued in payment of dividends on the Series B Preferred Stock, (y)
additional shares of the Company's Common Stock issued upon the conversion of
the Series B Preferred Stock in accordance with its terms, and (z) shares of
other securities of the Company issued in exchange for the Series B Preferred
Stock in accordance with its terms (collectively, the "RCBA Preferred Investment
Shares"), shall be disregarded unless and until the RCBA Group becomes the
beneficial owner, directly or indirectly, of securities of the Company
(including the RCBA Preferred Investment Shares) representing more than fifty
percent (50%) of the Base Capital Stock; provided that the beneficial ownership
of all or a portion of the RCBA Preferred Investment Shares by a third person
who acquires such shares through purchase, assignment or other transfer from
RCBA or another member of the RCBA Group, and the beneficial ownership by a
third person not affiliated with the RCBA Group as of the date of this Agreement
who acquires control of RCBA or the RCBA Group, shall not be disregarded.
8.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
8.6 "Compensation" shall mean the sum of all cash salary compensation
received by Executive from the Company for his service as an employee plus the
target (not actual) bonus compensation established for Executive. Such target
bonus compensation shall count as Compensation under this Agreement as of the
first day of each of the Company's fiscal years, or of any longer period, with
respect to which such target bonus has been established, and shall be deemed to
accrue ratably during each month of such year or longer period.
6.
8.7 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
8.8 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
8.9 "Final Average Compensation" shall mean the average annual
Compensation of Executive during the thirty-six (36) consecutive months during
the final one hundred twenty (120) months of Executive's employment with the
Company in which such average Compensation was highest.
8.10 "Potential Change in Control" shall mean the occurrence of any of
the following after the Effective Date:
(a) an event described in Section 8.4(c), but substituting
"ten percent (10%)" for "twenty percent (20%)," without the approval of a
majority of the Incumbent Directors;
(b) the institution by any person (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) of a tender offer to acquire ten
percent (10%) or more of the combined voting power of the Company's Base Capital
Stock without the approval of a majority of the Incumbent Directors prior to or
within twenty (20) business days following such offer; or
(c) a public announcement or receipt by the Board of a
proposal of any person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) or group of persons to merge into, combine with or acquire all or
substantially all of the assets or business of the Company without the approval
of a majority of the Incumbent Directors within twenty (20) business days
following such public announcement or receipt.
ARTICLE 9
ADMINISTRATION AND OPERATION OF THE AGREEMENT
The Company shall have the authority to control and manage the
operation and administration of this Agreement. The Company has the sole
discretion to make such rules, regulations, and interpretations of this
Agreement and to make such computations and shall take such other actions to
administer this Agreement as it may deem appropriate in its sole discretion.
Such rules, regulations, interpretations, computations, and other actions shall
be conclusive and binding upon all persons. The Company may engage the services
of such persons or organizations to render advice or perform services with
respect to its responsibilities under this Agreement as it shall determine to be
necessary or appropriate. Such persons or organizations may include (without
limitation) actuaries, attorneys, accountants and consultants.
ARTICLE 10
CLAIMS, INQUIRIES AND APPEALS
10.1 Applications for Benefits and Inquiries. Applications for benefits
shall be in writing, signed and submitted to the Company at its primary office
location.
7.
10.2 Claims Procedure. The Company and Executive agree that all
disputes regarding benefits under this Agreement shall be resolved in accordance
with a reasonable claims procedure complying with 29 CFR ss.2560.503-1, as such
regulations of the United States Department of Labor may from time to time be
amended. For purposes of such a procedure, any denied claim shall be subject to
review by the Compensation Committee of the Board.
10.3 Exhaustion of Remedies. No legal action for benefits under this
Agreement may be brought until Executive or other claimant has pursued a
resolution of the benefits claim in accordance with Section 10.2.
ARTICLE 11
GENERAL PROVISIONS
11.1 Employment Status. This Agreement does not constitute a contract
of employment or impose upon Executive any obligation to remain as an employee,
nor does it impose on the Company any obligation (i) to retain Executive as an
employee, (ii) to change the status of Executive as an at-will employee, or
(iii) to change the Company's policies regarding termination of employment.
11.2 Notices. Any notices provided hereunder must be in writing, and
such notices or any other written communication shall be deemed effective upon
the earlier of personal delivery (including personal delivery by facsimile) or
the third day after mailing by first class mail, to the Company at its primary
office location and to Executive at Executive's address as listed in the
Company's payroll records. Any payments made by the Company to Executive under
the terms of this Agreement shall be delivered to Executive either in person or
at the address as listed in the Company's payroll records.
11.3 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
11.4 Waiver. If either party should waive any breach of any provisions
of this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
11.5 Complete Agreement. This Agreement constitutes the entire
agreement between Executive and the Company and is the complete, final, and
exclusive embodiment of their agreement with regard to this subject matter,
wholly superseding all written and oral agreements with respect to supplemental
executive retirement benefits. It is entered into without reliance on any
promise or representation other than those expressly contained herein.
11.6 Amendment Or Termination Of Agreement. This Agreement may be
changed or terminated only upon the mutual written consent of the Company and
Executive. The written
8.
consent of the Company to a change or termination of this Agreement must be
signed by an executive officer of the Company after such change or termination
has been approved by the Board.
11.7 Counterparts. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.
11.8 Headings. The headings of the Articles and Sections hereof are
inserted for convenience only and shall not be deemed to constitute a part
hereof or to affect the meaning thereof.
11.9 Successors And Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and his Beneficiary, and
the Company, and any surviving entity resulting from a Change in Control and
upon any other person who is a successor by merger, acquisition, consolidation
or otherwise to the business formerly carried on by the Company, and their
respective successors, assigns, heirs, executors and administrators, without
regard to whether or not such person actively assumes any rights or duties
hereunder.
11.10 Non-Alienation. No benefit under this Agreement may be
anticipated, alienated, sold, transferred, assigned, pledged, encumbered or
charged, and any attempt to do so will be void.
11.11 Legal Construction. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the laws of
the State of California, without regard to such state's conflict of laws rules,
to the extent that such laws are not preempted by ERISA.
11.12 Non-Publication. The parties mutually agree not to disclose
publicly the terms of this Agreement except to their respective advisors (e.g.,
attorneys, accountants) or to the extent that disclosure is mandated by
applicable law.
11.13 Other Documents. In the event of a conflict between the text of this
Agreement and any summary, description or other information regarding this
Agreement, the text of this Agreement shall control.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
Effective Date written above.
URS CORPORATION MARTIN M. KOFFEL
BY: /s/ KENT P. AINSWORTH /s/ MARTIN M. KOFFEL
---------------------------------- ------------------------------
KENT P. AINSWORTH
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
9.
EXHIBIT A
TRUST UNDER URS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This AGREEMENT made this ____ of ________________ by and between URS
CORPORATION (the "Company") and ___________________ (the "Trustee").
WHEREAS, the Company and Martin M. Koffel ("Executive") have entered
into a Supplemental Executive Retirement Agreement effective July 13, 1999 (the
"Agreement");
WHEREAS, Company has incurred or expects to incur liability under the
terms of such Agreement with respect to Executive and his beneficiaries;
WHEREAS, Company wishes to establish a trust (hereinafter called the
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of Company's creditors in the event of Company's
Insolvency, as herein defined, until paid to Executive and his beneficiaries in
such manner and at such times as specified in the Agreement;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Agreement as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
WHEREAS, it is the intention of Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Agreement;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST
(a) Company hereby deposits with Trustee in trust [insert amount
deposited], which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which Company is
the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of Executive, his beneficiaries, and general creditors of
the Company as herein set forth. Executive and his beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust. Any rights created under the Agreement and this Trust Agreement shall
1.
be mere unsecured contractual rights of Executive and his beneficiaries against
Company. Any assets held by the Trust will be subject to the claims of Company's
general creditors under federal and state law in the event of Insolvency, as
defined in Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in trust with Trustee
to augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor Executive or his
beneficiaries shall have any right to compel such additional deposits.
Notwithstanding the foregoing, in accordance with Article 7 of the Agreement,
Company, in the event of a Change in Control (as defined in the Agreement) and
not later than thirty (30) days thereafter, shall deposit into the Trust an
amount of cash or marketable securities (other than securities issued by the
Company or any of its affiliates, or by any person who becomes an affiliate of
the Company as a result of a Change in Control or any of such person's
affiliates) equal in value to the lump sum payment that would be payable to
Executive under the Agreement if, on the effective date of such Change in
Control, he were to terminate employment with the Company having attained age
65, and Trustee, in accordance with Section 8(e) hereof, shall enforce such
obligation.
SECTION 2. PAYMENTS TO EXECUTIVE AND HIS BENEFICIARIES
(a) Company shall deliver to Trustee a copy of the Agreement and a
schedule (the "Payment Schedule") that indicates the amounts payable in respect
of Executive (and his beneficiaries) and provides a formula or other
instructions acceptable to Trustee for determining the amounts so payable, the
form in which such amount is to be paid (as provided for or available under the
Agreement), and the time of commencement for payment of such amounts. Except as
provided in (c) below, Trustee shall make payments to the Executive and his
beneficiaries in accordance with the Agreement and such Payment Schedule.
Trustee shall make provision for the reporting and withholding of any federal,
state or local taxes that may be required to be withheld with respect to the
payment of benefits pursuant to the terms of the Agreement and shall pay amounts
withheld to the appropriate taxing authorities or determine that such amounts
have been reported, withheld and paid by Company.
(b) The entitlement of Executive or his beneficiaries to benefits under
the Agreement shall be determined solely under the terms of the Agreement, and
any claim for such benefits shall be considered and reviewed by Trustee based on
Trustee's reasonable interpretation of the Agreement.
(c) Company may make payment of benefits directly to Executive or his
beneficiaries as they become due under the terms of the Agreement. Company shall
notify Trustee of its decision to make payment of benefits directly prior to the
time amounts are payable to Executive or his beneficiaries. In addition, if the
principal of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Agreement, Company
shall make the balance of each such payment as it falls due. Trustee shall
notify Company where principal and earnings are not sufficient.
2.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN
COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Executive and his
beneficiaries if Company is Insolvent. Company shall be considered "Insolvent"
for purposes of this Trust Agreement if (i) Company is unable to pay its debts
as they become due, or (ii) Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section l(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set forth
below.
(1) The Board of Directors and the Chief Executive Officer of
Company shall have the duty to inform Trustee in writing of Company's
Insolvency. If a person claiming to be a creditor of Company alleges in writing
to Trustee that Company has become Insolvent, Trustee shall determine whether
Company is Insolvent and, pending such determination, Trustee shall discontinue
payment of benefits to Executive or his beneficiaries.
(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person claiming to be a
creditor alleging that Company is Insolvent, Trustee shall have no duty to
inquire whether Company is Insolvent. Trustee may in all events rely on such
evidence concerning Company's solvency as may be furnished to Trustee and that
provides Trustee with a reasonable basis for making a determination concerning
Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Executive or his beneficiaries
and shall hold the assets of the Trust for the benefit of Company's general
creditors. Nothing in this Trust Agreement shall in any way diminish any rights
of Executive or his beneficiaries to pursue their rights as general creditors of
Company with respect to benefits due under the Agreement or otherwise.
(4) Trustee shall resume the payment of benefits to Executive
or his beneficiaries in accordance with Section 2 of this Trust Agreement only
after Trustee has determined that Company is not Insolvent (or is no longer
Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(a) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to
Executive or his beneficiaries under the terms of the Agreement for the period
of such discontinuance, less the aggregate amount of any payments made to
Executive or his beneficiaries by Company in lieu of the payments provided for
hereunder during any such period of discontinuance.
SECTION 4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, Company shall have no right or
power to direct Trustee to return to Company or to divert to others any of the
Trust assets before all payment of
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benefits have been made to Executive and his beneficiaries pursuant to the terms
of the Agreement.
SECTION 5. INVESTMENT AUTHORITY.
(a) In General. With respect to any and all money or other property
received by Trustee from Company, Trustee is authorized to act as an absolute
owner of the assets of the Trust and, not in limitation of, but in amplification
of, the foregoing:
(1) To invest and reinvest the assets of the Trust, without
distinction between principal and income;
(2) To retain and manage any property at any time received by
it, including any real, personal and mixed property and any tangible or
intangible property of any kind and wherever located, whether or not such
property is unproductive of income;
(3) To sell for cash or on credit, to grant options, convert,
redeem, exchange for other securities or other property, or otherwise to dispose
of any securities or other property at any time held;
(4) To exchange, mortgage, or lease any such property and to
convey, transfer, or dispose of any such property on such terms and conditions
as Trustee deems appropriate;
(5) To hold cash uninvested for any reasonable period of time
without liability for interest, pending investment thereof or the payment of
expenses or benefits therewith;
(6) To collect and receive any and all money and other
property of whatever kind or nature due or owing or belonging to the Trust and
to give full discharge thereto; and to extend the time of payment of any
obligation at any time owing to the Trust, as long as such extension is for a
reasonable period and continues at reasonable interest;
(7) To pay, contest, or settle any claim by or against the
Trust by compromise, arbitration or otherwise; and to release, in whole or in
part, any claim belonging to the Trust to the extent that the claim is
uncollectible;
(8) To prosecute or defend actions, claims or proceedings for
the protection of Trust assets and of Trustee in the performance of its duties;
(9) To register Trust property in Trustee's own name, in the
name of a nominee or in bearer form, provided Trustee's records and accounts
show that such property belongs to the Trust;
(10) To deposit Trust assets in any commercial, savings or
savings and loan accounts, common funds, mutual funds or certificates of
deposits with any bank or similar financial institution, and to keep such
portion of the Trust assets in cash or cash balances as Trustee may, from time
to time, deem to be in the best interests of the Trust, without liability for
interest thereon;
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(11) To employ in the management of the assets of the Trust,
accountants, attorneys, actuaries and any other persons, firms, or corporations
as Trustee may designate, and to pay from the assets of the Trust the reasonable
expenses and compensation of such parties;
(12) To consult with legal counsel (who may or may not also be
counsel to Company) concerning any question that may arise with reference to its
duties under the Trust or the Agreement;
(13) To have all the rights, powers, privileges and
responsibilities of an owner of securities, including (without limiting the
foregoing) the power to vote or refrain from voting, to give general or limited
proxies, to pay calls, assessments, and other sums; to assent to or oppose
corporate sales or other acts; to participate in or oppose any voting trusts,
pooling agreements, foreclosures, reorganizations, consolidations, mergers and
liquidations and, in connection therewith, to give warranties and
indemnifications and to deposit securities with and transfer title to any
protective or other committee; to exchange, exercise or sell stock subscription
or conversion rights; and, subject to any limitations elsewhere in the Trust
relative to investments by Trustee, to accept and retain as an investment
hereunder any securities received through the exercise of any of the foregoing
powers;
(14) To continue to exercise any powers and discretion herein
granted for a reasonable time after the termination of the Trust; and
(15) To do all other acts Trustee may deem necessary or proper
to carry out any of the foregoing powers, or otherwise for the protection of the
assets of the Trust.
Notwithstanding the foregoing, Trustee shall not (i) maintain the indicia of
ownership of any Trust assets outside the jurisdiction of the district courts of
the United States or (ii) invest in securities (including stock or rights to
acquire stock) or obligations issued by Company or its affiliates, other than a
de minimis amount held in common investment vehicles in which Trustee invests.
(b) Custodian. If Trustee is not a bank or trust company, Trustee may
appoint a bank or trust company to act as custodian (the "Custodian") for
securities and any other Trust assets. Any such appointment shall terminate when
a bank or trust company begins to serve as Trustee hereunder. The Custodian may
be appointed to keep the deposited property, to collect and receive the income
and principal, and to hold, invest, disburse or otherwise dispose of the
property or its proceeds (specifically including selling and purchasing
securities, and delivering securities sold and receiving securities purchased)
upon the order of Trustee.
SECTION 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY TRUSTEE.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as
5.
shall be agreed upon in writing between Company and Trustee. Within sixty (60)
days following the close of each calendar year and within thirty (30) days after
the removal or resignation of Trustee, Trustee shall deliver to Company a
written account of its administration of the Trust during such year or during
the period from the close of the last preceding year to the date of such removal
or resignation, setting forth all investments, receipts, disbursements and other
transactions effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.
SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by Company which is contemplated by, and
in conformity with, the terms of the Agreement or this Trust and is given in
writing by Company. In the event of a dispute between Company and a party,
Trustee may apply to a court of competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising in
connection with this Trust, Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) In the event that the Company fails to deposit assets in the Trust
within thirty (30) days following a Change in Control (as defined in the
Agreement) in accordance with the final sentence of Article 7 of the Agreement,
Trustee shall take all appropriate action, including the commencement of a legal
action against the Company, to enforce such obligation; provided, however, that
Trustee shall not be required to take any such action unless the assets of the
Trust are, at the time in question, sufficient to pay all costs that Trustee
expects to incur in taking such action.
(f) Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of
6.
the policy to a different form) other than to a successor Trustee, or to loan to
any person the proceeds of any borrowing against such policy.
(g) Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
Company shall pay all administrative and Trustee's fees and expenses.
If not so paid, the fees and expenses shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective thirty (30) days after receipt of such notice unless Company
and Trustee agree otherwise.
(b) Except as provided in paragraph (c) of this section, Trustee may be
removed by Company on thirty (30) days' notice or upon shorter notice accepted
by Trustee.
(c) Upon a Change in Control, as defined in the Agreement, Trustee may
not be removed by Company for one (1) year.
(d) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within sixty (60) days after receipt of
notice of resignation, removal or transfer, unless Company extends the time
limit.
(e) If Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraph (a) or (b) of this section. If no such appointment has
been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR.
(a) If Trustee resigns or is removed prior to a Change in Control, as
defined in the Agreement, Company may appoint any third party, such as a bank
trust department or other party that may be granted corporate trustee powers
under state law, as a successor to replace Trustee upon resignation or removal.
The appointment shall be effective when accepted in writing by the new Trustee,
who shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by Company or the successor Trustee
to evidence the transfer.
7.
(b) If Trustee resigns or is removed following a Change in Control, as
defined in the Agreement, Trustee may appoint any third party such as a bank
trust department or other party that may be granted corporate trustee powers
under state law, as a successor to replace Trustee upon resignation or removal.
The appointment of a successor Trustee shall be effective when accepted in
writing by the new Trustee. The new Trustee shall have all the rights and powers
of the former Trustee, including ownership rights in Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by the
successor Trustee to evidence the transfer.
(c) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets, subject to
Sections 7 and 8 hereof. The successor Trustee shall not be responsible for and
Company shall indemnify and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes successor
Trustee.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Agreement or shall make the Trust
revocable.
(b) The Trust shall not terminate until the date on which Executive and
his beneficiaries are no longer entitled to benefits pursuant to the terms of
the Agreement. Upon termination of the Trust any assets remaining in the Trust
shall be returned to Company.
(c) Upon written approval of Executive or his beneficiaries entitled to
payment of benefits pursuant to the terms of the Agreement, Company may
terminate this Trust prior to the time that all benefit payments under the
Agreement have been made. All assets in the Trust at termination shall be
returned to Company.
(d) Sections 10, 11(b), and this 12(d) of this Trust Agreement may not
be amended by Company for one (1) year following a Change in Control, as defined
in the Agreement.
SECTION 13. MISCELLANEOUS
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Executive and his beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of California.
8.
SECTION 14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be _________________.
COMPANY: TRUSTEE:
URS CORPORATION [________________________________]
By: ___________________________________ By: _______________________________
Name: _________________________________ Name: _____________________________
Title: ________________________________ Title: ____________________________
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