URS CORPORATION 1991 STOCK INCENTIVE PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
This NONSTATUTORY STOCK OPTION AGREEMENT (the "Agreement"), entered
into as of March 23, 1999, between URS CORPORATION, a Delaware corporation (the
"Company"), and MARTIN M. KOFFEL (the "Optionee"),
WITNESSETH
WHEREAS, the Company's Board of Directors has established the URS
Corporation 1991 Stock Incentive Plan in order to provide selected employees and
consultants of the Company and its Subsidiaries with an opportunity to acquire
Common Shares of the Company; and
WHEREAS, the Committee has determined that it would be in the best
interests of the Company and its stockholders to grant the Nonstatutory Stock
Option described in this Agreement to the Optionee as an inducement to enter
into or remain in the service of the Company and as an incentive for
extraordinary efforts during such service.
NOW, THEREFORE, it is agreed as follows:
I. GRANT OF OPTION.
A. Option. On the terms and conditions stated below, the Company hereby grants
to the Optionee the option to purchase Three Hundred Thousand (300,000) Common
Shares for the sum of fifteen dollars and seventy-five cents ($15.75) per Common
Share, which is agreed to be 100% of the fair market value thereof (as defined
in the Plan) as of the Date of Grant. This option is not intended to be an
Incentive Stock Option.
B. Stock Plan. This option is granted pursuant to the Plan, a copy of which the
Optionee acknowledges having received, read and understood. The provisions of
the Plan are incorporated into this Agreement by this reference.
II. NO TRANSFER OR ASSIGNMENT OF OPTION.
Except as otherwise provided in this Agreement, this option and the
rights and privileges conferred hereby shall not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to sale under execution, attachment or similar process.
Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of this option, or of any right or privilege conferred hereby, contrary to the
provisions hereof, or upon any attempted sale under any execution, attachment or
similar process upon the rights and privileges conferred hereby, this option and
the rights and privileges conferred hereby shall immediately become null and
void.
1.
III. RIGHT TO EXERCISE.
A. Vesting. Subject to the conditions stated herein, this option shall
become exercisable in installments as follows:
Date Percentage Exercisable
March 23, 2000 20%
March 23, 2001 40%
March 23, 2002 60%
March 23, 2003 80%
March 23, 2004 100%
In addition, this option shall become exercisable in its entirety in the event
that (i) a Change in Control occurs with respect to the Company or (ii) the
Optionee's employment as a Key Employee terminates by reason of his death, Total
and Permanent Disability or retirement at or after age 65.
B. Minimum Number. This option shall not be exercised for less than 100
Common Shares at any one time, except that it may be exercised for all of the
Common Shares then remaining subject to option, if less than 100 Common Shares.
IV. EXERCISE PROCEDURES.
A. Notice of Exercise. The Optionee or the Optionee's representative
may exercise this option by giving written notice to the Secretary of the
Company pursuant to Section XI.D hereof. The notice shall specify the election
to exercise this option and the number of Common Shares for which it is being
exercised. The notice shall be signed by the person or persons exercising this
option. In the event that this option is being exercised by the representative
of the Optionee, the notice shall be accompanied by proof (satisfactory to the
Company) of the representative's right to exercise this option. The Optionee or
the Optionee's representative shall deliver to the Secretary of the Company, at
the time of giving the notice, payment in a form described in Section V hereof
for the full amount of the Purchase Price.
B. Issuance of Shares. After receiving a proper notice of exercise, the
Company shall cause to be issued a certificate or certificates for the Common
Shares as to which this option has been exercised, registered in the name of the
person exercising this option (or in the names of such person and his spouse as
community property or as joint tenants with right of survivorship). The Company
shall cause such certificate or certificates to be delivered to or upon the
order of the person exercising this option.
2.
V. PAYMENT FOR STOCK.
The entire Purchase Price shall be paid in lawful money of the United
States of America or in one of the forms described in Sections 6.2, 6.3 and 6.4
of the Plan.
VI. TERM AND EXPIRATION.
A. Basic Term. This option shall in any event expire on the date 10
years after the Date of Grant.
B. Termination of Service (Except by Death). If the Optionee's service
as a Key Employee terminates for any reason other than death, then this option
shall expire on the earliest of the following occasions:
1. The expiration date determined pursuant to Subsection (a)
above;
2. The date three months after the termination of the
Optionee's service as a Key Employee for any reason other than retirement from
the Company on or after the date the Optionee attains age 65 or Total and
Permanent Disability;
3. The date 12 months after the termination of the Optionee's
service as a Key Employee because of his Total and Permanent Disability; or
4. The date three years after the Optionee's retirement from
the Company if such retirement occurs on or after the date on which the Optionee
attains age 65.
The Optionee may exercise all or part of this option at any time before its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable before the Optionee's service terminated or became
exercisable as a result of the termination. The balance of this option shall
lapse when the Optionee's service as a Key Employee terminates. In the event
that the Optionee dies after the termination of service but before the
expiration of this option, all or part of this option may be exercised (prior to
expiration) by the executors or administrators of the Optionee's estate or by
any person who has acquired this option directly from the Optionee by bequest,
beneficiary designation or inheritance, but only to the extent that this option
had become exercisable before the Optionee's service terminated.
C. Death of Optionee. If the Optionee dies as a Key Employee, then this
option shall expire on the earlier of the following dates:
1. The expiration date determined pursuant to Subsection VI.A
above; or
2. The date 12 months after the Optionee's death.
All or part of this option may be exercised at any time before its expiration
under the preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired this option directly from
the Optionee by bequest, beneficiary designation or inheritance, but only to the
extent that this option had become exercisable before the Optionee's
3.
death or became exercisable as a result of the Optionee's death. The balance of
this option shall lapse when the Optionee dies.
D. Leaves of Absence. For purposes of this Section VI, the Key Employee
relationship shall be deemed to continue during any period when the Optionee is
on military leave, sick leave or other bona fide leave of absence (to be
determined in the sole discretion of the Committee).
VII. LEGALITY OF INITIAL ISSUANCE.
No Common Shares shall be issued upon the exercise of this option
unless and until the Company has determined that:
a. It and the Optionee have taken any actions required to
register the Common Shares under the Securities Act or to perfect an exemption
from the registration requirements thereof;
b. Any applicable listing requirement of any stock exchange on
which Common Shares are listed has been satisfied; and
c. Any other applicable provision of state or federal law has
been satisfied.
VIII. NO REGISTRATION RIGHTS.
The Company may, but shall not be obligated to, register or qualify the
sale of Common Shares under the Securities Act or any other applicable law. The
Company shall not be obligated to take any affirmative action in order to cause
the sale of Common Shares under this Agreement to comply with any law.
IX. RESTRICTIONS ON TRANSFER OF SHARES.
A. Restrictions. Regardless of whether the offering and sale of Common
Shares under the Plan have been registered under the Securities Act or have been
registered or qualified under the securities laws of any state, the Company may
impose restrictions upon the sale, pledge or other transfer of such Common
Shares (including the placement of appropriate legends on stock certificates)
if, in the judgment of the Company and its counsel, such restrictions are
necessary or desirable in order to achieve compliance with the Securities Act,
the securities laws of any state or any other law or with restrictions imposed
by the Company's underwriters.
B. Investment Intent at Exercise. In the event that the sale of Common
Shares under the Plan is not registered under the Securities Act but an
exemption is available which requires an investment representation or other
representation, the Optionee shall represent and agree at the time of exercise
that the Common Shares being acquired upon exercising this option are being
acquired for investment, and not with a view to the sale or distribution
thereof, and shall make such other representations as are deemed necessary or
appropriate by the Company and its counsel.
4.
C. Legend. In the event that certificates evidencing Common Shares are
acquired under this Agreement in an unregistered transaction, they shall bear
the following restrictive legend (and such other restrictive legends as are
required or deemed advisable under the provisions of any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
D. Removal of Legends. If, in the opinion of the Company and its
counsel, any legend placed on a stock certificate representing Common Shares
sold under this Agreement is no longer required, the holder of such certificate
shall be entitled to exchange such certificate for a certificate representing
the same number of Common Shares but lacking such legend.
E. Administration. Any determination by the Company and its counsel in
connection with any of the matters set forth in this Section IX shall be
conclusive and binding on the Optionee and all other persons.
X. SHARES AND ADJUSTMENTS.
A. General. In the event of a subdivision of the outstanding Common
Shares, a declaration of a dividend payable in Common Shares, a declaration of a
dividend payable in a form other than Common Shares in an amount that has a
material effect on the price of Common Shares, a combination or consolidation of
the outstanding Common Shares (by reclassification or otherwise) into a lesser
number of Common Shares, a recapitalization, a spinoff or a similar occurrence,
the Committee shall make appropriate adjustments in one or both of (1) the
number of Common Shares covered by this option or (2) the Exercise Price.
B. Reorganizations. In the event that the Company is a party to a
merger or other reorganization, this option shall be subject to the agreement of
merger or reorganization. Such agreement may provide, without limitation, for
(1) the assumption of this option by the surviving corporation or its parent,
(2) its continuation by the Company, if the Company is a surviving corporation,
(3) the acceleration of its exercisability or (4) payment of a cash settlement
equal to the difference between the amount to be paid for one Common Share under
such agreement and the Exercise Price.
C. Reservation of Rights. Except as provided in this Section X, the
Optionee shall have no rights by reason of (1) any subdivision or consolidation
of shares of stock of any class, (2) the payment of any dividend or (3) any
other increase or decrease in the number of shares of stock of any class. Any
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of the
Common Shares subject to this option. The grant of this option shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
5.
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
XI. MISCELLANEOUS PROVISIONS.
A. Withholding Taxes. In the event that the Company determines that it
is required to withhold foreign, federal, state or local tax as a result of the
exercise of this option, the Optionee, as a condition to the exercise of this
option, shall make arrangements satisfactory to the Company to enable it to
satisfy all withholding requirements. Share withholding shall be available to
the extent provided in Section 11.2 of the Plan. Notwithstanding the foregoing,
the Company shall not be authorized to withhold Common Shares at rates in excess
of the minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes.
B. Rights As a Stockholder. Neither the Optionee nor the Optionee's
representative shall have any rights as a stockholder with respect to any Common
Shares subject to this option until such Common Shares have been issued in the
name of the Optionee or the Optionee's representative.
C. No Employment Rights. Nothing in this Agreement shall be construed
as giving the Optionee the right to be retained as a Key Employee. The Company
reserves the right to terminate the Optionee's service at any time, with or
without cause (subject to any employment agreement between the Optionee and the
Company).
D. Notice. Any notice required by the terms of this Agreement shall be
given in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail
with postage and fees prepaid and addressed to the party entitled to such notice
at the address shown below such party's signature on this Agreement, or at such
other address as such party may designate by 10 days' advance written notice to
the other party to this Agreement.
E. Entire Agreement. This Agreement and the Plan constitute the entire
contract between the parties hereto with regard to the subject matter hereof.
F. Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and performed in such State.
XII. DEFINITIONS.
"Agreement" shall mean this Nonstatutory Stock Option Agreement.
"Change in Control" shall mean the occurrence of any of the following
events after the Date of Grant:
a. A change in control required to be reported pursuant to
Item 6(e) of Schedule 14A of Regulation 14A under the Exchange Act;
6.
b. A change in the composition of the Board of Directors of
the Company (the "Board"), as a result of which fewer than two-thirds of the
incumbent directors are directors who either (i) had been directors of the
Company 24 months prior to such change or (ii) were elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the
directors who had been directors of the Company 24 months prior to such change
and who were still in office at the time of the election or nomination; or
c. Any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) by the acquisition or aggregation of securities is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 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.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
7.
"Committee" shall mean the committee of the Company's Board of
Directors described in Article 2 of the Plan.
"Common Share" shall mean one share of the common stock of the Company,
as adjusted in accordance with Section X (if applicable).
"Date of Grant" shall mean the date on which the Committee resolved to
grant this option, which is also the date as of which this Agreement is entered
into.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exercise Price" shall mean the amount for which one Common Share may
be purchased upon exercise of this option, as specified in Section I.A.
"Incentive Stock Option" shall mean an employee incentive stock option
described in section 422(b) of the Code.
"Key Employee" shall mean (i) a key common-law employee of the Company
or of a Subsidiary, as determined by the Committee or (ii) a consultant who
provides services to the Company or a Subsidiary as an independent contractor
and who is not a member of the Company's Board of Directors.
"Plan" shall mean the URS Corporation 1991 Stock Incentive Plan, as in
effect on the Date of Grant.
"Purchase Price" shall mean the Exercise Price multiplied by the number
of Common Shares with respect to which this option is being exercised.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subsidiary" shall mean any corporation, if the Company and/or one or
more other Subsidiaries own not less than 50% of the total combined voting power
of all classes of outstanding stock of such corporation.
"Total and Permanent Disability" shall mean that the Optionee is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than 12 months.
8.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its officer duly authorized to act on behalf of the
Committee, and the Optionee has personally executed this Agreement.
OPTIONEE URS CORPORATION
/s/ MARTIN M. KOFFEL By /s/ JOSEPH MASTERS
- ----------------------------- ----------------------------------
Martin M. Koffel Joseph Masters
Optionee's Address: Company's Address:
2772 Scott Street 100 California Street, Suite 500
San Francisco, California 94123 San Francisco, California 94111
9.