EXHIBIT 10.3
FORM OF OFFICER INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered into
as of March 23, 2004, between URS Corporation, a Delaware corporation (the
"Company"), and ____________________ (the "Indemnitee").
RECITALS
WHEREAS, highly competent persons are becoming more reluctant to serve or
to continue to serve publicly held corporations as executive officers unless
they are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the corporation;
WHEREAS, the current uncertainties relating to the availability of
adequate insurance for executive officers have increased the difficulty for
corporations to attract and retain competent and experienced persons to serve as
executive officers;
WHEREAS, the Company's Board of Directors (the "Board") has determined
that the continuation of present trends in litigation will make it more
difficult to attract and retain competent and experienced persons to serve as
executive officers, that this situation is detrimental to the best interests of
the Company's stockholders and that the Company should act to assure its
executive officers that there will be increased certainty of adequate protection
in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company to
obligate itself contractually to indemnify its executive officers to the fullest
extent permitted by applicable law so that they will serve or continue to serve
the Company free from undue concern that they will not be so indemnified;
WHEREAS, Indemnitee is an executive officer of the Company and is willing
to serve and continue to serve for and on behalf of the Company in such capacity
on the condition that the Company indemnify him or her to the fullest extent
permitted by the laws of the State of Delaware and upon the other undertakings
set forth in this Agreement; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability, in order to enhance Indemnitee's continued,
effective service as an executive officer of the Company, the uncertainty of
maintaining satisfactory director and officer liability insurance coverage, and
in order to provide such protection pursuant to express contractual rights
(intended to be enforceable irrespective of any amendment to the Company's
Certificate of Incorporation or By-Laws (together, the "Charter Documents") or
any change in the composition of the Board or an acquisition transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancement of expenses to Indemnitee as set
forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, Indemnitee's
agreement to continue to serve as an executive officer of the Company and the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
1. CERTAIN DEFINITIONS. In addition to terms defined elsewhere herein, the
following terms shall have the respective meanings indicated below when used in
this Agreement:
(a) CHANGE IN CONTROL. For purposes of this Agreement, "Change in
Control" shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
Voting Securities (as defined below), or (ii) during any period of two (2)
consecutive years, individuals who at the beginning of such period constitute
the Board and any new director whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving
entity) at least fifty 50% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (iv) the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of transactions)
all or substantially all of the Company's assets.
(b) CLAIM. For purposes of this Agreement, "Claim" shall mean (i) any
threatened, asserted, pending or completed claim, demand, action, suit or
proceeding (including any cross claim or counterclaim in any action, suit or
proceeding), whether made pursuant to federal, state or other law (including
securities laws) and (ii) any inquiry or investigation (including discovery),
whether made, instituted or conducted by the Company or any other party,
including any federal, state or other governmental entity, that Indemnitee in
good faith believes might lead to the institution of any such action, suit or
proceeding, whether civil, criminal, administrative, arbitrative, investigative
or other.
(c) EXPENSES. For purposes of this Agreement, "Expenses" shall mean all
costs (including attorneys' and experts' fees and expenses) and all other
expenses and obligations paid or incurred in connection with investigating,
defending (including affirmative defenses and counterclaims), being a witness in
or participating in (including on appeal), or preparing to investigate, defend,
be a witness in or participate in (including on appeal) any Claim relating to
any Indemnifiable Event.
2.
(d) INDEMNIFIABLE EVENT. For purposes of this Agreement, "Indemnifiable
Event" shall mean any event or occurrence related to the fact that Indemnitee is
or was a director, officer, employee, agent or fiduciary of the Company, or is
or was serving at the request of the Company as a director, officer, employee,
trustee, agent, partnership committee member or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, or by reason of anything done or not done by Indemnitee in any such
capacity.
(e) INDEPENDENT LEGAL COUNSEL. For purposes of this Agreement,
"Independent Legal Counsel" shall mean an attorney or firm of attorneys,
selected in accordance with the provisions of Section 6, who shall not have
otherwise performed services for the Company or Indemnitee within the past five
years (other than with respect to matters concerning the rights of Indemnitee
under this Agreement, or of other indemnitees under similar indemnity
agreements). Notwithstanding the foregoing, the term "Independent Legal Counsel"
shall not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's rights
under this Agreement.
(f) REVIEWING PARTY. For purposes of this Agreement, "Reviewing Party"
shall mean any appropriate person or body consisting of a member or members of
the Board or any other person or body appointed by the Board who is not a party
to the particular Claim for which Indemnitee is seeking indemnification, or
Independent Legal Counsel.
(g) VOTING SECURITIES. For purposes of this Agreement, "Voting
Securities" shall mean any securities of the Company that vote generally in the
election of directors.
2. INDEMNIFICATION ARRANGEMENT; DETERMINATION OF RIGHT; BURDEN OF PROOF.
(a) INDEMNIFICATION ARRANGEMENT. In the event Indemnitee was, is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law as soon as practicable but in
any event no later than thirty (30) days after written demand is presented to
the Company, against any and all Expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such Claim if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any criminal Claim, had no reasonable cause to believe Indemnitee's conduct was
unlawful. If so requested by Indemnitee, the Company shall advance (within ten
(10) business days of such request) any and all Expenses to Indemnitee (an
"Expense Advance").
(b) DETERMINATION OF RIGHT. Notwithstanding the foregoing, the
obligations of the Company under Section 2(a) shall be subject to the following
conditions:
(i) Following written demand for indemnification, the Reviewing
Party shall make a determination (in a written opinion, in any case in which the
Independent Legal Counsel referred to in Section 6 hereof is involved) that
Indemnitee is permitted to be indemnified under
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applicable law. If there has been no determination by the Reviewing Party within
thirty days (30) after written demand for indemnification made under Section
2(a) or if the Reviewing Party determines that Indemnitee substantively would
not be permitted to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in any court in the State
of California or the State of Delaware having subject matter jurisdiction
thereof and in which venue is proper seeking an initial determination by the
court or challenging any such determination by the Reviewing Party or any aspect
thereof, including the legal or factual bases therefor, and the Company hereby
consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and binding
on the Company and Indemnitee. If there has not been a Change in Control, the
Reviewing Party shall be selected by the Board, and if there has been such a
Change in Control (other than a Change in Control which has been approved by a
majority of the Company's Board of Directors who were directors immediately
prior to such Change in Control), the Reviewing Party shall be the Independent
Legal Counsel referred to in Section 6 hereof.
(ii) The obligation of the Company to make an Expense Advance
pursuant to Section 2(a) shall be subject to the condition that, if, when and to
the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed).
(c) BURDEN OF PROOF. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
3. INDEMNIFICATION FOR ADDITIONAL EXPENSES.
Without limiting the generality of Section 2, the Company shall indemnify
Indemnitee against any and all expenses (including attorneys' fees) and, if
requested by Indemnitee, shall (within five (5) business days of such request)
advance such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or the Charter
Documents relating to Claims for Indemnifiable Events and/or (ii) recovery under
any directors' and officers' liability insurance policies maintained by the
Company, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance expense payment or insurance recovery,
as the case may be; provided, however, that Indemnitee shall return, without
interest, any such advance of expenses (or portion thereof) that remains unspent
at the final disposition of the Claim to which the advance related.
4.
4. PARTIAL INDEMNITY, ETC.
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses, judgments,
fines, penalties and amounts paid in settlement of a Claim relating in whole or
in part to an Indemnifiable Event, but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful
on the merits or otherwise in defense of any or all such Claims or in defense of
any issue or matter therein, including dismissal without prejudice, Indemnitee
shall be indemnified against all Expenses incurred in connection therewith.
5. NOTICE AND OTHER INDEMNIFICATION PROCEDURES.
(a) NOTICE BY INDEMNITEE. Promptly after receipt by the Indemnitee of
notice of the commencement of or the threat of commencement of any Claim, the
Indemnitee shall, if the Indemnitee believes that indemnification with respect
thereto may be sought from the Company under this Agreement, notify the Company
of the commencement or threat of commencement thereof. In addition, the
Indemnitee shall give the Company such information and cooperation as it may
reasonably require and as shall be within Indemnitee's power to provide. The
failure by Indemnitee to timely notify the Company of any Claim shall not
relieve the Company from liability hereunder unless, and only to the extent
that, the Company did not otherwise learn of such Claim and such failure results
in forfeiture by the Company of substantial defenses, rights or insurance
coverage.
(b) NOTICE BY COMPANY. If, at the time of the receipt of a notice of the
commencement of or the threat of commencement of any Claim pursuant to Section
5(a) hereof, the Company has directors' and officers' liability insurance in
effect, the Company shall give prompt notice of the commencement of such Claim
to the insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as
a result of such Claim in accordance with the terms of such policies.
(c) DEFENSE. In the event the Company shall be obligated to pay the
expenses of any proceeding against the Indemnitee, the Company, if appropriate,
shall be entitled to assume the defense of such proceeding, with counsel
approved by the Indemnitee, upon the delivery to the Indemnitee of written
notice of its election to do so. After delivery of such notice, approval of such
counsel by the Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to the Indemnitee under this Agreement for any fees
of counsel subsequently incurred by the Indemnitee with respect to the same
proceeding; provided, that (i) the Indemnitee shall have the right to employ his
or her counsel in any such proceeding at the Indemnitee's expense and (ii) if
(A) the employment of counsel by the Indemnitee has been previously authorized
by the Company, (B) the Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and the Indemnitee in the
conduct of any such defense or (C) the Company shall not, in fact, have employed
counsel to assume the defense of such proceeding, the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.
5.
6. CHANGE IN CONTROL.
If there is a Change in Control of the Company (other than a Change in
Control which has been approved by a majority of the Board who were directors
immediately prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Indemnitee to indemnity payments and
Expense Advances under the Charter Documents, this Agreement or any other
agreement now or hereafter in effect relating to Claims for Indemnifiable
Events, the Company shall seek legal advice only from Independent Legal Counsel
selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
the Indemnitee would be permitted to be indemnified under applicable law. The
Company shall pay the reasonable fees of the Independent Legal Counsel referred
to above and shall fully indemnify such counsel against any and all expenses
(including attorneys' fees), claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
7. NO PRESUMPTIONS.
For purposes of this Agreement, the termination of any claim, action, suit
or proceeding, by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law. In addition, neither
the failure of the Reviewing Party to have made a determination as to whether
Indemnitee has met any particular standard of conduct or had any particular
belief, nor an actual determination by the Reviewing Party that Indemnitee has
not met such standard of conduct or did not have such belief, prior to the
commencement of legal proceedings by Indemnitee to secure a judicial
determination that Indemnitee should be indemnified under applicable law shall
be a defense to Indemnitee's claim or create a presumption that Indemnitee has
not met any particular standard of conduct or did not have any particular
belief.
8. NONEXCLUSIVELY, ETC.
The rights of the Indemnitee hereunder shall be in addition to any
other rights Indemnitee may have under the Charter Documents or the Delaware
General Corporation Law ("DGCL") or otherwise. To the extent that a change in
the DGCL (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the Charter
Documents and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. The indemnification provided under this Agreement shall continue as
to the Indemnitee for any action taken or not taken while serving in an
indemnified capacity even though he or she may have ceased to serve in such
capacity at the time of any Claim.
9. MUTUAL ACKNOWLEDGMENT.
Both the Company and Indemnitee acknowledge that in certain instances,
federal law or public policy may override applicable state law and prohibit the
Company from indemnifying its
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directors under this Agreement or otherwise. For example, the Company and
Indemnitee acknowledge that the Securities and Exchange Commission (the "SEC")
has taken the position that indemnification is not permissible for liabilities
arising under certain federal securities laws, and federal legislation prohibits
indemnification for certain ERISA violations. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the SEC to submit the question of indemnification to a court in
certain circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee.
10. LIABILITY INSURANCE.
To the extent the Company maintains an insurance policy or policies
providing directors' and officers' liability insurance, Indemnitee shall be
covered by such policy or policies, in accordance with its or their terms, to
the maximum extent of the coverage available for any Company executive officer.
11. EXCEPTIONS.
Any other provision herein to the contrary notwithstanding, the Company
shall not be obligated pursuant to the terms of this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance expenses to
Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee
and not by way of defense, prior to a Change in Control, unless the Board has
authorized or consented to the initiation of such Claim and except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board finds it to be appropriate.
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceedings was not made in good faith or was frivolous.
(c) INSURED CLAIMS. To indemnify Indemnitee for Expenses or liabilities
of any type whatsoever to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, the Charter Documents or otherwise) of the
amounts actually indemnifiable hereunder.
(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for expenses or
the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Exchange Act or any similar
successor statute.
(e) UNAUTHORIZED SETTLEMENTS. To indemnify Indemnitee for any amounts
paid in settlement of any Claim effected without the Company's written consent,
which shall not be unreasonably withheld; provided, however, that the Company
shall be permitted to settle any Claim except in any manner that would impose
any penalty or limitation on Indemnitee without
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Indemnitee's written consent, which consent may be given or withheld in
Indemnitee's sole discretion.
(f) JUDICIAL DETERMINATION. To indemnify Indemnitee for (i) conduct
finally adjudged as constituting active or deliberate dishonesty or willful
fraud or illegality, or (ii) conduct finally adjudged as producing an unlawful
personal benefit.
12. PROHIBITED LOAN LIMITATIONS.
Notwithstanding any provision in this Agreement to the contrary, in the
event that any Expense Advance or other advance payment of Expenses would amount
to a prohibited loan pursuant to Section 402 of the Xxxxxxxx-Xxxxx Act of 2002,
as determined by final regulation of a regulatory body having jurisdiction to
make such a determination or by a court of competent jurisdiction, then the
Company shall not be required to make such Expense Advance or other advance
payment of Expenses.
13. PERIOD OF LIMITATIONS.
No legal action shall be brought and no cause of action shall be asserted
by or in the right of the Company against Indemnitee, Indemnitee's spouse,
heirs, executors or personal or legal representatives after the expiration of
two (2) years from the date of accrual of such cause of action, and any claim or
cause of action of the Company shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such two- (2-) year
period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter period shall
govern.
14. AMENDMENTS; WAIVER.
No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
15. SUBROGATION.
In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such
rights.
16. BINDING EFFECT, ETC.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation or
otherwise to all or substantially all of the business and/or assets of the
Company, assigns, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee
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continues to serve as an executive officer of the Company or of any other
enterprise at the Company's request.
17. SEVERABILITY.
The provisions of this Agreement shall be severable in the event that any
of the provisions hereof (including any provision within a single section,
paragraph or sentence) is held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable in any respect, and the validity and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired and shall remain enforceable
to the fullest extent permitted by law.
18. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in such state without giving effect to the principles of
conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
____________________, 200___.
URS CORPORATION
By:___________________________________
Name:
Title:
INDEMNITEE
______________________________________
Name:
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