LAW OFFICES OF
XXXXXXX, XXXXXXX & XXXXXXXX LLP
FACSIMILE 000 XXXXXXXXXX XXXXXX XXX XXXXXXX
(415) 982-0000 XXX XXXXXXXXX, XXXXXXXXXX 00000-2514 SAN XXXX
TELEPHONE (000) 000-0000
October 10, 1997
Xxxxxxxx Xxxxx Group, Inc.
0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Re: Agreement and Plan of Merger, dated August 18, 1997, by and among
URS Corporation, a Delaware corporation, W-C Acquisition
Corporation, a Delaware corporation, and Xxxxxxxx-Xxxxx Group,
Inc., a Delaware corporation
Ladies and Gentlemen:
We have acted as special tax counsel to Xxxxxxxx-Xxxxx Group, Inc., a
Delaware corporation (the "Company"), with respect to the Agreement and Plan of
Merger dated August 18, 1997 (the "Plan of Merger") and entered into by and
among URS Corporation, a Delaware corporation ("URS"), W-C Acquisition
Corporation, a Delaware corporation and wholly owned subsidiary of URS ("WCAC"),
and the Company. Pursuant to the Plan of Merger, the Company will merge with and
into WCAC (the "Merger") in accordance with the Plan of Merger and related
Merger Documents (collectively, including the exhibits to each, the "Merger
Agreement"). This opinion is being rendered pursuant to your request. Except as
otherwise provided, capitalized terms not defined herein have the meanings set
forth in the Plan of Merger or in certificates dated October 10, 1997 delivered
to us by URS, WCAC and the Company containing certain representations of URS,
WCAC and the Company (the "Certificates of Representations").
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
the Plan of Merger and such other documents as we have deemed necessary or
appropriate in order to enable us to render the opinion below. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified, conformed or photostatic copies and the authenticity of the
originals of such copies. In rendering the opinion set forth below, we have
relied upon certain written representations and covenants of the Company, URS
and WCAC, which are annexed hereto, and upon representations and facts set forth
in the Plan of Merger. Further, our opinion assumes that the Merger will occur
fully in accordance with the terms and provisions of the Plan of Merger and
there is (or will be prior to
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the Closing) due execution and delivery of all documents where due execution and
delivery are a prerequisite of the effectiveness thereof.
In rendering our opinion, we have considered the applicable provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations, pertinent judicial authorities, interpretive rulings of the
Internal Revenue Service and such other authorities as we have considered
relevant. The opinions set forth below are also predicated upon and limited by
the assumptions set forth herein and are further subject to the qualifications,
assumptions, exceptions and limitations set forth below:
(a) The opinions and conclusions set forth herein are based upon the
federal income tax laws of the United States, including the Code, final,
temporary and proposed Treasury regulations, and judicial and administrative
interpretations thereof as they exist on the date of this letter. There can be
no assurance that the legal authorities upon which our opinion is based will not
be modified, revoked, supplemented or otherwise changed, and no assurance can be
given that future legislative, judicial or administrative changes will not
adversely affect the accuracy of the conclusions stated herein. To the extent of
any such changes, our opinion is not applicable. Furthermore, we undertake no
obligations to reexamine or in any way revise our opinion in the light of such
changes, or otherwise advise you of any new developments in the application or
interpretation of the federal income tax laws which might relate to the opinions
expressed herein.
(b) This opinion only represents our best judgment as to the federal
income tax consequences of the Merger and is not binding on the Internal Revenue
Service or the courts.
(c) There is no plan or intention on the part of the Company's
stockholders (a "Plan") to engage in a sale, exchange, transfer, distribution,
pledge, or other disposition (including a distribution by a corporation to its
stockholders) or any transaction which results in a reduction of risk of
ownership, or a direct or indirect disposition (a "Sale") of shares of URS
Common Stock to be received in the Merger that would reduce the Company
stockholders' collective ownership of URS Common Stock to a number of shares
having an aggregate fair market value, as of the Effective Time, of less than
fifty percent (50%) of the value of all of the stock of the Company outstanding
immediately prior to the Merger. Shares of the Company stock with respect to
which dissenters' rights are exercised in the Merger, which are exchanged for
cash in lieu of fractional shares of URS Common Stock or which are sold,
redeemed or disposed of in a transaction that is in contemplation of or related
to the Merger shall be considered shares of the Company stock held by
stockholders of the Company immediately before the Merger which are
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exchanged in the Merger for shares of URS Common Stock which are then disposed
of pursuant to a Plan.
(d) The shares of Common Stock of the Company surrendered pursuant to
the Merger will not be subject to any liability at the time surrendered and that
no liabilities of any stockholder of the Company will be assumed by URS or WCAC
in connection with the Merger.
(e) Any representation or statement made "to the best of knowledge" or
similarly qualified is correct without such qualification.
Based upon and subject to the foregoing, we are of the opinion that
under current law:
1. The Merger will constitute a tax-free reorganization within
the meaning of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code;
2. URS, WCAC and the Company are all "parties" to the
reorganization within the meaning of Section 368(b) of the Code;
3. Stockholders of the Company who receive part stock and part
cash in the Merger will recognize gain in the amount of such cash, limited,
however, by the total gain realized by such stockholder as a result of the
Merger (which is the difference between the fair market value of the URS Common
Stock and cash received by such stockholder in the Merger less such
stockholder's basis in such stockholder's Company stock exchanged therefor). A
stockholder's recognized gain should be capital if such Company stock was held
as a capital asset at the time of the Merger, provided that the payment is
neither essentially equivalent to a dividend within the meaning of Section 302
of the Code nor has the effect of a dividend within the meaning of Section
356(a)(2) of the Code (collectively, a "Dividend Equivalent Transaction"). If a
loss, rather than a gain, is realized as a result of the application of the
stockholder's cost basis for the Company stock surrendered against the total
consideration received, that loss will not be recognized;
4. The aggregate tax basis of any URS Common Stock received by a
Company stockholder in the Merger (including any fractional share deemed
received as described in Paragraph 6 below) generally should be equal to the
adjusted basis of the Company stock surrendered in exchange therefor, less the
cash received in the Merger, plus the gain recognized by such stockholder in the
Merger (if any);
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5. The holding period (for federal income tax purposes) for each
share of URS Common Stock received in the Merger should include the period
during which the share of Company stock surrendered in exchange therefor was
held, provided that such share of Company stock was held as a capital asset at
the time of the Merger;
6. A fractional share of URS Common Stock not actually issued
pursuant to the Merger but for which cash is received in lieu therefor should be
treated as a fractional share of URS Common Stock that is issued in the Merger
and then redeemed by URS. A Company stockholder receiving cash in lieu of a
fractional share generally should recognize gain or loss upon the payment
thereof equal to the difference (if any) between such stockholder's basis in the
fractional share and the amount of cash received. Such gain or loss should be a
capital gain or loss if, at the time of the Merger, the Company stock is held as
a capital asset;
7. A Company stockholder who exercises appraisal rights with
respect to shares of Company stock and receives cash payment for such shares
generally should recognize capital gain or loss (if such share was held as a
capital asset at the time of the Merger) measured by the difference between the
stockholder's basis in such share and the amount of cash received, provided that
such payment is not a Dividend Equivalent Transaction. A sale of shares pursuant
to an exercise of appraisal rights generally will not be a Dividend Equivalent
Transaction if, as a result of such exercise, the stockholder exercising
appraisal rights owns no shares of capital stock of URS (either actually or
constructively within the meaning of Section 318 of the Code) immediately after
the Merger;
8. URS and WCAC will not recognize gain or loss as a result of
the Merger; and
9. The Company will not recognize gain or loss as a result of the
Merger.
In addition to your request for our opinion on this specific matter of
federal income tax law, you have asked us to review the discussion of federal
income tax issues contained in the S-4 Registration Statement filed in
connection with the Merger ("Registration Statement"). We have reviewed the
discussion entitled "Certain Federal Income Tax Considerations" contained in the
Registration Statement and believe that such information fairly presents the
current federal income tax law applicable to the Merger and the material federal
tax consequences to URS, WCAC and the Company, and the Company's stockholders as
a result of the Merger.
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This opinion does not address the various state, local or foreign tax
consequences that may result from the Merger. In addition, no opinion is
expressed as to any federal income tax consequence of the Merger except as
specifically set forth herein, and this opinion may not be relied upon except
with respect to the consequences specifically discussed herein.
No opinion is expressed as to any transaction other than the Merger as
described in the Agreements or to any other transaction whatsoever including the
Merger if all the transactions described in the Agreements are not consummated
in accordance with the terms of the Agreements and without waiver of any
material provisions thereof. To the extent any of the representations,
warranties, statements and assumptions material to our opinion and upon which we
have relied are not complete, correct, true and accurate in all material
respects at all relevant times our opinion would be adversely affected and
should not be relied upon.
We consent to the reference to our firm under the caption "Certain
Federal Income Tax Considerations" in the Proxy Statement/Prospectus included in
the Registration Statement and to the filing of this opinion as an exhibit to
the Prospectus and as an exhibit to the Registration Statement.
This opinion has been delivered for your benefit in connection with the
filing of the Registration Statement and may not be distributed or otherwise
made available to any other person or entity without our prior written consent.
Very truly yours,
/s/ Xxxxxxx, Xxxxxxx & XxXxxxxx, LLP
RAS
