EXHIBIT 10.10
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
entered into as of September 5, 2003, by and between XXXXXX X. XXXXXX (the
"Employee") and URS CORPORATION, a Delaware corporation (the "Company").
WITNESSETH:
WHEREAS, the Company and the Employee entered into an Employment
Agreement effective as of December 16, 1991, as amended by that Amendment to
Employment Agreement effective as of October 13, 1998, and further amended by
that Second Amendment to Employment Agreement effective as of March 23, 1999
(which agreement, as so amended, is referred to below as the "Prior Agreement");
and
WHEREAS, the Company wishes to continue employing the Employee and the
Employee is willing to continue such employment pursuant to the terms and
conditions of this Agreement, which shall amend, restate and supersede the Prior
Agreement.
NOW, THEREFORE, the parties agree as follows:
1. TERM OF EMPLOYMENT.
(a) BASIC RULE. The Company agrees to continue to employ
the Employee, and the Employee agrees to remain in employment with the Company,
from the date hereof until the date when the Employee's employment terminates
pursuant to Subsection (b), (c), (d), (e), (f) or (g) below.
(b) TERMINATION BY COMPANY WITHOUT CAUSE. The Company may
terminate the Employee's employment at any time without Cause (as defined below)
and for any reason or no reason whatsoever by giving the Employee thirty (30)
days' advance notice in writing.
(c) TERMINATION BY COMPANY FOR CAUSE. The Company may
terminate the Employee's employment at any time for Cause. For all purposes
under this Agreement, "Cause" shall mean:
(i) A willful failure by the Employee to
substantially perform his duties hereunder, other than as a result of the death
or Disability (as defined below) of the Employee; or
(ii) A willful act, or failure to act, by the
Employee that constitutes gross misconduct or fraud and which is materially
injurious to the Company.
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No act, or failure to act, by the Employee shall be considered "willful" unless
committed without good faith and without a reasonable belief that the act or
omission was in the Company's best interest.
(d) DISABILITY. The Company may terminate the Employee's
employment due to Disability by giving the Employee thirty (30) days' advance
notice in writing. For all purposes under this Agreement, "Disability" shall
mean that the Employee, at the time the notice is given, has performed none of
his duties under this Agreement for a period of not less than one hundred eighty
(180) consecutive days as a result of his incapacity due to a physical or mental
illness. In the event the Employee resumes the performance of substantially all
of his duties hereunder before termination of his active employment under this
Section 1(d) becomes effective, the notice of termination shall automatically be
deemed to have been revoked.
(e) RESIGNATION BY EMPLOYEE. The Employee may terminate
his employment at any time by giving the Company thirty (30) days' advance
notice in writing.
(f) DEATH OF EMPLOYEE. The Employee's employment shall
terminate automatically in the event of his death.
(g) RETIREMENT OF EMPLOYEE. The Employee's employment
shall terminate automatically on the last day of the Company's fiscal year that
includes April 4, 2006, or such later date as the parties may mutually agree
(the "Retirement Date").
(h) RIGHTS UPON TERMINATION. Except as expressly provided
in Section 6, upon the termination of the Employee's employment pursuant to this
Section 1, the Employee shall only be entitled to the compensation, benefits and
reimbursements described in Sections 3, 4 and 5 for the period preceding the
effective date of the termination. The payments under this Agreement shall fully
discharge all responsibilities of the Company, its subsidiary and affiliated
corporations and related entities (collectively, "URS" and, individually, a "URS
Entity") to the Employee.
(i) TERMINATION OF AGREEMENT. This Agreement shall
terminate on the date when all obligations of the parties hereunder have been
satisfied.
2. DUTIES AND SCOPE OF EMPLOYMENT.
(a) POSITIONS. For the term of his employment under this
Agreement, the Company agrees to employ the Employee as the Chief Executive
Officer, President and Chairman of the Board of the Company. While employed
hereunder, the Employee shall have and may exercise all of the powers,
functions, duties and responsibilities normally attributable to and commensurate
with such positions, including such powers, duties and responsibilities as are
set forth with respect to such positions in the certificate of incorporation and
bylaws of the Company (as from time to time in effect) and as may be reasonably
delegated or assigned to him from time to time by the Board of Directors of the
Company (the "Board"). The Employee shall report directly and exclusively to the
Board, but acknowledges and agrees that responding to inquiries and requests
made by duly appointed committees of the Board is within the scope of his
responsibilities as Chief Executive Officer, President and Chairman of the
Board.
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(b) OBLIGATIONS. During the term of his employment under
this Agreement, the Employee shall devote his full business efforts and time to
URS and shall not render services to any other person or entity without
obtaining either the prior approval of the Compensation Committee of the Board
(the "Compensation Committee") or the written consent of the Chairman of the
Compensation Committee. The foregoing, however, shall not preclude the Employee
from (i) engaging in appropriate civic, charitable or religious activities, (ii)
devoting a reasonable amount of time to private investments that do not
interfere or conflict with his responsibilities to the Company or (iii) devoting
a reasonable amount of time to serving on the boards of directors of other
corporations, consistent with customary practices.
(c) RESIGNATION FROM OTHER POSITIONS. Immediately upon
request by the Company, upon or after the termination of the employment of the
Employee, he shall resign from any position he holds as director, officer,
trustee, nominee, agent for service of process, attorney-in-fact or similar
position with respect to any URS Entity, and shall execute, verify, acknowledge,
swear to and deliver any documents and instruments reasonably requested by the
Company or required to reflect such resignation.
3. BASE COMPENSATION AND TARGET BONUS.
Commencing April 1, 2003 and during the term of his employment
under this Agreement, the Company agrees to pay the Employee as compensation for
his services a base salary at an annual rate of Nine Hundred Thousand Dollars
($900,000), or at such higher rate as the Compensation Committee may determine
from time to time. Once the Compensation Committee has increased such salary, it
thereafter shall not be reduced. Such salary shall be payable in accordance with
the Company's standard payroll procedures. (The annual rate of base salary
specified in this Section 3, as increased by the Compensation Committee from
time to time, is referred to in this Agreement as "Base Compensation.") In
addition, during the term of his employment under this Agreement (including
without limitation with respect to any fiscal year that ends on the Retirement
Date), the Company agrees that the Employee shall participate in the Company's
annual bonus plan with a target bonus percentage of one hundred percent (100%)
of Base Compensation, or at such higher percentage as the Compensation Committee
may determine from time to time. (The annual target bonus percentage specified
in this Section 3, regardless of whether any actual bonus plan is in effect for
any fiscal year, as increased by the Compensation Committee from time to time,
is referred to in this Agreement as "Annual Target Bonus.")
4. EMPLOYEE BENEFITS, STOCK OPTIONS, AND INCENTIVE COMPENSATION,
AND OTHER COMPENSATION PLANS AND PROGRAMS.
(a) GENERAL. During the term of his employment under this
Agreement, the Employee shall be eligible to participate in the employee benefit
plans, stock option and other equity-based incentive and compensation plans, and
other executive incentive and compensation programs maintained with respect to
employees of the Company, subject in each case to (i) the generally applicable
terms and conditions of the applicable plan or program and to the determinations
of the Board, a duly appointed committee of the Board or other person
administering such plan or program and (ii) amendment, modification or
termination of any such plan or program in the sole and absolute discretion of
URS.
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(b) EQUITY GRANTS. Upon execution and delivery of this
Agreement, the Employee shall be granted 100,000 shares of restricted stock
under the Company's 1999 Equity Incentive Plan (the "1999 Plan"), such grant to
provide for (i) ratable vesting of 33,333 shares, 33,333 shares and 33,334
shares on the first, second and third anniversaries of the date of this
Agreement, (ii) accelerated vesting of all such unvested shares in the event of
termination pursuant to Section 6(a)(ii), (iv), (v) or (vi) of this Agreement,
and (iii) other terms consistent with prior restricted stock grants to the
Employee and the 1999 Plan. In addition, commencing November 1, 2003, the
Employee shall be eligible for additional equity grants or awards consistent
with the type and size of equity grants and awards provided to other senior
executives of the Company when such grants or awards are made generally to such
senior executives as a group.
(c) AUTOMOBILE. During the term of his employment under
this Agreement, the Company shall provide the Employee, at his election, either
(i) with an appropriate automobile or (ii) with a monthly automobile allowance
equal to the total cost of leasing an appropriate automobile.
(d) DISABILITY INSURANCE. During the term of his
employment under this Agreement, the Company shall reimburse the Employee for
the cost of maintaining a supplemental disability income insurance policy that
provides a monthly benefit of not less than $10,000. Such policy shall be
equivalent to the policy in effect on the date hereof.
(e) LIFE INSURANCE. During the term of his employment
under this Agreement, the Company shall pay to the Employee an amount (the "Life
Insurance Reimbursement Payment") sufficient to reimburse the Employee for the
cost as incurred of one or more policies of term life insurance on the life of
the Employee with face amount death benefits in an aggregate amount up to four
times his Base Compensation, together with an additional amount (the "Life
Insurance Gross-Up Payment") such that after payment by the Employee of all
income and employment taxes on the Life Insurance Reimbursement Payment and the
Life Insurance Gross-Up Payment, the Employee retains an amount equal to the
Life Insurance Reimbursement Payment.
5. BUSINESS EXPENSES.
In accordance with the Company's generally applicable
policies, (i) during the term of his employment under this Agreement, the
Employee shall be authorized to incur necessary and reasonable travel,
entertainment and other business expenses in connection with his duties
hereunder (including without limitation such expenses arising from the
participation of the Employee's spouse in the performance of such duties), and
(ii) the Company shall reimburse the Employee for such expenses upon
presentation of an itemized account and appropriate supporting documentation.
6. TERMINATION BENEFITS AND PRIVILEGES.
(a) The benefits set forth in this Section 6(a) shall
apply to (i) the voluntary resignation of employment by the Employee prior to
Xxxxx 0, 0000, (xx) the termination of the Employee's employment prior to April
4, 2004 due to death or Disability, (iii) the voluntary
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resignation of employment by the Employee on or after April 4, 2004 but before
the Retirement Date, (iv) the termination of the Employee's employment on the
Retirement Date, (v) the termination of the Employee's employment by the Company
for any reason other than Cause at any time prior to the Retirement Date, or
(vi) the voluntary resignation of employment by the Employee or the termination
of the Employee's employment by the Company during the term of this Agreement
and within two (2) years following a Change in Control (as defined below);
provided, that if clause (vi) applies at any time that any of clauses (i)
through (v) also apply, then the benefits and privileges associated with clause
(vi) shall override such other provisions.
(1) ONGOING PARTICIPATION IN GROUP PLANS. In the
event the termination of the Employee is described in clause (a)(i), (ii),
(iii), (iv), (v) or (vi) above, the Employee shall be entitled to continued
participation in the basic group health insurance plans maintained by the
Company, as further detailed in Article 6 of that Amended and Restated
Supplemental Executive Retirement Agreement between the Employee and the Company
dated as of September 5, 2003 (the "Restated SERP").
(2) SEVERANCE PAYMENT. In the event the
termination of the Employee is described in clause (a)(i) above, the Company
shall pay the Employee the amount of two million five hundred thousand dollars
($2,500,000). In the event the termination of the Employee is described in
clause (a)(ii), (iii), (iv) or (v) above, the Company shall pay the Employee (or
his estate) the amount of five million dollars ($5,000,000). In the event the
termination of the Employee is described in clause (a)(vi) above, the Company
shall pay the Employee the amount equal to three hundred percent (300%) of the
sum of (x) the Employee's Base Compensation plus (y) the product of the Annual
Target Bonus multiplied by the Employee's Base Compensation, all as such amounts
are in effect on the date of the employment termination. Any such payment under
this Subsection (a)(2) ("Severance Payment") shall be paid either in a lump sum
within five (5) business days following the date of termination or, as further
described in Section 7 below, at the Employee's election in installments.
(3) EXTENSION OF STOCK OPTION EXERCISE PERIOD.
In the event the termination of the Employee is described in clause (a)(i),
(ii), (iii), (iv), (v) or (vi) above, the exercise period for all of the
Employee's stock options shall be extended to thirty-six (36) months from the
date of such termination, except if and to the extent specifically provided to
the contrary under the terms of the applicable plan, or under the terms of any
specific grant or award made to the Employee under any such plan and accepted by
the Employee in writing.
(4) ACCELERATION OF STOCK AWARDS. The Company
acknowledges and agrees that all stock options, restricted stock awards and
similar rights previously granted to the Employee are fully vested as of the
date of this Agreement, other than the restricted stock award for 75,000 shares
and the stock option for 105,000 shares made to the Employee on July 15, 2002,
of which 25,000 shares and options for 35,000 shares, respectively, are fully
vested on the date of this Agreement. In addition, in the event the termination
of the Employee is described in clause (a)(iv), (v) or (vi) above, the Employee
shall become fully vested in all awards heretofore or hereafter granted to him
under all incentive compensation, deferred compensation, bonus, stock option,
stock appreciation rights, restricted stock, phantom stock or similar plans
maintained by URS, except if and to the extent specifically provided to the
contrary under the
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terms of any such plan, or under the terms of any specific grant or award made
to the Employee under any such plan and accepted by the Employee in writing.
(b) NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit contemplated by this Section 6,
nor shall any such payment or benefit be reduced by earnings or benefits that
the Employee may receive from any other source.
(c) CHANGE IN CONTROL DEFINITION. For all purposes under
this Agreement, "Change in Control" shall mean the occurrence of any of the
following events after the date of this Agreement:
(i) A change in control required to be reported
pursuant to Item 6(e) of Schedule 14A of Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act");
(ii) A change in the composition of the Company's
Board of Directors, as a result of which fewer than two-thirds (2/3) of the
incumbent 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 of Directors 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; or
(iii) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) through 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:
a. The beneficial ownership by a person
of twenty percent (20%) or more, but less than a majority, of the Base Capital
Stock shall not constitute a Change in Control if such beneficial ownership was
acquired 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 if
such 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;
b. The beneficial ownership by Xxxx
Capital Partners, L.P. and any person "affiliated" (within the meaning of the
Exchange Act) with Xxxx Capital Partners, L.P. (collectively, "Xxxx") of the
Base Capital Stock shall not constitute a Change in Control unless and until
Xxxx, either alone or as a member of a group that constitutes a "person" (as
defined above), beneficially owns an aggregate of over twenty-five percent (25%)
of the Base Capital Stock; and
c. The beneficial ownership by TCG
Holdings, L.L.C. and any person "affiliated" with TCG Holdings, L.L.C.
(collectively, "TCG") of the Base Capital Stock shall not constitute a Change in
Control unless and until TCG, either alone or as a member
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of a group that constitutes a "person" (as defined above), beneficially owns an
aggregate of over twenty-five percent (25%) of the Base Capital Stock.
7. TIMING OF SEVERANCE PAYMENT.
The Severance Payment shall be made in one lump sum on the
first day of the month following the month in which the Employee's employment
with the Company terminates (the "lump sum payment date"); provided, however,
that the Employee may, upon executing this Agreement or thereafter, upon written
notice to the Company, elect to receive his Severance Payment in installments
payable on such date or dates on or subsequent to the lump sum payment date as
the Employee may specify in such notice. Such election shall be irrevocable;
provided, however, that the Employee may change his election of the installment
method if such election is made by written notice to the Company at least one
(1) year prior to the date that the Severance Payment is due to be made to the
Employee. If the Employee does not elect the installment method at least one (1)
year prior to the date that the Severance Payment is due to be made by the
Employee, he shall be deemed to have elected to receive the Severance Payment in
one lump sum on the lump sum payment date.
8. CERTAIN ADDITIONAL PAYMENTS.
If any payments, distributions or other benefits by or from
the Company to or for the benefit of the Employee (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payment required
under this Section 8) (collectively, the "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Employee shall be entitled to receive
from the Company an additional payment (a "Gross-Up Payment") in an amount such
that after payment by the Employee of all taxes (including, without limitation,
any income and employment taxes and any interest and penalties imposed with
respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, the
Employee retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payment. All calculations required by this Section 8 shall be
performed by the independent auditors retained by the Company most recently
prior to the Change in Control (the "Auditors"), based on information supplied
by the Company and the Employee, and shall be final and binding on the Company
and the Employee. All fees and expenses of the Auditors shall be paid by the
Company.
9. SUCCESSORS.
(a) COMPANY'S SUCCESSORS. The Company shall require any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets, by an agreement in substance and form
satisfactory to the Employee, to assume this Agreement and to agree expressly to
perform this Agreement in the same manner and to the same extent as the Company
would be required to perform it in the absence of a succession. The Company's
failure to obtain
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such agreement prior to the effectiveness of a succession shall be a breach of
this Agreement and shall entitle the Employee to all of the compensation and
benefits to which he would have been entitled hereunder if the Company had
terminated his employment without Cause immediately after such succession
becomes effective. For all purposes under this Agreement, the term "Company"
shall include any successor to the Company's business and/or assets which
executes and delivers the assumption agreement described in this Subsection (a)
or which becomes bound by this Agreement by operation of law.
(b) EMPLOYEE'S SUCCESSORS. Provided that the Employee may
not delegate his duties hereunder without the consent of the Board, this
Agreement and all rights hereunder shall inure to the benefit of, and be
enforceable by, the parties' successors, assigns, personal or legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees.
10. NONDISCLOSURE.
During the term of this Agreement and thereafter, the Employee
shall not, without the prior written consent of the Board, disclose or use for
any purpose (except in the course of his employment under this Agreement and in
furtherance of the business of URS) confidential information or proprietary data
of URS, except as required by applicable law or legal process, in which case
promptly and before disclosure the Employee shall give notice to the Company of
any such requirement or process; provided, however, that confidential
information shall not include any information available from another source on a
nonconfidential basis, known generally to the public, or ascertainable from
public or published information (other than as a result of unauthorized
disclosure by the Employee) or any information of a type not otherwise
considered confidential by persons engaged in the same business as, or a
business similar to, that conducted by URS. The Employee agrees to deliver to
the Company at the termination of his employment, or at any other time the
Company may request, all memoranda, notes, plans, records, reports and other
documents or electronic information (and copies thereof) relating to the
business of URS, which he may then possess or have under his control. Nothing in
this Section 10 or elsewhere in this Agreement shall be deemed to waive, or to
permit or authorize the Employee to take any action which waives or could have
the consequence of waiving, the attorney-client privilege, the work product
doctrine or any other privilege or doctrine with respect to any information in
the possession of the Employee or any communication between the Employee and URS
or any of its directors, officers, employees, agents or other representatives.
11. MISCELLANEOUS PROVISIONS.
(a) NOTICE. Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered, when mailed by U.S. registered mail
(return receipt requested and postage prepaid), or when telecopied. In the case
of the Employee, mailed notices shall be addressed to him at the home address
which he most recently communicated to the Company in writing for income tax
withholding purposes or by notice given pursuant to this Subsection 11(a). In
the case of the Company, mailed notices shall be addressed to its corporate
headquarters as reflected in its most recent Report on Form 10-Q or Form 10-K
filed with the U.S. Securities and Exchange Commission, directed to the
attention of its Secretary. Telecopied notices shall be sent to such telephone
number as the Company and the Employee may specify for this purpose.
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(b) WAIVER. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by an authorized officer of
the Company (other than the Employee). No waiver by either party of any breach
of, or of compliance with, any condition or provision of this Agreement by the
other party shall be considered a waiver of any other condition or provision or
of the same condition or provision at another time.
(c) WHOLE AGREEMENT. This Agreement and the Restated SERP
constitute the entire agreement between the Employee and the Company with
respect to the subject matter hereof and thereof, and no agreements,
representations or understandings (whether oral or written and whether express
or implied) which are not expressly set forth in this Agreement or the Restated
SERP have been made or entered into by either party with respect to such subject
matter. Effective as of the date hereof, this Agreement amends, restates and
supersedes the Prior Agreement and any other prior employment agreement between
the Employee and any URS Entity.
(d) NO SETOFF; WITHHOLDING TAXES. There shall be no right
of setoff or counterclaim, with respect to any claim, debt or obligation,
against payments to the Employee under this Agreement. All payments made under
this Agreement shall be subject to reduction to reflect taxes required to be
withheld by law.
(e) CHOICE OF LAW. The validity, interpretation,
construction and performance of this Agreement shall be governed by the internal
laws of the State of California, without regard to where the Employee has his
residence or principal office or where he performs his duties hereunder.
(f) SEVERABILITY. The invalidity or unenforceability of
any provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(g) NO ASSIGNMENT. The rights of any person to payments
or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this Subsection (h) shall be
void.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
URS CORPORATION,
a Delaware corporation
/s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxxx
Executive Vice President and
Chief Financial Officer
10.
