URS CORPORATION 1999 Equity Incentive Plan NONSTATUTORY STOCK OPTION AGREEMENT
EXHIBIT 10.40
URS CORPORATION
1999 Equity Incentive Plan
1999 Equity Incentive Plan
Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock Option Agreement,
URS Corporation (the “Company”) has granted you an option under its 1999 Equity Incentive Plan (the
“Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined
in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the
Plan.
The details of your option are as follows:
1. Vesting. Subject to the limitations contained herein, your option will
vest as provided in your Grant Notice, provided that vesting will cease upon the termination of
your Continuous Service.
2. Number of Shares and Exercise Price. The number of shares of Common
Stock subject to your option and your exercise price per share referenced in your Grant Notice may
be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.
3. Method of Payment. Payment of the exercise price is due in full upon
exercise of all or any part of your option as follows:
(a) You may elect to make payment of the exercise price in any manner permitted by
your Grant Notice, which may include one or more of the following:
(i) In cash or by check;
(ii) In the Company’s sole discretion at the time your option is exercised, and
provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in
The Wall Street Journal, pursuant to a same day sale program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds; or
(iii) Provided that at the time of exercise the Common Stock is publicly traded and
quoted regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock
either that you have held for the period required to avoid a charge to the Company’s reported
earnings (generally six months) or that you did not acquire, directly or indirectly from the
Company, that are owned free and clear of any liens, claims, encumbrances or security interests,
and that are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes,
in the sole discretion of the Company at the time you exercise your option, shall include delivery
to the Company of your attestation of ownership of such shares of Common Stock in a form approved
by the Company. Notwithstanding the foregoing, you may not exercise your option by tender to the
Company of Common Stock to the extent such tender would violate the provisions of any law,
regulation or agreement restricting the redemption of the Company’s stock.
(b) If and when expressly authorized by the Compensation Committee of the Board of
Directors and permitted by your Grant Notice, you may “net exercise” your option in such manner as
the Compensation Committee may authorize, whereby the Company will deliver to you upon such
exercise, subject to withholding pursuant to Section 10 below, that number of shares equal to the
quotient of (i) the excess of the
1
aggregate Fair Market Value of the number of shares of Common Stock as to which your option is
being exercised over the aggregate exercise price of your option as to such number of shares,
divided by (ii) the Fair Market Value.
4. Minimum Exercise. You may not exercise your option for less than one
hundred (100) shares of Common Stock at any one time, except that it may be exercised for all of
the Common Stock remaining subject to the option if fewer than one hundred (100) shares remain.
You may exercise your option only for whole shares of Common Stock.
5. Securities Law Compliance. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common Stock issuable upon
such exercise are then registered under the Securities Act or, if such shares of Common Stock are
not then so registered, the Company has determined that such exercise and issuance would be exempt
from the registration requirements of the Securities Act. The exercise of your option must also
comply with other applicable laws and regulations governing your option, and you may not exercise
your option if the Company determines that such exercise would not be in material compliance with
such laws and regulations.
6. Term. You may not exercise your option before the commencement of its
term or after its term expires. The term of your option commences on the Date of Grant and expires
upon the earliest of the following:
(a) three (3) months after the termination of your Continuous Service for any reason
other than your retirement from the Company on or after the date you attain age 65, Disability or
death, provided that if during any part of such three- (3-) month period you may not exercise your
option solely because of the condition set forth in the preceding paragraph relating to “Securities
Law Compliance,” your option shall not expire until the earlier of the Expiration Date or until it
shall have been exercisable for an aggregate period of three (3) months after the termination of
your Continuous Service;
(b) three (3) years after your retirement from the Company, if such retirement
occurs on or after the date you attain age 65;
(c) twelve (12) months after the termination of your Continuous Service due to your
Disability;
(d) twelve (12) months after your death if you die either during your Continuous
Service or within three (3) months after your Continuous Service terminates for any reason other
than your retirement from the Company on or after the date you attain age 65;
(e) the Expiration Date indicated in your Grant Notice; or
(f) the day before the tenth (10th) anniversary of the Date of ▇▇▇▇▇.
7. Exercise.
(a) You may exercise the vested portion of your option during its term by delivering
a Notice of Exercise (in a form designated by the Company) together with the exercise price to the
Secretary of the Company, or to such other person as the Company may designate, during regular
business hours, together with such additional documents as the Company may then require.
(b) By exercising your option you agree that, as a condition to any exercise of your
option, the Company may require you to enter into an arrangement providing for the payment by you
to the Company of any tax withholding obligation of the Company arising by reason of (1) the
exercise of your option or (2) the disposition of shares of Common Stock acquired upon such
exercise.
2
8. Transferability. Your option is not transferable, except by will or by
the laws of descent and distribution, and is exercisable during your life only by you.
Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory
to the Company, you may designate a third party who, in the event of your death, shall thereafter
be entitled to exercise your option.
9. Option not a Service Contract. Your option is not an employment or
service contract, and nothing in your option shall be deemed to create in any way whatsoever any
obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company
or an Affiliate to continue your employment. In addition, nothing in your option shall obligate
the Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or Consultant for the
Company or an Affiliate.
10. Withholding Obligations.
(a) At the time you exercise your option, in whole or in part, or at any time
thereafter as requested by the Company, you hereby authorize withholding from payroll and any other
amounts payable to you, and otherwise agree to make adequate provision for (including by means of a
“cashless exercise” pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
(b) Upon your request and subject to approval by the Company, in its sole
discretion, and compliance with any applicable conditions or restrictions of law, the Company may
withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of
your option a number of whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, that satisfies federal, state, local and foreign tax
obligations of the Company and you; provided that the Company shall not withhold shares of Common
Stock at rates in excess of the minimum statutory withholding rates imposed upon the Company for
federal and state tax purposes if such withholding would result in a charge to the Company’s
earnings for accounting purposes. Any adverse consequences to you arising in connection with such
share withholding procedure shall be your sole responsibility.
(c) You may not exercise your option unless the tax withholding obligations of the
Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your
option when desired even though your option is vested, and the Company shall have no obligation to
issue a certificate for such shares of Common Stock or release such shares of Common Stock from any
escrow provided for herein.
11. Notices. Any notices provided for in your option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the case of notices
delivered by mail by the Company to you, five (5) days after deposit in the United States mail,
postage prepaid, addressed to you at the last address you provided to the Company.
12. Governing Plan Document. Your option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your option, and is further subject
to all interpretations, amendments, rules and regulations which may from time to time be
promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions
of your option and those of the Plan, the provisions of the Plan shall control.
3