8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 24, 2006

URS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State of jurisdiction of incorporation)

1-7567
(Commission File No.) 94-1381538
(IRS Employer Identification No.)

600 Montgomery Street, 26^th Floor
San Francisco, California 94111-2728
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (415) 774-2700

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.   Entry into a Material Definitive Agreement.

Amendment and Restatement of the Company’s 1999 Equity Incentive Plan

On May 25, 2006, at the Company’s Annual Meeting of Stockholders, the stockholders approved the proposal to amend and restate the URS Corporation 1999 Equity Incentive Plan (the “1999 Incentive Plan”) to incorporate provisions that will allow the Company to include performance-based criteria for certain equity and cash awards (“performance-based awards”) that may be granted under the 1999 Incentive Plan. Performance-based awards will be granted only upon the attainment during a specified time period of performance goals pre-established by the Board of Directors of the Company. The foregoing description is qualified in its entirety by reference to the amendment and restatement to the Company’s 1999 Equity Incentive Plan filed hereto as Exhibit 10.1.

Issuance of Restricted Stock

The Compensation Committee of the Board of Directors of the Company approved the following issuance of shares of restricted stock to certain of the Company’s senior officers as of May 25, 2006, which issuance was subject to and effective upon stockholder approval of the amendment and restatement of the 1999 Incentive Plan described above: 10,000 shares to Thomas W. Bishop, 5,000 shares to Reed N. Brimhall, 10,000 shares to H. Thomas Hicks, 16,000 shares to Gary V. Jandegian, 5,000 shares to Susan Kilgannon, 8,000 shares to Joseph Masters and 13,000 shares to Randall A. Wotring. The restrictions with respect to 50% of each such stock award are subject to time-based vesting on each of the first four anniversaries after May 25, 2006, which vesting is also subject to acceleration provisions contained in each individual’s employment agreement with the Company.

The restrictions with respect to the remaining 50% of the stock awards are subject to both time-based vesting and performance-based vesting that depends on the Company’s achievement of its annual net income target as approved by the Board of Directors for the fiscal year immediately preceding each applicable vesting date, subject to acceleration provisions contained in each individual’s employment agreement with the Company. In any fiscal year where the net income target is not met, that portion of the stock award that is performance-based award will not vest and will instead be canceled.

Each stock award recipient will receive a Restricted Stock Award, which is a grant document setting forth customary rights, privileges and restrictions as to the shares, including the right to receive any dividends declared with respect to the restricted stock, the right to provide instructions on how to vote the stock and restrictions on transfer. The foregoing description of the Restricted Stock Award is qualified in its entirety by reference to the form of Restricted Stock Award filed hereto as Exhibit 10.2.

Adoption of Bonus Plan Performance Targets for 2006

Most of our executive officers and selected senior managers (“Designated Participants”) participate annually in our 1999 Incentive Compensation Plan (the “Bonus Plan”). Under the Bonus Plan, the Designated Participants are eligible to earn annual bonuses based on formulas

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tied to certain predefined financial performance targets that are established annually by the Compensation Committee (“Target Bonuses”). On May 24, 2006, the Compensation Committee increased the Target Bonuses for fiscal year 2006 for Reed Brimhall from 55% to 60% and for Joseph Masters from 60% to 65%. If the financial performance targets are met, each Designated Participant’s bonus will be equal to the Target Bonus. If performance targets are not met, bonuses will be determined as a declining percentage of Target Bonuses depending on the extent of the shortfall. No bonus will be paid under the Bonus Plan if a Designated Participant fails to achieve predetermined minimum financial performance targets. Conversely, if performance targets are exceeded, then bonuses may be earned in excess of the Target Bonus up to a maximum of two times the Target Bonus.

Increase in Base Salary

On May 24, 2006, the Compensation Committee approved the following annual base salary increases for certain senior executives: from $362,000 to $400,000 for Thomas W. Bishop, from $385,000 to $400,000 for Reed N. Brimhall, from $450,000 to $525,000 for Gary V. Jandegian, from $275,000 to $290,000 for Susan B. Kilgannon, from $360,000 to $400,000 for Joseph Masters and from $400,000 to $450,000 for Randall A. Wotring.

Employment Agreement of Susan B. Kilgannon

The Company and Susan B. Kilgannon, the Company’s Vice President, Corporate Communications, entered into an employment agreement on May 25, 2006 (the “Agreement”). Under the Agreement, Mr. Kilgannon is entitled to an annual base salary of $290,000 and a Target Bonus of 40%. If the Company terminates Ms. Kilgannon’s employment for any reason other than cause or her disability, or if she voluntarily resigns her employment for good reasons, the Company will pay a severance payment equal to 100% of her base salary as in effect on the date her employment is terminated. The foregoing description of the Agreement is qualified in its entirety by reference to Exhibit 10.3 filed hereto.

Item 9.01.   Financial Statements and Exhibits.

     (c)   Exhibits

10.1	Amended and Restated 1999 Equity Incentive Plan, dated as of May 25, 2006. FILED HEREWITH.
10.2	Form of URS Corporation 1999 Equity Incentive Plan Restricted Stock Award, dated as of May 25, 2006. FILED HEREWITH.
10.3	Employment Agreement, dated May 25, 2006, between URS Corporation and Susan B. Kilgannon. FILED HEREWITH.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, URS Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	URS CORPORATION
Dated: May 31, 2006	By:	/s/ Reed N. Brimhall
		Reed N. Brimhall
		Vice President, Controller and Chief Accounting Officer

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EXHIBIT INDEX

Exhibit
Number	Description
10.1	Amended and Restated 1999 Equity Incentive Plan, dated as of May 25, 2006.
10.2	Form of URS Corporation 1999 Equity Incentive Plan Restricted Stock Award, dated as of May 25, 2006.
10.3	Employment Agreement, dated May 25, 2006, between URS Corporation and Susan B. Kilgannon.

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EX-10.1

EXHIBIT 10.1

URS CORPORATION

1999 EQUITY INCENTIVE PLAN

Adopted July 13, 1999
Approved By Stockholders October 12, 1999
Amended Effective October 14, 2003
Amended Effective January 21, 2004
Amended Effective July 12, 2004
Amended and Restated Effective May 25, 2006
Termination Date: July 12, 2009

1.   Purposes.

     (a)   Eligible Award Recipients. The persons eligible to receive Awards are the Employees, Directors and Consultants of the Company and its Affiliates.

     (b)   Available Awards. The purpose of the Plan is to provide a means by which eligible recipients of Stock Awards may be given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) rights to acquire restricted stock, (iv) Non-Executive Director Stock Awards and (v) Performance Stock Awards. The Plan also provides for the grant of Performance Cash Awards.

     (c)   General Purpose. The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to receive Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

2.   Definitions.

     (a)   “Affiliate” means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

(b)   “Award” means a Stock Award or a Performance Cash Award

     (c)   “Board” means the Board of Directors of the Company.

     (d)   “Change in Control” means any transaction, or series of transactions that occur within a twelve (12) month period, as a result of which the stockholders of the Company immediately prior to the completion of the transaction (or, in the case of a series of transactions, immediately prior to the first transaction in the series) hold, directly or indirectly, less than fifty percent (50%) of the beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act or comparable successor rules) of the outstanding securities of the surviving entity, or, if more than one entity survives the transaction or transactions, the controlling entity, following such transaction or transactions.

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     (e)   “Code” means the Internal Revenue Code of 1986, as amended.

     (f)   “Committee” means a committee of one or more members of the Board appointed by the Board in accordance with subsection 3(c).

     (g)   “Common Stock” means the common stock of the Company.

     (h)   “Company” means URS Corporation, a Delaware corporation.

     (i)   “Consultant” means any person, including an advisor, (i) engaged by the Company or an Affiliate to render consulting or advisory services and who is compensated for such services or (ii) who is a member of the Board of Directors of an Affiliate. However, the term “Consultant” shall not include either Directors who are not compensated by the Company for their services as Directors or Directors who are merely paid a director’s fee by the Company for their services as Directors.

     (j)   “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave.

     (k)   “Covered Employee” means the chief executive officer and the four (4) other highest compensated officers of the Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.

     (l)   “Director” means a member of the Board of Directors of the Company.

     (m)   “Disability” means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code.

     (n)   “Employee” means any person employed by the Company or an Affiliate. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.

     (o)   “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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     (p)   “Fair Market Value” means the closing sales price of a share of Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable.

     (q)   “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

     (r)   “1991 Plan” means the URS Corporation 1991 Stock Incentive Plan.

     (s)   “Non-Employee Director” means a Director who either (i) is not a current Employee or Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

     (t)   “Non-Executive Director” means a Director who is not an Employee.

     (u)   “Non-Executive Director Stock Award” means a Stock Award made to a Non-Executive Director pursuant to Section 8.

     (v)   “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

     (w)   “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

     (x)   “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan.

     (y)   “Option Agreement” means a written agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.

     (z)   “Optionee” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

     (aa)   “Outside Director” means a Director who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an “affiliated corporation” at any time and is not currently receiving direct or indirect remuneration from the Company or an “affiliated corporation” for services in any capacity other than as a Director or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code.

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     (bb)   “Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.

     (cc)   “Performance Cash Award” means an award of cash granted pursuant to Section 9(b).

     (dd)   “Performance Criteria” means the one or more criteria that the Board shall select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that shall be used to establish such Performance Goals may be based on any one of, or combination of, or any ratio between two or more of, the following: (i) earnings before interest, taxes, depreciation and amortization (“EBITDA”); (ii) earnings before interest and taxes (“EBIT”); (iii) earnings before unusual or nonrecurring items; (iv) net earnings; (v) earnings per share; (vi) net income; (vii) gross profit margin; (viii) operating margin; (ix) operating income; (x) net operating income; (xi) net operating income after taxes; (xii) growth; (xiii) net worth; (xiv) cash flow; (xv) cash flow per share; (xvi) total stockholder return; (xvii) return on capital; (xviii) stock price performance; (xix) revenues; (xx) costs; (xxi) working capital; (xxii) capital expenditures; (xxiii) changes in capital structure; (xxiv) economic value added; (xxv) industry indices; (xxvi) expenses and expense ratio management; (xxvii) debt reduction; (xxviii) profitability of an identifiable business unit or product; (xxix) levels of expense, cost or liability by category, operating unit or any other delineation; (xxx) implementation or completion of projects or processes; (xxxi) contribution; (xxxii) average days sales outstanding; (xxxiii) new sales; and (xxxiv) to the extent that a Performance Stock Award or a Performance Cash Award is not intended to comply with Section 162(m) of the Code, other measures of performance selected by the Board. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash Award. The Board shall, in its sole discretion, define the manner of calculating the Performance Criteria it selects to use for a Performance Period.

     (ee)   “Performance Goals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be set on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to other Performance Criteria or internally generated business plans approved by the Board, the performance of one or more comparable companies or a relevant index. The Board is authorized to make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to exclude the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards Board; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; (v) to exclude the effects of any “extraordinary items” as determined under generally accepted accounting principles; (vi) to exclude any other unusual, non-recurring gain or loss or other extraordinary item; (vii) to respond to, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development; (viii) to respond to, or in anticipation of, changes in applicable laws, regulations, accounting

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principles, or business conditions; (ix) to exclude the dilutive effects of acquisitions or joint ventures; (x) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (xi) to exclude the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common shareholders other than regular cash dividends; (xii) to reflect a corporate transaction, such as a merger, consolidation, separation (including a spinoff or other distribution of stock or property by a corporation), or reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code); and (xiii) to reflect any partial or complete corporate liquidation. The Board also retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals.

     (ff)   “Performance Period” means the one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Stock Award or a Performance Cash Award.

     (gg)   “Performance Stock Award” means a Stock Award granted pursuant to Section 9(a).

     (hh)   “Plan” means this URS Corporation 1999 Equity Incentive Plan.

     (ii)   “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

     (jj)   “Securities Act” means the Securities Act of 1933, as amended.

     (kk)   “Stock Award” means any right granted under the Plan, including an Option, a right to acquire restricted stock, a Non-Executive Director Stock Award and a Performance Stock Award.

     (ll)   “Stock Award Agreement” means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.

     (mm)   “Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.

3.   Administration.

     (a)   Administration by Board. The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as provided in subsection 3(c). Any interpretation of the Plan by the Board and any decision by the Board under the Plan shall be final and binding on all persons.

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     (b)   Powers of Board. The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

          (i)   To determine from time to time which of the persons eligible under the Plan shall be granted Awards; when and how each Award shall be granted; what type or combination of types of Awards shall be granted; the provisions of each Award granted (which need not be identical), including the time or times when a person shall be permitted to receive cash or Common Stock pursuant to an Award; and the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such person.

          (ii)   To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement or in the written terms of a Performance Cash Award, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

          (iii)   To amend the Plan or an Award as provided in Section 15.

          (iv)   To suspend or terminate the Plan as provided in Section 16.

          (v)   Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan.

     (c)   Delegation to Committee.

          (i)   General. Subject to the limitation set forth in subsection 3(c)(ii), the Board may delegate administration of the Plan to a Committee or Committees of one (1) or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.

          (ii)   Limitation on Delegation. Notwithstanding anything to the contrary in subsection 3(c)(i), the Board may not delegate the administration of the Plan to a Committee to the extent such administration would in any way affect Non-Executive Director Stock Awards described in Section 8.

          (iii)   Committee Composition. The Committee shall consist solely of two or more Non-Employee Directors, in accordance with Rule 16b-3 and, in the discretion of the Board, may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code. Within the scope of such authority, the Board or the Committee may (1) delegate to a committee of one or more members of the Board who are not Outside Directors, the authority to grant Awards to eligible persons who are either (a) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Award or (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code and/or (2) delegate to a committee of one or more members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act.

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     (d)   Delegation to One or More Company Officers.

          (i)   General. The Board or the Committee may delegate authority to one or more Company Officers to (a) grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act and (b) determine the number of such Stock Awards to be received by such eligible persons within such parameters as the Board or the Committee may establish from time to time. The delegation of authority shall be subject to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board or the Committee. The Board or the Committee may abolish any such delegation of authority at any time and revest in the Board or the Committee the administration of the Plan.

4.   Shares Subject to the Plan.

     (a)   Share Reserve. Subject to the provisions of Section 13 relating to adjustments upon changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate one million five hundred thousand (1,500,000) shares of Common Stock plus (i) the number of shares of Common Stock added to the share reserve pursuant to the next sentence of this subsection 4(a), (ii) the number of shares of Common Stock remaining available for award under the Company’s 1991 Stock Incentive Plan (the “1991 Plan”) on the Effective Date of this Plan, (iii) the number of shares of Common Stock that were issuable pursuant to options or stock award agreements under the 1991 Plan that revert to the share reserve pursuant to subsection 4(b) below and (iv) the number of shares of Common Stock remaining available for award under the Company’s Non-Executive Directors Stock Grant Plan on the Effective Date of this Plan. As of each July 1, beginning with July 1, 2000 and continuing through and including July 1, 2009, the number of reserved shares shall be increased automatically by the lesser of (i) five percent (5%) of the total number of shares of Common Stock outstanding, including for this purpose outstanding shares of capital stock convertible to Common Stock, on such date or (ii) one million five hundred thousand (1,500,000) shares of Common Stock.

     (b)   Reversion of Shares to the Share Reserve.

          (i)   Expiration or Termination of Stock Award. If any Stock Award granted under this Plan or any option or stock award agreement granted under the 1991 Plan shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan.

          (ii)   Issuance of Common Stock. To the extent that any shares of Common Stock are not issued to a Participant upon the exercise of an Option granted under this Plan, such shares shall revert to and again become available for issuance under this Plan. If shares of Common Stock are not issued to a Participant because the Common Stock issuable upon the exercise of the Option is used to satisfy an applicable tax withholding requirement, such shares will be deemed not to have been issued to a Participant. In addition, if the exercise price of any Option is satisfied by a Participant’s tender of shares of Common Stock to the Company (by actual delivery or attestation), only the number of shares of Common Stock issued net of the shares so tendered shall be deemed issued to the Participant.

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     (c)   Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.

5.   Eligibility.

     (a)   Eligibility for Specific Awards. Incentive Stock Options may be granted only to Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants. Non-Executive Director Stock Awards may be granted only to Non-Executive Directors and only pursuant to the formula set forth in Section 8. Performance Cash Awards may be granted to Employees, Directors and Consultants.

     (b)   Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

     (c)   Consultants. A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to register either the offer or the sale of the Company’s securities to such Consultant because of the nature of the services that the Consultant is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by the rules governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not require registration under the Securities Act in order to comply with the requirements of the Securities Act, if applicable, and (ii) that such grant complies with the securities laws of all other relevant jurisdictions.

     (d)   Section 162(m) Limitation. Subject to the provisions of Section 13 relating to adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted Options or Performance Stock Awards covering more than one million (1,000,000) shares of the Common Stock during any fiscal year of the Company, and no employee shall be eligible to be granted Performance Cash Awards with a value in excess of five million dollars ($5,000,000) during any fiscal year of the Company.

6.   Option Provisions.

     Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:

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     (a)   Term. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no Incentive Stock Option shall be exercisable after the expiration of ten (10) years from the date it was granted.

     (b)   Exercise Price of an Incentive Stock Option. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

     (c)   Exercise Price of a Nonstatutory Stock Option. The exercise price of each Nonstatutory Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if (i) such Option is granted with an exercise price of not less than fifty percent (50%) of the Fair Market Value of the Common Stock subject to the Option to an individual who is not employed by the Company or an Affiliate immediately prior to the date of grant of the Option to induce such individual to accept employment with the Company or an Affiliate or (ii) such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

     (d)   Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the Option (or subsequently in the case of a Nonstatutory Stock Option): (1) by delivery to the Company of other Common Stock that has been held by the Optionee for more than six (6) months, which delivery may be made by attestation or actual delivery, (2) by delivery, in a form prescribed by the Company, of an irrevocable direction to a securities broker approved by the Company to sell Common Stock and to deliver all or part of the sales proceeds to the Company in payment of all or part of the purchase price and applicable withholding taxes, (3) according to a deferred payment or other similar arrangement with the Optionee or (4) in any other form of legal consideration that may be acceptable to the Board; provided, however, that at any time that the Company is incorporated in Delaware, payment of the Common Stock’s “par value,” as defined in the Delaware General Corporation Law, shall not be made by deferred payment. If, pursuant to clause (ii)(2) above, the Optionee delivers shares of Common Stock that the Optionee has acquired pursuant to a restricted stock award made under this Plan or a stock award agreement made under the 1991 Plan and that have not yet vested, the restrictions applicable to the delivered shares shall be imposed upon the Common Stock issued upon the exercise of the Option.

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     In the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement.

     (e)   Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionee only by the Optionee. Notwithstanding the foregoing, the Optionee may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionee, shall thereafter be entitled to exercise the Option.

     (f)   Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option shall be transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option does not provide for transferability, then the Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionee only by the Optionee. Notwithstanding the foregoing, the Optionee may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionee, shall thereafter be entitled to exercise the Option.

     (g)   Vesting Generally. The total number of shares of Common Stock subject to an Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this subsection 6(g) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised.

     (h)   Termination of Continuous Service. In the event an Optionee’s Continuous Service terminates (other than upon the Optionee’s death or Disability), the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionee’s Continuous Service (or such longer or shorter period specified in the Option Agreement) or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionee does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate.

     (i)   Extension of Termination Date. An Optionee’s Option Agreement may also provide that if the exercise of the Option following the termination of the Optionee’s Continuous Service (other than upon the Optionee’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in subsection 6(a) or (ii) the expiration of a period of three (3) months after the termination of the Optionee’s Continuous Service during which the exercise of the Option would not be in violation of such registration requirements.

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     (j)   Disability of Optionee. In the event that an Optionee’s Continuous Service terminates as a result of the Optionee’s Disability, the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement) or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate.

     (k)   Death of Optionee. In the event (i) an Optionee’s Continuous Service terminates as a result of the Optionee’s death or (ii) the Optionee dies within the period (if any) specified in the Option Agreement after the termination of the Optionee’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionee was entitled to exercise such Option as of the date of death) by the Optionee’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionee’s death pursuant to subsection 6(e) or 6(f), but only within the period ending on the earlier of (1) the date twelve (12) months following the date of death (or such longer or shorter period specified in the Option Agreement) or (2) the expiration of the term of such Option as set forth in the Option Agreement. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate.

     (l)   Early Exercise. The Option may, but need not, include a provision whereby the Optionee may elect at any time before the Optionee’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate.

7.   Provisions of Restricted Stock Awards.

     Each restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of restricted stock purchase agreements may change from time to time, and the terms and conditions of separate restricted stock purchase agreements need not be identical, but each restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

     (a)   Consideration. A restricted stock award may be awarded in consideration for past services actually rendered to the Company or an Affiliate for its benefit.

     (b)   Vesting. Shares of Common Stock acquired under a restricted stock purchase agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board. The restricted stock award may be subject to such other terms and conditions on the time or times at which it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual restricted stock awards may vary.

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     (c)   Termination of Participant’s Continuous Service. In the event a Participant’s Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination under the terms of the restricted stock purchase agreement.

     (d)   Transferability. Rights to acquire shares under the restricted stock purchase agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the restricted stock purchase agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the restricted stock purchase agreement remains subject to the terms of the restricted stock purchase agreement. Notwithstanding the foregoing, the Participant may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Participant, shall thereafter be entitled to receive shares of Common Stock that have become vested as of the date of the Participant’s death.

8.   Non-Executive Director Stock Awards.

     (a)   Without any further action of the Board or any committee thereof, each Non-Executive Director shall be granted a Non-Executive Director Stock Award at each of the times specified in subsection 8(a)(1) below, which Non-Executive Director Award shall have the terms set forth in subsections 8(a)(2) and 8(a)(3) below. Such award shall result in the issuance and delivery of shares of the Corporation’s Common Stock to the Non-Executive Director on the date of grant.

          (i)   Quarterly Grants. Each Non-Executive Director who is serving as a Non-Executive Director on the last day of each of the Corporation’s fiscal quarters shall be granted a Non-Executive Director Stock Award on such day (a “Quarterly Grant”).

          (ii)   Number of Shares. The number of shares of the Corporation’s Common Stock subject to each Quarterly Grant will be equal to the quotient of Eight Thousand Seven Hundred Fifty Dollars ($8,750) divided by the Fair Market Value of the Common Stock on the date of grant, rounded down to the nearest whole share.

          (iii)   Vesting. Each Quarterly Grant shall be fully vested on the date of grant.

     (b)   Deferred Stock Awards. Without any further action of the Board or any committee thereof, each Non-Executive Director shall be granted a deferred Non-Executive Director Stock Award at the time specified in subsection 8(b)(1) below, which deferred Non-Executive Director Stock Award shall have the terms set forth in subsections 8(b)(2) and 8(b)(3) below. Until shares of the Corporation’s Common Stock are issued pursuant to subsection 8(b)(3) below in respect of a deferred Non-Executive Director Stock Award, such Award shall represent a notional number of shares and a promise by the Corporation to issue to the Non-Executive Director such number of shares (subject to adjustment as provided in Section 13(a)), and the Non-Executive Director shall have no stockholder or other ownership rights (including, but not limited to, the right to receive any dividend paid) in respect of such shares until their issuance.

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          (i)   Quarterly Grants. Each Non-Executive Director who is serving as a Non-Executive Director on the last day of each of the Corporation’s fiscal quarters shall be granted a deferred Non-Executive Director Stock Award on such day (a “Quarterly Deferred Grant”).

          (ii)   Number of Shares. Each Quarterly Deferred Grant will entitle the Non-Executive Director to receive, at the time specified in subsection 8(b)(3) below, a number of shares of the Corporation’s Common Stock equal to the quotient of Eight Thousand Seven Hundred Fifty Dollars ($8,750) divided by the Fair Market Value of the Common Stock on the date of grant, rounded down to the nearest whole share (and subject to adjustment as necessary).

          (iii)   Vesting; Issuance. Each Quarterly Deferred Grant shall be fully vested on the date of grant; provided that the notional number of shares of the Corporation’s Common Stock in respect of each Quarterly Deferred Grant shall not be issued or issuable, and instead shall accumulate and be credited by the Corporation to a bookkeeping account in the name of such Director, until such time as the Director terminates his or her service on the Board of Directors for any reason, at which time the Corporation shall issue and deliver to the Non-Executive Director, within thirty (30) days of such termination of service, a number of shares of the Corporation’s Common Stock equal to the cumulative notional number of shares (as adjusted) in respect of such Director’s cumulative Quarterly Deferred Grants.

     (c)   Consideration. Each Quarterly Grant and Quarterly Deferred Grant shall be awarded in consideration for services rendered as a Non-Executive Director.

     (d)   Amendment of Terms of Non-Executive Director Stock Awards. The Board may at any time, and from time to time, amend the terms pursuant to which Non-Executive Director Stock Awards, including the Quarterly Grants and Quarterly Deferred Grants, shall be granted including, without limitation, amendment of the dollar amount specified in subsections 8(a)(2) and 8(b)(2) above and any other provision of this Section 8.

9.   Performance Awards.

     (a)   Performance Stock Awards. A Performance Stock Award is a restricted stock award described in Section 7 that may be granted, may vest, or may be exercised based upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock Award may, but need not, require the completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Committee, in its sole discretion.

     (b)   Performance Cash Awards. A Performance Cash Award is a cash award that may be granted upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may, but need not, require the completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Committee, in its sole discretion.

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10.   Covenants of the Company.

     (a)   Availability of Shares. During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Stock Awards.

     (b)   Legal Compliance. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained.

11.   Use of Proceeds from Stock.

     Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company.

12.   Miscellaneous.

     (a)   Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest.

     (b)   Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms.

     (c)   No Employment or other Service Rights. Nothing in the Plan, any Stock Award Agreement or in the written terms of a Performance Cash Award or other instrument executed thereunder or any Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

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     (d)   Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.

     (e)   Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (A) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

     (f)   Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any federal, state, local or foreign tax withholding obligation relating to the exercise or acquisition of Common Stock under a Stock Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment, (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award or (iii) delivering to the Company owned and unencumbered shares of the Common Stock. Notwithstanding the foregoing, the Company shall not be authorized to 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.

13.   Adjustments upon Changes in Stock.

     (a)   Capitalization Adjustments. If any change is made in the Common Stock subject to the Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the

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maximum number of securities subject to award to any person pursuant to subsections 5(d) and 9(a), and the outstanding Stock Awards will be appropriately adjusted in the class(es) and number of securities and price per share of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction “without receipt of consideration” by the Company.)

     (b)   Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company, then all outstanding Stock Awards shall terminate immediately prior to such event.

     (c)   Change in Control. Unless otherwise provided in the Stock Award Agreement, in the event of a Change in Control, then (i) prior to the completion of the Change in Control, any surviving entity or controlling entity may assume any Stock Awards outstanding under the Plan or may substitute similar stock awards (including an award to acquire the same consideration paid to the stockholders in the Change in Control) for those outstanding under the Plan or (ii) prior to the completion of the Change in Control, the Board may, in its sole discretion, make cash payments to Participants holding Stock Awards in amounts that the Board determines represent the cash value of the outstanding Stock Awards and such payments shall completely discharge the Company’s obligations under such outstanding Stock Awards. In the event (i) any surviving corporation or acquiring corporation does not assume such Stock Awards or substitute similar stock awards for those outstanding under the Plan and (ii) the Board does not settle the outstanding Stock Awards in cash, then (a) with respect to Stock Awards held by Participants whose Continuous Service has not terminated, the vesting of such Stock Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be accelerated in full as of a time designated by the Board, and the Stock Awards shall terminate if not exercised (if applicable) at or prior to a time designated by the Board and (b) with respect to any other Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised (if applicable) prior to a time designated by the Board.

14.   Limitation on Payments.

     (a)   Basic Rule. Any provision of the Plan to the contrary notwithstanding, in the event that the independent auditors most recently selected by the Board (the “Auditors”) determine that any payment or transfer by the Company to or for the benefit of a Participant, whether paid or payable (or transferred or transferable) pursuant to the terms of this Plan or otherwise (a “Payment”), would be nondeductible by the Company for federal income tax purposes because of the provisions concerning “excess parachute payments” in Section 280G of the Code, then the aggregate present value of all Payments shall be reduced (but not below zero) to the Reduced Amount; provided that the Board, at the time of granting a Stock Award under this Plan or at any time thereafter, may specify in writing that such Award shall not be so reduced and shall not be subject to this Section 14. For purposes of this Section 14, the “Reduced Amount” shall be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code.

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     (b)   Reduction of Payments. If the Auditors determine that any Payment would be nondeductible by the Company because of Section 280G of the Code, then the Company shall promptly give the Participant notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount, and the Participant may then elect, in his or her sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall advise the Company in writing of his or her election within ten (10) days of receipt of notice; provided, however, that such election shall be subject to Company approval if made on or after the effective date of a Change in Control. If no such election is made by the Participant within such ten (10) day period, then the Company may elect which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall notify the Participant promptly of such election. For purposes of this Section 14, present value shall be determined in accordance with Section 280G(d)(4) of the Code. All determinations made by the Auditors under this Section 14 shall be binding upon the Company and the Participant and shall be made within sixty (60) days of the date when a payment becomes payable or transferable. As promptly as practicable following such determination and the elections hereunder, the Company shall pay or transfer to or for the benefit of the Participant such amounts as are then due to him or her under the Plan and shall promptly pay or transfer to or for the benefit of the Participant in the future such amounts as become due to him or her under the Plan.

     (c)   Overpayments and Underpayments. As a result of uncertainty in the application of Section 280G of the Code at the time of an initial determination by the Auditors hereunder, it is possible that Payments will have been made by the Company which should not have been made (an “Overpayment”) or that additional Payments which will not have been made by the Company could have been made (an “Underpayment”), consistent in each case with the calculation of the Reduced Amount hereunder. In the event that the Auditors determine, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant which the Auditors believe has a high probability of success, that an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to the Participant which he or she shall repay to the Company, together with interest at the applicable federal rate provided in Section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by the Participant to the Company if and to the extent that such payment would not reduce the amount that is subject to taxation under Section 4999 of the Code. In the event that the Auditors determine that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by the Company to or for the benefit of the Participant, together with interest at the applicable federal rate provided in Section 7872(f)(2) of the Code.

     (d)   Related Corporations. For purposes of this Section 14, the term “Company” shall include affiliated corporations to the extent determined by the Auditors in accordance with Section 280G(d)(5) of the Code.

15.   Amendment of the Plan and Awards.

     (a)   Amendment of Plan. The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 13 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any securities exchange listing requirements.

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     (b)   Stockholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers.

     (c)   Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith.

     (d)   No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.

     (e)   Amendment of Awards. The Board, at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the rights under any Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.

16.   Termination or Suspension of the Plan.

     (a)   Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

     (b)   No Impairment of Rights. Suspension or termination of the Plan shall not impair rights and obligations under any Award granted while the Plan is in effect, except with the written consent of the Participant.

17.   Effective Date of Plan.

     The Plan shall become effective on the date on which it is adopted by the Board (the “Effective Date”), but no Stock Award shall be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board.

18.   Choice of Law.

     The law of the State of California shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

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EX-10.2

EXHIBIT 10.2

URS Corporation
Restricted Stock Award

Grant Notice
(1999 Equity Incentive Plan)

URS Corporation (the “Company”), pursuant to its 1999 Incentive Equity Plan (the “Plan”), hereby grants to Participant the right to receive the number of shares of the Company’s Common Stock set forth below (“Award”). This Award is subject to all of the terms and conditions as set forth herein and in the Restricted Stock Award Agreement and the Plan, each of which are attached hereto and incorporated herein in their entirety. Defined terms not explicitly defined in this Grant Notice but defined in the Plan shall have the same definitions as in the Plan.

Participant:
Date of Grant:
Vesting Commencement Date:
Number of Shares Subject to Award:
Participant’s Social Security Number:
Fair Market Value Per Share:	$

Vesting Schedule:	One-half (1/2) of the shares subject to the Award shall vest as set forth in (a) below and the remaining one-half (1/2) of the shares subject to the Award shall vest as set forth in (b) below:
	(a)	Time-based vesting: 12.5% of the shares subject to the Award shall vest on each of the first four anniversaries of the Vesting Commencement Date, provided that Participant’s Continuous Service has not terminated prior to such vesting date.
	(b)	Time and performance-based vesting: 12.5% of the shares subject to the Award shall vest on each of the first four anniversaries of the Vesting Commencement Date, provided that (i) Participant’s Continuous Service has not terminated prior to such vesting date and (ii) the Company has met the net income goal for the fiscal year immediately preceding such vesting date, as established by the Board during the first quarter of such fiscal year, and as confirmed by the Compensation Committee after the audited financial results for such fiscal year have been prepared by the Company, in the Committee’s sole discretion acting pursuant to the terms of the Plan (including, but not limited to, Section 2(ee) regarding permissible adjustments in the method of calculating the attainment of Performance Goals).

Additional Terms/Acknowledgements:    The undersigned Participant acknowledges receipt of, and understands and agrees to, this Grant Notice, the Restricted Stock Award Agreement and the Plan. Participant further acknowledges that this Grant Notice, the Restricted Stock Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the award of Common Stock in the Company and supersede all prior oral and written agreements on that subject with the exception of awards previously granted and delivered to Participant under the Plan.

URS Corporation	Participant:
By:	By:
[NAME, TITLE]	[NAME]
Date:	Date:

Attachments:   Restricted Stock Award Agreement and 1999 Incentive Equity Plan

Attachment I

RESTRICTED STOCK AWARD AGREEMENT

URS Corporation
1999 Incentive Equity Plan

[NOTE: BRACKETED TERMS USED IN AGREEMENTS FOR PARTICIPANTS WITH EMPLOYMENT AGREEMENTS]

Restricted Stock Award Agreement

     Pursuant to the Restricted Stock Award Grant Notice (“Grant Notice”) and this Restricted Stock Award Agreement (collectively, the “Award”) and in consideration of your past services, URS Corporation (the “Company”) has awarded you a restricted stock award under its 1999 Incentive Equity Plan (the “Plan”) for the number of shares of the Company’s Common Stock subject to the Award indicated in the Grant Notice. Except where indicated otherwise, defined terms not explicitly defined in this Restricted Stock Award Agreement but defined in the Plan shall have the same definitions as in the Plan.

     The details of your Award are as follows:

     1.   Vesting. Subject to the limitations contained herein, your Award shall vest as provided in your Grant Notice, and any portion of your Award that does not vest due to either the termination of your Continuous Service or the failure to satisfy a Performance Goal shall be canceled. Notwithstanding the foregoing, your Award shall become vested in its entirety [either (i) in the circumstances providing for accelerated vesting under the terms of your Employment Agreement, dated as of [___], between you and URS Corporation, as it may be amended from time to time (the “Employment Agreement”), while your Employment Agreement is in effect, or (ii)] in the circumstances provided in Section 13(c) of the Plan. The shares subject to your Award will be held by the Company until your interest in such shares vests. As each portion of your interest in the shares vests, the Company shall issue you a stock certificate covering such vested shares.

     2.   Number of Shares. The number of shares subject to your Award may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.

     3.   Payment. This Award was granted in consideration of your past services to the Company and its Affiliates. Subject to Section 10 below, you will not be required to make any payment to the Company with respect to your receipt of the Award or the vesting thereof.

     4.   Securities Law Compliance. You will not be issued any shares of Common Stock under your Award unless either (a) such shares are then registered under the Securities Act or (b) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award must also comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with such laws and regulations.

     5.   Transfer Restrictions. Prior to the time that they have vested, you may not transfer, pledge, sell or otherwise dispose of the shares of Common Stock subject to the Award. For example, you may not use shares subject to the Award that have not vested as security for a

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loan. This restriction on the transfer of shares will lapse with respect to vested shares when such shares vest. Notwithstanding the foregoing, you may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of your death, shall thereafter be entitled to receive vested shares as of the date of your death.

     6.   Termination of Continuous Service.

          (a)   [Except as may be provided in your Employment Agreement and] subject to Section 1 hereof, in the event your Continuous Service terminates for reasons other than your death or Disability [(as that term is defined in your Employment Agreement)], you will be credited with the vesting that has accrued under your Award as of the date of your termination of Continuous Service. [Except as may be provided in your Employment Agreement and] subject to Section 1 hereof, you will accrue no additional vesting of your Award following your termination of Continuous Service. To the extent your Award is not vested on the date of your termination, it shall automatically lapse on such date.

          (b)   In the event your Continuous Service terminates due to your death, the Award automatically shall become vested in full as of the date of your death and your rights under the Award shall pass by will or the laws of descent and distribution; provided, however, that you may designate a beneficiary to receive your vested shares as set forth in Section 5 hereof.

          (c)   In the event your Continuous Service terminates due to your Disability [(as that term is defined in your Employment Agreement)], the Award automatically shall become vested in full as of the date of your termination of Continuous Service.

     7.   Restrictive Legends. The shares issued under your Award shall be endorsed with appropriate legends determined by the Company as applicable.

     8.   Rights as a Stockholder. You shall exercise all rights and privileges of a stockholder of the Company with respect to the shares subject to your Award. You shall be deemed to be the holder of the shares for purposes of receiving any dividends which may be paid with respect to such shares and for purposes of exercising any voting rights relating to such shares, even if some or all of such shares have not yet vested.

     9.  Award not a Service Contract. Your Award is not an employment or service contract, and nothing in your Award shall be deemed to [(i) alter the terms of your Employment Agreement or (ii)] create in any way whatsoever any obligation on your part to continue in the employ of the Company or any Affiliate thereof, or on the part of the Company or any Affiliate thereof to continue your employment or service. In addition, nothing in your Award shall obligate the Company or any Affiliate thereof, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a director or consultant for the Company or any Affiliate thereof.

     10.   Withholding Obligations.

          (a)   At the time your Award is made, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to

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you, and otherwise agree to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate thereof, if any, which arise in connection with your Award. Such withholding obligations may be satisfied by your relinquishment of your right to receive a portion of the shares otherwise issuable to you pursuant to the Award; provided, however, that you shall not be authorized to relinquish your right to shares with a fair market value in excess of the amount required to satisfy the minimum amount of tax required to be withheld by law.

          (b)   Unless the tax withholding obligations of the Company and/or any Affiliate thereof are satisfied, the Company shall have no obligation to issue a certificate for such shares or release such shares from any escrow provided for herein.

     11.   Tax Consequences. The acquisition and vesting of the shares may have adverse tax consequences to you that may be mitigated by filing an election under Section 83(b) of the Code. Such election must be filed within thirty (30) days after the date of the grant of your Award. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF YOU REQUEST THE COMPANY TO MAKE THE FILING ON YOUR BEHALF.

     12.   Notices. Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered 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.

     13.   Miscellaneous.

          (a)   The rights and obligations of the Company under your Award shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. Your rights and obligations under your Award may only be assigned with the prior written consent of the Company.

          (b)   You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

          (c)   You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award.

     14.   Governing Plan Document. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, 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 Award and those of the Plan, the provisions of the Plan shall control.

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Attachment II

1999 INCENTIVE EQUITY PLAN

EX-10.3

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is entered into as of May 25, 2006, by and between Susan B. Kilgannon (the “Employee”) and URS Corporation, a Delaware corporation (the “Company”).

     1.   Term Of Employment.

          (a)   Basic Rule. The Company agrees to employ the Employee, and the Employee agrees to remain in employment with the Company, from the date hereof until the date on which the Employee’s employment terminates pursuant to Subsection (b), (c), (d), (e) or (f) below.

          (b)   Termination by Company Without Cause. The Company may terminate the Employee’s employment at any time without Cause (as defined below) 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, with or without advance notice, for Cause. For all purposes under this Agreement, “Cause” shall mean:

               (i)   A willful failure or omission of the Employee to substantially perform her duties hereunder, other than as a result of the death or Disability (as defined below) of the Employee;

               (ii)   A willful act by the Employee that constitutes gross misconduct or fraud;

               (iii)   The Employee’s conviction of, or plea of “guilty” or “no contest” to, a felony or any misdemeanor involving dishonesty;

               (iv)   The Employee’s disobedience of lawful orders or directives of the Chief Financial Officer of the Company, or his respective designees, or of the Board of Directors of the Company or a duly appointed committee thereof (collectively, the “Board”) ; or

               (v)   The Employee’s breach of any agreement with the Company.

          (d)   Resignation by Employee. The Employee may terminate her employment by giving the Company thirty (30) days’ advance notice in writing.

          (e)   Death of Employee. The Employee’s employment shall terminate automatically and immediately in the event of her death.

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          (f)   Disability. Subject to applicable laws, 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 her duties under this Agreement for a period of not less than one hundred eighty (180) consecutive days as a result of any physical or mental injury or illness. In the event the Employee resumes the performance of substantially all of her duties hereunder before termination of her active employment under this Section 1(f) becomes effective, the notice of termination shall automatically be deemed to have been revoked.

          (g)   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 and including the effective date of the termination, which shall include all accrued and unused vacation, all of which shall fully discharge all responsibilities of the Company, its parent, subsidiary and affiliated corporations and related entities (collectively, “URS” and, individually, a “URS Entity”) to the Employee.

          (h)   Employment by Affiliate. The employment of the Employee shall not be considered to have terminated for purposes of this Agreement if the Employee is employed by any URS Entity.

          (i)   Termination of Agreement. This Agreement shall terminate on the earlier of June 1, 2016 or the date when all obligations of the parties hereunder have been satisfied.

     2.   Duties And Scope Of Employment.

          (a)   Position. The Company agrees to employ the Employee in an executive position for the term of her employment under this Agreement. The Employee shall report to the Chief Financial Officer or his designee, and shall serve in such positions on behalf of URS and perform such duties consistent with an executive position for URS as may be required by the Chief Financial Officer, or his respective designees. It is anticipated that the Employee’s duties will require her to travel frequently and extensively. The Employee’s principal office will be in the greater New York City metropolitan Area. If the principal office to which the Employee is assigned is changed by the Company, with the Employee’s consent, the Company shall reimburse reasonable relocation expenses of the Employee in accordance with generally applicable policies of the Company.

          (b)   Obligations. During the term of her employment under this Agreement, the Employee shall devote her full business efforts and time to URS and shall not render services to any other person or entity without the prior written consent of the Chief Financial Officer or his designee. 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 her responsibilities to the Company or (iii) serving on the boards of directors of other companies provided that prior written approval for such service is obtained from the Chief Financial Officer or his designee and that such service does not interfere or conflict with her responsibilities to the Company.

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          (c)   Resignation from Other Positions. Immediately upon request by the Company, before or after the termination of the employment of the Employee, she shall resign from any and all positions she 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.

          During the term of the Employee’s employment under this Agreement, the Company agrees to pay the Employee as compensation for her services a base salary at an annual rate of two hundred and ninety thousand dollars ($290,000), or at such higher rate as the Company may determine from time to time. Such salary shall be payable in accordance with the Company’s standard payroll procedures. (The annual rate of compensation specified in this Section 3, as increased by the Company from time to time in its sole discretion, is referred to in this Agreement as “Base Compensation.”) In addition, during the term of the Employee’s employment under this Agreement, the Company agrees that the Employee shall participate in the Company’s annual bonus plan with a target bonus percentage of forty (40%) of Base Compensation or at such higher rate as the Company may determine from time to time. (The annual target bonus percentage specified in this Section 3, as increased by the Company from time to time in its sole discretion, is referred to in this Agreement as “Annual Target Bonus.”)

     4.   Employee Benefits, Stock Options, Incentive Compensation And Other Compensation Plans And Programs.

          During the term of her 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 or other person administering such plan or program, (ii) determinations by URS, the Board or any such person as to whether and to what extent Employee shall so participate or cease to participate, and (iii) amendment, modification or termination of any such plan or program in the sole and absolute discretion of URS.

     5.   Business Expenses.

          In accordance with the Company’s generally applicable policies, (i) during the term of her employment under this Agreement, the Employee shall be authorized to incur necessary and reasonable travel, entertainment and other business expenses in connection with her duties hereunder, and (ii) the Company shall reimburse the Employee for such expenses upon presentation of an itemized account and appropriate supporting documentation.

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     6.   Termination Of Employment.

          (a)   Severance Payment and Severance Benefits. In the event that, during the term of the Employee’s employment under this Agreement, the Company terminates the Employee’s employment for any reason other than Cause or Disability or the Employee voluntarily resigns her employment for Good Reason (as defined below) within one (1) month of the occurrence of the event constituting Good Reason, then:

               (i)   The Company shall pay a lump sum amount (“Severance Payment”) in, as provided below, equal to one hundred percent (100%) of the Employee’s Base Compensation as in effect on the date of employment termination, plus a pro-rata target bonus based on the number of calendar days employed during the year of termination divided by 365. The Severance Payment shall be paid commencing not more than five (5) business days following the effective date of the Employee’s release as described in Section 7 below. In addition, at the time of the employment termination, the Company shall pay to the Employee all accrued and unpaid vacation.

               (ii)   For the period of one (1) year following such termination, the Company shall (i) if the Employee elects COBRA continuation coverage within the meaning of Section 4980B(f)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), reimburse the Employee for a portion of the dental and health insurance premiums required to be paid by the Employee for such one (1) year period to obtain such continuation coverage equal to the same portion of such premiums generally paid by the Company at the time of such termination for the benefit of other employees of the Company with responsibilities, organizational level and titles comparable to those of the Employee, and (ii) cause group long-term disability insurance coverage and basic term life insurance coverage then provided to the Employee by the Company, if any, to be continued for such one (1) year period (or, if such coverage cannot be continued or can only be continued at a cost to the Company greater than the Company would have incurred absent such termination, then, at the Company’s election, the Company may either provide such long-term disability or term life insurance as may be available at no greater cost than one hundred fifty percent (150%) of what the Company would have incurred absent such termination or pay to the Employee one hundred fifty percent (150%) of the amount of premiums the Company would have incurred to continue such coverage absent such termination) (payments and benefits under this Subdivision (ii) of Section 6(a), collectively “Severance Benefits”).

          (b)   Good Reason. For purposes of this Agreement, “Good Reason” shall mean that the Employee has incurred a reduction in her Base Compensation or Annual Target Bonus.

          (c)   Termination of Severance Benefits. All Severance Benefits shall be discontinued completely as of the date when the Employee returns to employment or self-employment, whether full- or part-time, with an entity that offers any group health insurance coverage to its employees or independent contractors, regardless of whether such coverage is equivalent to the insurance coverage contemplated by the Severance Benefits.

          (d)   No Mitigation. The Employee shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 6 (whether by seeking new employment or in any other manner), nor shall any such payment or benefit be reduced by earnings or benefits that the Employee may receive from any other source.

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     7.   Severance Payment And Severance Benefits Conditioned Upon Execution Of Effective Release Of Claims.

          Notwithstanding any of the foregoing to the contrary, in no event shall the Company be required to make any payment or provide any benefit pursuant to Section 6 above unless and until the Employee executes and delivers to the Company a General Release in the form of Exhibit A hereto, and such release becomes effective in accordance with its terms; provided, however, that pending such execution and delivery of such a release by the Employee, the Company will advance for the account of the Employee premiums required to be paid during the period during which the effectiveness of the release is pending if necessary to avoid lapse with respect to the Employee within such period of a group dental, health or disability policy to which Severance Benefits provided under Subdivision (ii) of Section 6(a) relate, which advance shall be repaid by the Employee upon expiration of (i) the period during which the Employee is permitted to consider whether to execute the release (if the Employee does not execute the release) or (ii) the period during which the effectiveness of the release is pending (if the Employee executes the release then revokes it within the seven-(7-) day revocation period).

     8.   Nondisclosure.

          During the term of this Agreement and thereafter, the Employee shall not, without the prior written consent of the Chief Executive Officer or his designee or the Board, disclose or use for any purpose (except in the course of her 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 her 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 she may then possess or have under her control. Nothing in this Section 8 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.

     9.   Miscellaneous Provisions.

          (a)   Successors. Subject to Section 9(j) below and provided that the Employee may not delegate her 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.

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          (b)   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 her at the home address which she most recently communicated to the Company in writing for income tax withholding purposes or by notice given pursuant to this Section 9(b). In the case of the Company, mailed notices shall be addressed to its corporate headquarters as reflected in its most recent Quarterly Report on Form 10-Q or Annual Report on 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.

          (c)   Modifications; 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.

          (d)   Whole Agreement. No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof.

          (e)   Withholding. All payments made under this Agreement shall be subject to reduction to reflect taxes and other payroll deductions required to be withheld by law. The Employee hereby declares under penalty of perjury that the Social Security Number she has provided to the Company is true and accurate

          (f)   Certain Reductions and Offsets. Notwithstanding any other provision of this Agreement to the contrary, any payments or benefits under this Agreement shall be reduced by any severance payments and benefits payable by URS to the Employee under any policy, plan, program or arrangement, including, without limitation, any contract between the Employee and URS.

          (g)   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 her residence or principal office or where she performs her duties hereunder.

          (h)   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.

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          (i)   Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, or the Employee’s employment with the Company or the terms and conditions or termination thereof, or any action or omission of any kind whatsoever in the course of or connected in any way with any relations between URS and the Employee, including without limitation all claims encompassed within the scope of the form of General Release attached to this Agreement as Exhibit A, shall be finally settled by binding arbitration before a single arbitrator in accordance with the National rules for the Resolution of Employment Disputes of the American Arbitration Association (the “Association”), and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitration shall be administered by the San Francisco, California regional office of the Association and shall be conducted at the San Francisco, California offices of the Association or at such other location in San Francisco, California as the Association may designate. All fees and expenses of the arbitrator and the Association shall be paid by the Company. Each party shall bear their own attorneys’ fees, costs and other expenses associated with such arbitration. The Company and the Employee acknowledge and agree that any and all rights they may have to resolve their claims by a jury trial hereby are expressly waived.

          (j)   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 Section 9(j) shall be void.

     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.

/s/ Susan B. Kilgannon

Susan B. Kilgannon 

URS Corporation,
By:	/s/ Joseph Masters

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Exhibit A

GENERAL RELEASE
(Individual Termination)

     This General Release (“Release”) is executed and delivered by ___ (“Employee”) to and for the benefit of URS Corporation, a Delaware corporation, and any parent, subsidiary or affiliated corporation or related entity of URS Corporation (collectively, “Company”).

     In consideration of certain payments and benefits which Employee will receive following termination of employment pursuant to the terms of the Employment Agreement entered into as ___, between Employee and Company (the “Agreement”), the sufficiency of which Employee hereby acknowledges, Employee hereby agrees not to sue and fully, finally, completely and generally releases, absolves and discharges Company, its predecessors, successors, subsidiaries, parents, related companies and business concerns, affiliates, partners, trustees, directors, officers, agents, attorneys, servants, representatives and employees, past and present, and each of them (hereinafter collectively referred to as “Releasees”) from any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, grievances, arbitrations, unfair labor practice charges, wages, vacation payments, severance payments, obligations, commissions, overtime payments, debts, profit sharing or bonus claims, expenses, damages, judgments, orders and/or liabilities of whatever kind or nature in law, equity or otherwise, whether known or unknown to Employee which Employee now owns or holds or has at any time owned or held as against Releasees, or any of them through the date Employee executes this Release (“Claims”), including specifically but not exclusively and without limiting the generality of the foregoing, any and all Claims arising out of or in any way connected to Employee’s employment with or separation of employment from Company including any Claims based on contract, tort, wrongful discharge, fraud, breach of fiduciary duty, attorneys’ fees and costs, discrimination in employment, any and all acts or omissions in contravention of any federal, state or local laws or statutes (including, but not limited to, federal or state securities laws, any deceptive trade practices act or any similar act in any other state and the Racketeer Influenced and Corrupt Organizations Act), and any right to recovery based on local, state or federal age, sex, pregnancy, race, color, national origin, marital status, religion, veteran status, disability, sexual orientation, medical condition, union affiliation or other anti-discrimination laws, including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the National Labor Relations Act, the California Fair Employment and Housing Act, and any similar act in effect in any jurisdiction applicable to Employee or Company, all as amended, whether such claim be based upon an action filed by Employee or by a governmental agency.

     During the time Employee is entitled to any Severance Payment or Severance Benefits, as defined and provided in Section 6 of the Agreement, Employee agrees (i) to assist, as reasonably requested by Company, in the transition of Employee’s responsibilities and (ii) not to solicit any employee of Company to terminate or cease employment with Company. Without superseding any other agreements, including the Agreement, and obligations Employee has with respect thereto, (i) Employee agrees not to divulge any information that might be of a confidential or proprietary nature relative to Company, and (ii) Employee agrees to keep confidential all

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information contained in this Release (except to the extent (A) Company consents in writing to disclosure, (B) Employee is required by process of law to make such disclosure and Employee promptly notifies Company of receipt by Employee of such process, or (C) such information previously shall have become publicly available other than by breach hereof on the part of Employee).

     Employee agrees to cooperate with Company in responding to the reasonable requests of Company in connection with any and all existing or future litigation, arbitrations, mediations or investigations brought by or against Company, or its current or former affiliates, agents, officers, directors or employees, whether administrative, civil or criminal in nature, in which reasonably deems Employee’s cooperation necessary or desirable. In such matters, Employee agrees to provide Company with reasonable advice, assistance and information, including offering and explaining evidence, providing sworn statements and participating in discovery and trial preparation and testimony. Employee also agrees to promptly send Company copies of all correspondence (for example, but not limited to, subpoenas) received by Employee in connection with any such proceedings, unless Employee is expressly prohibited by law from so doing.

     Without superseding any other agreements, including the Agreement, and obligations Employee has with respect thereto, (i) Employee agrees not to divulge or use, at any time, any information that might be of a confidential or proprietary nature relative to Company, and (ii) Employee agrees to keep confidential all information contained in this Release (except to the extent (A) Company consents in writing to disclosure, (B) Employee is required by process of law to make such disclosure and Employee promptly notifies Company of receipt by Employee of such process, or (C) such information previously shall have become publicly available other than by breach hereof on the part of Employee).

     Employee acknowledges and agrees that neither anything in this Release nor the offer, execution, delivery, or acceptance thereof shall be construed as an admission by Company of any kind, and this Release shall not be admissible as evidence in any proceeding except to enforce this Release.

     It is the intention of Employee in executing this instrument that it shall be effective as a bar to each and every claim, demand, grievance and cause of action hereinabove specified. In furtherance of this intention, Employee hereby expressly consents that this Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims, demands, grievances and causes of action, if any, as well as those relating to any other claims, demands, grievances and causes of action hereinabove specified, and elects to assume all risks for claims, demands, grievances and causes of action that now exist in Employee’s favor, known or unknown, that are released under this Release. Employee acknowledges Employee may hereafter discover facts different from, or in addition to, those Employee now knows or believes to be true with respect to the claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, wages, obligations, debts, expenses, damages, judgments, orders and liabilities herein released, and agrees the release herein shall be and remain in effect in all respects as a complete and general release as to all matters released herein, notwithstanding any such different or additional facts.

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     If any provision of this Release or application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Release which can be given effect without the invalid provision or application. To this end, the provisions of this Release are severable.

     Employee represents and warrants that Employee has not heretofore assigned or transferred or purported to assign or transfer to any person, firm or corporation any claim, demand, right, damage, liability, debt, account, action, cause of action, or any other matter herein released.

     Employee represents that she is not aware of any claims other than the claims that are released by this instrument. Employee acknowledges that she is familiar with the provisions of California Civil Code Section 1542, which states as follows:

     A general release does not extend to claims which the creditor does not know or suspect to exist in her favor at the time of executing the release, which if known by her must have materially affected her settlement with the debtor.

     Employee, being aware of such Code section, agrees to waive any rights she may have thereunder, as well as under any other statute or common law principle of similar effect.

NOTICE TO EMPLOYEES AGE 40 OR OLDER ON THE DATE
OF TERMINATION OF EMPLOYMENT

     The law requires that Employees age 40 or older be advised and Company hereby advises such Employees in writing to consult with an attorney and discuss this Release before executing it. Employee acknowledges Company has provided to Employee at least twenty-one (21) calendar days (forty-five (45) calendar days, in the case of a group termination) within which to review and consider this Release before signing it.

     Should Employee decide not to use the full twenty-one (21) or forty-five (45) days, as applicable, then Employee knowingly and voluntarily waives any claims that Employee was not in fact given that period of time or did not use the entire twenty-one (21) or forty-five (45) days to consult an attorney and/or consider this Release. Employee acknowledges that Employee may revoke this Release for up to seven (7) calendar days following Employee’s execution of this Release and that it shall not become effective or enforceable until such revocation period has expired. Employee further acknowledges and agrees that such revocation must be in writing and delivered to Company in accordance with Section 10(b) of the Agreement and must be received by Company as so addressed not later than midnight on the seventh (7th) day following Employee’s execution of this Release. If Employee so revokes this Release, the Release shall not be effective or enforceable and Employee will not receive the monies and benefits described above. If Employee does not revoke this Release in the time frame specified above, the Release shall become effective at 12:00:01 A.M. on the eighth (8th) day after it is signed by Employee.

     In the case of a group termination, the law requires that Employee be provided a detailed list of the job titles and ages of all employees who were terminated in the group termination and the ages of all employees of Company in the same job classification or organizational unit who

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were not terminated. Employee acknowledges that Employee has been provided with this information.

PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A
GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

     I have read and understood the foregoing General Release, have been advised to and have had the opportunity to discuss it with anyone I desire, including an attorney of my own choice, and I accept and agree to its terms, acknowledge receipt of a copy of the same and the sufficiency of the monies and benefits described above, and hereby execute this Release voluntarily and with full understanding of its consequences.

Dated: __________________________
	Susan B. Kilgannon

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