Employment Agreement between URS Corporation and Thomas H. Zarges, dated as of August 7, 2008

This Employment Agreement (the “Agreement”) is entered into as of August 7, 2008, by and between Thomas H. Zarges (the “Employee”) and Washington Group Holdings, Inc., a Delaware corporation (the “Company”).

Whereas, the Employee entered into a Severance Agreement dated September 8, 2006 with Washington Group International, Inc., a predecessor of the Company (the “Prior Agreement”); and

Whereas, effective as of the Employee’s promotion to the position of President of the Washington Division of URS Corporation, a Delaware corporation and the parent of the Company (“URS Delaware”) on January 11, 2008 (the “Effective Date”), the Company wished and agreed to continue employing the Employee, and the Employee was and is willing to continue such employment, on the terms and conditions of this Agreement, which shall amend, restate and supersede the Prior Agreement.

Now, Therefore, the parties agree as follows:

1. Term Of Employment.

(a) Basic Rule.  The Company agrees to continue to employ the Employee, and the Employee agrees to remain in employment with the Company, from the date hereof until the date 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.

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

(iv) The Employee’s disobedience of lawful orders or directives of the Chief Executive Officer (the “Chief Executive Officer”) of URS Delaware or his designee, or of the Board of Directors of URS Delaware, or a duly appointed committee thereof (collectively, the “Board”); or

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

(d) Resignation by Employee.  The Employee may terminate his 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 his death.

2. Duties And Scope Of Employment.

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 his services a base salary at an annual rate of Seven Hundred Thousand Dollars ($700,000), or at such higher rate as the Board may determine from time to time in its sole discretion.  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 his 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 at least one hundred percent (100%) of Base Compensation beginning with the 2008 fiscal year and for each subsequent fiscal year. (The annual target bonus percentage specified in this Section 3, as increased by the Board from time to time in its sole discretion, is referred to in this Agreement as “Annual Target Bonus.”)

 

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

5. Business Expenses.

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 4(b) or Section 6 above (except for payments of accrued and unpaid vacation) unless and until the Employee executes and delivers to the Company a General Release in the form of Exhibit A, 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. Certain Additional Payments.

If any payments, distributions or other benefits by or from the Company to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payment required under this Section 8 (collectively, the “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Employee shall be entitled to receive from the Company an additional payment  (a “Gross-Up Payment”) in an amount such that after payment by the Employee of all taxes (including, without limitation, any Excise Tax, income and employment taxes and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.  All calculations required by this Section 8 shall be performed by the independent auditors retained by URS Delaware most recently prior to the Change in Control (the “Auditors”), based on information supplied by the Company and the Employee, and shall be final and binding on the Company and the Employee.  All fees and expenses of the Auditors shall be paid by the Company.  Any Gross-Up Payment shall be made by the end of the Employee’s taxable year following the Employee’s taxable year in which the Employee remits the related taxes.

9. 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 his employment under this Agreement and in furtherance of the business of URS) confidential information or proprietary data of URS, except as required by applicable law or legal process, in which case promptly and before disclosure the Employee shall give notice to the Company of any such requirement or process; provided, however,  that confidential information shall not include any information available from another source on a nonconfidential basis, known generally to the public, or ascertainable from public or published information (other than as a result of unauthorized disclosure by the Employee) or any information of a type not otherwise considered confidential by persons engaged in the same business as, or a business similar to, that conducted by URS.  The Employee agrees to deliver to the Company at the termination of his employment, or at any other time the Company may request, all memoranda, notes, plans, records, reports and other documents or electronic information (and copies thereof) relating to the business of URS, which he may then possess or have under his control.  Nothing in this Section 9 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.

10. Miscellaneous Provisions.

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.

                  

This General Release (“Release”) is executed and delivered by Thomas H. Zarges (“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 of August 7, 2008, 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 or state 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 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, the Age Discrimination in Employment Act (the “ADEA”), 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.  Employee represents that as of Employee’s execution of this Release, Employee has been paid all wages owed, has received all the leave and leave benefits and protections for which Employee is eligible, pursuant to the Family and Medical Leave Act or otherwise, and has not suffered any on-the-job injury for which Employee has not already filed a claim.  Notwithstanding the above, Employee is (a) not releasing any claim that cannot be waived under applicable state or federal law and (b) not releasing any rights that Employee has to be indemnified (including any right to reimbursement of expenses) arising under applicable law, the certificate of incorporation or by-laws (or similar constituent documents of the Company), any indemnification agreement between Employee and the Company, or any directors’ and officers’ liability insurance policy of the Company.  Further, nothing in this Release shall prevent Employee from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing, and any similar administrative agency in any jurisdiction applicable to Employee or Company, except that Employee acknowledges and agrees that Employee shall not recover any monetary benefits in connection with any such claim, charge or proceeding with regard to any Claims released herein.

During the time Employee is entitled to any Change in Control vesting, 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 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.

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 he is not aware of any claims other than the claims that are released by this instrument.  Employee acknowledges that he 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 his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

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

The law requires that Employee be advised and Company hereby advises Employee 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.

Employee acknowledges that as part of this Release Employee is knowingly and voluntarily waiving and releasing any rights Employee may have under the ADEA (the “ADEA Waiver”).  Employee also acknowledges that the consideration given for the ADEA Waiver is in addition to anything of value to which Employee was already entitled.  Employee further acknowledges that Employee has been advised by this writing, as required by the ADEA, that Employee’s ADEA Waiver does not apply to any rights or claims that arise after the date Employee executes this Release.

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 the Company in the same job classification or organizational unit who were not terminated.  Employee acknowledges that Employee has been provided with this information.

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.