Document:

exv4w1

 

EXHIBIT 4.1

SECOND SUPPLEMENTAL INDENTURE

     SECOND SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of June 15, 2005, by
and between URS CORPORATION, a Delaware corporation (the “Company”) and U.S. BANK NATIONAL
ASSOCIATION, as trustee under the indenture referred to below (the “Trustee”).

W I T N E S S E T H :

     WHEREAS the Company heretofore executed and delivered to the Trustee an Indenture (as
supplemented on June 30, 2003, the “Original Indenture”) dated as of August 22, 2002, providing for
the issuance of an aggregate principal amount of $200,000,000 of 11
1/2% Senior Notes due 2009 (the
“Notes”) (capitalized terms defined in the Original Indenture have the same meanings for purposes
of this Supplemental Indenture);

     WHEREAS, Section 9.02 of the Indenture provides, among other things, that, with the written
consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Notes then
outstanding, the Company and the Trustee may amend the Original Indenture, except as provided
therein;

     WHEREAS, the Company desires to amend or delete certain provisions to the Original Indenture;

     WHEREAS, all action on the part of the Company necessary to authorize its execution, delivery
and performance of the Original Indenture, as further supplemented by this Supplemental Indenture,
has been duly taken;

     WHEREAS, the Company has solicited the consent of the Holders of the Notes to amendments (the
“Amendments”) to certain provisions of the Indenture pursuant to that certain Offer to Purchase and
Consent Solicitation Statement dated June 1, 2005 (the “Offer to Purchase”);

     WHEREAS, the Holders of at least 66 2/3% in aggregate principal amount of the Notes have
consented to the Amendments and such consents have been received by the Company and the Trustee and
have become effective in accordance with Section 9.03 of the Indenture;

     WHEREAS, the Company has delivered to the Trustee simultaneously with the execution and
delivery of this Supplemental Indenture an Opinion of Counsel as contemplated by Sections 9.05 and
11.03 of the Original Indenture and an Officers’ Certificate as contemplated by Section 11.03 of
the Original Indenture;

     WHEREAS, the Company has satisfied all other conditions required under Article 9 of the
Original Indenture to enable the Company and the Trustee to enter into this Supplemental Indenture;
and

     WHEREAS, the Company desires to execute and deliver, and has requested the Trustee to join in
the execution and delivery of, this Supplemental Indenture for the purpose of amending certain
provisions of the Original Indenture.

     NOW THEREFORE, in consideration of the premises and for other good and valuable consideration,
it is mutually covenanted and agreed for the equal and ratable benefit of all Holders of the
Securities as follows:

 1.

 

     1. Definitions. When used herein, “Effective Time” shall mean such time as
the Notes are accepted for payment by the Company pursuant to the offer made pursuant to the Offer
to Purchase and the accompanying Consent and Letter of Transmittal. All other capitalized terms
used but not defined herein shall have the same meanings as in the Original Indenture.

     2. Amendments to Original Indenture.

          (a) Deleted Definitions. At the Effective Time, Section 1.01 of the
Original Indenture shall be amended by deleting the definition of each term that is used in the
Original Indenture only in the Sections or subsections thereof that are deleted pursuant to Section
2(b) or (c) hereof.

          (b) Deleted Provisions. At the Effective Time, the text of each of the
following Articles, Sections, subsections or clauses of the Original Indenture shall be deleted in
its entirety and replaced, in each case, by the words “Intentionally Omitted”:

	 	 	 	 	 
	 

	 	Section 4.03
	 	(Limitation on Incurrence of Indebtedness)
	 
	 	 	 	 
	 

	 	Section 4.04
	 	(Limitation on Restricted Payments)
	 
	 	 	 	 
	 

	 	Section 4.05
	 	(Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries)
	 
	 	 	 	 
	 

	 	Section 4.06
	 	(Limitation on Issuances of Guarantees by Restricted Subsidiaries
	 
	 	 	 	 
	 

	 	Section 4.07
	 	(Limitation on Transactions with Shareholders and Affiliates
	 
	 	 	 	 
	 

	 	Section 4.08
	 	(Limitation on Liens)
	 
	 	 	 	 
	 

	 	Section 4.09
	 	(Limitation on Sale/Leaseback Transactions)
	 
	 	 	 	 
	 

	 	Section 4.10
	 	(Limitation on Asset Sales)
	 
	 	 	 	 
	 

	 	Section 4.11
	 	(Repurchase of Notes upon a Change of Control)
	 
	 	 	 	 
	 

	 	Section 4.12
	 	(Existence)
	 
	 	 	 	 
	 

	 	Section 4.13
	 	(Payment of Taxes)
	 
	 	 	 	 
	 

	 	Section 4.14
	 	(Maintenance of Properties and Insurance)
	 
	 	 	 	 
	 

	 	Section 4.16
	 	(Compliance Certificates)
	 
	 	 	 	 
	 

	 	Section 4.17
	 	(Commission Reports and Reports to Holders)
	 
	 	 	 	 
	 

	 	Section 4.19
	 	(Designation of “Designated Senior Indebtedness”)
	 
	 	 	 	 
	 

	 	Section 5.01
	 	(When Company May Merge, Etc.)

          (c) Amended Provisions. At the Effective Time, the text of Section 6.01
shall be amended and restated in its entirety to read as follows:

     “SECTION 6.01 EVENTS OF DEFAULT. Any of the following events shall constitute
an “Event of Default” hereunder:

     (a) default in the payment of principal of (or premium, if any, on) any Note
when the same becomes due and payable at maturity, upon acceleration, redemption or
otherwise;

     (b) default in the payment of interest on any Note when the same becomes due
and payable, and such default continues for a period of 30 days;

     (c) [Intentionally Omitted.]

     (d) the Company or any Subsidiary Guarantor defaults in the performance of or
breaches any other covenant or agreement of the Company in this Indenture or under
the Notes (other than a default specified in clause (a), (b) or (c) above) and such
default or

 2.

 

breach continues for a period of 60 consecutive days after written notice
by the Trustee or the Holders of 25% or more in aggregate principal amount of the
Notes;

     (e) [Intentionally Omitted.]

     (f) [Intentionally Omitted.]

     (g) [Intentionally Omitted.]

     (h) [Intentionally Omitted.]

     (i) except as permitted by this Indenture, any Subsidiary Guarantor repudiates
its obligations under its Note Guarantee or any Note Guarantee is determined to be
unenforceable or invalid or shall for any reason cease to be in full force and
effect.”

     3. Amendments to the Notes. At the Effective Time, the text of Section 14
of each of the Notes shall be amended and restated in its entirety to read as follows:

     “14. Defaults and Remedies

     Any of the following events constitutes an “Event of Default” under the
Indenture:

     (a) default in the payment of principal of (or premium, if any, on) any Note
when the same becomes due and payable at maturity, upon acceleration, redemption or
otherwise;

     (b) default in the payment of interest on any Note when the same becomes due
and payable, and such default continues for a period of 30 days;

     (c) [Intentionally Omitted.]

     (d) the Company or any Subsidiary Guarantor defaults in the performance of or
breaches any other covenant or agreement of the Company in the Indenture or under
the Notes (other than a default specified in clause (a), (b) or (c) above) and such
default or breach continues for a period of 60 consecutive days after written notice
by the Trustee or the Holders of 25% or more in aggregate principal amount of the
Notes;

     (e) [Intentionally Omitted.]

     (f) [Intentionally Omitted.]

     (g) [Intentionally Omitted.]

     (h) [Intentionally Omitted.]

     (i) except as permitted by the Indenture, any Subsidiary Guarantor repudiates
its obligations under its Note Guarantee or any Note Guarantee is determined to be
unenforceable or invalid or shall for any reason cease to be in full force and
effect.

           If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee
may, and at the direction of the Holders of at least 25% in aggregate principal amount of the Notes
then

 3.

 

outstanding shall, declare all the Notes to be due and payable. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations,
Holders of not less than 66 2/3% in aggregate principal amount of the Notes then outstanding may
direct the Trustee in its exercise of any trust or power.”

     4. Miscellaneous.

          (a) Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

          (b) Trustee Makes No Representation. The Trustee makes no representation as
to the validity or sufficiency of this Supplemental Indenture.

          (c) Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together represent
the same agreement.

          (d) Effect of Headings. The Section headings herein are for convenience only
and shall not effect the construction thereof.

 4.

 

     IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed as of the date first written above.

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	URS 
Corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Judy L. Rodgers
 

	 	 	Name: Judy L. Rodgers
	 	 	Title: Vice President Corporate Treasurer
	 
	 	 	 	 
	 	 	
Trustee:
	 
	 	 	 	 
	 	 	
U.S. Bank National Association
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Richard Prokosch

 

	 	 	Name: Richard Prokosch
	 	 	Title: Vice Presidentexv10w1

 

Exhibit 10.1

SEVERANCE AGREEMENT

     THIS SEVERANCE AGREEMENT (this “Agreement”) is made and effective this 13th day of
June, 2005 by and between AFFILIATED COMPUTER SERVICES, INC. (the “Company”) and Tom Burlin,
Executive Vice President and Group President – Government Solutions Group of the Company (the
“Executive”).

     The Company has determined that both the Executive’s performance and the Company’s ability to
retain the Executive as an employee will be significantly enhanced if the Executive is provided
with fair and reasonable protection from a Change of Control of the Company. Accordingly, the
Company and the Executive agree as follows:

     1. Defined Terms. Unless otherwise indicated, capitalized terms used in this
Agreement shall have the meanings set forth herein or in Schedule A.

     2. Effective Date; Term. This Agreement shall be effective on the date hereof and
shall remain in effect until (a) the Company terminates this Agreement by giving the Executive at
least one (1) year advance written notice of termination or (b) the effective date of any
termination of the Executive’s employment with the Company, whether voluntary, involuntary, or for
Cause, and regardless of the reason for such termination. Notwithstanding the foregoing, this
Agreement shall, if in effect on the date of a Change of Control, remain in effect for such time
following a Change of Control as may be necessary to give effect to the terms of the Agreement.

     3. Change of Control Benefits. Upon a Change of Control, the Executive shall be
entitled to the benefits provided herein.

     (a) Severance Payments. Within two (2) business days after a Change of
Control, the Company shall pay the Executive a lump sum amount, in cash, equal to:

     (i) three (3) times the sum of:

     (A) the Executive’s per annum base salary in effect on the date of
the Change of Control (“Base Salary”), and

     (B) the Executive’s bonus for the immediately preceding fiscal year
(or, if Executive has been employed by the Company for less than one year
and has not yet received a bonus, the bonus the Executive would have
received for the immediately preceding fiscal year if Executive had been
employed by the Company for all of such immediately preceding fiscal
year); and

     (ii) the Executive’s target bonus for the current fiscal year multiplied by a
fraction, the numerator of which shall be the number of days the Executive was
employed by the Company in the fiscal year

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in which the Change of Control occurs and the denominator of which shall be 365.

     (b) Continued Benefits. Until the earlier of the third anniversary of the
termination of the Executive’s employment with the Company after a Change of Control or the
date on which the Executive becomes employed by a new employer, the Company shall, at its
expense, provide the Executive with medical, dental, life insurance, disability and
accidental death and dismemberment benefits (“Insurance Benefits”) at the highest level
provided to the Executive immediately prior to the Change of Control, provided,
however, that if the Executive becomes employed by a new employer which maintains
Insurance Benefits that either (i) do not cover the Executive with respect to a
pre-existing condition which was covered under the Company’s Insurance Benefits, or (ii) do
not cover the Executive for a designated waiting period, the Executive’s coverage under the
Company’s Insurance Benefits shall continue, without limitation, until the earlier of the
end of the applicable period of noncoverage under the new employer’s Insurance Benefits or
the third anniversary of the Change of Control.

     (c) Payment of Accrued But Unpaid Amounts. Within two (2) business days after
a Change of Control or such other timeframe as required by applicable law, rule or
regulation, the Company shall pay the Executive (i) any unpaid portion of compensation
previously earned by the Executive; and (ii) all compensation previously deferred by the
Executive but not yet paid.

     (d) Post-Retirement Welfare Benefits. For purposes of determining the
Executive’s eligibility for post-retirement benefits under any welfare benefit plan (as
defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended)
maintained by the Company immediately prior to the Change of Control and in which the
Executive then participated, the Executive shall be credited with the excess of three (3)
years of participation in the applicable plan and three (3) years of age over the actual
years of participation and age credited to the Executive on the date of the Change of
Control. If, after taking into account the credited participation and age, the Executive
would have been eligible for post-retirement benefits, the Executive shall receive,
commencing on the date of the Change of Control, post-retirement benefits based on the
terms and conditions of the applicable plans in effect immediately prior to the Change of
Control.

     (e) Effect on Existing Plans. All Change of Control provisions applicable to
the Executive and contained in any plan, program, agreement or arrangement maintained on or
after the date hereof by the Company (including, but not limited to, any stock option,
restricted stock or pension plan) shall remain in effect for such period after the date of
a Change of Control as is necessary to carry out such provisions and provide the benefits

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payable thereunder, and may not be altered in a manner which adversely affects the
Executive without the Executive’s prior written approval.

     (f) Outplacement Counseling. The Company shall reimburse all reasonable
expenses incurred by the Executive for professional outplacement services by qualified
consultants selected by the Executive for a period of 12 months following a Change of
Control.

     4. Mitigation. The Executive shall not be required to seek other employment after a
Change of Control and any compensation earned from other employment shall not reduce the amounts
otherwise payable under this Agreement.

     5. Gross-up.

     (a) In the event it shall be determined that any payment, benefit or distribution (or
combination thereof) by the Company, or any trust established by the Company for the
benefit of its employees, to or for the benefit of the Executive (whether payable pursuant
to the terms of this Agreement (a “Payment”)) would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code and any interest or penalties are incurred by the
Executive with respect to such excise tax (the excise tax, together with interest and
penalties thereon, hereinafter collectively referred to as the “Excise Tax”), the Executive
shall be entitled to receive an additional payment (a “Gross-up Payment”) in an amount such
that after payment by the Executive of all taxes, including, without limitation, any income
taxes and the Excise Tax imposed upon the Gross-up Payment, the Executive retains an amount
of the Gross-up Payment equal to the Excise Tax imposed upon the Payments.

     (b) Subject to the provisions of Section 5(c), all determinations required to
be made under this Section 5, including whether and when a Gross-up Payment is
required and the amount of such Gross-up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by a nationally recognized certified public
accounting firm as may be designated by the Executive (the “Accounting Firm”). All fees
and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-up
Payment, as determined pursuant to this Section 5, shall be paid by the Company to
the Executive within five (5) days after the receipt of the Accounting Firm’s
determination. If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall so indicate to the Executive in writing. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive.

     (c) The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of a Gross-up
Payment. Such notification shall be

- 3 -

 

given no later than ten (10) business days after the
Executive is informed in writing of such claim and shall apprise the Company of the nature
of the claim and the date of requested payment. The Executive shall not pay the claim
prior to the expiration of the
thirty (30) day period following the date on which it gives notice to the Company. If
the Company notifies the Executive in writing prior to the expiration of the period that it
desires to contest such claim, the Executive shall:

     (i) give the Company any information reasonably requested by the Company
relating to such claim;

     (ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company;

     (iii) cooperate with the Company in good faith in order to effectively contest
such claim; and

     (iv) permit the company to participate in any proceedings relating to such
claim.

     Without limitation on the foregoing provisions of this Section 5(c), the
Company shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative appeals, proceedings, hearings
and conferences with the taxing authority in respect of such claim and may, at its sole
option, either direct the Executive to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the Company shall determine provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax
or income tax (including interest and penalties with respect thereto) imposed as a result
of the contest; provided, further, that if the Company directs the
Executive to pay any claim and sue for a refund, the Company shall advance the amount of
the payment to the Executive, on an interest-free basis, and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to the advance or with
respect to any imputed income with respect to the advance.

- 4 -

 

     (d) In the event that the Company exhausts its remedies pursuant to Section
5(c) and the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Gross-up Payment required and such
payment shall be promptly paid by the Company to or for the benefit of the Executive.

     (e) If, after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 5(c), the Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 5(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-up Payment required to be paid.

     6. Termination for Cause. Nothing in this Agreement shall be construed to prevent the
Company from terminating the Executive’s employment for Cause.

     7. Indemnification; Director’s and Officer’s Liability Insurance. The Executive
shall, after the Change of Control, retain all rights to indemnification under applicable law or
under the Company’s Certificate of Incorporation or Bylaws, as they may be amended or restated from
time to time. In addition, the Company shall maintain Director’s and Officer’s liability insurance
on behalf of the Executive, at the level in effect immediately prior to the Change of Control, for
the five (5) year period following the Change of Control.

     8. Executive Covenants. During the twelve (12) month period following the Change of
Control, the Executive shall not disclose to any person, or use to the significant disadvantage of
any of the Company, any non-public information relating to business plans, marketing plans,
customers or employees of the Company other than information the disclosure of which cannot
reasonably be expected to adversely affect the business of the Company (“Confidential
Information”), provided that nothing contained in this Section 8 shall prevent the
Executive from being employed by a competitor of the Company or utilizing the Executive’s general
skills, experience, and knowledge, including those developed while employed by the Company.

     9. Disputes. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Dallas, Texas, or, at the option of the
Executive, in the county where the Executive then resides, in accordance with the Rules of the
American Arbitration Association then in effect to

- 5 -

 

be completed within 45 days after notice of such
dispute or controversy is given pursuant to Section 13. Judgment may be entered on an
arbitrator’s award relating to this Agreement in any court having jurisdiction.

     10. Costs of Proceedings. The Company shall pay all costs and expenses, including
attorneys’ fees and disbursements, at least monthly, of the Executive in connection with any legal
proceeding (including arbitration), whether or not instituted by the Company or the Executive,
relating to the interpretation or enforcement of any
provision of this Agreement, except that if the Executive instituted the proceeding and the judge,
arbitrator or other individual presiding over the proceeding affirmatively finds that the Executive
instituted the proceeding in bad faith, the Executive shall pay all costs and expenses, including
attorney’s fees and disbursements, of the Executive.

     11. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder can be assigned or delegated by the Executive, without the prior written
consent of the Company. Except as otherwise provided herein, this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the Company and the Executive and their respective
heirs, legal representatives, successors and assigns. If the Company shall be merged into or
consolidated with another entity, the provisions of this Agreement shall be binding upon and inure
to the benefit of the entity surviving such merger or resulting from such consolidation. The
Company will require any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business or assets of the Company, by agreement in
form and substance satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. The provisions of this Section 11 shall continue
to apply to each successive employer of the Executive hereunder in the event of any merger,
consolidation or transfer of assets of a successor employer.

     12. Withholding. Notwithstanding the provisions of Sections 4 and 5
hereof, the Company may, to the extent required by law, withhold applicable federal, state, and
local income and other taxes from any payments due to the Executive hereunder.

     13. Notices. All notices and other communications hereunder must be in writing and
will be deemed to have been duly given if delivered personally, mailed by certified mail (return
receipt requested) or sent by overnight delivery service or facsimile transmission to the Executive
at the Executive’s most recent address in the records of the Company and to the Company at:

Affiliated Computer Services, Inc.

2828 North Haskell Avenue

Dallas, Texas 75204

Attn: General Counsel

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Fax: 214-823-5746

     14. Confidentiality. The parties agree to keep the terms and conditions of this
Agreement in strictest confidence, it being understood that this restriction shall not prohibit
disclosure required by applicable law, rule or regulation.

     15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN.

     16. Entire Agreement. This Agreement (along with grants of stock options, if any, to
the Executive, pursuant to the Company’s 1997 Stock Option Plan, as amended) constitutes the entire
agreement between the parties and, except as expressly provided herein, supersedes all other prior
agreements concerning the effect of a Change of Control on the relationship between the Company and
the Executive. This Agreement may be changed only by a written agreement executed by the Company
and the Executive.

[Signature Page Follows]

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     The parties have executed this Agreement to be effective as of the 13th day June,
2005.

	 	 	 	 	 
	 	 	AFFILIATED COMPUTER SERVICES, INC.
	 
	 	 	 	 
	

	 	By:
	 	          /s/ JEFFREY A. RICH
	

	 	 	 	 
	

	 	 	 	          Jeffrey A. Rich
	

	 	 	 	          Its: Chief Executive Officer
	 
	 	 	 	 
	 	 	EXECUTIVE
	 
	 	 	 	 
	 	 	                    /s/ TOM BURLIN
	 	 	 
	 	 	Tom Burlin

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SCHEDULE A

CERTAIN DEFINITIONS

     As used in this Agreement, and unless the context requires a different meaning, the following
terms, when capitalized, have the meaning indicated:

     “Cause” shall mean:

     (i) the willful and continued failure of the Executive to perform substantially the
Executive’s duties with the Company (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for substantial performance is
delivered to the Executive by the Board which specifically identifies the manner in which
the Board believes that the Executive has not substantially performed the Executive’s
duties, or

     (ii) the willful engaging by the Executive in illegal conduct or gross misconduct
which is materially and demonstrably injurious to the Company.

For purpose of this provision, no act or failure to act, on the part of the Executive, shall be
considered willful unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company. The termination of employment of the Executive shall not be deemed to be
for cause unless and until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the entire membership of
the Board at a meeting of the Board called and held for such purpose (after reasonable notice is
provided to the Executive and Executive is given an opportunity, together with counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of
the conduct described in subparagraph (i) or (ii) above and specifying the particulars thereof in
detail.

     “Change of Control” shall mean the first to occur of any of the following dates:

     (i) the date a Corporate Event is consummated;

     (ii) the date any person (as such term is used in Section 13(d) of the Securities
Exchange Act of 1934, hereinafter the “1934 Act”), other than one or more trusts
established by the Company for the benefit of employees of the Company or its subsidiaries,
shall become the beneficial owner (within

- 9 -

 

the meaning of Rule 13d-3 under the 1934 Act) of
fifteen percent (15%) or more of the Company’s outstanding Common Stock, other than holders
of such amounts as of the date hereof; or

     (iii) the date, during any period of twenty-four (24) consecutive months, on which
individuals who at the beginning of such period constitute the entire Board of Directors of
the Company shall cease for any reason to constitute a majority thereof unless the
election, or the nomination for election by the Company’s stockholders, of each new
director comprising the majority was approved by a vote of at least a majority of the
Continuing Directors in office on the date of such election or nomination for election of
the new director. For purposes hereof, a “Continuing Director” shall mean:

     (A) any member of the Board of Directors at the close of business on January
1, 2004;

     (B) any member of the Board who succeeds any Continuing Director described in
subparagraph (A) above if such successor was elected, or nominated for election by
the Company’s stockholders, by a majority of the Continuing Directors then still in
office; or

     (C) any director elected, or nominated for election by the Company’s
stockholders to fill any vacancy or newly created directorship on the Board of
Directors of the Company by a majority of the Continuing Directors then still in
office.

     “Corporate Event” shall mean any of the following:

     (i) any consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company’s Common
Stock would be converted into cash, securities or other property, other than any
consolidation or merger of the Company in which the holders of the Company’s Common Stock
immediately prior to the consolidation or merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the consolidation or merger;

     (ii) any sale, lease, or other transfer of all, or substantially all, of the assets of
the Company, other than any sale, lease, or other transfer to any corporation where the
Company owns, directly or indirectly, at least eighty percent (80%) of the outstanding
voting securities of the corporation after the transfer; or

     (iii) any plan or proposal for the liquidation or dissolution of the Company.

- 10 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]