EXHIBIT 10.16
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is made as of this 11th day of
June, 1997 between Tetra Tech, Inc. a Delaware corporation ("Tetra Tech"), and
Xxxxxx X. Xxxxxx (the "Employee").
R E C I T A L S
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A. Concurrently herewith, Employee, Tetra Tech, Xxxxxx & Company, Inc.,
a Delaware corporation ("Xxxxxx & Company"), and Xxxxxx Service Corps Inc., a
Delaware Corporation ("Xxxxxx Service") (Xxxxxx & Company and Xxxxxx Service
are sometimes referred to collectively as the "Xxxxxx Companies"), are
consummating the transactions contemplated by that certain Agreement and Plan
of Reorganization made and entered into as of June 11, 1997 (the
"Reorganization Agreement"), pursuant to which the Xxxxxx Companies will be
merged with and into Tetra Tech.
B. This Agreement is the Employment Agreement referred to in SECTION 7.2
of the Reorganization Agreement and, pursuant thereto, must be entered into by
the parties hereto as a condition to the consummation of the transactions
contemplated by the Reorganization Agreement. The execution and performance of
this Agreement is a substantial inducement to Employee to enter into and
consummate the transactions contemplated by the Reorganization Agreement.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the mutual covenants and the agreements
hereinafter set forth, and in consideration of Tetra Tech consummating the
transactions contemplated by the Reorganization Agreement, the parties hereto
covenant and agree as follows:
1. EMPLOYMENT. Tetra Tech agrees to employ the Employee, and the
Employee agrees to perform services for Tetra Tech, on the terms and conditions
set forth in this Agreement.
2. TERM. The term of this Agreement (the "Term") shall be four (4)
years, commencing on the date hereof and terminating on the fourth anniversary
of the date hereof.
3. POSITION AND DUTIES. During his term of employment under this
Agreement, the Employee shall serve on an exclusive and full-time basis as the
Executive Vice President -- Telecommunications of Tetra Tech and the President
of each of Tetra Tech's Xxxxxx & Company and Xxxxxx Service subsidiaries. In
addition, the Employee
shall serve as a member of Tetra Tech's Executive Board. The Employee's
services will be performed at Xxxxxx & Company's principal place of business.
The Employee shall have such additional authority and responsibility as
shall be determined from time to time by the Chief Executive Officer of Tetra
Tech. The Employee will at all times perform all of the duties and
obligations required of him by the terms of this Agreement in a loyal and
conscientious manner and in reasonable accordance with the Employee's ability
and experience.
4. BASE SALARY COMPENSATION.
(a) Tetra Tech shall pay the Employee for all his services a base
salary at the rate of One Hundred Forty Thousand Dollars ($140,000) per year,
which dollar amount shall be increased, on each anniversary date of the
commencement of the Term, by a percentage amount equal to the percentage
increase in the Consumer Price Index for Urban Wage Earners (San
Francisco-Oakland-San Jose, California; 1986=100) as published by the United
States Department of Labor, Bureau of Labor Statistics as of such anniversary
date compared to such index as in effect as of the commencement of the Term.
The base salary, as so adjusted on each anniversary date, is herein referred
to as the "Base Salary". Such Base Salary shall be payable in equal
installments at such intervals as salaries are paid by Tetra Tech to other
executives of Tetra Tech, subject to the usual and required employee payroll
deductions and withholdings.
(b) The Chief Executive Officer of Tetra Tech may, at any time in his
sole discretion, with the concurrence of Tetra Tech's Compensation Committee,
determine to increase the Base Salary of the Employee to an amount greater than
the amount determined pursuant to SECTION 4(a) above. The Chief Executive
Officer and the Compensation Committee shall, no less frequently than annually,
review the then-current level of the Base Salary and consider the propriety of a
discretionary Base Salary increase.
5. BONUS PLAN. The Employee shall be entitled to participate in and
receive benefits under Tetra Tech's annual bonus plan for the Xxxxxx Companies
(the "Bonus Plan"). The Bonus Plan shall consist of a pool determined by
multiplying the Operating Profit (as hereinafter defined) from the Xxxxxx
Companies for any fiscal year in excess of 6.5% of the Xxxxxx Companies' gross
revenues for such fiscal year by 25%. "Operating Profit" is defined as income
from the Xxxxxx Companies' operations (after consideration of the payment of all
bonuses to those employees of Tetra Tech or the Xxxxxx Companies, as applicable,
performing services for the Xxxxxx Companies during the applicable period)
before Federal income taxes and interest income/expense. For any partial fiscal
year during the Term, "Operating Profit" shall be appropriately annualized.
6. STOCK OPTION GRANT. On the date hereof, Tetra Tech will grant to the
Employee an incentive stock option (the "Option") covering 10,000 shares of
Tetra Tech's common stock, $.01 par value (the "Common Stock"). The exercise
price of the Option will be 110% of the closing price of the Common Stock on the
date hereof.
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7. EXPENSES AND BENEFITS.
(a) The Employee shall be entitled to reimbursement for all
reasonable and ordinary expenses incurred by Employee in the course of, and
directly related to, the rendering of services pursuant to this Agreement. Such
expenses shall be supported by reasonable documentation and shall be subject to
reasonable audit by Tetra Tech.
(b) During his employment under this Agreement, the Employee shall be
entitled to participate in or receive benefits under all of Tetra Tech's
employee benefit plans and arrangements then in effect and made available
generally to senior executives of Tetra Tech, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements.
8. TERMINATION. Tetra Tech's obligations and the Employee's rights upon
the termination of Employee's employment shall be governed by Tetra Tech's
standard policies and procedures as set forth in Tetra Tech's employee manual
(the "Policies and Procedures"), a copy of which has been delivered to the
Employee.
9. LICENSE OF XXXXXX NAME. The Employee acknowledges and agrees that, in
connection with the transactions contemplated by the Reorganization Agreement,
Tetra Tech will acquire and own all rights to the names "Xxxxxx & Company,"
"Xxxxxx Service Corps Inc.," "Xxxxxx Management Service, Co.," and "Xxxxxx
Project Management, Inc.," and that such rights shall survive the death of the
Employee. The Employee further agrees that he will not use the name "Xxxxxx" or
any derivative thereof (i) in any business in which Tetra Tech or any of its
divisions or subsidiaries is engaged on the date of termination of the
Employee's employment with Tetra Tech which uses the Xxxxxx name or (ii) in any
business in the telecommunications industry in which Tetra Tech or any of its
divisions or subsidiaries is engaged on the date of termination of the
Employee's employment with Tetra Tech.
10. NOTICES. Any notice or other communication required or permitted
hereunder will be in writing and will be deemed sufficiently given only if
delivered in person or sent by registered airmail letter, postage prepaid, or by
facsimile transmission followed by U.S. Mail, addressed as follows:
If to the Employee:
Xxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
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with a copy to:
Piper & Marbury L.L.P.
00 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
If to Tetra Tech:
Tetra Tech, Inc.
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
or to such other address or facsimile number as any of the persons designated
above may have specified in a notice or communication duly given to the other
designated person as provided herein. Such notice or communication will be
deemed to have been given as of the date so delivered or telecopied, or if
mailed, two days thereafter.
11. POLICIES AND PROCEDURES. The Employee acknowledges that he shall
perform his services in full compliance with Tetra Tech's Policies and
Procedures, as the same may be in effect from time to time.
12. MODIFICATION/WAIVER; GOVERNING LAW; ATTORNEY FEES.
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(a) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing, and is signed by the Employee and Tetra Tech. No waiver by either
party to this Agreement at any time of any breach by the other party of, or
compliance with, any agreement, condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
agreements, provisions or conditions at the same or at any prior or subsequent
time.
(b) The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of California
applicable to contracts to be performed wholly within California.
(c) If either party institutes any legal action (including any
mediation pursuant to SECTION 16 below) to enforce his or its rights under or to
recover damages for breach of, this Agreement, the prevailing party in such
action shall be entitled to recover from the other party all costs (including
costs of arbitration) and all reasonable expenses for attorney's fees and the
disbursements incurred by him or it.
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13. BINDING AGREEMENT; ASSIGNEES. This Agreement may not be assigned by
either party hereto without the written consent of the other; PROVIDED, HOWEVER,
that (a) Tetra Tech may, without such written consent of Employee, assign its
rights and obligations hereunder to subsidiary corporations in connection with
the formation of Xxxxxx & Company and/or Xxxxxx Service subsidiaries, and
(b) the Employee's rights to payments hereunder shall, upon his death, inure to
the benefit of the Employee's personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees.
14. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
15. ENTIRE AGREEMENT. Except for the Noncompetition and Nondisclosure
Agreement of even date between the parties, no agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter of
this Agreement have been made by either party which are not set forth expressly
in this Agreement.
16. MEDIATION. The parties agree that any dispute as to the construction,
interpretation or application of provisions of this Agreement shall be submitted
to expedited mediation in an attempt to resolve such dispute prior to the
commencement of any litigation with respect to such dispute. In the event
either party intends to seek recourse against the other by action at law or
equity, such party shall first give notice to the other party. Within ten
business days of such notice, the parties shall attempt to agree on one mediator
who shall be a person mutually agreeable to both parties. In the event the
parties cannot agree on one mediator, each shall have the right to appoint one
mediator, and the two mediators shall appoint a third. Mediation shall commence
within 20 business days of the notice for request for mediation. Each party
agrees to cooperate fully with the mediator(s) in an attempt to resolve any
disputes. The mediator(s) shall use the rules of the American Arbitration
Association in conducting the mediation. Any decision reached through mediation
shall be in writing but shall not be legally binding on the parties nor
admissible as evidence in any legal proceedings. If the mediator or the parties
cannot resolve their differences to their mutual satisfaction within 30 business
days of the notice, either party shall be free to pursue any and all other
remedies available to such party.
17. EQUITABLE REMEDIES. The Employee and Tetra Tech agree that the
services to be rendered by the Employee pursuant to this Agreement are of a
special, unique and extraordinary character which gives them a peculiar value,
the loss of which may not be reasonably or adequately compensated in damages in
any action at law, and that a breach by Employee of any of the terms of this
Agreement may cause Tetra Tech great and irreparable injury and damage. The
Employee expressly agrees that Tetra Tech may apply for the remedies of
injunction, specific performance and other equitable relief to prevent a breach
of this Agreement by the Employee. This provision shall not, however, be
construed as a waiver of any of the rights which Tetra Tech may have hereunder,
at law, for damages or otherwise.
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18. HEADINGS. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
TETRA TECH, INC.
By: /s/ LI-SAN HWANG
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Li-San Hwang
President and Chief Executive Officer
/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
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