Exhibit 10.16

 

Tetra Tech, Inc.

 

Employee Stock Purchase Plan

 

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Table of Contents

 

Article 1

Purpose and Effective Date

 

 

Article 2

Definitions

 

 

2.1

“Account”

2.2

“Board”

2.3

“Code”

2.4

“Committee”

2.5

“Common Stock”

2.6

“Company”

2.7

“Continuous Employment”

2.8

“Employee”

2.9

“Exchange Act”

2.10

“Fair Market Value”

2.11

“Leave of Absence”

2.12

“Participant”

2.13

“Plan”

2.14

“Purchase Right”

2.15

“Purchase Right Period”

2.16

“Stockholders”

2.17

“Subsidiary”

 

 

Article 3

Eligibility and Participation

 

 

3.1

Eligibility

3.2

Payroll Withholding

3.3

Limitations

3.4

Granting of Purchase Rights

3.5

Establishment of Accounts

3.6

Special Rules for Acquisitions

3.7

Transfers of Employment

3.8

Suspension upon Hardship Withdrawal

 

 

Article 4

Purchase Rights

 

 

4.1

Termination of Purchase Rights

4.2

Exercise of Purchase Rights

4.3

Termination Event

4.4

Non-Transferability of Purchase Rights

 

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Article 5

Common Stock

 

 

5.1

Shares Subject to Plan

5.2

Adjustment Upon Changes in Capitalization

 

 

Article 6

Plan Administration

 

 

6.1

Administration

6.2

Indemnification

 

 

Article 7

Amendment and Termination

 

 

7.1

Amendment and Termination

7.2

Stockholders Approval

 

 

Article 8

Miscellaneous Matters

 

 

8.1

Uniform Rights and Privileges

8.2

Application of Proceeds

8.3

Notice of Disqualifying Disposition

8.4

No Additional Rights

8.5

Governing Law

 

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Tetra Tech, Inc.

Employee Stock Purchase Plan

(As amended through May 31, 2003)

 

Article 1

Purpose and Effective Date

 

The purpose of the Plan is to provide employment incentives for, and to
encourage stock ownership by, Employees of Tetra Tech, Inc. or any Subsidiary
who maintains the Plan in order to increase their proprietary interest in the
success of the Company.

 

The original effective date of the Plan was February 8, 1996.

 

Article 2

Definitions

 

Whenever capitalized in the text, the following terms shall have the meanings
set forth below.

 

2.1          “Account” shall mean the account established pursuant to Section
3.5 below to hold a Participant’s contributions to the Plan.

 

2.2          “Board” shall mean the Board of Directors of Tetra Tech, Inc.

 

2.3          “Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time.

 

2.4          “Committee” shall mean the Board of Tetra Tech, Inc. or a committee
designated by the Board to administer the Plan.  The Board may appoint and
remove members of the Committee at any time.

 

2.5          “Common Stock” shall mean the common stock of Tetra Tech, Inc.

 

2.6          “Company” shall mean Tetra Tech, Inc., a Delaware corporation, as
well as any Subsidiary whose employees participate in the Plan with the consent
of the Board.

 

2.7          “Continuous Employment” shall mean uninterrupted employment with
the Company.  Employment shall not be considered interrupted because of:

 

(a)           Transfers of employment between the Company and a Subsidiary (or
vice versa); transfers between a Subsidiary and Subsidiary; or

 

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(b)           Any Leave of Absence.

 

2.8          “Employee” shall mean any person employed by the Company.  This
term does not include members of the Board unless the Company employs them in a
position in addition to their duties as directors.

 

2.9          “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

 

2.10        “Fair Market Value” shall be determined in accordance with the
following rules.

 

(a)           If the Common Stock is admitted to trading or listed on a national
securities exchange, Fair Market Value shall be the last reported sale price
regular way, or if no such reported sale takes place on that day, the average of
the last reported bid and ask prices regular way, in either case on the
principal national securities exchange on which the Common Stock is admitted to
trading or listed.

 

(b)           If not admitted to trading or listed on any national securities
exchange, Fair Market Value shall be the last sale price on that day of the
Common Stock reported on the NASDAQ National Market of the NASDAQ Stock Market
(“NASDAQ National Market”) or, if no such reported sale takes place on that day,
the average of the closing bid and ask prices on that day.

 

(c)           If not included in the NASDAQ National Market, Fair Market Value
shall be the average of the closing bid and ask prices of the Common Stock on
that day reported by the NASDAQ Stock Market, or any comparable system on that
day.

 

(d)           If the Common Stock is not included in the NASDAQ Stock Market or
any comparable system, Fair Market Value shall be the closing bid and ask prices
on that day as furnished by any member of the National Association of Securities
Dealers, Inc. selected from time to time by the Company for that purpose.

 

If the markets were closed on the day in question, Fair Market Value shall be
determined as of the last preceding day on which they were open.

 

2.11        “Leave of Absence” shall mean an unpaid leave of absence taken in
accordance with the Company’s leave of absence policy.  A Participant will not
be considered to have incurred a break in Continuous Employment because of a
Leave of Absence that does not exceed ninety (90) days.  If the Leave of Absence
exceeds ninety (90) days, the Participant will be deemed to have incurred a
break in Continuous Employment on the ninety-first (91st) day, unless statute or
contract guarantees the Participant’s rights to reemployment.

 

2.12        “Participant” shall mean an Employee who has been granted a Purchase
Right under the Plan.

 

2.13        “Plan” shall mean the Tetra Tech, Inc. Employee Stock Purchase Plan.

 

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2.14        “Purchase Right” shall mean a stock option granted pursuant to the
Plan.

 

2.15        “Purchase Right Period” shall mean the period that begins on the
first day on or after June 1st on which the Company’s stock is traded and end on
the last day on which the Company’s stock is traded that occurs before the next
June 1st.

 

2.16        “Stockholders” shall mean the holders of Common Stock.

 

2.17        “Subsidiary” shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.

 

Article 3

Eligibility and Participation

 

3.1          Eligibility.

 

(a)           All Regular Full-Time Employees and all Regular Part-Time
Employees of the Company (as those terms are defined in Tetra Tech Policies and
Procedures Number 13) who are regularly scheduled to work at least twenty (20)
hours per week are eligible to participate in the Plan, provided they have
completed at least three (3) months of Continuous Employment prior to the first
day of the applicable Purchase Right Period.

 

(b)           No Employee may be granted a Purchase Right if the Employee would
immediately thereafter own, directly or indirectly, five percent (5%) or more of
the combined voting power or value of all classes of stock of the Company or of
a Subsidiary.  For this purpose, an Employee’s ownership interest shall be
determined in accordance with the constructive ownership rules of Code Section
424(d).

 

3.2          Payroll Withholding.

 

(a)           Employees who have satisfied the eligibility conditions of Section
3.1 above may enroll as Participants by executing prior to the commencement of
each Purchase Right Period a form provided by the Committee on which they
designate the dollar amount (not a percentage of compensation) to be deducted
from their paychecks and contributed to their Accounts for the purchase of
Common Stock, which shall not be less than twenty-five dollars ($25) per payroll
period.

 

(b)           Once chosen, the rate of contributions for a Purchase Right Period
cannot be increased.  However, pursuant to rules and procedures prescribed by
the Committee, a Participant may make additional contributions to make up any
contributions that he or she failed to make while on a Leave of Absence if the
Participant returns to active employment and contributes those amounts before
the end of the Purchase Right Period.

 

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3.3          Limitations.

 

(a)           Notwithstanding anything herein to the contrary, a Participant may
not accrue a right to purchase shares of Common Stock under the Plan at a rate
that exceeds five thousand dollars ($5,000) per Purchase Right Period.

 

(b)           Furthermore, in no event may a Participant accrue a right to
purchase stock under the Plan and under all other employee stock purchase plans
described in Code Section 423 that are maintained by the Company and its
Subsidiaries at a rate that exceeds twenty-five thousand dollars ($25,000) per
calendar year.

 

(c)           The dollar limitations of this Section 3.3 apply to the Fair
Market Value of Common Stock determined at the time the Purchase Right is
granted.

 

3.4          Granting of Purchase Rights.

 

(a)           Upon the Employee’s completion and return of the enrollment form,
the Committee will, at the commencement of the Purchase Right Period, grant a
Purchase Right to allow the Participant to purchase the number of whole shares
of Common Stock calculated by:

 

(i)            Multiplying the dollar amount of the deduction designated by the
Participant by the number of payroll periods in the Purchase Right Period; and

 

(ii)           Dividing this sum by the Fair Market Value of a share of Common
Stock on the first day of the Purchase Right Period.

 

(b)           Notwithstanding the provisions of Paragraph (a) above, the price
at which each share covered by a Purchase Right will be purchased will be the
lesser of:

 

(i)            One hundred percent (100%) of the Fair Market Value of a share of
Common Stock on the first day of the applicable Purchase Right Period; or

 

(ii)           Eighty-five percent (85%) of the Fair Market Value of a share of
Common Stock on the last day of that Purchase Right Period.

 

(c)           Notwithstanding anything in this Plan to the contrary, in no event
can a Participant purchase more than twenty thousand (20,000) shares of Common
Stock in a single Purchase Right Period.

 

3.5          Establishment of Accounts.

 

(a)           All amounts contributed by the Participant to the Plan (by means
of payroll withholding) will be deposited into a separate Account maintained for
the Participant.  No interest will be earned on those contributions.

 

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(b)           A Participant may not withdraw any amounts from his or her Account
without terminating his or her Purchase Right pursuant to Section 4.1 below.

 

3.6          Special Rules for Acquisitions.  If the Company or a Subsidiary
acquires another entity, whether by means of the purchase of stock or assets
(“Acquired Entity”), the Board of Directors may (a) designate a special Purchase
Right Period for the employees of the Acquired Entity, and (b) may treat service
with the Acquired Entity as service with the Company for purposes of the service
requirement of Section 3.1(a).  Any such treatment shall be made by means of
resolutions of the Board of Directors, and shall apply to all of the employees
of the Acquired Entity.

 

3.7          Transfers of Employment.  If an employee’s employment situation has
changed so that the individual is no longer entitled to participate in the Plan
(e.g., because of a reduction of hours worked), but his of her employment has
not been terminated, the Employee shall not be entitled to make any more
contributions to the Plan after the change in status, but may elect to leave his
or her prior contributions in the Plan to be used to purchase Common Stock at
the end of the Purchase Right Period.

 

3.8          Suspension upon Hardship Withdrawal.

 

(a)           If a Participant receives a distribution from a Section 401(k)
plan maintained by the Company (or any other entity affiliated with the Company
under Code Section 414) on account of a financial hardship (“Hardship
Withdrawal”) and it is intended that the Hardship Withdrawal satisfy the safe
harbor contained in the Section 401(k) regulations, the Participant shall be (i)
considered to have withdrawn from the Plan and (ii) precluded from making any
contributions to this plan for at least twelve (12) months.

 

(b)           The Committee shall prescribe such rules and procedures, as it
deems appropriate regarding suspensions pursuant to this Section 3.8.

 

Article 4

Purchase Rights

 

4.1          Termination of Purchase Rights.

 

(a)           Upon the termination of a Purchase Right, all amounts held in the
Participant’s Account shall be refunded to the Participant.

 

(b)           A Participant may withdraw from the Plan at any time prior to the
last day of the Purchase Right Period by submitting written notice to the
Company.  The Participant’s Purchase Right shall terminate upon his or her
withdrawal from the Plan.

 

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(c)           A Purchase Right shall terminate automatically if the Participant
holding the Purchase Right ceases to be employed by the Company for any reason
(including by reason of an extended Leave of Absence under Section 2.11 above)
prior to the last day of the Purchase Right Period.

 

(d)           Notwithstanding the provisions of Paragraph (a) above, in the
event that a Participant ceases making contributions during a Purchase Right
Period, the Participant may elect to leave his or her prior contributions in the
Plan to be used to purchase Common Stock at the end of the Purchase Right
Period.  However, in no event can a Participant:

 

(i)            Reduce (but not eliminate) his or her contributions during a
Purchase Right Period; or

 

(ii)           Suspend his or her contributions and recommence making them in
the same Purchase Right Period, unless due to a Leave of Absence.

 

4.2          Exercise of Purchase Rights.

 

(a)           Unless previously terminated, Purchase Rights will be
automatically exercised on the last day of the Purchase Right Period.

 

(b)           Except as provided in Section 3.2(b) above, payment for shares to
be purchased at the termination of the Purchase Right Period may only be made
from funds accumulated through payroll deductions made during the Purchase Right
Period.

 

(c)           If the amount in the Participant’s Account at the end of the
Purchase Right Period is insufficient to purchase all the shares covered by the
Purchase Right granted to the Participant, those funds will be used to purchase
as many whole shares as possible.

 

(d)           If the balance of the Participant’s Account on the date of
purchase exceeds the purchase price of the whole number of shares to be
acquired, the surplus shall be applied to any subsequent Purchase Right Period,
unless the Participant elects to receive a refund in accordance with rules and
procedures prescribed by the Committee.  Of course, any funds remaining after
the last Purchase Right Period are automatically refunded to the Participant.

 

(e)           Stock certificates for the whole number of shares of Common Stock
will be distributed as soon as reasonably possible following the date of the
exercise of the Purchase Right.

 

4.3          Termination Event.  The following provisions of this Section 4.3
shall apply, notwithstanding anything herein to the contrary.

 

(a)           A “Termination Event” shall be deemed to occur as a result of:

 

(i)            A transaction in which the Company will cease to be an
independent publicly-owned corporation; or

 

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(ii)           A sale or other disposition of all or substantially all of the
assets of the Company.

 

(b)           All Purchase Rights shall be automatically exercised immediately
preceding the Termination Event.  In such an event, the consideration paid for
the Common Stock in the transaction shall be deemed to be the Fair Market Value
of the Common Stock on that date for purposes of Section 3.4(b)(ii) above.

 

4.4          Non-Transferability of Purchase Rights.  A Purchase Right may not
be assigned or otherwise transferred by a Participant other than by will and the
laws of descent and distribution.  During the lifetime of the Participant, only
the Participant may exercise the Purchase Right.

 

Article 5

Common Stock

 

5.1          Shares Subject to Plan

 

(a)           The maximum number of shares of Common Stock, which may be issued
under the Plan, is one million, ninety-eight thousand, six-hundred and
thirty-two (1,098,632) shares, subject to adjustment under Section 5.2 below.

 

(b)           If any outstanding Purchase Right is terminated for any reason
prior to its exercise, the shares allocable to the Purchase Right may again
become subject to purchase under the Plan.

 

(c)           The Common Stock subject to issue under the Plan may be previously
un-issued stock or may have been reacquired by the Company in the open market
(or otherwise).

 

5.2          Adjustment Upon Changes in Capitalization.  A proportionate
adjustment shall be made by the Committee in the number, price, and kind of
shares subject to outstanding Purchase Rights if the outstanding shares of
Common Stock are increased, decreased, or exchanged for different securities,
through reorganization, recapitalization, reclassification, stock split, stock
dividend, or other similar transaction not constituting a Termination Event
under Section 4.3 above.

 

Article 6

Plan Administration

 

6.1          Administration

 

(a)           The Committee shall administer the Plan.  The Committee shall have
authority to:

 

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(i)            Interpret the Plan;

 

(ii)           Prescribe rules and procedures relating to the Plan; and

 

(iii)          Take all other actions necessary or appropriate for the
administration of the Plan.

 

(b)           A majority of the members of the Committee shall constitute a
quorum, and any action shall constitute the action of the Committee if it is
authorized by:

 

(i)            A majority of the members present at any meeting; or

 

(ii)           All of the members in writing without a meeting.

 

(c)           All decisions of the Committee shall be final and binding on all
Participants.

 

(d)           No member of the Committee shall be liable for any action or
inaction made in good faith with respect to the Plan or any Purchase Right
granted under it.

 

6.2          Indemnification.

 

(a)           To the maximum extent permitted by law, the Company shall
indemnify each member of the Committee and every other member of the Board, as
well as any other Employee with duties under the Plan, against all liabilities
and expenses (including any amount paid in settlement or in satisfaction of a
judgment) reasonably incurred by the individual in connection with any claims
against the individual by reason of the performance of his or her duties under
the Plan.  This indemnity shall not apply, however, if:

 

(i)            It is determined in the action, lawsuit, or proceeding that the
individual is guilty of gross negligence or intentional misconduct in the
performance of those duties; or

 

(ii)           The individual fails to assist the Company in defending against
any such claim.

 

(b)           Notwithstanding the above, the Company shall have the right to
select counsel and to control the prosecution or defense of the suit. 
Furthermore, the Company shall not be obligated to indemnify any individual for
any amount incurred through any settlement or compromise of any action unless
the Company consents in writing to the settlement or compromise.

 

Article 7

Amendment and Termination

 

7.1          Amendment and Termination.  The Board may amend or terminate the
Plan at any time by means of written action, except with respect to any
outstanding Purchase Rights.

 

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Furthermore, the Board may elect to suspend or recommence the Plan following the
end of any Purchase Right Period.

 

7.2          Stockholder Approval.

 

(a)           The Board shall issue no shares of Common Stock under the Plan
unless the Stockholders approve the Plan within twelve (12) months before or
after the date of the adoption of the Plan.

 

(b)           If the Stockholders do not approve the Plan within the time period
specified in Paragraph (a) above, the Plan and all Purchase Rights issued under
the Plan will terminate and all contributions will be refunded to the
Participants.  The approval by the Stockholders must relate to:

 

(i)            The class of individuals who may be Participants; and

 

(ii)           The aggregate number of shares to be granted under the Plan.

 

If either of those items is changed, approval of the Stockholders must again be
obtained.

 

Article 8

Miscellaneous Matters

 

8.1          Uniform Rights and Privileges.  The rights and privileges of all
Participants under the Plan shall be the same.

 

8.2          Application of Proceeds.  The proceeds received by the Company from
the sale of Common Stock pursuant to Purchase Rights may be used for any
corporate purpose.

 

8.3          Notice of Disqualifying Disposition.  A Participant must notify the
Company if the Participant disposes of stock acquired pursuant to the Plan prior
to the expiration of the holding periods required to qualify for long-term
capital gains treatment on the sale.

 

8.4          No Additional Rights.

 

(a)           Neither the adoption of this Plan nor the granting of any Purchase
Right shall:

 

(i)            Affect or restrict in any way the power of the Company to
undertake any corporate action otherwise permitted under applicable law; or

 

(ii)           Confer upon any Participant the right to continue to be employed
by the Company, nor shall it interfere in any way with the right of the Company
to terminate the employment of any Participant at any time, with or without
cause.

 

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(b)           No Participant shall have any rights as a Stockholder with respect
to the shares covered by a Purchase Right until the time at which the Fair
Market Value of the Common Stock is determined on the last day of the Purchase
Right Period in which the shares were purchased.

 

(c)           No adjustments will be made for cash dividends or other rights for
which the record date is prior to the date of the exercise of the Purchase
Right.

 

8.5          Governing Law.

 

(a)           The Plan and all actions taken under it shall be governed by and
construed in accordance with the laws of the State of Delaware.

 

(b)           The provisions of this Plan shall be interpreted in a manner that
is consistent with this Plan satisfying the requirements of Code Section 423.

 

To signify its adoption of the Plan, the Company has caused its execution.

 

 

 

TETRA TECH, INC.,

 

a Delaware corporation

 

 

 

 

 

By:

 

 

 

 

Its:

 

 

 

 

Date:

 

 

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