Exhibit 10.23

 

TETRA TECH, INC.

EXECUTIVE COMPENSATION PLAN

(Amended and Restated November 14, 2013)

 

1.                                    PURPOSE

 

The purpose of the Executive Compensation Plan (the “Plan”) of Tetra Tech, Inc.
(the “Company”) is to attract, motivate, reward and retain top level executives
upon whom, in large part, the success of the Company depends.  The Plan provides
opportunities for Participants (as defined in Section 2 below) to earn financial
rewards if the Company achieving the Performance Objective (as defined in
Section 5(b)). The Plan as amended and restated will cover each Plan Year (as
defined in Section 2 below) beginning with its 2014 fiscal year.  The Plan is
intended to permit the incentives paid hereunder to the executive officers of
the Company (within the meaning of Rule 3b-7 of the Securities Exchange Act of
1934, as amended) (“Executive Officers”) to qualify as “performance-based
compensation” under Section 162(m) of the Internal Revenue Code of 1986, as
amended, and the regulations and interpretations promulgated thereunder (the
“Code”).

 

2.                                    DEFINITIONS

 

The following definitions shall be applicable throughout the Plan:

 

(a)                               “Award” means the amount of a cash incentive
payable under the Plan to a Participant with respect to a Plan Year.

 

(b)                              “Board” means the Board of Directors of the
Company, as constituted from time to time.

 

(c)                               “Committee” means the Compensation Committee
of the Board or another Committee designated by the Board.

 

(d)                             “Participant” means each Executive Officer of
the Company who is designated by the Committee as a participant for any Plan
Year.

 

(e)                               “Plan Year” means each fiscal year of the
Company.

 

3.                                    ADMINISTRATION

 

The Plan shall be administered by the Committee, which shall have the
discretionary authority to interpret the provisions of the Plan, including, but
not limited to, all decisions regarding (i) eligibility to participate,
(ii) whether the Performance Objective and other conditions that are a
prerequisite to earning an Award have been met and (iii) the exercise of
discretion to reduce or eliminate the amount to be provided as an incentive
payment hereunder.  The Committee shall have broad authority to grant and
administer Awards under the Plan and may, subject to the provisions of the Plan,
establish, adopt or revise rules and regulations relating to the Plan or take
such actions as

 

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it deems necessary or advisable for the proper administration of the Plan.  Any
decision or interpretation of the Committee shall be final and conclusive for
all purposes and binding on all parties making claims under the Plan.  Neither
the Committee nor any member of the Committee shall be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with the Plan.  The Committee may delegate the authority to execute
and deliver those instruments and documents, to do all acts and things, and to
take all other steps deemed necessary, advisable or convenient for the effective
administration of the Plan in accordance with its terms and purposes; provided
however that the Committee may not delegate its responsibilities hereunder where
such delegation would jeopardize compliance with Code Section 162(m) and
Section 1.162-27(e) of the Regulations.

 

4.                                    ELIGIBILITY

 

The Committee shall designate those Executive Officers of the Company that are
eligible to participate in the Plan for any Plan Year.  Designation of an
Executive Officer as a Participant in any Plan Year shall not require the
Committee to designate such person as a Participant in any other Plan Year.  The
Committee shall consider such factors as it deems pertinent in designating
Participants for any Plan Year.

 

5.                                    AWARDS

 

(a)                               Participants.  Not later than 90 days after
the beginning of each Plan Year, the Committee will identify the Participants in
the Plan for that Plan Year.  If a Participant is initially employed by the
Company after the beginning of a Plan Year, the Committee may grant an Award to
that Participant with respect to a period of service following the Participant’s
date of hire, provided that no more than twenty-five percent (25%) of the Plan
Year has elapsed when the Committee grants the Award to such Participant for
such Plan Year and provided further that the Performance Objective for such Plan
Year otherwise satisfies the requirements of this Plan.  After the Committee
designates an Executive Officer as a Participant for a Plan Year, the Committee
shall provide the Participant with written notice of such participation and such
other terms and conditions as may be determined by the Committee in addition to
those set forth in this Plan.  Awards are not guaranteed and will not be paid
unless the Performance Objective is met and the Committee authorizes the payment
of an incentive payment hereunder.

 

(b)                              Performance Objective(s).  Each Award shall
provide that the Performance Objective is the Company’s achievement of positive
Net Income for the then current Performance Period.  Each Participant may earn a
payment equal to the Maximum Amount (as defined below) or such lesser amount,
including zero, that the Committee determines in its sole discretion based on
such factors as it may deem appropriate, including but not limited to overall
corporate performance based on an assessment of how the Company did on an
overall basis in achieving its key objectives and individual contribution based
on individual performance.  In no event shall the Committee increase the amount
of any Award above the Maximum Amount.  The “Maximum Amount” under the Plan for
a Plan Year shall be equal to (i) 2.5% of the Company’s Net Income for that Plan
Year in the case of the Company’s Chief Executive

 

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Officer; and (ii) 1.25% of the Company’s Net Income for that Plan Year in the
case of any other Executive Officer participating in the Plan for such Plan
Year.  The Committee shall have discretion to determine the conditions,
restrictions or other limitations, in accordance with and subject to the terms
of this Plan and Code Section 162(m), on the payment of Awards to Participants.

 

(c)                               Certification of Results.  Before authorizing
any Award payment under this Plan to a Participant, the Committee must certify
in writing (by resolution or otherwise) that the payments are consistent with
Section 5(b) above, and that any other material terms under the Plan for payment
of the Award were satisfied.

 

(d)                             Net Income.  For purposes of this Plan, “Net
Income” means the Company’s net income as set forth in its audited financial
statements excluding (i) the dilutive effects of acquisitions or joint ventures;
(ii) restructuring and/or other nonrecurring charges, including but not limited
to goodwill impairments and earn-out adjustments; (iii) the effects of changes
to generally accepted accounting standards required by the Financial Accounting
Standards Board; (iv) the impact of any “extraordinary items” as determined
under generally accepted accounting principles; and (v) exchange rate effects,
as applicable, for any non-US dollar denominated sales and earnings.

 

6.                                    PAYMENT OF AWARDS

 

(a)                               Continued Employment.  Unless otherwise
determined by the Committee, a Participant must be employed on the date the
Award for a Plan Year is to be paid. The Committee may make exceptions to this
requirement in the case of retirement, death or disability or under other
circumstances, as determined by the Committee in its sole discretion.  For
avoidance of doubt, no payment shall be made under the Plan on account of
employment termination due to special circumstances unless the Performance
Objective for the Plan Year has been met.

 

(b)                              Payment.  Any payment made under the Plan shall
be in a lump sum in cash or other readily available funds, and shall occur
within a reasonable period of time after the end of the Plan Year to which the
Award relates.  Notwithstanding the foregoing, in order to comply with the
short-term deferral exception under Code Section 409A, if the Committee waives
the requirement that a Participant must be employed on the date the Award is to
be paid, payout shall occur no later than the 15th day of the third month
following the later of (i) the end of the Company’s taxable year in which such
requirement is waived; or (ii) the end of the calendar year in which such
requirement is waived.

 

7.                                    DODD-FRANK CLAWBACK

 

Notwithstanding any other provision of the Plan to the contrary, in order to
comply with Section 10D of the Securities Exchange Act of 1934, as amended, and
any regulations promulgated, or national securities exchange listing conditions
adopted, with respect thereto (collectively, the “Clawback Requirements”), if
the Company is required to

 

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prepare an accounting restatement due to its material noncompliance with any
financial reporting requirements under the securities laws, then the Participant
shall return to the Company, or forfeit if not yet paid, the amount of any
payment received with respect to an Award under the Plan during the three-year
period preceding the date on which the Company is required to prepare the
accounting restatement, based on the erroneous data, in excess of what would
have been paid to the Participant under the accounting restatement as determined
by the Committee in accordance with the Clawback Requirements and any policy
adopted by the Committee pursuant to the Clawback Requirements.

 

8.                                    NO LIMITS ON OTHER AWARDS AND PLANS.

 

Nothing contained in the Plan shall prohibit the Company from establishing other
special awards or compensation plans providing for the payment of compensation
to employees of the Company, including any Participants.  For avoidance of
doubt, the Compensation Committee may pay discretionary bonuses on a
non-deductible basis separate from the Plan based on performance criteria other
than New Income as it determines to be appropriate in its sole discretion.

 

9.                                    GENERAL

 

(a)                               Tax Withholding.  The Company shall have the
right to deduct from all Awards any federal, state or local income and/or
payroll taxes required by law to be withheld with respect to such payments. The
Company also may withhold from any other amount payable by the Company or any
affiliate to the Participant an amount equal to the taxes required to be
withheld from any Award.

 

(b)                              Claim to Awards and Employment Rights.  Nothing
in the Plan shall confer on any Participant the right to continued employment
with the Company or any of its affiliates, or affect in any way the right of the
Company or any affiliate to terminate the Participant’s employment at any time,
and for any reason, or change the Participant’s responsibilities. Awards
represent unfunded and unsecured obligations of the Company and a holder of any
right hereunder in respect of any Award shall have no rights other than those of
a general unsecured creditor to the Company.

 

(c)                               Beneficiaries.  To the extent the Committee
permits beneficiary designations, any payment of Awards due under the Plan to a
deceased Participant shall be paid to the beneficiary duly designated by the
Participant in accordance with the Company’s practices. If no such beneficiary
has been designated or survives the Participant, payment shall be made to the
Participant’s legal representative.  A beneficiary designation may be changed or
revoked by a Participant at any time, provided the change or revocation is filed
with the Committee prior to the Participant’s death.

 

(d)                             Non-transferability.  A person’s rights and
interests under the Plan, including any Award previously made to such person or
any amounts payable under the Plan, may not be assigned, pledged or transferred
except, in the event of a Participant’s death, to a designated beneficiary as
provided in the Plan, or in the absence of such

 

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designation, by will or the laws of descent and distribution.

 

(e)                               Indemnification.  Each person who is or shall
have been a member of the Committee and each employee of the Company or an
affiliate who is delegated a duty under the Plan shall be indemnified and held
harmless by the Company from and against any loss, cost, liability or expense
that may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit or proceeding to which he may be a party
or in which he may be involved by reason of any action or failure to act under
the Plan and against and from any and all amounts paid by him in satisfaction of
judgment in any such action, suit or proceeding against him, provided such loss,
cost, liability or expense is not attributable to such person’s willful
misconduct. Any person seeking indemnification under this provision shall give
the Company prompt notice of any claim and shall give the Company an
opportunity, at its own expense, to handle and defend the same before the person
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.

 

(f)                                Expenses.  The expenses of administering the
Plan shall be borne by the Company.

 

(g)                              Pronouns.  Masculine pronouns and other words
of masculine gender shall refer to both men and women.

 

(h)                              Titles and Headings.  The titles and headings
of the sections in the Plan are for convenience of reference only, and in the
event of any conflict, the text of the Plan, rather than such titles or
headings, shall control.

 

(i)                                  Intent.  The intention of the Company and
the Committee is to administer the Plan in compliance with Code
Section 162(m) so that the Awards paid under the Plan to Participants who are or
may become subject to Code Section 162(m) will be treated as performance-based
compensation under Code Section 162(m)(4)(C). If any provision of the Plan does
not comply with the requirements of Code Section 162(m), then such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements. With respect to all other Participants, the Plan may be operated
without regard to the constraints of Code Section 162(m).

 

(j)                                  Governing Law.  The validity, construction,
and effect of the Plan, any rules and regulations relating to the Plan, and any
Award shall be determined in accordance with the laws of the State of Delaware
(without giving effect to principles of conflicts of laws thereof) and
applicable federal law.  No Award made under the Plan shall be intended to be
deferred compensation under Code Section 409A and will be interpreted
accordingly.

 

(k)                              Amendments and Termination.  The Committee may
terminate the Plan at any time, provided such termination shall not affect the
payment of any Awards accrued

 

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under the Plan prior to the date of the termination. The Committee may, at any
time, or from time to time, amend or suspend and, if suspended, reinstate, the
Plan in whole or in part; provided, however, that any amendment of the Plan
shall be subject to the approval of the Company’s stockholders to the extent
required to comply with the requirements of Code Section 162(m), or any other
applicable laws, regulations or rules.

 

(l)                                  Effective Date.  The Plan shall be
effective with respect to the operations of the Company for the Plan Year
beginning September 30, 2013, contingent upon approval by the Company’s
stockholders at its 2014 annual meeting.  In the event the stockholders do not
approve the Plan at its 2014 meeting, the Plan shall not be effective and no
payments will be made under the Plan.

 

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