Exhibit 10.1

 

RETIREMENT AGREEMENT

 

This Retirement Agreement dated and effective as of December 16, 2005 is entered
into by and between TRC Companies, Inc. and its affiliates (“TRC”) on the one
hand and Miro Knezevic (“Knezevic”) on the other hand.

 

In consideration of the covenants contained herein, the Parties hereto agree as
follows:

 

1.               Knezevic will retire from all positions with TRC effective
January 3, 2006.  Between the date hereof and January 3, 2006, Knezevic will
transition any on-going initiatives in which he is involved.  The Parties
anticipate this will involve no more than a day or two of time.

 

2.               Knezevic shall be paid an amount equal to his current salary
rate from January 3, 2006 through September 8, 2006.  Such amount shall be paid
in accordance with the normal payroll practices of the Company.  All amounts
paid to Knezevic pursuant hereto shall be subject to all applicable taxes
required to be withheld by the Company pursuant to federal, state or local law. 
Knezevic shall be solely responsible for income taxes imposed on the Employee by
reason of any amounts payable pursuant hereto.

 

3.               TRC will reimburse Knezevic for the cost of current benefits
coverage pursuant to COBRA until September 8, 2006.

 

4.               All options held by Knezevic shall be deemed fully vested as of
January 3, 2006.  All Series C options held by Knezevic shall survive and be
fully exercisable for and through their original term (“Expiration Date” as
noted on SEC Form 5 signed by Knezevic on August 12, 2005) and all other stock
options held by Knezevic shall not expire until December 31, 2007.  All options
held by Knezevic shall not terminate early by reason of Knezevic’s ceasing to be
an employee or any other reason other than the merger, consolidation,
dissolution or liquidation of TRC as provided in Section 13 of the Stock Option
Plan which also provides that option holders will be given thirty (30) days’
notice of such event, and such options shall survive for the period specified
herein.  Except for restrictions imposed under applicable securities laws,
Knezevic shall not be restricted or prevented from exercising all options held
by him for any reason during the periods specified herein.

 

5.               Knezevic shall pay the Company in immediately available funds
on or before December 31, 2005 the sum of $36,000 in full settlement of any and
all claims by TRC known or unknown related to the filing of expense reports.

 

6.               Knezevic and his heirs, assigns and agents release, waive and
discharge TRC, its directors, officers, employees, subsidiaries, and agents from
each and every claim, action or right of any sort known or unknown arising on or
before the effective date of this Agreement.

 

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a.               The foregoing release includes, but is not limited to, any
claim of discrimination on the basis of race, sex, marital status, national
origin, handicap or disability, age, veteran status, specified disabled veteran
status; any claim of defamation, business defamation, false or true light, and
any other claim based on a statutory prohibition; any claim arising out of or
related to an express or implied employment contract, any other contract
affecting the terms and conditions of employment, or a covenant of good faith
and fair dealings; any tort claims and any personal gain with respect to any
claim arising under the qui tam provisions of the False Claims Act, 31, U.S.C.
3730 or similar California law.

 

b.              The Knezevic Release excludes, however, the following: all
obligations and covenants of TRC under this Agreement, all rights, obligations,
and claims relating to stock options and stock grants granted by TRC to Knezevic
and all employee benefits, such as pension and 401k rights and benefits, and
rights to receive compensation, including accrued vacation pay, through December
31, 2005.

 

c.               Knezevic represents that he understands the foregoing release,
that rights and claims under the Age Discrimination and Employment Act of 1967
are among the rights and claims against TRC which he is releasing.

 

7.               Knezevic understands and agrees that this release extends to
all claims of every nature, known or unknown, suspected or unsuspected, past,
present and future, attributable to any action or omission to act arising out of
Knezevic’s employment, and retirement/separation.  This release extends to the
shareholders, officers, directors, employees or agents of the Employer.  Any and
all rights granted to Knezevic under §1542 of the California Civil Code or any
analogous federal law or regulation in regard to Knezevic’s employment and
retirement are hereby expressly waived.

 

8.               Knezevic waives and releases and promises never to assert any
of those claims that are described in paragraph 6 above, even if he does not
believe that he has any such claims.  TRC waives and releases and promises never
to assert any of those claims that are described in paragraph 5 above, even if
it does not believe that it has any such claims.  Knezevic and TRC therefore
waive any rights they would otherwise have under California Civil Code §1542
with respect to the releases granted herein, which states:

 

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.

 

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9.               TRC agrees to comply with the provisions of paragraph 3 of the
Employment Agreement dated March 21, 1994 by and between ESI Acquisition
Corporation and Knezevic as they relate to a policy of life insurance with a
value of $500,000 and to transfer such policy to Knezevic as soon as practicable
after January 3, 2006.  Knezevic understands that this will be an event subject
to income taxes payable by him.

 

10.         Knezevic and TRC understand and expressly agree that this Agreement
shall bind and benefit their respective heirs, partners, successors, employees,
owners, stockholders, officers, directors, attorneys, affiliates, predecessors,
representatives and assigns.

 

11.         In any dispute with respect to this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys’ fees and costs from the other
party.

 

12.         The validity, construction and enforceability of this Agreement
shall be governed in all respects by the law of California applicable to
agreements negotiated, executed and performed in California regardless of
whether either of the parties shall now be or hereafter become a resident of
another state or country, except as to any matters which are required by law to
be governed by the laws of another jurisdiction.

 

13.         The parties hereto agree not to divulge or publicize the terms
hereof except as to their attorney or CPA or staff, as may be necessary to
enforce the promises, covenants and/or understandings contained herein or as
required by law.  Knezevic may disclose the terms of this Agreement, however, to
his immediate family members, but shall caution them to keep the settlement
confidential consistent with this paragraph.

 

14.         Each party shall bear its own legal fees arising out of this matter
and waive any claims it may have against the other for attorneys’ fees, except
under the conditions set forth in paragraph 11.

 

15.         Knezevic was exposed to and received information relating to the
confidential affairs of TRC and its clients, including, but not limited to,
technical information, business and marketing plans, strategies, customer
information, other information concerning the Company’s services and products,
promotions development, financing, expansion plans, business policies and
practices, and other forms of information considered by TRC to be confidential
and in the nature of trade secrets.  Knezevic is required to keep this
information confidential and not use it for any purpose other than for the
benefit of TRC; provided, however that the preceding covenants shall not apply
to information that:  (a) is a matter of public knowledge, (b) is independently
developed by a person not a party to this Agreement without the use, directly or
indirectly, of TRC confidential  information, (c) was in my Knezevic’s
possession prior to his employment with TRC unless otherwise conveyed to TRC,
(d) is information of a general nature that could reasonably be acquired  by
Knezevic without reference to TRC confidential information, (e) is obtained by
Knezevic from a third party not subject to any confidentiality obligation to
TRC; or (f) is required to be disclosed by

 

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law or the order of any court or governmental agency, or in any litigation or
similar proceeding.

 

16.         TRC represents and warrants that Knezevic is and shall remain
covered by its liability insurance policies with respect to any matters
concerning the use by TRC of Knezevic’s contractor licenses in connection with
work performed or services rendered by TRC, and TRC agrees to indemnify, defend
and hold harmless Knezevic and his heirs, successors and assign from all claims,
liabilities, costs, expenses, attorneys fees and obligations arising out of any
work performed or services rendered by TRC or any of its subsidiaries or
affiliates or contractors. TRC will cease using Knezevic as the “RME” or
otherwise use his contractors licenses as soon as practical but in any event no
later than January 31, 2006.

 

17.         This Agreement sets forth the entire agreement between the parties
hereto and fully supersedes any and all prior agreements or understandings
between the parties pertaining to the subject matter hereof.  Any change or
modification of this Agreement must be in writing and signed by the parties. 
Neither Knezevic nor TRC has relied upon any representation or statement not now
set forth in this writing concerning the terms, conditions, and inducements of
this mutual release. TRC warrants and represents that the undersigned individual
signing on behalf of TRC is duly authorized by TRC to sign on behalf of and to
bind TRC with respect to the provisions of this Agreement, and that this
Agreement has been duly and validly executed and delivered by TRC and
constitutes a valid and binding obligation of TRC enforceable against TRC in
accordance with its terms.

 

18.         Knezevic has consulted with a private attorney prior to executing
this Agreement, and has discussed this with an attorney, and Knezevic has
carefully read and fully understands all of the provisions of this Agreement and
is freely and voluntarily entering into this Agreement.

 

19.         Knezevic has been advised by his legal counsel of the right to
consider this Agreement for up to twenty-one (21) days prior to its execution
and voluntarily waives this period, electing with full knowledge and consent to
execute this release at this time.  Knezevic further acknowledges and
understands the right to revoke this Agreement within seven (7) days after its
execution and that, at Knezevic’s election, this Agreement is not effective or
enforceable until the seven (7) day period has expired.

 

20.         This Agreement may be executed in two or more counterparts each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.  Facsimile signatures shall be effective
to bind the Parties hereto with original signatures exchanged as soon as
reasonably practicable.

 

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IN WITNESS WHEREOF, the parties have set their hands as of the date first
written above.

 

 

TRC COMPANIES, INC.

 

 

 

 

 

/s/

Martin H. Dodd

 

 

 

Martin H. Dodd

 

 

Senior Vice President, General Counsel
and Secretary

 

 

 

 

 

Employee:

 

 

 

/s/

Miro Knezevic

 

 

 

Miro Knezevic

 

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