<PAGE>
 
                                                             Exhibit No. 10 (nn)
 
                   AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                   -----------------------------------------


       THIS AGREEMENT is made as of the 1st day of July, 1997, by and between
ICF Kaiser International, Inc., a Delaware corporation (the "Company"), on the
one hand, and Kenneth L. Campbell, a resident of Fairfax County, Virginia (the
"Executive"), on the other hand.

       WHEREAS, ICF Kaiser desires to employ Executive in a new position, and
Executive desires to assume such new position, on the terms and conditions set
forth herein;

       NOW, THEREFORE, in consideration of the premises and the mutual
agreements made herein, and intending to be legally bound hereby, the Company,
on the one hand, and Executive, on the other hand, agree as follows:

       1.   Employment Period; Duties.
            --------------------------

            The Company shall employ the Executive to serve as Executive Vice
President and Chief Financial Officer of the Company for a period of three years
commencing July 1, 1997 (the "Employment Period").

       2.   Compensation and Fringe Benefits.
            ---------------------------------

            (a)     Base Compensation.  For the period from the beginning of the
                    ------------------                                          
Employment Period to June 30, 1998, the Company shall pay Executive a base
salary at the rate of $270,000 per year; for the period July 1, 1998 to June 30,
1999, the Company shall pay Executive a base salary at the rate of $285,000 per
year; for the period July 1, 1999, to June 30, 2000, the Company shall pay
Executive a base salary at the rate of $300,000 per year, all in accordance with
the Company's regular practice for compensating senior management personnel.

            (b)     Bonus Compensation. The Company shall grant to Executive 
                    -------------------
30,000 shares of the Company's common stock, par value $0.01 per share ("Common
Stock"), pursuant to the Company's Stock Incentive Plan.  Such shares shall not
vest, and shall not be transferable, unless Executive remains as an employee of
the Company through and including July 1, 1999, provided that such shares shall
vest and become immediately transferable if at any time prior to July 1, 1999,
(a) Executive's employment by the Company is terminated (i)  by the Company for
any reason other than "cause" (as defined in Section 5 below), (ii)  by
Executive for "good reason" (as defined in Section 5 below), or (iii) by
Executive in order to accept employment at a total compensation substantially in
excess of that provided by the Employment Agreement, as amended, provided that
the Company has been given the opportunity to match substantially such higher
total compensation and has declined to do so, or (b) Executive dies or becomes
disabled (as defined in Section 6 below).  For calendar year 1997, the Executive
will participate in the Long-Term Incentive Compensation Plan for Senior
Executives and the Annual Incentive Compensation Plan for Senior Executives as
described in Attachment A; any bonus is dependent upon the Company's achievement
of its profit target and the Executive's personal achievement of performance
criteria associated with his position and shall be pro-rated to adjust for the
portion of the year that Executive was employed by the Company.  For future
years (calendar year 1998 and beyond), any bonus will be determined by the
Compensation Committee of the Board of Directors.  Bonus awards may be comprised
of cash, stock options and/or restricted stock.

            (c)     Fringe Benefits.  The Executive shall be entitled to such 
                    ----------------
fringe benefits as are generally made available by the Company to senior
management personnel. Such benefits shall include participation in the Company's
defined contribution retirement plan, Section 401(k) Plan, and health, term life
and disability insurance programs. The Executive also will be reimbursed for
reasonable expenses incurred in connection with travel and entertainment related
to the Company's business and affairs which will be paid by the Company in a
manner, consistent with past practice and as amended by any subsequent changes
of Company Policy. For the retirement plan, credit will be given for prior years
of service for purpose of vesting.

       3.   Stock Options.
            --------------
<PAGE>
 
            (a)     On or before May 2, 1997, the Company will grant to the
Executive non-qualified stock options under the Company's Consultants, Agents,
and Part-time Employees Stock Plan to purchase 100,000 shares of Common Stock,
at a purchase price equal to the average of the closing prices of the Common
Stock on the New York Stock Exchange on each of the 20 days ending the day
immediately preceding the grant date. Such options will be represented by a
Stock Option Agreement in the form customarily used by the Company for such
agreements, containing the following provisions:

            (i)     Option Term.  The options will expire at five years from 
                    -----------
date of grant.  All unexercised vested options shall expire 90 days after the
Executive ceases being employed by the Company for any reason.

            (ii)    Vesting.  Twenty-five percent (25%) of the options vest on
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each of July 1, 1998, 1999, 2000 and 2001.

            (iii)   Exercise.  Subject to applicable securities laws and
                    --------                                            
regulations, all vested options are exercisable at any time prior to their
expiration.


            (b)     If the price per share of the Common Stock (as adjusted for
splits, reverse spits or stock dividends) on July 1, 1999, (or if the Common
Stock is not publicly traded on July 1, 1999, on the first day thereafter that
shares of Common Stock are publicly traded) is less than $6.00, the Company
shall grant to the Executive on July 2, 1999, non-qualified stock options under
the Company's Stock Incentive Plan to purchase an additional 100,000 shares of
the Company's common stock, par value $0.01 per share ("Common Stock"), at a
purchase price equal to the average of the closing prices of the Common Stock on
the New York Stock Exchange on each of the 20 days ending on the day immediately
preceding the grant date.  Such options will be represented by a Stock Option
Agreement in the form customarily used by the Company for such agreements,
containing the following provisions:

            (i)     Option Term.  The options expire 5 years from the date of 
                    -----------
grant. All unexercised vested options shall expire 90 days after the Executive
ceases being employed by the Company for any reason.

            (ii)    Vesting. The options vest as follows:
                    -------

<TABLE>
<CAPTION>
                                                                   # of Options
                  Grant Date              Vesting Date                Vested
                  ----------              ------------             ------------
                  <S>                     <C>                <C>
                  07/02/99                  07/02/99                  50,000
                  07/02/99                  07/01/00         addt'l   25,000
                  07/02/99                  07/01/01         addt'l   25,000
 
</TABLE>

            (iii)   Exercise.  Subject to applicable securities laws and
                    --------                                            
regulations, all vested options are exercisable at any time prior to their
expiration.

       4.   Restrictions on Certain Activities
            ----------------------------------

            (a)     Restrictions in Respect of Company Securities.  Executive 
                    ---------------------------------------------
agrees that for a period commencing the first day of the Employment Period and
running through one year following termination of the Executive's employment by
the Company for any reason, whether by action of the Executive or the Company
(the "Restriction Period"), the Executive will not:

                          (i)    acquire, directly or indirectly, or serve as an
employee, director, officer, manager, partner, adviser, consultant or agent of
any person, entity or group which acquires directly or indirectly, any voting
securities of the Company if, following such acquisition, such Executive,
together with his affiliates, or such person, entity or group would directly or
indirectly be the Beneficial Owners under Rule 13d-3 under the Securities
Exchange Act of 1934 of voting securities of the Company representing in the
aggregate more than 20% of the total combined voting power of all issued and
outstanding securities of the Company; or
<PAGE>
 
                          (ii)   solicit proxies or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the Exchange
Act) in opposition to any recommendation of the Board of Directors of the
Company.

            (b)     Non-Solicitation of Employees. During the Restriction
                    -----------------------------
Period, the Executive will not (for his own benefit or for the benefit of any
person or entity other than the Company) solicit, or assist any person or entity
other than the Company to solicit, any officer, director, executive or employee
of the Company to leave his or her employment.

            (c)     Investments.  Nothing in this Agreement shall be deemed to
                    -----------                                               
prohibit the Executive from owning equity or debt investments in any
corporation, partnership or other entity which is competitive with the Company,
provided that such investments (i) are passive investments and constitute five
--------                                                                      
percent (5%) or less of the outstanding equity securities of such an entity the
equity securities of which are traded on a national securities exchange or other
public market, or (ii) are approved by the Company.

       5.   Termination
            -----------

            (a)     Either the Corporation or the Executive may terminate this
Agreement, with or without "cause", upon 30 days' prior written notice.

            (b)     In the event the Corporation elects to terminate this
Agreement without "cause", or the Executive elects to terminate this Agreement
for "good reason", subject to the provisions of Section 6, the Corporation shall
pay to the Executive, in addition to any amounts paid or payable under other
provisions of this Agreement or any other agreements between the Corporation and
the Executive, one of the following amounts: (i) a severance payment of $540,000
if the termination occurs within the first year of the Employment Period; (ii) a
severance payment equal to the remaining term of whole months of the Employment
Period times the average monthly base salary paid to the Executive for the 12-
month period immediately preceding the termination if the termination occurs
within the second year of the Employment Period; or (iii) a severance payment
equal to 12 times the average monthly base salary paid to the Executive for the
12-month period immediately preceding the termination if the termination occurs
within the third year of the Employment Period. Such severance will be issued in
two cash payments (with deduction of such amount as may be required to be
withheld under applicable law and regulations): one-half within ten working days
of termination, the other one-half one year from the date of termination,
provided the Executive has not breached Section 4 of this Agreement. In such
event, all unvested options will vest in full on the effective date of
termination and expire 90 days after the effective date of termination.
Notwithstanding the provisions of the Annual Incentive Compensation Plan for
Senior Executives or other bonus plan, if the Company terminates Executive
without cause or if Executive terminates this Agreement for good reason, the
Company shall pay Executive a bonus as provided in Section 2 (b) above for that
year based on the following: if Executive is employed by the Company for at
least one day and less than 183 days in the year, the Company shall pay
Executive one half of the full year's bonus earned; and if Executive is employed
by the Company for more than 182 days in the year, the Company shall pay
Executive the full year's bonus earned. Any such bonus shall be paid when other
similar bonuses are paid for that year. All other compensation and benefits
provided for in this Agreement shall cease upon such termination.

            (c)     In the event the Corporation terminates this Agreement for
"cause" or the Executive terminates this Agreement without "good reason", the
Executive's rights hereunder shall cease as of the effective date of such
termination.

            (d)     For purposes of this Agreement, the Executive shall be
considered to have "good reason" to terminate this Agreement if (i) without his
express written consent, the responsibilities, compensation or benefits of the
Executive are substantially reduced (except in connection with the termination
of his employment voluntarily by the Executive or by the Company for "cause" or
under the circumstances described in Section 6 hereof), (ii) without the
Executive's express written consent the Corporation's principal executive
offices shall have been relocated outside the Washington, DC metropolitan area,
or the Executive shall be based anywhere other than the Washington, DC
metropolitan area (except for required travel on the Company's business, or
(iii) a majority of the Board of Directors of the Company is not comprised of
"Continuing Directors," where a "Continuing Director" of 
<PAGE>
 
the Company as of any date means a member of the Board of Directors of the
Company who (x) was a member of the Board of Directors of the Company on the
effective date of this Agreement or (y) was nominated for election or elected to
the Board of Directors of the Company with the affirmative vote of at least a
majority of the directors who were Continuing Directors at the time of such
nomination or election. For purposes of this Agreement, the Corporation shall
have "cause" to terminate the Executive's employment hereunder upon (i) the
continued, willful and deliberate failure of the Executive to perform his
duties, in a manner substantially consistent with the manner prescribed by the
Board of Directors or the Chief Executive Officer of the Corporation (other than
any such failure resulting from his incapacity due to physical or mental
illness), (ii) the engaging by the Executive in misconduct materially and
demonstrably injurious to the Corporation, (iii) the conviction of the Executive
of commission of a felony, whether or not such felony was committed in
connection with the Corporation's business or (iv) the circumstances described
in Section 6 hereof, in which case the provisions of Section 6 shall govern the
rights and obligations of the parties.

       6.   Disability; Death.
            ------------------

            (a)     If, prior to the expiration or termination of the Employment
period, the Executive shall be unable to perform his duties by reason of
disability or impairment of health for at least six consecutive calendar months,
the Corporation shall have the right to terminate this Agreement by giving
written notice to the Executive to that effect, but only if at the time such
notice is given such disability or impairment is still continuing.  After giving
such notice, the Employment Period shall terminate with the payment of the
Executive's base compensation for the month in which notice is given.  In the
event of a dispute as to whether the Executive is disabled within the meaning of
this Section 6(a), either party may from time to time request a medical
examination of the Executive by a doctor appointed by the Chief of Staff of a
hospital selected by mutual agreement of the parties, or as the parties may
otherwise agree, and the written medical opinion of such doctor shall be
conclusive and binding upon the parties as to whether the Executive has become
disabled and the date when such disability arose.  The cost of any such medical
examinations shall be borne by the Corporation.

            (b)     If, prior to the expiration or termination of the Employment
Period, the Executive shall die, the Corporation shall pay to the Executive's
estate his base compensation through the end of the month in which the
Executive's death occurred, at which time the Employment Period shall terminate
without further notice and the Corporation shall have no further obligations
hereunder.

            (c)     Nothing contained in this Section 6 shall impair or
otherwise affect any rights and interests of the Executive under any
compensation plan or arrangement of the Corporation which may be adopted by the
Board of Directors of the Corporation.

       7.   Other Terms and Conditions
            --------------------------

            The Company's Standard Terms and Conditions of Employment for
Executive Personnel (Attachment B) is incorporated herein by reference.

       8.   Enforcement
            -----------

            Executive agrees that the Company's remedies at law for any breach
or threat of breach by him of the provisions of Sections 2, 3 or 4 of Attachment
B and Section 4 hereof will be inadequate, and that the Company shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of Sections 2, 3 or 4 of Attachment B and Section 4 hereof and to enforce
specifically the terms and provisions thereof, in addition to any other remedy
to which the Company may be entitled at law or equity.

       9.   Notices
            -------

            Any notice required or permitted under this Agreement shall be
deemed to have been effectively made or given if in writing and personally
delivered or mailed properly addressed in a sealed envelope, postage prepaid by
certified or registered mail. Unless otherwise changed by notice, notice shall
be properly addressed to Executive:
<PAGE>
 
                       Kenneth L.  Campbell
                       9482 Deramus Farm Court
                       Vienna, Virginia  22182

and properly addressed to the Company is addressed to:


                       ICF Kaiser International, Inc.
                       9300 Lee Highway
                       Fairfax, Virginia  22031-1207
                       Attn:  James O. Edwards

with a copy to:

                       Paul Weeks II
                       Senior Vice President, Secretary
                        and General Counsel
                       ICF Kaiser International, Inc.
                       9300 Lee Highway
                       Fairfax, Virginia  22031-1207

 
       10.  Award to Prevailing Party in Dispute
            ------------------------------------

            In the event either of the parties to this Agreement commences
any action or proceeding arising out of, or relating in any way to, this
Agreement, the prevailing party shall be entitled to recover, in addition to any
other relief awarded to such party, his or its costs, expenses and reasonable
attorney's fees.

       11.  Miscellaneous
            -------------

            This Agreement, its Attachments, and the Option Agreement(s)
constitute the entire agreement, and supersede all prior agreements, of the
parties hereto relating to the subject matter hereof, and there are no written
or oral terms or representations made by either party other than those contained
herein.  The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Virginia.  The headings
contained herein are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.


       IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first written.

              Executive                        ICF Kaiser International, Inc.


        /s/ Kenneth L. Campbell                    /s/ James O. Edwards        
     ----------------------------          -------------------------------------
     Kenneth L. Campbell                           James O. Edwards
                                                   Chairman and Chief
                                                   Executive Officer