Exhibit
10.7.5


 


EMPLOYMENT AGREEMENT


 


EMPLOYMENT AGREEMENT
(the “Agreement”), dated as of March 6, 2006, between TRC Companies, Inc., a
Delaware Corporation (the “Company”), and Timothy D. Belton (the “Executive”)
(individually a “Party” and collectively the “Parties”).


 


1.             Effective Date and Employment
Term.


 


(a)           Effective
Date. This Agreement shall become effective upon the execution hereof by
the Parties (the “Effective Date”).


 


(b)           Employment
Term. Executive agrees to commence employment immediately and to commence
providing full-time services to the Company no later than April 3, 2006 (the “Commencement
Date”). The Effective Date shall be considered the date of employment for all
purposes. Executive’s employment with the Company shall continue for a period
of three (3) years from the Effective Date (the “Initial Term”), unless sooner
terminated pursuant to Section 4 this Agreement. Upon the expiration of such
Initial Term, it is anticipated that Executive will continue as an
employee-at-will upon terms and conditions generally available to individuals
at his level in the Company. The Initial Term and any successive term or period
of employment shall hereinafter be referred to as the “Employment Term.”


 


2.             Position, Reporting, and Other
Activities.


 


(a)           Position. Executive hereby
accepts employment with the Company as its Senior Vice President and Chief
Operating Officer as well as its Central Region General Manager in accordance
with the terms and conditions herein. Executive shall devote all of his full professional
time and attention (except for vacation, sick leave, and other excused periods
of absence) to the performance of the services customarily incident to such
offices and of such other duties as may be reasonably assigned to Executive
from time to time by the Company’s Chief Executive Officer (“CEO”). The Company
will provide office facilities, secretarial, and clerical support consistent
with customary practices of the Company. No later than twelve (12) months from
the Commencement Date, and contingent on Executive’s meeting mutually agreed
operational goals determined by Executive and the CEO and subject to the
approval of the Company’s Board of Directors, Executive shall be eligible to be
promoted to President of the Company.


 


(b)           Reporting. During the
Employment Term, Executive shall report to the Company’s CEO.


 


(c)           Other Activities. Except upon
the prior written consent of the Board of Directors of the Company (the “Board”),
during the Employment Term, Executive will not: (i) accept any other employment
or (ii) engage, directly or indirectly, in any other business activity (whether
or not for pecuniary advantage) that is competitive with, or that places him in
a competing position to, the Company. Personal passive investments and personal
business affairs not inconsistent with this Agreement, or teaching, writing or
publicly speaking, are permitted, so long as these activities do not interfere
or conflict with Executive’s duties hereunder.


 

















 


3.             Compensation and Other Benefits.


 


(a)           Base Salary. In consideration
of the services to be rendered hereunder, beginning on the Commencement Date,
Executive shall be paid an initial annual base salary of $300,000.00, payable
in accordance with the Company’s payroll practices in effect during the course
of this Agreement. Upon Executive’s promotion to President of the Company,
Executive’s base annual salary shall increase to $350,000.00. The compensation
payable under this Subsection 3(a) shall be Executive’s “Base Salary”
hereunder.


 


(b)           Initial Bonus. Executive shall
be paid an initial bonus of $25,000 on the Commencement Date and two additional
payments of $25,000 each on the 91st and 181st day
respectively following the Commencement Date provided that he is employed by
the Company at those times. On mutual agreement between the Parties, these
additional payments can be made by restricted stock in lieu of cash.


 


(c)           Options. As of the Effective
Date, the Company grants to Executive ten-year options to purchase 75,000
shares of the Company’s common stock, par value $0.01 per share (the “Options”),
pursuant to the Company’s 2002 Restated Stock Option Plan (the “Plan”), which
grant shall be further evidenced by a separately executed Options Agreement as
provided in the Plan, the terms of which are specifically incorporated by
reference herein. The exercise price of such Options shall be the closing price
of the Company’s common stock on the Effective Date. In the event Executive’s
employment with the Company is terminated, Executive will only be permitted to
exercise such vested Options within the ninety (90) day period following such
termination. The Options will vest in equal one-third increments upon the
first, second, and third anniversaries of such grant and, to the extent
unvested, shall vest in their entirety upon a Change of Control, as defined
below, or upon termination of employment pursuant to Subsubsections 4(d) or
4(e) hereof.


 


(d)           Annual Bonuses. Executive
shall be paid a bonus of $150,000.00 in a single lump sum on the first
anniversary date of the Commencement Date. Executive shall also participate in
the Company’s Bonus Plan for senior management and be given consideration
thereunder in accordance with Executive’s role in the Company.


 


(e)           Periodic Options. Executive
will be eligible to receive stock options under the Plan and will be given
consideration thereunder in accordance with Executive’s role in the Company.


 


(f)            Benefits. Executive shall
have the right to participate in and to receive benefits from all present and
future life, vacation, accident, disability, medical, pension, and savings
plans and all similar benefits made available generally to executives of the
Company. The amount and extent of benefits to which Executive is entitled shall
be governed by any applicable benefit plan, as it may be amended from time to
time. Executive shall receive four (4) weeks’ each year of the Agreement, which
vacation shall accrue if not used in any year and be paid to Executive or
carried forward to subsequent years, consistent with Company policy. The Company
shall also carry D&O Liability Insurance coverage for the benefit of its
officers and directors, including Executive, and shall provide Executive with
such other insurance coverages provided its executives, officers, and
directors, from on and after the Effective Date.


 


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(g)           Automobile Allowance. During
the Employment Term, the Company shall provide Executive with an automobile
allowance of $700 per month to be increased consistent with policies applicable
to other executives of the Company. Executive will also receive a Company
gasoline credit card pursuant to its standard practice for officers.


 


(h)           Expenses. The Company shall
reimburse Executive for reasonable travel and other business expenses incurred
by Executive in the performance of his duties hereunder in accordance with the
Company’s general policies, as they may be amended from time to time during the
course of this Agreement, including, but not limited to, the cost of Executive’s
private club expenses up to $10,000 per fiscal year of the Employment Term.


 


4.             Termination of Employment.


 


(a)           By Death. If Executive dies
prior to the expiration of the Employment Term, his beneficiaries or estate
shall be paid within thirty (30) days of his death any unpaid Base Salary for
services rendered prior to the date of his death, any unreimbursed business
expenses, any accrued but unused vacation for the year of his death, any unpaid
automobile allowance through the month of Executive’s death, any balance on the
annual private club allowance, any awarded but unpaid bonus under Subsection
3(d), any earned but unpaid bonus under Subsection 3(b), any other
earned/awarded but unpaid bonuses, payment for any carried-over vacation from
prior years; provided that the manner and time frame in which the bonuses under
Subsection 3(d) for the remainder of the year of his death will be paid shall
be pursuant to Subsection 4(f). In addition, Executive agrees to enroll in the
Company’s life insurance plan, and the Company will provide a benefit to
Executive’s estate equal to the amount, if any, such life insurance benefit is
less than Executive’s annual Base Salary hereunder. Thereafter, the Company’s
obligations hereunder shall terminate.


 


(b)           By Disability. If Executive
becomes “Permanently Disabled” (as defined below) prior to the expiration of
the Employment Term, then the Company shall be entitled to terminate his
employment, subject to the requirements of applicable law, and Executive shall
be entitled to receive disability benefits in accordance with any applicable
disability policy maintained by the Company as of the date of such disability,
Executive agrees to enroll in such policy. In the event of such termination,
the Company will pay Executive the amount, if any, by which amounts paid under
such disability policy are less than Executive’s Base Salary hereunder for the
year in which he becomes disabled. Additionally, the Company shall pay to
Executive on the date of termination a lump sum payment for: bonuses pursuant
to Subsection 3(d) (if any, other than any awarded/earned but unpaid bonuses
under that Subsection) for the year of termination), pro rated pursuant to
Subsection 4(f); accrued but unused vacation for the year of termination;
payment for any unpaid Base Salary for services rendered prior to the date of
termination; unreimbursed business expenses; any unpaid automobile allowance
through the month of Executive’s termination; any balance on the annual private
club allowance; any earned but unpaid bonus under Subsection 3(b); any other
earned/awarded but unpaid bonuses; and payment for any carried-over vacation
from prior years; provided that the manner and time frame in which the bonuses
under Subsection 3(d) for the remainder of the year of his termination will be
paid shall be pursuant to Subsection 4(f), and thereafter the Company shall
have no further obligations to Executive hereunder other than to provide
Executive with the benefits as set forth in this subparagraph. For the purposes
of this subparagraph, Executive shall be deemed


 


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“Permanently Disabled”
when, and only when, the Company determines, after consultation with Executive’s
physician, that Executive suffers a physical or mental disability that prevents
Executive from performing the essential duties of his position with reasonable
accommodations as may be required by law: (i) for a period of one hundred
twenty (120) consecutive days or (ii) for an aggregate of one hundred fifty
(150) business days in any twelve (12) month period.


 


(c)           By the Company for Cause. If
the Company terminates Executive for “Cause” (as defined below), then the
Company shall pay Executive, within ten (10) days of the termination, his Base
Salary for services rendered prior to the date of termination; accrued but
unused vacation for the year of termination, and any vacation balance for prior
years; any unreimbursed business expenses; and any unpaid automobile allowance
through the month of termination; and thereafter the Company shall have no
obligations to Executive hereunder. For purposes of this Agreement, “Cause”
shall mean: (i) any act or omission that constitutes a material breach by
Executive of any of his obligations under this Agreement, or under any other
material agreement with, or material written policy of the Company, which act
or omission is not cured within thirty (30) days of the Company providing
Executive with reasonably detailed written notice of the act, omission, or
failure deemed to constitute Cause; (ii) the failure or refusal by Executive to
follow any lawful reasonable written direction of the Board of Directors or
CEO, which failure or refusal is not cured within thirty (30) days of the
Company providing Executive with reasonably detailed written notice of the
failure or refusal deemed to constitute Cause; (iii) the conviction of
Executive of a felony or a crime involving moral turpitude or the perpetration
by Executive of fraud; or (iv) any other willful act or omission by Executive,
which is or will be materially injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company, which act
or omission is not cured within thirty (30) days of the Company providing
Executive with reasonably detailed written notice of the act or omission deemed
to constitute Cause.


 


(d)           By Executive for Good Reason. Executive
may terminate, without liability, the Employment Term for “Good Reason” (as
defined below) upon advance written notice of thirty (30) business days to the
Company if such circumstance claimed to constitute Good Reason is not cured
within such 30-day period. Within ten (10) days after termination by Executive
for Good Reason, the Company shall pay to Executive a lump sum payment equal to
the sum of:  one year’s compensation at
the level of his Base Salary at the time of termination; a payment of $8400.00,
or a payment equal to 12 months’ payment of the then-current monthly automobile
allowance, under Subsection 3(g) herein; a payment of $10,000.00, or the
then-current annual allowance, under Subsection 3(h) herein for private club
expenses; any unpaid Base Salary for services rendered prior to termination of
employment; any accrued but unused vacation, pro rated to the date of
termination for the year of termination, and any unpaid balance for prior
years; any unreimbursed business expenses; any balance on the annual private
club allowance for the year in which the termination occurs; any unpaid
automobile allowance through the month of the termination; pro-rated bonuses
pursuant to Subsection 3(d) through the date of such termination; and a single
payment for the cost of continued coverage under the Company’s benefit plans
and the benefits described in Subsection 3(f) herein for a period of one (1)
year following the date of termination. Thereafter, the Company’s obligations
hereunder shall terminate. Thereafter, the Company’s obligations hereunder
shall terminate. For purposes of this Agreement, “Good Reason” shall exist if:
(i) there is a permanent assignment to Executive of a role materially
inconsistent with, or which constitutes a material adverse diminution in,


 


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Executive’s position,
duties, responsibilities, or status with the Company, or a material adverse
diminution in Executive’s reporting responsibilities, title, or offices; or
(ii) there is a material breach by the Company of this Agreement or any other
material agreement between the Company and Executive; or (iv) Executive is
required to relocate his principal place of employment to a location outside a
radius of 50 miles from the Company’s current offices in Houston, Texas.


 


(e)           By the Company other than for
Reasons of Death, Disability, or Cause. If the Company terminates Executive’s
employment for any reason other than death, disability, or Cause, then, within
ten (10) days after termination, the Company shall pay to Executive a lump sum
payment equal to the sum of: one year’s compensation at the level of his Base
Salary at the time of termination; a payment of $8400.00, or a payment equal to
12 months’ payment of the then-current monthly automobile allowance, under
Subsection 3(g) herein; a payment of $10,000.00, or the then-current allowance,
under Subsection 3(h) herein, for private club expenses; any unpaid Base Salary
for services rendered prior to termination of employment; any accrued but
unused vacation, and any unpaid balance for prior years; any unreimbursed
business expenses; any balance on the annual private club allowance; any unpaid
automobile allowance through the month of the termination; pro-rated bonuses
pursuant to Subsection 3(d) through the date of such termination; and a single
payment for the cost of continued coverage under the Company’s benefit plans
and the benefits described in Subsection 3(f) herein for a period of one (1)
year following the date of termination. Thereafter, the Company’s obligations
hereunder shall terminate.


 


(f)            Bonus Calculation. The pro
rata bonuses payable to Executive pursuant to Subsections 4(a), (b), (d), or
(e) for the fiscal year in which the termination occurs will be calculated at
the end of the fiscal year in question according to the following method and
paid to Executive during the calendar year following the fiscal year but in no
event later than the date on which the other executives awarded fiscal year
bonuses are paid those bonuses. The Company and/or Board shall determine the
amount that would have been paid to Executive as if he had remained employed
through the end of the fiscal year (the “Determined Bonus”) and multiply that
amount by the number of days of such fiscal year during which Executive was
employed by the Company divided by 365 days.


 


5.             Proprietary Information.


 


(a)           Defined. “Proprietary
Information” is all proprietary, secret, or confidential information pertaining
to the business of the Company.


 


(b)           General Restrictions on Use. Executive
agrees to hold all Proprietary Information in strict confidence and trust for
the sole benefit of the Company, and not, directly or indirectly, to disclose,
use, copy, publish, summarize, or remove from the Company’s premises any
Propriety Information except: (i) during the Employment Term to the extent
necessary to carry out Executive’s responsibilities under this Agreement; (ii)
to the extent that such Proprietary Information is generally available to the
public other than as a result of disclosure by Executive; and (iii) after
termination of the Employment Term as specifically authorized in writing by the
Board.


 


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6.             No Assignment.


 


(a)           Neither this Agreement nor any right
or interest hereunder shall be assignable by Executive, his beneficiaries, or
legal representatives without the Company’s prior written consent; provided
that nothing in this Subsection 6(a) shall preclude Executive from designating
a beneficiary to receive, upon his death, any benefit payable hereunder, or the
executors, administrators, or other legal representatives of Executive’s estate
from assigning any rights hereunder to the person or persons entitled thereto.


 


(b)           Except as otherwise required by law,
without the Company’s prior written consent, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to exclusion,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void, and of no effect.


 


(c)           The Company agrees that in any Change
of Control, as defined in Section 7 herein, the terms of this Agreement will
survive and will be assumed by any successor to the Company in such Change of
Control.


 


7.             Change of Control. For
purposes of this Agreement, “Change of Control” shall mean: (i) the merger or
consolidation of the Company with another entity, as a result of which the
Company will not be the surviving entity; (ii) the sale of all or substantially
all of the Company’s assets or all or substantially all of the assets of the
Company’s wholly-owned subsidiaries; or (iii) the acquisition, by an entity,
person, or group of beneficial ownership (as defined in Rule 13d-3 under the
Securities and Exchange Act of 1934) of the capital stock of the Company (other
than Peter Kellogg and or related entities) if, immediately after such
acquisition, such entity, person, or group is entitled to exercise more than
25% of the outstanding voting power of all capital stock of the Company
entitled to vote at elections of Directors.


 


8.             Section 409A Issues. Notwithstanding
any provision of this Agreement to the contrary, if at the time of Executive’s
termination of employment with the Company he is a “specified employee” as
defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
then no payment or benefit will be provided with respect to such
termination until the earlier of (A) the date which is six months after
the date of Executive’s termination of employment and (B) the date of Executive’s
death. The first sentence of this Section shall apply only to the extent
required to avoid Executive’s incurrence of any additional tax,
interest, or penalties under Section 409A of the Code or any regulations
or Treasury guidance promulgated thereunder. In addition, if any provision of
this Agreement (or of any award of compensation) would cause Executive to incur
any additional tax, interest, or penalties under Section 409A of the Code
or any regulations or Treasury guidance promulgated thereunder, then
the Company shall reform such provision so that such tax, interest, or
penalties shall be avoided; provided that the Company shall (i) maintain,
to the maximum extent practicable, the original intent of the applicable
provision without violating the provisions of Section 409A of the Code and (ii)
notify and consult with Executive regarding such amendments or modifications
prior to the effective date of any such change.  In the event that the
Company causes the Executive to incur any additional tax, interest, or
penalties under Section 409A of the


 


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Code
or any regulations or Treasury guidance promulgated thereunder, the Company
shall indemnify Executive in the amount of any such amounts.


 


9.             Non-Interference. Executive
agrees that, during any period for which or related to which Executive is
receiving payments pursuant to Section 4 hereof, but, in any event, (other than
a termination by Executive for Good Reason) for no less than 12 months
following a termination of employment, Executive will not, without the prior
written consent of the Company, directly or indirectly, solicit, induce, or
attempt to solicit or induce any employee, agent, or other representative or
associate of the Company to terminate its relationship with the Company or in
any way interfere with such a relationship.


 


10.           Notices. All notices,
requests, claims, demands, and other communications under this Agreement shall
be in writing and shall be deemed given if delivered personally or sent by
overnight courier (providing proof of delivery) or confirmed facsimile to the
Parties at the following addresses (or at such address for a party as shall be
specified by like notice):


 


If to
the Company:


 


TRC
Companies, Inc.

21 Griffin Road North

Windsor, Connecticut 06095

Facsimile: (860) 298-6399

Attn:  General Counsel


 


If to
Executive:


 


Timothy
D. Belton

5428 Braeburn Drive

Bellaire, TX  77401

Facsimile: (713) 662-3582


 


With
a copy to:


 


Nancy
Morrison O’Connor

Bracewell & Giuliani, LLP

2000 K Street, N.W.

Washington, DC     20006

Facsimile: (202) 223-1225


 


11.           Right to Rescind. It shall be
the right of either Party to this Agreement, in its or his sole discretion, to
rescind its or his assent to this Agreement within seventy-two (72) hours of
its or his execution thereof by giving the other Party written notice thereof
and, in the event of such a rescission by either Party, this Agreement shall
immediately be and remain null and void as if never executed, and neither Party
shall have any obligations or rights hereunder.


 


12.           Entire Agreement. The terms of
this Agreement are intended by the Parties to be the final expression of their
agreement with respect to the employment of Executive by the Company and may
not be contradicted by evidence of any prior or contemporaneous agreement.


 


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The Parties further
intend that this Agreement shall constitute the complete and exclusive
statement of its terms and that no extrinsic evidence whatsoever, except as
specifically referenced herein, may be introduced in any judicial,
administrative, or other legal proceeding involving this Agreement.


 


13.           Amendments; Waivers. This
Agreement may not be modified, amended, or terminated except by an instrument
in writing, signed by Executive and by a duly authorized representative of the
Company other than Executive. By an instrument in writing similarly executed,
either Party may waive compliance by the other Party with any provision of this
Agreement that such other Party was or is obligated to comply with or perform;
provided that such waiver shall not operate as a waiver of, or estoppel with
respect to, any other or subsequent failure. No failure to exercise and no
delay in exercising any right, remedy, or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
or power hereunder preclude any other or further exercise thereof, or the
exercise of any other right, remedy, or power provided herein, or by law or in
equity.


 


14.           Confidentiality. Executive
agrees that the terms and conditions of this Agreement are confidential and
shall not be disclosed by Executive to any third parties, other than  Executive’s lawyers and other professional
advisors, unless such disclosure is required by law.


 


15.           Governing Law. The validity,
interpretation, enforceability, and performance of this Agreement shall be
governed by and construed in accordance with the law of the State of Texas
without giving effect to its conflict of laws principles.


 


16.           Executive Acknowledgment. Executive
acknowledges: (i) that he has consulted with or has had the opportunity to
consult with independent counsel of his own choice concerning this Agreement
and has been advised to do so by the Company and that he has been advised by
the Company that it will pay him a maximum of $15,000.00 for fees and expenses
in connection with securing said advice; and (ii) that he has read and
understands the Agreement, is fully aware of its legal effect, and has entered
into it freely based on his own judgment.


 


17.           Binding Effect. This Agreement
shall be binding upon and shall inure to the benefit of the Company and its
respective successors and assigns, but the rights and obligations of Executive
are personal and may not be assigned or delegated without the Company’s prior
written consent. By its execution of the Agreement, the Company represents that
the signatory is authorized to and intends to so bind the Company.


 


18.           Arbitration. Any dispute or
controversy between the Parties arising out of or under this Agreement,
Executive’s employment with the Company, or the termination thereof, including
without limitation, claims under any federal, state, or local statute
preventing discrimination, shall not be decided in court, but instead shall be
submitted to final, binding arbitration before the American Arbitration
Association (the “AAA”) in Houston, TX. The National Rules for Resolution of
Employment Disputes shall be used by the AAA to resolve any disputes between
the Parties. Each Party shall bear its own expenses arising under this
arbitration provision.


 


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19.           Counterparts. This Agreement
may be signed in counterparts, each of which shall be deemed an original and
all of which taken together shall constitute one and the same agreement, and
delivered by facsimile transmission confirmed promptly thereafter by actual
delivery of executed counterparts.


 


20.           Indemnification. To the fullest extent permitted by the
Delaware corporation law, and comparably with other executive officers, the
Company hereby agrees to indemnify, during and after the Employment Term, the
Executive from and against all loss, costs, damages, and expenses including,
without limitation, legal expenses of counsel reasonably selected by Executive
to represent his interests (which expenses the Company will, to the extent so
permitted, advance to Executive as the same are incurred) arising out of or in
connection with the fact that Executive is or was an officer, employee, or
agent of the Company or serving in such capacity for another affiliate or
subsidiary at the request of the Company.


 


21.           Severability.          To the extent any provision of this
Agreement or portion thereof shall be invalid or unenforceable, it shall be
considered deleted therefrom and the remainder of such provision and of this
Agreement shall be unaffected and shall continue in full force and effect.


 


The Parties have duly
executed this Agreement as of the date first written above.


 


	
   

  	
  TRC COMPANIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher P. Vincze

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Christopher
  P. Vincze

  
	
   

  	
   

  	
  Title:

  	
  Chairman,
  President and

  
	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Timothy D. Belton

  	
   

  
	
   

  	
  Timothy
  D. Belton

  
						



 


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