Exhibit 10.1


 


August 5, 2005


 


 


PERSONAL AND CONFIDENTIAL


 


Mr. Albert E. Smith


 


Dear Al:


 


On behalf of Tetra Tech, Inc.,
I am pleased to make you this formal offer to join our Company as its Vice
Chairman with executive responsibilities. 
As I mentioned, your election received the unanimous approval of the
Board at a special meeting yesterday afternoon. 
We believe that your experience at Lockheed Martin, together with your
strategic business knowledge, are a good complement to the vision and mission
of our management at Tetra Tech.  This
letter sets forth the terms of our offer. 
If it is acceptable, please sign and return it to me.


 


Base Salary.  You will be paid an annual base salary of
$200,000 per year.


 


Bonus.  You will receive a bonus of up to $200,000
based on performance metrics, commencing in fiscal 2006.  You may elect to receive the bonus in the
form of cash, equivalent value restricted stock or stock options.


 


Start Date.  Your first day of employment with the Company
will be September 1, 2005.


 


Stock Options.  Upon commencing employment with the Company,
you will receive an incentive stock option to purchase up to 166,667 shares of
Tetra Tech stock at an exercise price equal to the closing price of Tetra Tech’s
stock on September 1, 2005.  This option
will become exercisable in accordance with the following schedule:  (i) 50,000 shares on September 1,
2006, and (ii) 116,667 in 24 equal monthly installments following September 1,
2006.


 


  The option will be exercisable as to vested
shares for three months following the termination of your employment.  Further, the option will become immediately
exercisable for all shares in the event the Company is acquired in a merger or
asset sale, unless the option is assumed by the acquiring entity.  The option will be issued under the Company’s
2002 Stock Option Plan.


 


Termination of
Employment without Cause. 
Your employment is at-will, and can be terminated by you or the Company
at any time, with or without cause.  As
used herein, “cause” means fraud, embezzlement, theft, or violation of law
during the course of your employment, unauthorized disclosure of Tetra Tech
confidential information, intentional breach of Tetra Tech policies, or willful
failure to substantially perform your duties. 
If the 


 





















 


Company terminates your employment without cause, you will receive one
year of base salary plus a pro rated bonus earned during the fiscal year of
termination, both payable weekly (or otherwise subject to Tetra Tech’s regular
payroll schedule) over the course of one year, subject to the terms of the
paragraph below entitled “Conditions for Severance.”


 


Conditions for
Severance.  In the
event that your employment with the Company is terminated without cause, your
receipt of any salary or bonus payments will cease if (i) you become
employed or otherwise affiliated with a business engaged in any industry in
which Tetra Tech operates, (ii) you make an unauthorized disclosure of
Tetra Tech confidential information, or (iii) you disparage the Company in
public.


 


Benefit Plans.  You will be eligible for the customary full
range of employee benefits available to the Company’s executive officers,
including health, dental and life insurance and a retirement program.


 


Housing and Travel.  We understand that you expect to be in Pasadena
approximately one week per month. 
Accordingly, the Company will provide you with an apartment in the
Pasadena area.  Further, the Company will
reimburse you for the costs incurred by you and your fiancé in traveling to and
from Pasadena.  To the extent you incur
any tax liability with respect to these benefits, the Company will pay a “gross
up” to cover such liability.


 


Administrative
Support.  You will
receive the administrative support necessary to perform your duties for the
Company.


 


If this letter is
acceptable, please sign below and return it to me.  I am excited about your joining the Tetra
Tech team and look forward to working with you.


 


	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Li-San Hwang

  	
   

  	
   

  
	
  Li-San
  Hwang

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  	
   

  
	
   

  	
   

  
	
  /s/ Albert E. Smith

  	
   

  	
  8/5/2005

  	
   

  
	
  Albert E. Smith

  	
  Date

  	
   

  
					



 


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