Document:

Exhibit
10.9

 

Tetra Tech, Inc.

 

Employee Stock Purchase Plan

 

(As Amended Through January 1, 2011)

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  ESTABLISHMENT, PURPOSE AND TERM OF PLAN

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Account

  	
  1

  
	
  2.2

  	
   

  	
  Board

  	
  1

  
	
  2.3

  	
   

  	
  Code

  	
  1

  
	
  2.4

  	
   

  	
  Committee

  	
  1

  
	
  2.5

  	
   

  	
  Common
  Stock

  	
  2

  
	
  2.6

  	
   

  	
  Company

  	
  2

  
	
  2.7

  	
   

  	
  Continuous
  Employment

  	
  2

  
	
  2.8

  	
   

  	
  Employee

  	
  2

  
	
  2.9

  	
   

  	
  Exchange
  Act

  	
  2

  
	
  2.10

  	
   

  	
  Fair
  Market Value

  	
  2

  
	
  2.11

  	
   

  	
  Leave
  of Absence

  	
  2

  
	
  2.12

  	
   

  	
  Participant

  	
  2

  
	
  2.13

  	
   

  	
  Plan

  	
  2

  
	
  2.14

  	
   

  	
  Purchase
  Right

  	
  3

  
	
  2.15

  	
   

  	
  Purchase
  Right Period

  	
  3

  
	
  2.16

  	
   

  	
  Stockholders

  	
  3

  
	
  2.17

  	
   

  	
  Subsidiary

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  ELIGIBILITY AND PARTICIPATION

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Eligibility

  	
  3

  
	
  3.2

  	
   

  	
  Payroll
  Withholding

  	
  3

  
	
  3.3

  	
   

  	
  Limitations

  	
  4

  
	
  3.4

  	
   

  	
  Granting
  of Purchase Rights

  	
  4

  
	
  3.5

  	
   

  	
  Establishment
  of Accounts

  	
  4

  
	
  3.6

  	
   

  	
  Special
  Rules for Acquisitions

  	
  5

  
	
  3.7

  	
   

  	
  Change
  in Employment Status; Transfers of Employment

  	
  5

  
	
  3.8

  	
   

  	
  Suspension
  upon Hardship Withdrawal

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  PURCHASE RIGHTS

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Termination
  of Purchase Rights

  	
  5

  
	
  4.2

  	
   

  	
  Exercise
  of Purchase Rights

  	
  6

  
	
  4.3

  	
   

  	
  Termination
  Event

  	
  7

  
	
  4.4

  	
   

  	
  Non-Transferability

  	
  7

  

 

-i-

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  COMMON STOCK

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Shares
  Subject to Plan

  	
  7

  
	
  5.2

  	
   

  	
  Adjustment
  Upon Changes in Capitalization

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  PLAN ADMINISTRATION

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Administration

  	
  8

  
	
  6.2

  	
   

  	
  Indemnification

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  AMENDMENT AND TERMINATION

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Amendment
  and Termination

  	
  9

  
	
  7.2

  	
   

  	
  Stockholder
  Approval

  	
  9

  
	
  7.3

  	
   

  	
  Participating
  Subsidiaries

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  MISCELLANEOUS MATTERS

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Uniform
  Rights and Privileges

  	
  9

  
	
  8.2

  	
   

  	
  Application
  of Proceeds

  	
  9

  
	
  8.3

  	
   

  	
  Notice
  of Disqualifying Disposition

  	
  9

  
	
  8.4

  	
   

  	
  No
  Additional Rights

  	
  10

  
	
  8.5

  	
   

  	
  Accommodation
  of Local Laws

  	
  10

  
	
  8.6

  	
   

  	
  Section 409A

  	
  10

  
	
  8.7

  	
   

  	
  Data
  Privacy

  	
  11

  
	
  8.8

  	
   

  	
  Governing
  Law; Severability

  	
  11

  

 

-ii-

 

Tetra Tech, Inc.

Employee Stock Purchase Plan

(As Amended Through January 1, 2011)

 

Article 1

Establishment, Purpose and Term of Plan

 

The
Tetra Tech, Inc. Employee Stock Purchase Plan (the “Plan”) was originally
established effective as of February 8, 1996.  The purpose of the Plan is to provide
employment incentives for, and to encourage stock ownership by, Eligible
Employees (as defined in Section 3.1 of the Plan) of Tetra Tech, Inc.
or any Subsidiary that maintains the Plan in order to increase their
proprietary interest in the success of the Company.

 

This
amendment and restatement of the Plan is effective as of January 1, 2011
and applies to any Purchase Right Period beginning on or after that date.  As amended and restated, the Plan includes
two components, a Section 423 Component and a Non-423 Component.  The “Section 423 Component” is intended
to qualify as an “employee stock purchase plan” under Code Section 423,
and the Plan shall be so construed.  The “Non-423
Component” means the part of the Plan applicable to certain Subsidiaries that
is not intended to meet the requirements set forth in Code Section 423.  The Plan shall govern the terms and conditions
of grants made under both the Section 423 Component and the Non-423
Component.  Except as otherwise indicated
below, the Non-423 Component will operate and be administered in the same
manner as the Section 423 Component.

 

The
Plan shall continue in effect until the earlier of its termination by the Board
or the date on which all of the shares of Common Stock available for issuance
under the Plan have been issued.

 

Article 2

Definitions

 

Whenever
capitalized in the text, the following terms shall have the meanings set forth
below.

 

2.1                               “Account” shall mean the account established pursuant to Section 3.5
below to hold a Participant’s contributions to the Plan.

 

2.2                               “Board”
shall mean the Board of Directors of Tetra Tech, Inc.

 

2.3                               “Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time.

 

2.4                               “Committee”
shall mean the Board of Tetra Tech, Inc. or a committee designated
by the Board to administer the Plan.  The
Board may appoint and remove members of the Committee at any time.

 

1

 

2.5                               “Common
Stock” shall mean the common stock of Tetra Tech, Inc.

 

2.6                               “Company”
shall mean Tetra Tech, Inc., a Delaware corporation, as well as
any Subsidiary whose employees participate in the Plan with the consent of the
Board.

 

2.7                               “Continuous
Employment” shall mean uninterrupted employment with the
Company.  Employment shall not be
considered interrupted because of (i) transfers of employment between
Tetra Tech, Inc. and a Subsidiary, (ii) transfers of employment
between Subsidiaries, and (iii) any Leave of Absence except as otherwise
provided in Section 2.11.

 

2.8                               “Employee”
shall mean any person in an employee-employer relationship with Tetra
Tech, Inc. or any Subsidiary.  This
term does not include members of the Board unless the Company employs them in a
position in addition to their duties as directors.

 

2.9                               “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

 

2.10                        “Fair
Market Value” shall be determined in accordance with the following
rules.

 

(a)                                 If the Common
Stock is admitted to trading or listed on a national securities exchange,
including but not limited to The NASDAQ Stock Market LLC, Fair Market Value
shall be the last reported sale price regular way, or if no such reported sale
takes place on that day, the average of the last reported bid and ask prices
regular way, in either case on the principal national securities exchange on
which the Common Stock is admitted to trading or listed.

 

(b)                                 If not admitted
to trading or listed on any national securities exchange, Fair Market Value
shall be the closing bid and ask prices on that day as furnished by any member
of the National Association of Securities Dealers, Inc. selected from time
to time by the Company for that purpose.

 

If
the markets were closed on the day in question, Fair Market Value shall be
determined as of the last preceding day on which they were open.

 

2.11                        “Leave
of Absence” shall mean a bona fide leave of absence taken in
accordance with the Company’s leave of absence policy.  A Participant will not be considered to have
incurred a break in Continuous Employment because of a Leave of Absence that
does not exceed ninety (90) days.  If the
Leave of Absence exceeds ninety (90) days, the Participant will be deemed to
have incurred a break in Continuous Employment on the ninety-first (91st) day,
unless statute or contract guarantees the Participant’s rights to reemployment
after the end of such Leave of Absence.

 

2.12                        “Participant”
shall mean an Eligible Employee who has been granted a Purchase Right
under the Plan.

 

2.13                        “Plan” shall mean the
Tetra Tech, Inc. Employee Stock Purchase Plan.

 

2

 

 

2.14                        “Purchase
Right” shall mean a stock option granted pursuant to the Plan.

 

2.15                        “Purchase
Right Period”shall mean the period that begins on the first day
after January 1st on which the Company’s Common Stock is traded and ending
on the last day on which the Company’s Common Stock is traded that occurs
before the next January 1st.

 

2.16                        “Stockholders”
shall mean the holders of Common Stock.

 

2.17                        “Subsidiary”
shall mean a corporation (other than the Company), whether in existence
as of the date of this amendment and restatement or thereafter, in an unbroken
chain of corporations beginning with the Company if each of the corporations
(other than the last corporation in the unbroken chain) owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.

 

Article 3

Eligibility and Participation

 

3.1                               Eligibility.

 

(a)                                 Employees of
Tetra Tech, Inc. and each Subsidiary listed in Appendix A-1 shall be
Eligible Employees with respect to the Section 423 Component of the Plan
except for Employees who are either customarily employed less than twenty (20)
hours per week or for not more than 5 months per calendar year.  With respect to the Non-423 Component of the
Plan, these same eligibility rules apply except that the Committee shall
have the authority to expand or limit eligibility within any Subsidiary listed
in Appendix A-2 in its sole discretion, including but not limited to compliance
with applicable local law.

 

(b)                                 No Employee may
be granted a Purchase Right if the Employee would immediately thereafter own,
directly or indirectly, five percent (5%) or more of the combined voting power
or value of all classes of stock of the Company or of a Subsidiary.  For this purpose, an Employee’s ownership
interest shall be determined in accordance with the constructive ownership rules of
Code Section 424(d).

 

3.2                               Payroll
Withholding.

 

(a)                                 Eligible
Employees may enroll as Participants by designating prior to the commencement
of each Purchase Right Period the dollar amount (not a percentage of
compensation) to be deducted from their paychecks and contributed to their
Accounts for the purchase of Common Stock, which shall not be less than
twenty-five dollars (U.S. $25), or its foreign currency equivalent, per payroll
period.

 

(b)                                 Once chosen,
the rate of contributions for a Purchase Right Period cannot be increased.  However, pursuant to rules and
procedures prescribed by the Committee, a Participant may make additional
contributions to make up any contributions that he or she failed to make while
on a Leave of Absence if the Participant returns to active employment prior to
having a break in Continuous Service and contributes those amounts before the
end of the Purchase Right Period.

 

3

 

3.3                               Limitations.

 

(a)                                 Notwithstanding
anything herein to the contrary, a Participant may not accrue a right to
purchase shares of Common Stock under the Plan at a rate that exceeds five
thousand dollars (U.S. $5,000), or its foreign currency equivalent, per
Purchase Right Period.

 

(b)                                 Furthermore, in
no event may a Participant accrue a right to purchase stock under the Plan and
under all other employee stock purchase plans described in Code Section 423
that are maintained by the Company and its Subsidiaries at a rate that exceeds
twenty-five thousand dollars (U.S. $25,000), or its foreign currency
equivalent, per calendar year.

 

(c)                                  The dollar
limitations of this Section 3.3 apply to the Fair Market Value of Common
Stock determined at the time the Purchase Right is granted.

 

3.4                               Granting
of Purchase Rights.

 

(a)                                 Upon an
Eligible Employee’s enrollment in the Plan, the Committee will, at the
commencement of the Purchase Right Period, grant a Purchase Right to allow the
Participant to purchase the number of whole shares of Common Stock calculated
by:

 

(i)                                     Multiplying the
dollar amount of the deduction designated by the Participant by the number of
payroll periods in the Purchase Right Period; and

 

(ii)                                  Dividing this
sum by the Fair Market Value of a share of Common Stock on the first day of the
Purchase Right Period.

 

(b)                                 Notwithstanding
the provisions of Paragraph (a) above, the price at which each share
covered by a Purchase Right will be purchased will be the lesser of:

 

(i)                                     One hundred
percent (100%) of the Fair Market Value of a share of Common Stock on the first
day of the applicable Purchase Right Period; or

 

(ii)                                  Eighty-five
percent (85%) of the Fair Market Value of a share of Common Stock on the last
day of that Purchase Right Period.

 

(c)                                  Notwithstanding
anything in this Plan to the contrary, in no event can a Participant purchase
more than twenty thousand (20,000) shares of Common Stock in a single Purchase
Right Period.

 

3.5                               Establishment
of Accounts.

 

(a)                                 All amounts
contributed by the Participant to the Plan (by means of payroll withholding)
will be accounted for separately for the benefit of the Participant.  No interest will be earned on those
contributions.

 

(b)                                 A Participant
may not withdraw any amounts from his or her Account without terminating his or
her Purchase Right pursuant to Section 4.1 below.

 

4

 

3.6                               Special
Rules for Acquisitions.   If the Company or a Subsidiary acquires
another entity, whether by means of the purchase of stock or assets (“Acquired
Entity”), the Board may (a) designate a special Purchase Right Period for
the employees of the Acquired Entity, and (b) may treat service with the
Acquired Entity as service with the Company for purposes of the service
requirement of Section 3.1(a).  Any
such treatment shall be made by means of resolutions of the Board, and shall
apply to all of the employees of the Acquired Entity.

 

3.7                               Change
in Employment Status; Transfers of Employment.

 

(a)                                 If an Employee’s
employment situation has changed so that the individual is no longer an
Eligible Employee under Section 3.1 (e.g., because of a reduction of hours
worked), but his or her employment has not been terminated, such Employee shall
not be entitled to make any more contributions to the Plan after the change in
status, but may elect to leave his or her prior contributions in the Plan to be
used to purchase Common Stock at the end of the Purchase Right Period.

 

(b)                                 A Participant
who transfers employment from a Subsidiary listed in either Appendix A-1 (with
respect to the Section 423 Component of the Plan) or Appendix A-2 (with
respect to the Non-423 Component of the Plan) to a Subsidiary that is listed in
a different Appendix (for example, a transfer of employment from a Subsidiary
listed in Appendix A-1 to a Subsidiary listed in either Appendix A-2 or
Appendix A-3) shall not be entitled to make any more contributions to any
component of the Plan after such change in status for the remainder of the then
current Purchase Right Period; provided, however, that any such Participant may
elect to apply his or her contributions made prior to any such transfer towards
the purchase of Common Stock at the end of the then current Purchase Right
Period under the component of the Plan under which such contributions were made
to the Plan.

 

3.8                               Suspension
upon Hardship Withdrawal.

 

(a)                                 If a
Participant receives a distribution from a Section 401(k) plan (or
another similar type of retirement or savings plan) maintained by the Company
(or any other entity affiliated with the Company under Code Section 414)
on account of a financial hardship (“Hardship Withdrawal”) and it is intended
that the Hardship Withdrawal satisfy the safe harbor contained in the Section 401(k) regulations
(or a restriction that is similar to it), the Participant shall be (i) considered
to have withdrawn from the Plan and (ii) precluded from making any
contributions to this plan for at least six (6) months.

 

(b)                                 The Committee
shall prescribe such rules and procedures, as it deems appropriate
regarding suspensions pursuant to this Section 3.8.

 

Article 4

Purchase Rights

 

4.1                               Termination
of Purchase Rights.

 

(a)                                 Upon the
termination of a Purchase Right, all amounts held in the Participant’s Account
shall be refunded to the Participant.

 

5

 

(b)                                 A Participant
may withdraw from the Plan at any time prior to the last day of the Purchase
Right Period by submitting written notice to the Company, which shall be deemed
to be duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.  The Participant’s Purchase Right shall
terminate upon his or her withdrawal from the Plan.

 

(c)                                  A Purchase
Right shall terminate automatically if the Participant holding the Purchase
Right ceases to be in Continuous Employment for any reason prior to the last
day of the Purchase Right Period.

 

(d)                                 Notwithstanding
the provisions of Paragraph (a) above, in the event that a Participant
ceases making contributions during a Purchase Right Period, the Participant may
elect to leave his or her prior contributions in the Plan to be used to
purchase Common Stock at the end of the Purchase Right Period.  However, in no event can a Participant:

 

(i)                                     Reduce (but not
eliminate) his or her contributions during a Purchase Right Period; or

 

(ii)                                  Suspend his or
her contributions and recommence making them in the same Purchase Right Period,
unless due to a Leave of Absence.

 

4.2                               Exercise
of Purchase Rights.

 

(a)                                 Unless
previously terminated, Purchase Rights will be automatically exercised on the
last day of the Purchase Right Period. 
Under no circumstances may Purchase Rights be exercised after the
expiration of 27 months from the date the Purchase Right is granted.

 

(b)                                 Except as
provided in Section 3.2(b) above or an Appendix to the Plan, payment
for shares to be purchased at the termination of the Purchase Right Period may
only be made from funds accumulated through payroll deductions made during the
Purchase Right Period.

 

(c)                                  If the amount
in the Participant’s Account at the end of the Purchase Right Period is
insufficient to purchase all the shares covered by the Purchase Right granted
to the Participant, those funds will be used to purchase as many whole shares
as possible.

 

(d)                                 If the balance of
the Participant’s Account on the date of purchase exceeds the purchase price of
the whole number of shares to be acquired, the surplus shall be refunded to the
Participant in accordance with rules and procedures prescribed by the
Committee.  Any funds remaining after the
last Purchase Right Period are automatically refunded to the Participant.

 

(e)                                  Distribution of
the whole number of shares of Common Stock shall be made as soon as reasonably
possible following the date of the exercise of the Purchase Right either
electronically to the brokerage accounts of the Participants or, if they have
no such accounts, by means of a stock certificate.

 

6

 

4.3                               Termination
Event.  The following provisions of
this Section 4.3 shall apply, notwithstanding anything herein to the
contrary.

 

(a)                                 A “Termination
Event” shall be deemed to occur as a result of:

 

(i)                                     A transaction
in which the Company will cease to be an independent publicly-owned corporation
(as determined by the Committee); or

 

(ii)                                  A sale or other
disposition of all or substantially all of the assets of the Company.

 

(b)                                 All Purchase
Rights shall be automatically exercised as of the Termination Event.

 

4.4                               Non-Transferability.  Neither payroll deductions/contributions
credited to a Participant’s Account nor a Participant’s Purchase Right may be
assigned, transferred, pledged or otherwise disposed of in any manner other
than as provided by the Plan or by will or the laws of descent and
distribution.  Any such attempted
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw from the
Plan.  A Purchase Right shall be
exercisable during the lifetime of the Participant only by the Participant.

 

Article 5

Common Stock

 

5.1                               Shares
Subject to Plan.

 

(a)                                 Effective as of
March 1, 2007, the maximum number of shares of Common Stock available for
issuance under the Plan was 4,373,290, subject to adjustment under Section 5.2
below.  The maximum number of shares of
Common Stock authorized under this Section 5.1 may be issued under the Section 423
Component (provided no shares of Common Stock are issued under the Non-423
Component).

 

(b)                                 Only the number
of shares of Common Stock that are issued under a Purchase Right shall reduce
the number of shares available under the Plan. 
If any outstanding Purchase Right is terminated for any reason prior to
its exercise, the shares allocable to the Purchase Right may again become
subject to purchase under the Plan.

 

(c)                                  The Common
Stock subject to issue under the Plan may be previously unissued stock or may
have been reacquired by the Company in the open market (or otherwise).

 

5.2                               Adjustment
Upon Changes in Capitalization.  A proportionate
adjustment shall be made by the Committee in the number, price, and kind of
shares subject to outstanding Purchase Rights if the outstanding shares of
Common Stock are increased, decreased or exchanged for different securities,
through reorganization, recapitalization, reclassification, stock split, stock
dividend, or other similar transaction not constituting a Termination Event
under Section 4.3 above.

 

7

 

Article 6

Plan Administration

 

6.1                               Administration.

 

(a)                                  The Committee
shall administer the Plan.  The Committee
shall have authority in its sole discretion to:

 

(i)                                     Interpret the
Plan;

 

(ii)                                  Prescribe rules and
procedures relating to the Plan, including without limitation rules and
procedures regarding employment transfers, handling of payroll deductions or
other contributions by Participants, conversion of local currency, data privacy
security, payroll tax, withholding procedures for U.S. source income.

 

(iii)                               Establish rules or
sub-plans applicable to particular Subsidiaries or locations under Section 8.5
of the Plan and updating the Appendices to the Plan; or

 

(iv)                              Take all other
actions necessary or appropriate for the administration of the Plan, including
delegation of administrative duties to officers of Tetra Tech, Inc.

 

Notwithstanding
the foregoing, the provisions of the Section 423 Component of the Plan
shall be interpreted, administered and enforced in accordance with Code Section 423(b),
so as to extend and limit Plan participation in a uniform and nondiscriminatory
basis consistent with the requirements of Code Section 423.

 

(b)                                 A majority of
the members of the Committee shall constitute a quorum, and any action shall
constitute the action of the Committee if it is authorized by:

 

(i)                                     A majority of
the members present at any meeting; or

 

(ii)                                  All of the
members in writing without a meeting.

 

(c)                                  All actions,
decisions and determinations taken or made by the Committee shall be final and
binding on all Participants and any other person having an interest herein.

 

(d)                                 No member of
the Committee shall be liable for any action or inaction made in good faith
with respect to the Plan or any Purchase Right granted under it.

 

6.2                               Indemnification.

 

(a)                                  To the maximum
extent permitted by law, the Company shall indemnify each member of the
Committee and every other member of the Board, as well as any other Employee
with duties under the Plan, against all liabilities and expenses (including any
amount paid in settlement or in satisfaction of a judgment) reasonably incurred
by the individual in connection with any claims against the individual by
reason of the performance of his or her duties under the Plan.  This indemnity shall not apply, however, if:

 

8

 

(i)                                     It is
determined in the action, lawsuit, or proceeding that the individual is guilty
of gross negligence or intentional misconduct in the performance of those
duties; or

 

(ii)                                  The individual
fails to assist the Company in defending against any such claim.

 

(b)                                 Notwithstanding
the above, the Company shall have the right to select counsel and to control
the prosecution or defense of the suit. 
Furthermore, the Company shall not be obligated to indemnify any individual
for any amount incurred through any settlement or compromise of any action
unless the Company consents in writing to the settlement or compromise.

 

Article 7

Amendment and Termination

 

7.1                               Amendment
and Termination.   The Board may amend or terminate
the Plan at any time by means of written action, except with respect to any
outstanding Purchase Rights. Furthermore, the Board may elect to suspend or
recommence the Plan following the end of any Purchase Right Period.

 

7.2                               Stockholder
Approval.  An amendment
to the Plan must be approved by the Stockholders within twelve months of being
adopted by the Board if such amendment would authorize the sale of more Common
Stock than is then authorized for issuance under the Plan (for avoidance of
doubt, not including any adjustment under Section 5.2 above) or would
involve any change that would be considered the adoption of a new plan under
Code Section 423 and Treas. Reg. Sect. 1.423-2(c)(4).

 

7.3                               Participating
Subsidiaries.  The Board
may change, from time to time, the designation of Subsidiaries whose Employees
may participate in the Plan.  For the
avoidance of doubt, the Board shall have the exclusive authority to determine
which Subsidiaries shall participate in the Non-423 Component and which shall
participate in the Code Section 423 Component.  Any change made under this Section 7.3
shall not require shareholder approval.

 

Article 8

Miscellaneous Matters

 

8.1                               Uniform
Rights and Privileges.  The
rights and privileges of all Participants under the Section 423 Component
of the Plan shall be the same.

 

8.2                               Application
of Proceeds.  The proceeds
received by the Company from the sale of Common Stock pursuant to Purchase
Rights may be used for any corporate purpose.

 

8.3                               Notice
of Disqualifying Disposition.  A Participant
must notify the Company if the Participant disposes of stock acquired pursuant
to the Section 423 Component of the Plan prior to the expiration of the
holding periods required to qualify for long-term capital gains treatment on
the sale.

 

9

 

8.4                               No
Additional Rights.

 

(a)                                  Neither the
adoption of this Plan nor the granting of any Purchase Right shall:

 

(i)                                     Affect or
restrict in any way the power of the Company to undertake any corporate action
otherwise permitted under applicable law; or

 

(ii)                                  Confer upon any
Participant the right to continue to be employed by the Company, nor shall it
interfere in any way with the right of the Company to terminate the employment
of any Participant at any time, with or without cause.

 

(b)                                 No Participant
shall have any rights as a Stockholder with respect to the shares covered by a
Purchase Right until the time at which the Fair Market Value of the Common
Stock is determined on the last day of the Purchase Right Period in which the
shares were purchased.

 

(c)                                  No adjustments
will be made for cash dividends or other rights for which the record date is
prior to the date of the exercise of the Purchase Right.

 

8.5                               Accommodation
of Local Laws.  The Committee
may adopt rules or procedures relating to the operation and administration
of this Plan to accommodate the specific requirements of local laws and
procedures.  Without limiting the
generality of the foregoing, the Committee is specifically authorized to adopt rules and
procedures regarding handling of payroll deductions or other contributions by
Participants, payment of interest, conversion of local currency, obligations to
pay payroll tax, determination of beneficiary designation requirements,
withholding procedures and handling of stock certificates that vary with local
requirements; however, if such varying provisions are not in accordance with
the provisions of Code Section 423(b), including but not limited to the
requirement of Code Section 423(b)(5) that all options granted under
the Plan shall have the same rights and privileges unless otherwise provided
under the Code and the regulations promulgated thereunder, then the individuals
affected by such varying provisions shall be deemed to be participating under a
sub-plan and not the Plan.  The Committee
may also adopt rules, procedures or sub-plans applicable to particular
Subsidiaries or locations, which may be designed to be within or outside the
scope of Code Section 423.  Such rules or
sub-plans may take precedence over other provisions of the Plan, but unless
otherwise superseded by the terms of such rules or sub-plan, the
provisions of the Plan shall govern.

 

8.6                               Section 409A.  The Section 423
Component of the Plan shall be exempt from the application of Section 409A
of the Code as a stock right that does not provide for the deferral of
compensation.  The
Non-423 Component of the Plan shall be exempt from Section 409A of the
Code under the short-term deferral exception and any ambiguities in the Plan
shall be construed and interpreted in accordance with such intent.  The Company shall have no liability to a
Participant or any other party if a Purchase Right that is intended to be
exempt from Code Section 409A is not so exempt or for any action taken by
the Board or the Committee with respect thereto.  The Company makes no representation that a
Purchase Right is exempt from Code Section 409A.

 

10

 

8.7                               Data
Privacy.  By
participating in the Plan, each Participant agrees to the collection,
processing, use and transfer of personal information by the entity that employs
the Participant, the Company, the Committee and its designees in order to
administer the Plan.

 

8.8                               Governing
Law; Severability.  The Plan and
all actions taken under it shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to conflicts of laws
principles.  If any provision of the Plan
(including all or any part of an Appendix hereto) shall be held unlawful or
otherwise invalid or unenforceable in whole or in part, the unlawfulness,
invalidity or unenforceability shall not affect any other provision of the Plan
or part thereof, each of which shall remain in full force and effect.  Venue for any dispute involving the Plan
shall be in Los Angeles County, California.

 

11

 

Appendix A-1

 

List of Subsidiaries Whose Employees are Designated to

Participate in the Section 423 Component of the Plan

 

	
  Name of Entity

  	
   

  	
  Domicile

  
	
  Advanced
  Management Technology, Inc.

  	
   

  	
  United
  States

  
	
  Ardaman &
  Associates, Inc.

  	
   

  	
  United
  States

  
	
  Bryan
  A. Stirrat & Associates

  	
   

  	
  United
  States

  
	
  Consentini
  Associates, Inc.

  	
   

  	
  United
  States

  
	
  Engineering
  Management Concepts, Inc.

  	
   

  	
  United
  States

  
	
  GeoTrans, Inc.

  	
   

  	
  United
  States

  
	
  Hartman &
  Associates, Inc.

  	
   

  	
  United
  States

  
	
  Haselwood
  Enterprises, Inc.

  	
   

  	
  United
  States

  
	
  INCA
  Engineers, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech Construction Services, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech EC, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech EM Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech Executive Services, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech Facilities Construction, LLC

  	
   

  	
  United
  States

  
	
  Tetra
  Tech NUS, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech Technical Services, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech Tesoro, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech WEC, Inc.

  	
   

  	
  United
  States

  
	
  The
  Delaney Group, Inc

  	
   

  	
  United
  States

  
	
  Western
  Utility Contractors, Inc.

  	
   

  	
  United
  States

  

 

12

 

APPENDIX A-2

(As of January 1, 2011)

 

List of Subsidiaries Whose Employees are Designated to

Participate in the Non-Section 423 Component of the Plan

 

	
  Name of Entity

  	
   

  	
  Domicile

  
	
  ARD, Inc.

  	
   

  	
  United
  States

  
	
  BPR Inc.

  	
   

  	
  Canada

  
	
  EBA
  Engineering Consultants Ltd.

  	
   

  	
  Canada

  
	
  Tetra
  Tech Australia Pty. Ltd.

  	
   

  	
  Australia

  
	
  Tetra
  Tech Canada Construction Inc.

  	
   

  	
  Canada

  
	
  Tetra
  Tech ENE, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech ES, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech IC, Inc.

  	
   

  	
  Canada

  
	
  Tetra
  Tech India Limited

  	
   

  	
  India

  
	
  Tetra Tech ES India Limited

  	
   

  	
  India

  
	
  Tetra
  Tech MA, Inc.

  	
   

  	
  United
  States

  
	
  Tetra
  Tech Middle East Limited

  	
   

  	
  United
  Kingdom

  
	
  Wardrop
  Engineering Inc.

  	
   

  	
  Canada

  

 

13

 

APPENDIX A-3

(As of January 1, 2011)

List of Subsidiaries Ineligible to Participate in the Plan

 

	
  Name of Entity

  	
   

  	
  Domicile

  
	
  Tetra Tech Argentina S.A.

  	
   

  	
  Argentina

  
	
  Tetra
  Tech Caribe, Inc.

  	
   

  	
  Puerto
  Rico

  
	
  Tetra
  Tech (Beijing) Consultancy Company Limited

  	
   

  	
  China

  
	
  Tetra
  Tech ENE China, Ltd.

  	
   

  	
  China

  
	
  Tetra
  Tech International (BVI) Ltd.

  	
   

  	
  British
  Virgin Islands

  
	
  Tetra
  Tech International S.R.L.

  	
   

  	
  Peru

  
	
  Taheel
  Tetra Tech L.L.C.

  	
   

  	
  Saudi
  Arabia

  
	
  Wardrop
  (Ghana) Ltd.

  	
   

  	
  Ghana

  

 

14

 

APPENDIX B

(As of January 1, 2011)

Australia Addendum

 

1.                                       Purpose.  This Appendix B (the “Australia Addendum”) to
the Tetra Tech, Inc. Employee
Stock Purchase Plan, as amended (the “U.S. Plan”) is hereby adopted
under Section 8.5 of the U.S. Plan to set forth certain rules which,
together with the provisions of the U.S. Plan (which are modified by this
Appendix B in certain respects to comply with the requirements of Australian
law), shall govern the operation of the Plan with respect to Australian
resident employees of its Australian Subsidiary.  The Australia Addendum is intended to comply
with the provisions of the Corporations Act 2001, ASIC Policy Statement 49 and
ASIC Class Order 03/184 issued pursuant to that policy statement.

 

2.                                       Definitions.  Except as set forth below, capitalized terms
used herein shall have the meaning ascribed to them in the U.S. Plan.  In the event of any conflict between the
provisions set forth in the Australia Addendum and the U.S. Plan, the Australia
Addendum provisions shall prevail.  For
purposes of the Australia Addendum:

 

ASIC”
means the Australian Securities & Investments Commission.

 

“Associated
Body Corporate” means, as determined in accordance with the Corporations Act
2001:

 

(a)                                  a body
corporate that is a related body corporate of the Company;

 

(b)                                 a body
corporate that has voting power in the Company of not less than 20%; or

 

(c)                                  a body
corporate in which the Company has voting power of not less than 20%.

 

“Australian
ADI” means an Australian authorized deposit taking institution which is
regulated by the Australian Prudential Regulation Authority under the
Australian Banking Act 1959.

 

“Australian
Subsidiary” means any Australian Associated Body Corporate.  For avoidance of doubt, Tetra Tech Australia
Pty. Ltd. is the Australian Subsidiary as of the date of this amendment and
restatement of the U.S. Plan.

 

“Plan”
means collectively the U.S. Plan and the Australia Addendum.

 

“Shares”
means shares of the Company’s Common Stock.

 

“U.S.
Plan” means the Tetra Tech, Inc. Employee Stock Purchase Plan, as amended
from time to time.

 

3.                                       Form of
Awards.  Only Shares and rights to
acquire Shares shall be awarded to Eligible Employees (as defined in paragraph
4 below) employed by the Australian Subsidiary under the Plan.

 

15

 

4.                                       Eligible
Employees.  The offer
under the Plan must be extended only to persons who at the time of the
beginning of the Purchase Right Period are full or part-time employees or
directors of an Australian Subsidiary (for purposes of the Australia Addendum, “Australian
Employees”).

 

5.                                       Form of
Offer.  Any offer under the Plan must
be in writing (“Offer Document”) and must include or be accompanied by a copy
of the rules of the Plan.  The
Company must take reasonable steps to ensure that any Eligible Employee to whom
an offer under the Plan is made is given a copy of the Offer Document.  The Offer Document must also state the name
of the Australian ADI where contributions are held, the length of time they may
be held and the rate of interest payable (if any).  The Offer Document will include a statement
to the effect that any advice given by the Company or an Australian Subsidiary in
connection with the offer is general advice only, and that Australian offerees
should consider obtaining their own financial product advice from an
independent person who is licensed by ASIC to give such advice.

 

6.                                       Australian
Dollar Equivalent of Purchase Price at Offer Date.  The Offer Document must specify the
Australian dollar equivalent of the purchase price of the Shares offered were
the formula in Section 3.4 of the U.S. Plan applied at the date of the
Offer Document.

 

7.                                       Updated
Purchase Price Information.  The Offer Document must include an
undertaking that, and an explanation of the way in which the Company or its
Australian Subsidiary must, within a reasonable period of an Eligible Employee
so requesting, make available to the Eligible Employee the following
information:

 

(a)                                  the Australian
dollar equivalent of the current market price of shares in the same class as
the Shares to which the offer relates; and

 

(b)                                 the Australian
dollar equivalent of the purchase price as if Section 3.4 of the U.S. Plan
were applied at the date of the Eligible Employee’s request.

 

For
the purposes of the above calculation, the current market price of a Share
shall be taken as the price published by the principal exchange on which the
Share is quoted as the closing price for the previous day on which the Share
was traded on the stock market of that exchange.

 

8.                                       Exchange Rate
for Australian Dollar Equivalent of the Purchase Price. For the
purpose of paragraphs 6 and 7 above, the Australian dollar equivalent of the purchase
price under Section 3.4 of the U.S. Plan and current market price of a
Share shall be calculated by reference to the Australian/U.S. dollar exchange
rate published by an Australian bank on the previous business day.

 

9.                                       Restriction on
Capital Raising: 5% Limit.  In
the case of an offer of Shares or options for issue under the Plan, the number
of Shares subject of the offer or to be received on exercise of an option, when
aggregated with the Offer Shares, must not exceed 5% of the total number of
issued Shares in that class of the Company as at the time of the offer.

 

In
calculating the Offer Shares, the following must be counted:

 

16

 

(a)                                  the number of
Shares in the same class that would be issued were each outstanding offer or
option to acquire unissued Shares, being an offer made or option acquired
pursuant to an employee share scheme extended only to employees or directors of
the Company or of Associated Bodies Corporate, to be accepted or exercised (as
the case may be), and

 

(b)                                 the number of
Shares in the same class issued during the previous 5 years pursuant to the
Plan or any other employee share scheme extended only to employees or directors
of the Company or of Associated Bodies Corporate.

 

In
calculating the Offer Shares, disregard any offer made, or option acquired or
Share issued by way or as a result of:

 

(c)                                  an offer to a
person situated at the time of receipt of the offer outside Australia,

 

(d)                                 an offer that
was an excluded offer or invitation within the meaning of the Corporations Law
as it stood prior to 13 March 2000,

 

(e)                                  an offer that
did not need disclosure to investors because of section 708 of the Corporations
Act 2001,

 

(f)                                    an offer that
did not require the giving of a Product Disclosure Statement (within the
meaning of the Corporations Act 2001) because of section 1012D of the
Corporations Act 2001, or

 

(g)                                 an offer made
under a disclosure document or a Product Disclosure Statement.

 

10.                                 Providing Offer
Document to ASIC.  A copy of the
Offer Document (which need not contain details of the offer particular to the
offeree such as the identity or entitlement of the offeree) and each
accompanying document must be provided to ASIC not later than 7 days after the
provision of that material to the offeree.

 

11.                                 Compliance with
Undertakings.  The Company
or an Australian Subsidiary must comply with any undertaking required to be
made in the Offer Document, such as the undertaking to provide pricing
information on request.

 

12.                                 No Loan or
Financial Assistance. Neither the Company nor any Associated Body
Corporate may offer employees any loan or other financial assistance for the
purpose of, or in connection with, the acquisition of the Shares to which the
offer relates.

 

13.                                 Contribution
Plan. All contributions from wages or salary made in connection with
participation in the Plan must be authorized by the offeree on the same form of
application which is used in respect of the offer, or on a form that is
included in or accompanies the Offer Document. 
Any contributions made by an offeree as part of the Plan must be held by
the Company for the offeree in an account of an Australian ADI which is
established and kept by the 

 

17

 

Company
solely for the purpose of depositing contribution moneys and other money paid
by employees for the Shares on offer under the Plan.

 

The
Australian offeree may elect to discontinue their participation in the Plan
under procedures established under the Plan, and as soon as practicable after
that election is made, all money deposited with the Australian ADI in relation
to that offeree shall be returned.

 

18

 

APPENDIX C

(As of January 1, 2011)

Canada Addendum

 

1.                                       Purpose.  This Appendix C (the “Canada Addendum”) to
the Tetra Tech, Inc. Employee
Stock Purchase Plan, as amended (the “U.S. Plan”) is hereby adopted
under Section 8.5 of the U.S. Plan to set forth certain rules which,
together with the provisions of the U.S. Plan (which are modified by this
Appendix C in certain respects to comply with the requirements of Canadian
national and provincial law), shall govern the operation of the Plan with
respect to Canadian residents employed by Subsidiaries domiciled in Canada.

 

2.                                       Deductions.  A Participant may specify as the amount to be
deducted from his or her compensation an amount that may not be less than $10
(Canadian dollars) per pay period.  Check
or money order contributions are to be included in the $5,000 (U.S. dollars)
limitation per Purchase Right Period described in Section 3.3(a) of
the U.S. Plan.

 

3.                                       Continuous
Employment.  A
Participant shall be considered to have a break in Continuous Employment upon
the earlier of the date that the Participant is notified that his or her
employment has been terminated (without immediate re-employment by the Company
or a Subsidiary) or the date on which the Participant provides notice of his or
her termination of employment.

 

4.                                       Disposition of
Shares.  Shares acquired by Canadian
residents who participate in the Plan shall only be disposed of over the NASDAQ
Stock Market or as otherwise may be permitted under Canadian securities law.

 

5.                                       Participant
Consent to Receive Information in English.  The Company shall obtain a written consent
from a Canadian resident of Quebec who is a Participant in the following form
before providing documents, notices and legal proceedings in English.

 

Les parties reconnaissent avoir exig la rdaction
en anglais de cette convention, ainsi que de tous documents excuts, avis donns
et procedures judiciaries intentes, directement ou indirectement, relativement
ou suite la prsente convention.

 

19

 

APPENDIX D

(As of January 1, 2011)

Germany Addendum

 

1.                                       Purpose.  This Appendix D (the “Germany Addendum”) to
the Tetra Tech, Inc. Employee
Stock Purchase Plan, as amended (the “U.S. Plan”) is hereby adopted
under Section 8.5 of the U.S. Plan to set forth certain rules which,
together with the provisions of the U.S. Plan (which are modified by this
Appendix D in certain respects to comply with the requirements of applicable
German, EU and U.S. law), shall govern the operation of the Plan with respect
to German residents employed by Subsidiaries domiciled in Germany.

 

2.                                       Shares Subject
to Plan.  Notwithstanding Article 5
of the U.S. Plan, the aggregate value of the shares of Common Stock (the “Shares”)
and any securities of the same class as the Shares offered by the Company in
the European Union, whether offered through the Plan or otherwise, shall be
limited so that it never exceeds 2.5 million euros in any 12-month period or
such higher limit as may be adopted for an exemption under the EU prospectus requirements.

 

3.                                       Eligible
Employees. 
Notwithstanding anything to the contrary in Section 3.1, all
Employees, including Employees employed on part-time or temporary basis, who
provide services in Germany and are employed by a Subsidiary domiciled in
Germany shall be treated as Eligible Employees under Article 3 of the U.S.
Plan.

 

20

 

APPENDIX E

(As of January 1, 2011)

India Addendum

 

[Reserved]

 

21

 

APPENDIX F

(As of January 1, 2011)

U.K. Addendum

 

1.                                       Purpose.  This Appendix F (the “U.K. Addendum”) to the
Tetra Tech, Inc. Employee Stock
Purchase Plan, as amended (the “U.S. Plan”) is hereby adopted under Section 8.5
of the U.S. Plan to set forth certain rules which, together with the
provisions of the U.S. Plan (which are modified by this Appendix F in certain
respects to comply with the requirements of applicable local law), shall govern
the operation of the Plan with respect to U.K. resident employees employed by Subsidiaries
domiciled in the United Kingdom of Great Britain (“U.K.”).

 

2.                                       Shares Subject
to Plan.  Notwithstanding Article 5
of the U.S. Plan, the aggregate value of the shares of Common Stock (the “Shares”)
and any securities of the same class as the Shares offered by the Company in
the European Union, whether offered through the Plan or otherwise, shall be
limited so that it never exceeds 2.5 million euros in any 12-month period  or such higher limit as may be
adopted for an exemption under the EU prospectus requirements.

 

3.                                       Eligible
Employees. 
Notwithstanding anything to the contrary in Section 3.1, all
Employees, including Employees employed on part-time or temporary basis, who
provide services in the U.K. and are employed by a Subsidiary domiciled in the
U.K. shall be treated as Eligible Employees under Article 3 of the U.S.
Plan.

 

4.                                       Data Protection.  It shall be a term and condition of each
award granted under this Appendix F that the Eligible Employee agrees and
consents to:

 

(a)                                  the collection,
use and processing of his or her Personal Data (as defined below) by Tetra Tech, Inc.
and any Subsidiary and the transfer of his or her Personal Data to any third
party administrator of the Plan and any broker through whom shares of Common
Stock are to be sold on behalf of the Eligible Employee;

 

(b)                                 Tetra Tech, Inc.,
its Subsidiaries and the third party administrator of the Plan transferring the
Eligible Employee’s Personal Data amongst themselves for the purposes of
implementing, administering and managing the Plan and the grant of awards and
the acquisition of shares of Common Stock pursuant to the Plan;

 

(c)                                  the use of
Personal Data by any such person for any such purposes; and

 

(d)                                 the transfer to
and retention of Personal Data by third parties (including any situated outside
the European Economic Area) for or in connection with such purposes.

 

For
the purpose of this paragraph 4, “Personal Data” means an Eligible Employee’s
name, home address, e-mail address and telephone number, date of birth, social
security number or equivalent, details of all rights to acquire shares of
Common Stock or other securities issued or transferred to such Eligible
Employee pursuant to this Plan and any other personal information which could
identify the Eligible Employee and is necessary for the administration of the
Plan.

 

22

 

5.                                       Taxes.

 

(a)                                  The Eligible
Employee subject to this Appendix F agrees to indemnify and keep indemnified
the Company from and against any liability for or obligation to pay any tax
liability that is attributable to: (i) the grant or exercise of a Purchase
right; (ii) the acquisition by the Participant of the Common on exercise
of a Purchase right; or (iii) the disposal of any shares of Common Stock,
(a “Tax Liability”).

 

(b)                                 At the
discretion of the Committee, the Purchase Right cannot be exercised until the
Eligible Employee has entered into an election with his or her employer (the “Employer”)
(in a form approved by the Employer and HMRC) (a “joint election”) under which
any liability of the Employer for Employer’s National Insurance Contributions
arising in respect of the grant, exercise of or other dealing in the Purchase
Right, or the acquisition of the shares on exercise of the option, is
transferred to and met by the Participant. 
Without prejudice to the terms of the Plan, the Purchase Right cannot be
exercised until the Eligible Employee has made such arrangements as the Company
may require for the satisfaction of any Tax Liability that may arise in connection
with the exercise of the Purchase Right and/or the acquisition of the shares by
the Eligible Employee.

 

(c)                                  Where any Tax
Liability is likely to arise, the Company, the Employer or any Subsidiary may
recover from the Eligible Employee an amount of money sufficient to meet the
Tax Liability by any of the following arrangements: (i) deduction from
salary or other payments due to the Eligible Employee; or (ii) withholding
the issue, allotment or transfer to the Eligible Employee of that number of
shares (otherwise to be acquired by the Eligible Employee on the exercise of
the option) whose aggregate market value on date of exercise is, so far as
possible, equal to, but not less than, the amount of Tax Liability (together
with the fees and expenses incurred in the sale of the shares, where the
company intends to sell the shares to meet the Tax Liability); or (iii) withholding
the issue, allotment or transfer to the Eligible Employee of the shares
otherwise to be acquired by the Eligible Employee pursuant to the option until
such Employee has demonstrated to the satisfaction of the Company or the
Employer that he has given irrevocable instructions to a third party (for
example a broker) satisfactory to the Company or the Employer to sell
sufficient of those shares to ensure the net proceeds are so far as possible,
equal to but not less than, the amount of the tax liability.

 

(d)                                 Paragraph (c) above
will not apply where the Eligible Employee has, before the allotment, issuance
or transfer of the shares to be issued or transferred to the Eligible Employee
as a result of the exercise of a Purchase Right, paid to the Company or the
Employer, in cleared funds a sum equal to the Tax Liability arising on the
exercise of the Purchase Right.

 

23Exhibit 10.19

 

 

EXECUTIVE COMPENSATION POLICY

 

 

	
  Approved
  as amended

  	
   

  	
  November 7,
  2010

  
	
  Document
  Owner:

  	
   

  	
  Board
  of Directors

  

 

Page 1 of 14

 

Tetra Tech Confidential

 

 

TABLE OF CONTENTS

 

Section

 

	
  1.0

  	
  PURPOSE

  
	
  2.0

  	
  PHILOSOPHY

  
	
  3.0

  	
  SCOPE

  
	
  4.0

  	
  ROLES
  AND RESPONSIBILITIES

  
	
  5.0

  	
  EXECUTIVE
  COMPENSATION COMPONENTS AND PLAN

  
	
  6.0

  	
  PROCESS
  FLOW/SCHEDULE

  
	
  7.0

  	
  APPENDIX
  I — EXAMPLES OF ANNUAL INCENTIVE BONUS

  
	
  8.0

  	
  APPENDIX
  II — RESTRICTED STOCK PLAN SUMMARY AND EXAMPLES

  
	
  9.0

  	
  APPENDIX
  III — TIMING OF EXECUTIVE EQUITY AWARDS

  
	
  10.0

  	
  APPENDIX
  IV — DETERMINATION OF NET INCOME

  

 

Page 2 of 14

 

Tetra Tech Confidential

 

 

1.0                               PURPOSE

 

The
purpose of this document is to define the executive compensation policy for
Tetra Tech, Inc. “Tetra Tech” or the “Company”.

 

2.0                               PHILOSOPHY

 

Tetra
Tech’s executive compensation program is designed to

 

·                  Align the interests of
executive officers with those of the stockholders;

 

·                  Attract, motivate, reward and
retain top level executives upon whom, in large part, the success of the
Company depends;

 

·                  Be competitive with
compensation programs for companies of similar size and complexity with whom
the Company competes for executive talent, including direct competitors;

 

·                  Provide compensation based
upon the short-term and long-term performance of both the individual executive
and the Company; and

 

·                  Strengthen the relationship
between pay and performance by emphasizing variable, at-risk compensation that
is dependent upon the successful achievement of specified corporate and
individual goals.

 

We
believe a significant portion of executive officer pay should be at risk, and
based upon performance.  Therefore, base
salaries are targeted for approximately the median of the peer group.   Conversely, compensation at risk,
specifically bonuses and equity grants, are targeted to provide compensation
that is above the median of our peers when above average business results are
attained.

 

3.0                               SCOPE

 

This
policy applies to all executive officers of Tetra Tech.

 

4.0                               ROLES
AND RESPONSIBILITIES

 

Board
of Directors

 

·                  Approves this Executive
Compensation Policy;

 

·                  Delegates authority as
specified in this policy to the Compensation Committee; and

 

·                  Approves positions to be
covered by this policy as recommended by the Chairman/CEO.

 

Compensation
Committee

 

·                  Under delegated authority
from the Board of Directors, develops, administers and monitors executive
compensation in the long-term interests of the Company and its stockholders;

 

·                  Evaluates the performance
and establishes the compensation of the Chairman/CEO;

 

Page 3 of 14

 

Tetra Tech Confidential

 

 

·                  Establishes the compensation
of all other executive officers of the Company based, in part, on the
Chairman/CEO’s recommendations;

 

·                  Determines that performance
goals have been attained before payment; and

 

·                  Reserves the right to
approve exceptions to this policy as recommended by the Chairman/CEO (subject
to the terms of the Executive Compensation Plan described in Section 5.2).

 

Audit
Committee

 

·                  Jointly with the
Compensation Committee determines the individual performance factor for the CFO
position.

 

Chairman/CEO

 

·                  Reviews the performance of
all other officers of the Company and makes specific recommendations to the
Compensation Committee in regard to their compensation; and

 

·                  Develops performance targets
for all other executive officers and recommends those targets to the
Compensation Committee.

 

Human
Resources

 

·                  Acquires information
regarding peer group and other competitor pay practices, and provides analysis
of this information to the Chairman/CEO and the Compensation Committee; and

 

·                  Provides compensation
practice trend data to the Chairman/CEO, and the Compensation Committee.

 

Finance
and Accounting

 

·                  Provides Corporate
performance data for use in determining the degree to which certain performance
objectives have been met; and

 

·                  Assures payments have been
properly accrued and reported.

 

5.0                               EXECUTIVE
COMPENSATION COMPONENTS AND PLAN

 

The
primary components of compensation for executive officers are base salary,
annual performance bonuses and long-term incentive compensation.

 

5.1          Base
Salary

 

Base
salaries for executive officers are reviewed on an annual basis to ensure
internal equity and external competitiveness. 
Salaries are reviewed to determine whether the base compensation is
within a reasonable range of executive pay levels at other companies that
potentially compete with the Company for business and executive talent.  Total compensation is considered during this
analysis.  Consideration is given to
individual performance, experience and time in the 

 

Page 4 of 14

 

Tetra Tech Confidential

 

 

position,
initiative, contribution to overall corporate performance, and salaries paid to
other executives in the Company.  The
review and determination occur as shown in Section 6.0.

 

5.2          Annual
Performance Bonuses

 

Executive
officer bonuses shall be subject to the terms of the Company’s Executive
Compensation Plan as adopted by the Board on November 10, 2008 (the “Plan”).  Specifically, no bonus may exceed the
applicable percentage of the Company’s Net Income set forth in Section 5
of the Plan.  Unless otherwise specified
by the Compensation Committee within 90 days after the beginning of a Plan Year
under the Plan, the term “Net Income” shall be as defined in Appendix IV of
this Policy.  Notwithstanding any term or
provision set forth in this Policy, in the event of any inconsistency between
this Policy and the Plan, or the exercise of any discretion on the part of the
Compensation Committee pursuant to this Policy, the terms of the Plan shall
control and supersede the inconsistent term or provision of this Policy or the
exercise of discretion hereunder.

 

This
component is intended to promote the interests of the Company by providing both
an incentive and a financial reward for key employees who contribute most to
the operating results and growth of the Company.  Each year the Company identifies a target
amount of incentive compensation for each executive officer.  This target is expressed as a percentage of
base salary.

 

Bonuses
are paid based upon meeting pre-determined performance criteria.  These criteria fall into two categories:  (1) overall corporate performance,
designated the Corporate Performance Factor (CPF), based on an assessment of
how Company did on an overall basis in achieving its key objectives and (2) individual
contribution, designated the Individual Factor (IF), based on individual
performance.  The CPF, determined by the
Compensation Committee, will have a range of 0 to 1.4 with a target of 1.0
based on the achievement of key objectives. 
The CPF for group presidents will be determined by the Chairman/CEO
based on the contribution of the specific group to the Company.  The IF will have a range of 0 to 1.2 with a
target of 1.0 for expected contribution level for each covered position.  The IF will be recommended by the
Chairman/CEO and approved by the Compensation Committee, with the exception of
the Chairman/CEO and CFO positions.  The
IF for the Chairman/CEO will be determined by the Compensation Committee.   The IF for the CFO will be recommended by
the Chairman/CEO and determined jointly by the Audit Committee and Compensation
Committee, giving strong consideration to the Audit Committee’s assessment of
the strength of the Company’s internal financial controls and the accuracy and
appropriateness of its financial reporting.

 

Target
bonus amounts as a percentage of base salary are as follows:

 

TARGET BONUS AMOUNTS

 

	
  POSITION

  	
   

  	
  PERCENTAGE (%)

  	
   

  
	
  Chairman/CEO/President

  	
   

  	
  120

  	
   

  
	
  Chief Financial Officer

  	
   

  	
  75

  	
   

  
	
  Group Presidents

  	
   

  	
  75

  	
   

  
	
  Other Executive Officers

  	
   

  	
  50

  	
   

  

 

Page 5 of 14

 

Tetra Tech Confidential

 

 

Each
Officer is eligible to receive an annual bonus in the range of 0% to 168% of
target, i.e., CPF (1.4) x IF (1.2) = 1.68 (168%) x target.

 

MINIMUM/MAXIMUM OF BASE

 

	
  POSITION

  	
   

  	
  TARGET PERCENTAGE

  (%)

  	
   

  	
  MINIMUM (%)

  	
   

  	
  MAXIMUM (%)

  	
   

  
	
  Chairman/CEO/President

  	
   

  	
  120

  	
   

  	
  0

  	
   

  	
  202

  	
   

  
	
  Chief Financial Officer

  	
   

  	
  75

  	
   

  	
  0

  	
   

  	
  126

  	
   

  
	
  Group Presidents

  	
   

  	
  75

  	
   

  	
  0

  	
   

  	
  126

  	
   

  
	
  Other Executive Officers

  	
   

  	
  50

  	
   

  	
  0

  	
   

  	
  84.0

  	
   

  

 

The
Compensation Committee reserves the right to “zero” the CPF if results are
significantly below expected targets or a manageable event negatively and
severely impacts stockholder value.  The
minimum performance threshold is .6; achievement of less than 60% in either the
CPF or IF will result in the elimination of the bonus paid.  Notwithstanding the above, the Compensation
Committee, in consultation with the Chairman/CEO, reserves the discretion to
adjust specific performance bonus amounts when deemed to be in the interests of
the stockholders.  Bonus payments are
made by December 15 of each year, based upon performance in the recently
concluded fiscal year.

 

5.3          Long-Term
Incentive Compensation

 

Long-term
incentive awards are designed to:

 

·                  Reward financial performance
and encourage recipients to achieve long term sustained growth of stockholder
value.  The long-term incentive
compensation program encourages executives to maintain a long-term financial
perspective by linking a substantial portion of their compensation to
stockholder returns and the Company’s long-term financial success;

 

·                  Aid in the retention of key
executives;

 

·                  Balance the effect of market
dynamics on equity compensation;

 

·                  Take into consideration the
effect of equity award expense on Company performance; and

 

·                  Foster executive officer
stock ownership.

 

Long-term
incentives are generally provided in the form of equity compensation, such as
stock options and/or other equity related awards.  However, the Compensation Committee reserves
the right to utilize deferred cash incentives if beneficial to the interests of
the Company and its stockholders. 
Long-term incentive awards may have certain restrictions, such as
mandatory vesting periods, which encourage participating executives to continue
in the Company’s employ and thereby act as a retention incentive.

 

All
grants of equity compensation shall be in accordance with the provisions and
limitations of the equity incentive plan periodically adopted by the Board of
Directors and approved by the stockholders. 
The schedule for distribution of long term-incentives is shown in Section 6.

 

Page 6 of 14

 

Tetra Tech Confidential

 

 

In
addition to the above, the following guidelines will apply to the long-term
incentive plan:

 

·                  A maximum of 2% of
outstanding shares of stock and/or options will be distributed in any one year
period.  The Compensation Committee
retains the discretion to increase this amount due to special circumstances,
such as an acquisition;

 

·                  A reserve of at least 10% of
the shares available for distribution each year will be held outside the normal
distribution for special needs (i.e., hiring, retention) that occur during the
year; and

 

·                  All restricted stock grants
shall be approved by the Compensation Committee.  Restricted stock will typically not be
granted to executives who are not Section 16B officers.  Restricted stock grants will generally vest
over a minimum of a three-year period. 
Vesting will primarily be performance-based.  The mix of awards will generally be
approximately 2/3 stock options and 1/3 restricted stock.  Each share of restricted stock will be
considered equivalent to 2.5 stock options.

 

Example:  The normal grant is 15,000 stock
options.  On a converted basis, using the
ratio of 2/3 options and 1/3 restricted stock, the award would be approximately
10,000 options and 2,000 shares of restricted stock.

 

·                  No more than 0.9% of the
outstanding shares of stock and/or options can be distributed to executive
officers in one year;

 

·                  The plan shall target 5-15%
of the non-officer population for inclusion in the long-term incentive program;

 

·                  Minimum stock option grants
to non-officers will typically be 500 shares and maximum grants to non-officers
will typically be 10,000 shares; and

 

·                  Executive officers will be
eligible to receive restricted stock grants during the first restricted stock
approval cycle following their date of hire, or date of appointment as an
executive officer.

 

5.4          Other Section 16B
Officer Provisions

 

Certain
additional consideration will be provided to Section 16B officers as
approved by the Compensation Committee. 
These provisions recognize and reward the officers for the additional
responsibilities, liabilities and contributions that accompany officer
status.  Specifically, the Chairman/CEO
is provided with a country club membership that is made available primarily for
use in entertaining clients and other business associates.  Section 16B officers receive a $900 per
month automobile allowance, as well as limited reimbursement for club
memberships, estate/financial planning and annual physical examinations.  Also, Section 16B officers are eligible
to defer compensation via participation in the Deferred Compensation Program.

 

Page 7 of 14

 

Tetra Tech Confidential

 

 

6.0                               PROCESS
FLOW/SCHEDULE

 

 

Page 8 of 14

 

Tetra Tech Confidential

 

 

7.0                               APPENDIX
I — EXAMPLES OF ANNUAL INCENTIVE BONUSES

 

Subject
to the limitations of the Executive Compensation Plan:

 

Example
1

 

Narrative:                                            The
Company significantly exceeds each of its keys objectives and the CEO
significantly exceeds all individual contribution expectations, maximizing the
bonus payment.

 

	
  Position:

  	
  CEO

  	
  Base
  Salary:  $100,000

  	
  CPF:  1.4

  	
  IF:  1.2

  

 

Bonus
to be paid:  $100,000 X 1.20 X 1.4 X 1.2
= $201,600

 

Example
2

 

Narrative:                                            The
Company achieves all and exceeds some of its key objectives, and the CFO meets
all individual contribution expectations.

 

	
  Position:

  	
  CFO

  	
  Base
  Salary:  $100,000

  	
  CPF:  1.2

  	
  IF:  1.0

  

 

Bonus
to be paid:  $100,000 X 0.75 X 1.2 X 1.0
= $90,000

 

Example
3

 

Narrative:                                            The
Company meets its key objectives, and the General Counsel meets individual
contribution expectations.

 

	
  Position:

  	
  General
  Counsel

  	
  Base
  Salary:  $100,000

  	
  CPF:
   1.0

  	
  IF:  1.0

  

 

Bonus
to be paid: $100,000 X 0.50 X 1.0 X 1.0
= $50,000

 

Example
4

 

Narrative:                                            The
Company meets most of its key objectives, and the Corporate Controller
significantly exceeds individual contribution expectations.

 

	
  Position:

  	
  Corporate
  Controller

  	
  Base
  Salary:  $100,000

  	
  CPF:  0.8

  	
  IF:  1.2

  

 

Bonus
to be paid:  $100,000 X 0.50 X 0.8 X 1.2
= $48,000

 

Page 9 of 14

 

Tetra Tech Confidential

 

 

8.0          APPENDIX
II — RESTRICTED STOCK PLAN SUMMARY AND EXAMPLES

 

Overview

 

Tetra
Tech’s baseline equity compensation plan provides for a mix of stock options
and restricted stock grants to be awarded to Section 16B officers.  Restricted stock will typically not be
granted to individuals who are not Section 16B officers.

 

Restricted
stock awards will be eligible for vesting in equal installments annually over a
three-year period.  Vesting will be
performance-based, based on GAAP EPS growth, as follows:

 

	
  Annual Award Vesting %

  	
   

  	
  EPS Growth

  
	
  0%

  	
   

  	
  EPS
  < 5% year-over-year growth

  
	
  60%

  	
   

  	
  EPS
  5-9% year-over-year growth

  
	
  100%

  	
   

  	
  EPS
  10-14% year-over-year growth

  
	
  120%

  	
   

  	
  EPS
  15-20% year-over-year growth

  
	
  140%

  	
   

  	
  EPS
  > 20% year-over-year growth

  

 

Evaluation
of performance for vesting purposes and the award of restricted stock will
occur annually as part of the normal compensation cycle as shown in Section
6.0.

 

For
the purpose of this Plan, “GAAP EPS” is the fully diluted earnings per share
from continuing operations, as defined by Statement of Financial Accounting
Standards (SFAS) 128, and related interpretations, adjusted as follows:

 

·                  The impact of goodwill
impairment will be excluded;

 

·                  The impact of impairment on
long-lived assets will be excluded;

 

·                  The impact of accounting
changes requiring current and prior period adjustments due to materiality under
relevant SEC Staff Accounting Bulletins and related accounting pronouncements
will be excluded;

 

·                  The impact of any changes in
newly issued or existing accounting principles and related interpretations will
be excluded;

 

·                  The financial statement
impact from the settlement of tax audits more or less than amounts previously
recorded will be excluded;

 

·                  Gains and losses from the
sales of subsidiaries and significant lines of businesses will be excluded; and

 

·                  The impact of shares issued
and costs incurred in connection with acquisitions, mergers or debt
restructurings will be excluded.

 

Page 10 of 14

 

Tetra Tech Confidential

 

 

For
each fiscal year, the Company’s CFO shall certify the amount of “GAAP EPS”,
adjusted as set forth above.

 

Executive
officer restricted stock grants shall be subject to the terms of the Company’s
2005 Equity Incentive Plan, as amended by the Board on November 10, 2008 (the “2005
Plan”).  Notwithstanding any term or
provision set forth in this Policy, in the event of any inconsistency between
this Policy and the 2005 Plan, or the exercise of any discretion on the part of
the Compensation Committee pursuant to this Policy, the terms of the 2005 Plan
shall control and supersede the inconsistent term or provision of this Policy
or the exercise of discretion hereunder.

 

Plan
Summary

 

In
the November/December Compensation Committee meeting the Committee will
authorize a specific number of shares of restricted stock to be used for the
three-year Restricted Stock (RS) Plan that starts in the current fiscal
year.  For example, in December, 2006 the
“2007, 2008 and 2009 Restricted Stock Plan” was authorized and funded.  The Compensation Committee will also approve
the number of shares to be allocated to 16B officers.

 

As
stated, the restricted stock will vest in 1/3 increments over three years based
on GAAP EPS achieved during the Performance Period.  For a specific three year RS plan, the prior
year GAAP EPS is the measurement control point (see examples).  Once established for a three year RS Plan,
the EPS control point cannot be modified.

 

At
the end of each fiscal year, EPS will be determined and compared to EPS for the
immediately preceding fiscal year so that the year-over-year growth rate may be
calculated.  For each Section 16B
officer, the EPS growth rate will be used to determine the vesting percentage
of each installment.  Each installment of
stock eligible for vesting in a given year will be scored based upon the average
annual EPS growth since the year in which that installment was granted.

 

In
the event the duties of a restricted stock holder are reduced, such shares may
continue to vest at the discretion of the Compensation Committee.

 

Assuming
a new RS Plan is authorized each year, by the third year, three individual
plans, each with its own period and control point will be running concurrently
(see below).

 

	
  DATE

  	
   

  	
  PLAN AUTHORIZED

  	
   

  	
  CONTROL POINT

  	
   

  	
  PLAN PERIOD

  
	
  12/06

  	
   

  	
  2007 RS Plan

  	
   

  	
  FY 06 GAAP EPS

  	
   

  	
  ‘07,08,09

  
	
  12/07

  	
   

  	
  2008 RS Plan

  	
   

  	
  FY 07 GAAP EPS

  	
   

  	
  08,09,10

  
	
  12/08

  	
   

  	
  2009 RS Plan

  	
   

  	
  FY 08 GAAP EPS

  	
   

  	
  09,10,11

  

 

Page 11 of 14

 

Tetra Tech Confidential

 

 

Example
1

 

A
Section 16B officer is allocated 3,000 shares of restricted stock at the end of
fiscal year 2006 to vest in equal amounts at the end of fiscal years 2007, 2008
and 2009, designated the “07 RS Plan.” 
For fiscal year 2007, the EPS growth rate is determined to be an 8%
improvement over fiscal year 2006. 
Accordingly, 600 of the 1,000 (i.e., .6 x 1,000) eligible shares will
vest in 2007.

 

Example
2

 

This
example provides vesting results under a series of scenarios involving vesting
award amounts and hypothetical EPS growth.

 

	
   

  	
   

  	
  Restrictive Stock

  	
   

  	
  Earnings Per

  	
   

  	
  Average

  Annual

  	
   

  	
  Vesting Schedule

  Through 11/09

  	
   

  	
  Vesting Schedule Effective

  12/09

  	
   

  
	
  Date

  	
   

  	
  Awarded

  	
   

  	
  Share (EPS)

  	
   

  	
  Growth %

  	
   

  	
  Year-over-Year

  	
   

  	
  %

  	
   

  	
  Year-over-Year

  	
   

  	
  %

  	
   

  
	
  12/06

  	
   

  	
  1200

  	
   

  	
  .65

  	
   

  	
  0%

  	
   

  	
  EPS<
  5%

  	
   

  	
  0%

  	
   

  	
  EPS
  < 5%

  	
   

  	
  0%

  	
   

  
	
  12/07

  	
   

  	
  1500

  	
   

  	
  .79

  	
   

  	
  21.5%

  	
   

  	
  EPS
  5% - 9%

  	
   

  	
  60%

  	
   

  	
  EPS
  5% - 9%

  	
   

  	
  60%

  	
   

  
	
  12/08

  	
   

  	
  1800

  	
   

  	
  1.02

  	
   

  	
  29.1%

  	
   

  	
  EPS
  10% - 14%

  	
   

  	
  100%

  	
   

  	
  EPS
  10% - 14%

  	
   

  	
  100%

  	
   

  
	
  12/09

  	
   

  	
  2100

  	
   

  	
  1.21

  	
   

  	
  18.6%

  	
   

  	
  EPS > 14%

  	
   

  	
  120%

  	
   

  	
  EPS 15% - 20%

  	
   

  	
  120%

  	
   

  
	
  12/10

  	
   

  	
  2400

  	
   

  	
  .85

  	
   

  	
  <29.8>%

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EPS
  > 20%

  	
   

  	
  140%

  	
   

  
	
  12/11

  	
   

  	
  2700

  	
   

  	
  1.45

  	
   

  	
  71.0%

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Sample
Vesting

 

Eligible
for Vesting (1/3 of Annual RS Award)

 

	
  12/07

  	
   

  	
  12/08

  	
   

  	
  12/09

  	
   

  	
  12/10

  	
   

  	
  12/11

  
	
  400 Shares

  (from ‘06 award)

  	
   

  	
  900 Shares

  (400 of ‘06 award,

  500 of ‘07 award)

  	
   

  	
  1,500 Shares

  (400 from ‘06 award, 500 from ‘07 award, 600 from
  ‘08 award)

  	
   

  	
  1,800 Shares

  (500 from ‘07 award, 600 from ‘08 award, 700 from
  ‘09 award)

  	
   

  	
  2,100 Shares

  (600 from ‘08 award, 700 from ‘09 award, 800 from
  ‘10 award)

  

 

Actual
Vesting

 

	
  400 x 1.2 = 480

  	
   

  	
  400 x 1.2 = 480

  	
   

  	
  400 x 1.2 = 480

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  500 x 1.2 = 600

  	
   

  	
  500 x 1.2 = 600

  	
   

  	
  500
  x 0 = 0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  600 x 1.2 = 720

  	
   

  	
  600
  x 0 = 0

  	
   

  	
  600 x .1.0 = 600

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  700 x 0 = 0

  	
   

  	
  700 x .6 = 420

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  800 x 1.4 = 1120

  
	
  480 Shares

  	
   

  	
  1,080 Shares

  	
   

  	
  1,800 Shares

  	
   

  	
  0 Shares

  	
   

  	
  2,140 Shares

  

 

Page 12 of 14

 

Tetra Tech Confidential

 

 

9.0          APPENDIX
III — TIMING OF EXECUTIVE EQUITY AWARDS

 

The
effective date of the grant for all stock options and restricted stock awards
is the date of approval by the Compensation Committee.

 

Equity
compensation recommendations for executive officers in accordance with this
policy, including both stock options and restricted stock, will be presented to
the Compensation Committee at the November/December meeting.  The Compensation Committee will also consider
salary increase and annual performance bonus recommendations at the
November/December meeting.

 

Actual
approval of stock option and restricted stock awards to executive officers will
be made by the Compensation Committee at its November/December meeting,
consistent with the annual stock option grants to all stock option recipients.

 

The
Compensation Committee approves grants for new hires as recommended by the
Chairman/CEO.  The effective date of the
grant is the date of approval by the Compensation Committee.

 

Page 13 of 14

 

Tetra Tech Confidential

 

 

10.0        APPENDIX
IV — DETERMINATION OF NET INCOME

 

For
the purpose of this Policy, “net income” is defined as the Company’s net income
as set forth in its audited financial statements, adjusted as follows:

 

·                  The impact of goodwill impairment will be
excluded;

 

·                  The impact of impairment on long-lived assets
will be excluded;

 

·                  The impact of accounting changes requiring
current and prior adjustments due to materiality under relevant SEC Staff
Accounting Bulletins and related accounting pronouncements will be excluded;

 

·                  The impact of any changes in newly issued or
existing accounting principles and related interpretations will be excluded;

 

·                  The financial statement impact from the
settlement of tax audits more or less than amounts previously recorded will be
excluded;

 

·                  Gains and losses from the sales of
subsidiaries and significant lines of businesses will be excluded;

 

·                  The costs incurred in connection with
acquisitions, mergers or debt restructurings will be excluded; and

 

·                  The impact of bonuses, net of tax, accrued
for individuals subject to the Executive Compensation Plan will be excluded.

 

For
each fiscal year, the Company’s CFO shall certify the amount of “net income”,
adjusted as set forth above.

 

Page 14 of 14

 

Tetra Tech Confidential

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