-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S9KGs6XLkApURVDjEym18YX5lPOLTMJ0UmLfX1vX9tl0+79FrH7wJYuLjcodiGCi QQQvlQmFEVoNuW7HhujtvA== 0000898430-96-003375.txt : 19960730 0000898430-96-003375.hdr.sgml : 19960730 ACCESSION NUMBER: 0000898430-96-003375 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960329 FILED AS OF DATE: 19960729 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL TECHNOLOGY CORP CENTRAL INDEX KEY: 0000731190 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 330001212 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09037 FILM NUMBER: 96600450 BUSINESS ADDRESS: STREET 1: 23456 HAWTHORNE BLVD CITY: TORRANCE STATE: CA ZIP: 90505 BUSINESS PHONE: 3103789933 MAIL ADDRESS: STREET 1: 23456 HAWTHORNE BLVD CITY: TORRANCE STATE: CA ZIP: 90505 10-K/A 1 AMENDMENT #1 TO FORM 10-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 (Mark One) [X] AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 29, 1996 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 1-9037 INTERNATIONAL TECHNOLOGY CORPORATION (Exact name of Registrant as specified in its charter) Delaware 33-0001212 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 23456 Hawthorne Boulevard Torrance, California 90505 (Address of principal executive offices) (ZIP CODE) Registrant's telephone number, including area code: (310) 378-9933 The undersigned registrant hereby amends the following items of its Annual Report for the fiscal year ended March 29, 1996 on Form 10-K as set forth in the pages attached hereto. ================================================================================ PART I ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY - ------- The following table provides information as of July 25, 1996 regarding the Company's executive officers and the positions they hold with the Company. The officers are appointed annually by the Board of Directors to serve at the discretion of the Board.
Term as First elected as director director or officer Name Age Position(1) expires of the Company - ------------------------------ ---- ------------------------------------------ -------- ------------------- Anthony J. DeLuca(1) 49 President and Acting Chief Executive Officer 1997 1990 Franklin E. Coffman 54 Senior Vice President, Government and -- 1984 Commercial Program Development James R. Mahoney 57 Senior Vice President, Technical Operations and Corporate Development -- 1991 Raymond J. Pompe 62 Senior Vice President, Project Operations -- 1988 Eric Schwartz 49 Senior Vice President, Law and -- 1992 Administration, General Counsel and Secretary
- ------------- (1) Robert B. Sheh resigned as President and Chief Executive Officer and a director of the Company as of July 1, 1996, but will be treated as an employee of the Company through June 26, 1998. As of July 1, 1996, Anthony J. DeLuca was named as President and Acting Chief Executive Officer and a director of the Company. Mr. Coffman joined the Company in October 1984 as Vice President, Government Programs and was named Senior Vice President, Government and Commercial Program Development, in March 1995. Prior to joining the Company, Mr. Coffman served in various capacities for the Department of Energy including Deputy Assistant Secretary of Waste Management, Director of the Office of Advanced Nuclear Systems and Projects, and Director of the Division of Fusion Development and Technology. Previously, he was employed in the Atomic Energy Commission as Chief, Energy Research Development Agency, Fusion Systems and Applications -Applications Studies Branch, Washington, D.C. and as a health physicist. Mr. DeLuca was named President and Acting Chief Executive Officer and a director of the Company as of July 1, 1996. Prior thereto, Mr. DeLuca had been Senior Vice President and Chief Financial Officer of the Company since March 1990. Before joining the Company Mr. DeLuca had been a senior Partner at the public accounting firm Ernst & Young LLP. Mr. Mahoney, who joined the Company in January 1991 as Senior Vice President and Director of Technology was named Senior Vice President, Corporate Development and Sales in April 1992, and Senior Vice President, Technical Operations and Corporate Development in March 1995. Prior to joining the Company, Mr. Mahoney was Director of the National Acid Precipitation Assessment Program, a U.S. government research and assessment program, from 1988 to 1991. From 1984 to 1987, Mr. Mahoney served in various environmental managerial capacities with Bechtel Group, Incorporated, a major construction firm. Mr. Pompe joined the Company in 1988 as Vice President, Construction and Remediation and was named Senior Vice President, Project Operations, in March 1995. Prior to joining the Company, Mr. Pompe was employed by Dravo Corporation, a major construction firm, from 1956 to 1988 in various executive capacities, most recently as Senior Vice President responsible for construction projects. Mr. Schwartz joined the Company in October 1992 as Senior Vice President, General Counsel and Secretary. Prior to joining the Company, Mr. Schwartz served in various capacities for Tosco Corporation, an energy company, from 1978 to 1992, including that of Executive Vice President, Finance, Administration and General Counsel, a member of its Board of Directors and a consultant. From 1972 to 1978, Mr. Schwartz was associated with the law firm of Cleary, Gottlieb, Steen & Hamilton. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - -------- The directors of the Company serve for three-year terms which are staggered to provide for the election of approximately one-third of the Board members each year. Set forth in the following table is certain information about the directors.
Director of Term to the Company Name Age Position expire since - ------------------------- --- ----------------------------------- ----------- ----------- Donald S. Burns(1)(2) 70 Director 1997 1989 Kirby L. Cramer(3) 59 Director 1996 1995 Ralph S. Cunningham(1)(3) 55 Director 1997 1981 Anthony J. DeLuca 49 Director, President and Acting Chief 1997 1996 Executive Officer E. Martin Gibson(1)(3) 58 Director and Chairman of the Board 1998 1994 (non-officer position) James C. McGill (1)(2) 52 Director 1996 1990 W. Scott Martin(2) 46 Director 1996 1994 Henry E. Riggs(2) 61 Director 1998 1995 Jack O. Vance(3) 71 Director 1998 1987
- ----------- (1) Member of Nominating Committee. (2) Member of Audit Committee. (3) Member of Compensation Committee. BACKGROUND OF THE DIRECTORS Mr. Burns has been Chairman, President and Chief Executive Officer of Prestige Holdings, Ltd., a property management and business consulting firm, since 1978. Mr. Burns serves on the Boards of Directors of ESI Corporation and International Rectifier Corporation. 2 Mr. Cramer became a director of the Company on November 2, 1995. He is the Chairman Emeritus of Hazleton Laboratories Corporation, a contract biological and chemical research laboratory, which was acquired by Corning Incorporated in 1987. He is also Chairman of Northwestern Trust Company and is the President of Keystone Capital Company, an investment company. Mr. Cramer is a member of the University of Washington Foundation and also is Chairman of the Advisory Board of the University of Washington School of Business Administration. He is the past President and Trustee Emeritus of the Darden School Foundation of the University of Virginia. In addition, Mr. Cramer serves on the Boards of Directors of Immunex Corporation, Unilab Corporation, The Commerce Bank of Washington, N.A., Northwestern Trust Company, Landec Corporation, Advanced Technology Laboratories and Applied Bioscience International. Since May 1, 1995, Dr. Cunningham has served as President and Chief Executive Officer of CITGO Petroleum Corporation. From May 1994 to May 1995, he served as the Vice Chairman of the Board of Huntsman Corporation and Huntsman Specialty Chemicals Corporation. Prior to joining Huntsman in 1994 he served as the President of Texaco Chemical Company from 1990 to 1994 when Texaco Chemical Company was acquired by Huntsman Corporation in 1994. From 1989 to 1990, he was Chairman and Chief Executive Officer of Clark Oil Refining Corporation. In 1980, he joined Tenneco Oil Processing and Marketing as Executive Vice President and served as President of that company from 1982 to 1989. Dr. Cunningham served as the Company's Chairman of the Board of Directors from May 5, 1994 to January 5, 1995. Such position was a non-officer, non-employee position. Dr. Cunningham serves as a director of Viridan, Inc. (formerly Sherritt, Inc.), Enterprise Products Company, Huntsman Corporation, CITGO Petroleum Corporation and Bank of Oklahoma. Mr. DeLuca was named President and Acting Chief Executive Officer and a director of the Company as of July 1, 1996. Prior thereto, Mr. DeLuca had been Senior Vice President and Chief Financial Officer of the Company since March 1990. Before joining the Company, Mr. DeLuca had been a senior partner at the public accounting firm Ernst & Young LLP. Mr. Gibson became a director of the Company on October 11, 1994 and was elected Chairman of the Board of Directors, a non-officer, non-employee position, on April 6, 1995. From 1990 until December 1994, Mr. Gibson served as Chairman of Corning Life Sciences, Inc., a subsidiary of Corning Incorporated. Mr. Gibson served in various other senior management capacities with Corning Incorporated during his 32 year career there, including as a Senior Vice President and General Manager of Corning Medical and Scientific Division from 1980 until 1983, and as Group President of Corning Consumer Products and Laboratory Sciences from 1983 until 1990. From 1983 to 1994, Mr. Gibson served on the Board of Directors of Corning Incorporated. Mr. Gibson also serves on the Boards of Directors of Hardinge, Inc. and NovaCare, Inc. Mr. Martin has been President of the Tulsa Loan Production Office of the First Bank & Trust Company, Wagoner, Oklahoma, since September 1994. He was the President, Chief Executive Officer and a member of the Board of Directors of WestStar Bank in Tulsa, Oklahoma, from 1984 until September 1994. He has also served as a member of the Boards of Directors of First Bank & Trust Company, Wagoner, Oklahoma, since 1974; of First Bank of Chandler, Chandler, Oklahoma, since 1977; and of First National Bank, Burkburnett, Texas, since 1983. Mr. McGill is currently, and has been for at least five years, a private investor. He served as Chairman of McGill Environmental Systems, Inc. from 1970 to 1987. Mr. McGill serves on the Board of Trustees of the University of Tulsa and on the Boards of Directors of four private corporations that are engaged in tax consulting, health care, pipeline construction and golf. 3 Mr. Riggs became a director of the Company on November 2, 1995. He has been the President of Harvey Mudd College in Claremont, California since August 1, 1988. He was Vice President for Development of Stanford University from 1983 to 1988, and was Chairman of the Stanford University Department of Industrial Engineering and Engineering Management from 1978 to 1982. He is currently a director of several mutual funds managed by The Capital Group. Mr. Vance was a director of McKinsey & Company from 1960 until he retired on December 31, 1989. He currently serves as Managing Director of Management Research, Inc., a management consulting firm. Mr. Vance also serves as a member of the Boards of Directors of International Rectifier Corporation, The Olson Company, Vencor, Inc., ESCORP, University Restaurant Group, FCG Enterprises, Inc. and Semtech Corporation. See also "Executive Officers of the Company" in Part I, Item 4A of this report for certain information concerning the Company's executive officers. COMPLIANCE WITH SECURITIES REPORTING REQUIREMENTS Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires directors, certain officers of the Company and persons holding more than 10% of the Company's Common Stock to file reports concerning their ownership of Common Stock by dates established under the Act and also requires that the Company disclose any noncompliance with those requirements during fiscal year 1996. Based solely upon a review of reports delivered to the Company, all Section 16(a) filing requirements were satisfied, except that (i) Mr. Murray Hutchison, who resigned from the Board of Directors in July 1995, filed one late report with respect to three transactions during October 1995 involving the sale of an aggregate of 23,480 shares of Common Stock in the aggregate, and (ii) Mr. James C. McGill filed one late report with respect to his wife's inheritance of 1,000 of the Company's Depositary Shares (the "Depositary Shares"). Mr. McGill disclaims beneficial ownership of such Depositary Shares. 4 ITEM 11. EXECUTIVE COMPENSATION - -------- SUMMARY COMPENSATION TABLE The following table sets forth the annual, long-term compensation and other compensation for services in all capacities to the Company for fiscal years 1996, 1995 and 1994 of those persons who were, as of March 29, 1996, the Chief Executive Officer and the other four most highly compensated executive officers of the Company (the "Named Officers").
Long Term Compensation -------------------------- Annual Compensation Awards ---------------------------------------- -------------------------- Other Annual Restricted Securities All Other Name and Compen- Stock Underlying Compen- Principal Position Year Salary($) Bonus($)(4) sation($)(5) Awards($)(6) Options (#) sation($)(7) - ---------------------------- ---- --------- ----------- ------------ ------------ ----------- ------------ Robert B. Sheh (1) 1996 $450,000 $ 26,578 $ 0 $475,000 0 $ 52,100 President and 1995 450,000 225,000 0 74,993 150,000 34,519 Chief Executive Officer 1994 450,000 0 175,449 0 50,000 103,219 Anthony J. DeLuca (2) 1996 270,400 12,776 0 296,875 0 17,732 Senior Vice President 1995 270,400 108,160 0 173,550 77,000 16,519 and Chief Financial Officer 1994 268,667 0 0 0 22,000 34,759 James R. Mahoney 1996 260,000 12,285 0 118,750 0 28,579 Senior Vice President, 1995 256,925 104,000 0 172,163 77,000 20,330 Technical Operations and 1994 232,834 0 5,630 0 22,000 32,420 Corporate Development Eric Schwartz 1996 250,000 11,813 0 268,750 0 17,575 Senior Vice President, 1995 250,000 100,000 0 33,330 77,000 11,488 Law and Administration 1994 245,834 0 0 0 22,000 2,828 General Counsel and Secretary Raymond J. Pompe(3) 1996 206,691 9,923 0 118,750 0 16,250 Senior Vice President 1995 192,992 57,000 0 156,498 35,000 11,328 Project Operations 1994 165,692 0 0 0 18,000 8,423 ---- -------- -------- -------- -------- ------- --------
- ----------- (1) Mr. Sheh resigned as President and Chief Executive Officer and a director of the Company as of July 1, 1996, but will be treated as an employee of the Company through June 26, 1998. See "Termination of Employment Arrangements - Sheh Agreement." (2) As of July 1, 1996, Mr. DeLuca was named as President and Acting Chief Executive Officer and a director of the Company. (3) Mr. Pompe, who joined the Company on September 1, 1988, was promoted to the position of Senior Vice President, Project Operations in March 1995. (4) Bonus amounts are reported in the fiscal year they are earned or accrued, even though the actual cash payment for the fourth quarter may be made in the next fiscal year. All bonus amounts reported for fiscal year 1995 include all cash bonus amounts paid, earned or accrued for the fiscal year even 5 though the actual cash payment for the fourth quarter were actually paid in fiscal year 1996. In lieu of additional cash, each Named Officer also received an award of restricted stock in fiscal year 1996 attributable to the fiscal year 1995 incentive compensation plan. The value of such restricted stock awards is reported in this table under Restricted Stock Awards in 1995. The total value of bonuses, including the aforementioned restricted stock awards, earned in fiscal year 1995, by each of the Named Officers are as follows: Mr. Sheh, $299,993; Mr. DeLuca, $144,210; Mr. Mahoney, $138,663; Mr. Schwartz, $133,330; and Mr. Pompe, $75,998. (5) The dollar value of perquisites and other personal benefits, if any, for each of the Named Officers, except Mr. Sheh and Mr. Mahoney in 1994 was less than the reporting thresholds established by the SEC. The amount shown for Mr. Sheh in fiscal year 1994 includes (i) $58,171 for a tax gross up on the relocation expenses reported under Other Annual Compensation, and (ii) $95,794 for club memberships; all in accordance with terms of agreements between the Company and Mr. Sheh. Of the $95,794 reported for club memberships, $25,000 was a one-time non-refundable admission fee and $59,400 is a membership fee. Mr. Sheh was permitted to retain such membership upon his resignation as President and Chief Executive Officer. See "Termination of Employment Arrangements - Sheh Agreement." The amount shown for Mr. Mahoney for fiscal year 1994 is a tax gross up on relocation expenses reported under Other Annual Compensation; all in accordance with the terms of agreements between the Company and Mr. Mahoney. The amount shown for Mr. Sheh in fiscal year 1995 includes $18,903 of imputed interest on an interest-free loan to purchase a residence. See "Termination of Employment Arrangements - Sheh Agreement." (6) 50,000 shares of restricted stock were awarded to each of Messrs. DeLuca, Mahoney and Pompe on March 2, 1995, with a fair market value of $2.75 per share on the date of grant. 50,000 shares of restricted stock were awarded to Mr. Schwartz on June 1, 1995, with a fair market value of $3.00 per share on the date of the grant. The shares vest in 20% increments over five years provided that Messrs. Mahoney, DeLuca, Pompe and Schwartz remain employed by the Company on the vesting dates. In lieu of cash, each Named Officer received awards of restricted stock in connection with a fiscal year 1995 incentive compensation plan. A total of 63,371 shares of restricted stock were awarded to the Named Officers on July 5, 1995 with a fair market value of $3.125 per share. The shares awarded were as follows: Mr. Sheh, 23,998 shares; Mr. DeLuca, 11,536 shares; Mr. Mahoney, 11,092 shares; Mr. Schwartz, 10,666 shares; and Mr. Pompe, 6,079 shares. The restrictions on the shares will lapse three years from the date of award provided that each Named Officer remains employed by the Company at that date. On March 28, 1996, the following number of restricted shares were issued to the Named Officers, with a fair market value of $2.375 per share on the date of grant: Mr. Sheh, 200,000 shares (which shares were returned to the Company pursuant to Mr. Sheh's separation agreement with the Company (see "Termination of Employment Arrangements - Sheh Agreement")); Mr. DeLuca, 125,000 shares; Mr. Mahoney, 50,000 shares; Mr. Schwartz, 50,000 shares; and Mr. Pompe, 50,000 shares. The restrictions on the shares will lapse upon the earlier of: (i) attainment of an average $4.00 or greater price of the Company's Common Stock for any period of sixty consecutive calendar days; (ii) four years from the date of issuance of the restricted shares; or (iii) upon death, disability or retirement of the holder or a change of control (as defined). (7) For 1994, the amount shown for Mr. Sheh includes $83,679 in moving expenses in accordance with the terms of an agreement between the Company and Mr. Sheh, $10,000 for partial principal forgiveness on a relocation loan to purchase a residence and $9,540 of life insurance premiums in excess of $50,000. The amount shown for Mr. DeLuca includes $23,400 paid for accrued but unused vacation, $1,925 of life insurance premiums in excess of $50,000 and $9,434 for the 6 Company's contribution to the Company's Retirement Plan, a defined contribution plan. Plan participants are fully vested in the plan following six years of service. The amount shown for Mr. Mahoney includes $13,091 in previously unreimbursed moving expenses in connection with his relocation to Southern California, $10,000 for partial principal forgiveness on a relocation loan to purchase a residence, $9,119 for the Company's contribution to the Company's Retirement Plan and $210 of life insurance premiums in excess of $50,000. The amounts shown for Messrs. Pompe and Schwartz include $1,878 and $2,828, respectively, of life insurance premiums in excess of $50,000. For 1995, the amount shown for Mr. Sheh includes $6,572 for the Company's contribution to the Company's Retirement Plan, $10,000 for partial principal forgiveness on a relocation loan to purchase a residence and $17,947 of life insurance premiums in excess of $50,000. The amount shown for Mr. DeLuca includes $6,608 for the Company's contribution to the Company's Retirement Plan, $5,200 paid for accrued but unused vacation and $4,711 of life insurance premiums in excess of $50,000. The amount shown for Mr. Mahoney includes $6,599 for the Company's contribution to the Company's Retirement Plan, $3,731 of life insurance premiums in excess of $50,000 and $10,000 for partial principal forgiveness on a relocation loan to purchase a residence. The amounts shown for Mr. Schwartz and Mr. Pompe represent $4,916 and $4,711, respectively, of life insurance premiums in excess of $50,000 and the Company's contributions to the Company's Retirement Plan. For 1996, the amount shown for Mr. Sheh includes $9,003 for the Company's fixed and 401(k) Company matching contributions to the Company's Retirement Plan, $10,000 for partial forgiveness on a relocation loan to purchase a principal residence and $20,034 of life insurance premiums in excess of $50,000. The amounts shown for Messrs. DeLuca, Schwartz and Pompe represent $5,798, $5,177 and $5,706, respectively, of life insurance premiums in excess of $50,000 and the Company's contributions to the Company's Retirement Plan for the Company's fixed and 401(k) Company matching contributions. The amount shown for Mr. Mahoney includes $7,498 for the Company's Contributions to the Company's Retirement Plan for the Company's fixed and 401(k) Company matching contributions, $10,000 for partial forgiveness on a relocation loan to purchase a principal residence and $5,990 of life insurance premiums in excess of $50,000. Although required to be reported as income, the Named Officers pay the cost for all life insurance premiums for coverage in excess of one and one-half times their salary, as do all salaried employees. In addition, each of the Named Officers received in fiscal year 1996 a contribution to the Company's Restoration Plan, a non-qualified supplemental retirement plan, as follows: Mr. Sheh, $13,063; Mr. DeLuca, $5,475; Mr. Mahoney, $5,091; Mr. Schwartz, $4,722; and Mr. Pompe, $3,334. STOCK OPTION GRANTS IN LAST FISCAL YEAR No stock options were granted to any of the Named Officers during the last fiscal year. No stock appreciation rights ("SARs") were granted during the last fiscal year or at any time under either the 1983 Stock Incentive Plan (the "1983 Plan") or the 1991 Stock Incentive Plan (the "1991 Plan"). 7 AGGREGATED OPTION EXERCISES DURING LAST FISCAL YEAR AND OPTION VALUES AT END OF LAST FISCAL YEAR The following table provides information with respect to the exercise of stock options during the fiscal year ended March 29, 1996 by the Named Officers, and with respect to unexercised "in-the-money" stock options outstanding as of March 29, 1996. In-the-money stock options are options for which the exercise price is less than the market price of the underlying stock at the end of the fiscal year. No executive officer or any other employee of the Company held or exercised any SARs at any time during fiscal year 1996.
Number of Securities Underlying Unexercised Value of Unexercised Options at Fiscal Year End In-the-Money Options at Shares Acquired (in shares) Fiscal Year End($)(2) on Value ------------------------------ --------------------------- NAME Exercise Realized($) Exercisable Unexercisable(3) Exercisable Unexercisable --------------- ----------- ----------- ---------------- ----------- ------------- Robert B. Sheh (1).... 0 $0 250,000 200,000 $0 $0 Anthony J. DeLuca..... 0 0 107,250 78,750 0 0 James R. Mahoney...... 0 0 85,250 76,750 0 0 Eric Schwartz......... 0 0 67,750 81,250 0 0 Raymond J. Pompe...... 0 0 36,020 43,250 0 0
- ----------- (1) Mr. Sheh resigned as President and Chief Executive Officer and a director of the Company as of July 1, 1996, but will be treated as an employee of the Company through June 26, 1998. See "Termination of Employment Arrangements - Sheh Agreement." (2) Represents the difference between the $2.50 closing market price of the Company's Common Stock at March 29, 1996, minus the exercise price of the options. (3) Messrs. DeLuca, Mahoney and Schwartz's options with respect to 7,500 shares, 6,000 shares and 6,000 shares, respectively, have vested as a result of the passage of time but may not be exercised unless the Company's stock price increases to certain predetermined levels. Because this condition has not been satisfied and the options therefore are not vested, such options are not included in the "Beneficial Ownership of Shares" table in Item 12. COMPENSATION OF DIRECTORS Retainer Fees. Non-employee directors receive a retainer fee of $5,000 per quarter, $1,000 for each Board or committee meeting attended, $500 for each telephonic Board or committee meeting attended (reduced from $1,000 previously), $500 per day for travel on business days and reimbursement of air travel and other expenses incurred in connection with attending Board or committee meetings. Committee chairmen receive $1,500 for each committee meeting attended and $750 for each telephonic committee meeting attended (reduced from $1,500 previously). The fees paid for meeting attendance are limited to no more than one committee meeting for all committee meetings held in tandem with a Board meeting, regardless of the actual number of committee meetings attended. Additionally, in order to more closely align the compensation of the Board members with the interests of Company's stockholders, effective with the third quarter of fiscal year 1996, the quarterly retainer fee payable to each director for the third quarter of each fiscal year is paid in the form of shares of Common Stock, rather than in cash. Such shares are purchased by the Company in the open market and reissued to directors in order to avoid dilution to the Company's stockholders. 8 Chairman of the Board. Mr. E. Martin Gibson was elected on April 6, 1995 as Chairman of the Board, which is a non-officer, non-employee position. In lieu of the non-employee director fees described above, Mr. Gibson receives compensation at the rate of $120,000 per year. Mr. Gibson serves as a member or ex-officio member of all committees of the Board and spends significant time on Company matters. Stock Options. Prior to expiration of the 1991 plan on March 31, 1996, each non-employee director also received automatic grants of nonqualified stock options under the 1991 plan, to purchase 20,000 shares of Common Stock upon his initial election as a director plus options to purchase an additional 10,000 shares of Common Stock at each subsequent annual meeting after having served at least six months. Because the 1991 Plan has expired, no additional awards may be made including option grants to the non-employee directors. The non-employee director options that are outstanding have an exercise price equal to the fair market value of Common Stock at the date of grant; become exercisable in installments of 25% on each of the first four anniversaries of the date of grant; have a five-year term; and terminate when the holder ceases to be a director unless due to death, disability or retirement. All such grants were subject to the limitation that a non-employee director may not hold, at any time, nonqualified stock options to purchase a number of shares that, when added to all shares previously purchased by such director under the 1983 plan or 1991 plan, exceeds 50,000 shares. At the time the 1991 Plan expired, there were 502,205 shares remaining available for grant under the 1991 Plan, none of which were or will be granted. Retirement Plan. Non-employee directors qualify for five years of retirement payments if on retirement (i) they have five years of Board service (in which case payments would begin at age 70, or upon retirement if the director is between 70 and 73 when he retires) or (ii) they have ten years of Board service (in which case payments would begin at age 65, or upon retirement if the director is between 65 and 73 when he retires). However, directors who served or have served continuously from December 4, 1984 to retirement are not subject to such requirements and have qualified for the retirement plan, provided that they retire at the conclusion of the annual meeting following the date they reach age 75 unless the Board otherwise provides. In the event of an eligible director's death, the director's beneficiary will be entitled to receive a lump sum payment of the amount that would otherwise have been payable to the director, less any amounts previously paid under the plan. In the event of a director's disability or a change of control (as defined in the plan) pursuant to which a director elects not to remain on the Board, the service and age requirements are waived. Payment will be made in the normal manner upon disability or in a lump sum if a director elects not to remain on the Board in the event of a change of control. The annual retirement amount is equal to the retainer fee and the meeting and committee fees paid for a normal schedule of meetings during a fiscal year (or the actual schedule of meetings during the 12- month period prior to such director's retirement, if such schedule would result in higher retirement benefits), as determined in accordance with the Board's retirement plan. Additionally, former employees of the Company become eligible to participate in the plan once they have completed five years of service as a non-employee director. TERMINATION OF EMPLOYMENT ARRANGEMENTS Severance Benefit Agreements. The Company currently maintains change in control severance benefit agreements (the "Severance Agreements") with certain executive officers. The Severance Agreements generally have a two-year term. The persons with whom the company has entered into Severance Agreements are Anthony J. DeLuca, James R. Mahoney and Eric Schwartz expiring on April 2, 1998, September 15, 1997 and September 15, 1997, respectively. 9 The Severance Agreements provide, upon the occurrence of certain events, for the payment of lump sum cash compensation equal to 2.99 times the executive officer's annual base salary and the highest aggregate cash bonus paid to the executive officer in the preceding three fiscal years (subject to reduction in certain circumstances, including the limitation that the Company's aggregate severance liability shall not exceed 5% of the Company's market capitalization (as defined in the Severance Agreements). The Company is obligated to pay such compensation to the executive officer if a change in control of the Company as defined in the Severance Agreements occurs and the officer's employment subsequently is terminated by the Company or by the officer for specified reasons. The Severance Agreements also provide that the Company will arrange in such event to provide the officer for two years with disability, life, accident and health insurance substantially similar to those insurance benefits being received by the officer at the time of the termination of employment. The Severance Agreements generally have a two-year term if no change in control of the Company occurs. If there is a change in control of the Company, the Severance Agreements remain in effect for three years from the date of the change in control if it has not been approved by the Board of Directors and for two years if the change in control has been approved by the Board of Directors. If the Severance Agreements had been triggered as of July 1, 1996, the lump sum cash compensation payable to Messrs. DeLuca, Mahoney and Schwartz would have been $915,716, $848,826 and $869,285, respectively. The purpose of the Severance Agreements is to continue to attract and retain well-qualified executives and key personnel who are an integral part of the management of the Company and whose performance is considered critical to the future success of the Company. To this end, the Severance Agreements are intended to protect the continued employment of such executives and key personnel which would be at risk in the event of a change in control and to provide an incentive to such executives and key personnel to remain in the employ of the Company, notwithstanding the uncertainty in job security caused by an actual or threatened change in control. Sheh Agreement. Mr. Robert B. Sheh resigned as President and Chief Executive Officer and a director of the Company as of July 1, 1996. Pursuant to the terms of an agreement between the Company and Mr. Sheh, Mr. Sheh will continue to be treated as an employee of the Company until June 26, 1998, but will have no further duties or responsibilities to the Company. Pursuant to the agreement, until June 26, 1998, Mr. Sheh will continue to be paid $450,000 per annum and will receive a car allowance of $5,850 per annum. Mr. Sheh will also receive a one-time payment of $40,300 for accrued but unused vacation. Additionally, a relocation loan made by the Company to Mr. Sheh with an outstanding principal amount of $150,000 was forgiven. Mr. Sheh will retain a club membership in his name for which the Company has previously paid admission and membership fees. Mr. Sheh remains eligible for certain insurance benefits and is entitled to certain other benefits until the earlier of June 26, 1998 or the date on which Mr. Sheh becomes a full-time employee of another company. Under the agreement, 23,998 shares of restricted Common Stock awarded to Mr. Sheh in July 1995 will become fully vested on June 26, 1998, and options to purchase a total of 450,000 shares of Common Stock will continue to vest in accordance with the terms of the applicable stock option agreements and will become fully vested on April 27, 1998. Finally, 200,000 shares of restricted stock awarded to Mr. Sheh in March 1996 were returned to the Company. Hart Agreement. Mr. Larry M. Hart resigned as Senior Vice President and Chief Operating Officer of the Company effective as of October 1, 1995. Pursuant to the terms of an agreement between the Company and Mr. Hart, Mr. Hart will remain an employee of the Company until the earlier of his resignation of employment, his obtaining full-time, permanent employment with another company, or November 1, 1996. Pursuant to the agreement, the Company paid Mr. Hart an aggregate of $535,770 in salary and severance payments. Additionally, a relocation loan made by the company to Mr. Hart 10 remains outstanding, with no interest accruing or payable from October 1, 1995 until September 30, 1996. The loan will become due and payable upon the earlier of the sale of the principal residence purchased with the relocation loan or October 1, 1997. Additionally, pursuant to the agreement, Mr. Hart remains eligible for certain insurance benefits, until the termination of his employment and is entitled to certain other benefits. Finally, under the agreement, 15,998 shares of restricted Common Stock and options to purchase a total of 280,000 shares of Common Stock will become fully vested upon Mr. Hart's termination of his employment. 11 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - -------- BENEFICIAL OWNERSHIP OF SHARES The following table sets forth information as of July 10, 1996 with respect to beneficial ownership of (i) the Company's Common Stock and (ii) the Company's Depositary Shares, each representing 1/100 of a share of 7% Cumulative Convertible Exchangeable Preferred Stock, par value $100.00 per share (the "Preferred Stock"), by (a) each person known by the Company to be the beneficial owner of 5% or more of the outstanding Common Stock or Depositary Shares and as of July 10, 1996, (b) each director, (c) the Named Officers listed in the Summary Compensation Table in Item 11, and (d) all directors and persons serving as executive officers as a group.
Amount and nature Amount and nature of Percent of Common of beneficial Percent of beneficial ownership of Stock beneficially ownership of Depositary Shares Name and Address Common Stock(1)(2) owned(2) Depositary Shares beneficially owned - ---------------- ----------------------- ------------------ ----------------- ------------------ Wisconsin Investment Board (3)..................... 3,551,800 9.93% -- -- Dimensional Fund Advisors....... 1,884,300 5.27 -- -- Inc. (4) Donald S. Burns................. 26,481 * -- -- Kirby L. Cramer................. 43,808 * 10,000 * Ralph S. Cunningham............. 16,981 * -- -- E. Martin Gibson................ 28,904 * 5,000 * W. Scott Martin................. 48,981( 5) * -- -- James C. McGill................. 93,614( 6) * 1,000 * Henry E. Riggs.................. 20,000 * -- -- Robert B. Sheh (7).............. 628,002 1.70 5,000 * Jack O. Vance................... 18,331( 8) * -- -- Anthony J. DeLuca............... 315,257 * -- -- James R. Mahoney................ 233,547 * -- -- Raymond J. Pompe................ 160,802 * -- -- Eric Schwartz................... 211,635 * 1,200 * All directors and executive officers as a group (15 persons).................. 1,975,705 5.40% 22,200 *
- ---------- * Less than 1% (1) The number of shares of the Common Stock beneficially owned includes shares of the Common Stock in which the persons set forth in the table have either investment or voting power. Unless otherwise indicated, all of such interests are owned directly, and the indicated person or entity has sole voting and investment power, subject to community property laws where applicable. The number of shares beneficially owned also includes shares that the following individuals have the right to acquire within sixty days of July 10, 1996 upon exercise of stock options (and conversion of Depositary Shares in the case of Messrs. Cramer, Gibson, McGill, Sheh and Schwartz) in the following amounts: (i) 25,000 shares as to Mr. Burns, (ii) 0 shares upon exercise of options and 42,808 shares upon conversion of Depositary Shares as to Mr. Cramer, (iii) 12,500 shares as to 12 Dr. Cunningham, (iv) 7,500 shares upon exercise of options and 21,404 shares upon conversion of the Depositary Shares as to Mr. Gibson, (v) 12,500 shares as to Mr. Martin, (vi) 25,000 shares upon exercise of options and 4,281 shares upon conversion of the Depositary Shares as to Mr. McGill, (vii) 0 shares as to Mr. Riggs, (viii) 362,500 shares upon exercise of options and 21,404 shares upon conversion of Depositary Shares as to Mr. Sheh, (ix) 15,000 shares as to Mr. Vance, (x) 132,000 shares as to Mr. DeLuca, (xi) 110,000 shares as to Mr. Mahoney, (xii) 43,000 shares as to Mr. Pompe and (xiii) 92,500 shares upon exercise of options and 5,136 shares upon conversion of Depositary Shares as to Mr. Schwartz. (2) For the purposes of determining the number of shares of Common Stock beneficially owned as well as the percentage of outstanding Common Stock held by each person or group set forth in the table, the number of shares is divided by the sum of the number of outstanding shares of the Common Stock on July 10, 1996 plus (i) the number of shares of Common Stock subject to options exercisable currently or within 60 days of July 10, 1996 by such person or group, and/or (ii) shares of Common Stock into which persons who hold Depositary Shares or other securities may convert the Preferred Stock represented by such Depositary Shares (or otherwise obtain Common Stock), in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended ("Rule 13d-3(d)(1)"). (3) Such information is derived solely from a Schedule 13G filed by such beneficial owner with the Securities and Exchange Commission (the "SEC") dated February 7, 1996. The address of the Wisconsin Investment Board set forth in its Form 13G is P.O. Box 7842, Madison, Wisconsin 53707. (4) Such information is derived solely from a Schedule 13G dated February 7, 1996 filed by such beneficial owner with the SEC. The address of Dimensional Fund Advisors Inc. set forth in its Form 13G is 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401. (5) Includes 5,000 shares owned by Martcon, Inc., a company owned by Mr. Martin. Mr. Martin disclaims beneficial ownership of such shares. (6) Includes 4,000 shares of Common Stock and 1,000 Depositary Shares (convertible into 4,281 shares of Common Stock) owned by Mr. McGill's wife, as to which Mr. McGill has no voting or dispositive power, and 5,000 shares owned by McGill Resources, Inc., a company owned by Mr. McGill. Mr. McGill disclaims beneficial ownership of all such shares. (7) Mr. Sheh resigned as President and Chief Executive Officer and a director of the Company as of July 1, 1996, but will be treated as an employee of the Company through June 26, 1998. See "Termination of Employment Arrangements - Sheh Agreement" in Item 11. (8) Includes 300 shares owned by Mr. Vance as a custodian under the California Uniform Gifts to Minors Act. Mr. Vance disclaims beneficial ownership of such shares. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - -------- Relocation Loans. In certain circumstances, the Company has granted and may in the future grant interest-free loans to executive officers, officers and certain other employees principally for real estate purchases in connection with Company-initiated transfers to a new location. All loans are approved by the compensation committee and are secured by the principal residence of the individual. Mr. James R. 13 Mahoney, Senior Vice President, entered into a relocation loan arrangement with the Company with an original principal amount of $200,000 and secured by a deed of trust on his personal residence. The loan will remain interest free so long as Mr. Mahoney remains an employee. Beginning December 31, 1991 and on each December 31st thereafter until the due date of the loan, 5% of the original principal amount (to a maximum of 50% of the original principal amount) was scheduled to be forgiven by the Company, provided Mr. Mahoney remains employed by the Company. The loan to Mr. Mahoney is due and payable on December 31, 2000. Additionally, Mr. Mahoney has agreed to repay the remaining 50% of the original principal amount in installments related to the issuance of awards under the Company's incentive compensation plan. Since no bonuses were awarded or paid under the Company's incentive compensation plan during fiscal years 1993 and 1994, Mr. Mahoney was not required to make any installment payments to the Company in those years. During the fiscal year ended March 29, 1996, (i) Mr. Mahoney repaid $7,549 of the loan, and (ii) the maximum amount owed by Mr. Mahoney to the Company under the loan was $150,000. As of March 29, 1996, the principal amount outstanding for Mr. Mahoney's loan was $132,451. Indemnification. The General Corporation Law of the State of Delaware, the state of incorporation of the Company, and the bylaws of the Company provide for indemnification of directors and officers. Section 145 of the Delaware General Corporation Law provides generally that a person sued as a director, officer, employee or agent of a corporation may be indemnified by the corporation for reasonable expenses, including attorneys' fees, if, in cases other than actions brought by or in the right of the corporation, he or she has acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation (and in the case of a criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful). Section 145 provides that no indemnification for any claim or matter may be made, in the case of an action brought by or in the right of the corporation, if the person has been adjudged to be liable, unless the Court of Chancery or other court determines that indemnity is fair and reasonable despite the adjudication of liability. Indemnification is mandatory in the case of a director, officer, employee or agent who has been successful on the merits, or otherwise, in defense of a suit against him or her. The determination of whether a director, officer, employee or agent should be indemnified must be made by a majority of disinterested directors, independent legal counsel or the stockholders. Directors and officers of the Company are covered under policies of directors' and officers' liability insurance. The directors and all officers serving the Company as Senior Vice President or in a higher position are parties to Indemnity Agreements (the "Indemnity Agreements"). The Indemnity Agreements provide indemnification for the directors and covered officers in the event the directors' and officers' liability insurance does not cover a particular claim for indemnification or if such a claim or claims exceed the limits of such coverage. The Indemnity Agreements are generally intended to provide indemnification for any amounts a director or covered officer is legally obligated to pay because of claims arising out of the director's or officer's service to the Company. Additionally, in 1987 the Company's Certificate of Incorporation was amended with the approval of stockholders to provide that its directors are not to be liable to the Company or its stockholders for monetary damages for breach of fiduciary duty to the fullest extent permitted by law. This provision is intended to allow the Company's directors the benefit of the Delaware General Corporation Law which provides that directors of Delaware corporations may be relieved of monetary liabilities for breach of their fiduciary duty of care, except under certain circumstances, including breach of the director's duty of loyalty, acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law or any transaction from which the director derived an improper personal benefit. 14 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS - -------- ON FORM 8-K 3. Exhibits These exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K. Exhibit Number Description ------ ----------- 10(iii) 17. Separation Agreement dated as of July 1, 1996 between Registrant and Robert B. Sheh. (9) 18. Separation Agreement dated October 1, 1995 between Registrant and Larry M. Hart. (9) ________________ (9) Filed as a management compensation plan or arrangement per Item 14(a)(3) of the Securities Exchange Act. 15 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 on Form 10-K/A to its Form 10-K for the year ended March 29, 1996 to be signed on its behalf by the undersigned, thereunto duly authorized in Torrance, California on the 29th day of July, 1996. INTERNATIONAL TECHNOLOGY CORPORATION By: /s/ Anthony J. DeLuca -------------------------------- Anthony J. DeLuca President and Acting Chief Executive Officer 16 EX-10.17 2 SEPARATION AGREEMENT EXHIBIT 10.1 SEPARATION AGREEMENT This Separation Agreement (hereinafter the "Agreement") is entered into as of the 1st day of July, 1996, by and between Robert B. Sheh (hereafter "Sheh"), an individual, and International Technology Corporation, a Delaware corporation (the "Company"). RECITALS A. WHEREAS, Sheh has been employed by the Company, has held the position of President and Chief Executive Officer of the Company, and has held positions as an officer and director of subsidiaries of the Company; B. WHEREAS, Sheh and the Company wish to finally and forever resolve all matters between them relative to Sheh's employment and his entitlement to severance pay and other additional forms of compensation and benefits, and to provide for the termination of the employment relationship; C. NOW, THEREFORE, in consideration of the aforementioned recitals and the mutual covenants and conditions set forth below and in full settlement of any and all claims for lost compensation including, without limitation, all claims for back pay, severance pay, accrued vacation pay, continuation of health or other benefits or any other payment in the nature of compensation attributable to Sheh's employment by the Company or any of its subsidiaries, and any and all other claims which were or could have been raised by either party prior to the date of this Agreement, Sheh and the Company hereby agree as follows: AGREEMENT 1. Resignation and Termination of Employment. Sheh hereby resigns as an ----------------------------------------- officer and director of the Company and of all subsidiaries of the Company; provided, however that Sheh shall continue to be treated as an employee of the Company until June 26, 1998. Notwithstanding the foregoing, Sheh shall have no duties or responsibilities to the Company after his resignation except such duties as may arise under the terms of this Agreement. 2. Salary and Car Allowance. Through June 26, 1998, the Company will pay ------------------------ Sheh at the rate of $450,000 per annum, less payroll deductions, in equal bi- weekly payments. In addition to such amount, Sheh shall receive payment of $5,850 per annum, less payroll deductions, as a car allowance, payable in equal bi-weekly payments. 3. Vacation Pay. The Company will pay Sheh the sum of $40,300 promptly ------------ upon the expiration of seven (7) days after the execution of this Agreement by Sheh, representing accrued vacation pay through his resignation; and thereafter no further vacation pay shall accrue or be payable. 4. Relocation Loan and Country Club Membership. ------------------------------------------- (a) Sheh is indebted to the Company in the amount of $150,000 in connection with a relocation loan. Such indebtedness, and any interest accrued and unpaid as of 1 the date hereof is hereby forgiven and canceled; and the Company shall promptly take all appropriate steps to reconvey the deed of trust securing such indebtedness. (b) Sheh shall be entitled, at no cost, to retain his membership in Los Angeles Country Club, which was paid for by the Company. All ongoing membership dues and other fees and costs associated with such membership shall be the responsibility of Sheh. 5. Welfare Benefits. Until the earlier of June 26, 1998, or such date as ---------------- Sheh shall become a full-time employee of another person, Sheh shall continue, to the same extent and on the same basis as other executive employees of the Company, to be eligible to participate in the Company's Group Medical Insurance Plan and the Corporate Executive Medical Plan (together, the "Medical Plan"); the Company's Group Life and Accidental Death and Dismemberment Plan (the "Life Plan"); and the Company's short and long term disability plans (together, the "Disability Plan"). During such period, Sheh and the Company shall pay their respective costs for such benefits in accordance with the terms and conditions of the applicable plans. Assuming Sheh has not become a full-time employee of another person on or prior to June 26, 1998, then, after such date: (a) in connection with the Medical Plan, Sheh may elect to continue participation in such plan pursuant to the terms of Section 4980B(f) of the Internal Revenue Code of 1986 and, to the extent consistent therewith, the terms of such Plan; but (b) shall no longer participate in the Life Plan and Disability Plan. 6. Retirement Plans. Sheh shall continue to participate in the IT ---------------- Corporation Retirement Plan, the IT Corporation Restoration Plan and the IT Corporation Deferred Compensation Plan through June 26, 1998, as a regular employee of the Company, treating such date as his date of employment termination with the Company for all purposes under such. 7. Restricted Stock Award. The parties acknowledge that on July 5, 1995 ---------------------- Sheh was granted by the Company 23,998 shares of restricted stock pursuant to the Special Turn-A-Round Plan (Fiscal 1995 Management Incentive Plan) and on March 28, 1996 Sheh was granted by the Company 200,000 additional shares of restricted stock of the Company. Notwithstanding any terms to the contrary in the restricted stock agreement pertaining to the 23,998 shares granted July 5, 1995, such shares shall be fully vested on June 26, 1998 and shall not be subject to forfeiture by reason of the termination of Sheh's employment with the Company. On Sheh's execution of this Agreement, the 200,000 shares granted March 28, 1996 shall be relinquished by Sheh and transferred back to the Company. 8. Stock options. The parties acknowledge that Sheh, has unexercised ------------- options covering 250,000 shares of common stock of the Company granted on July 29 1992, 50,000 shares granted on June 3, 1993 and 150,000 shares granted on April 29, 1994 under the Company's stock incentive plans. All such options shall continue to vest in accordance with the terms of the applicable stock option agreements and shall be fully vested in Sheh, notwithstanding any terms to the contrary in the stock option agreements evidencing such options, on April 27, 1998. Sheh shall have the right to exercise the vested options in accordance with the terms of the applicable Stock Option Agreements during the remaining term of the options; provided, however, that 2 notwithstanding any terms to the contrary in the stock option agreements evidencing such options, such options shall not terminate by reason of the termination of Sheh's employment with the Company. 9. Expenses Related to Seeking Employment. The Company will provide Sheh -------------------------------------- with an outplacement service at a cost not to exceed $25,000. 10. Other Expenses. The Company shall reimburse Sheh for reasonable -------------- business expenses incurred by Sheh prior to his resignation, in accordance with the Company's standard practices. 11. Sole Entitlement. Sheh agrees that his sole entitlement to ---------------- compensation, payments of any kind, monetary and/or nonmonetary benefits and/or perquisites with respect to his employment with, his services rendered to, and all other matters between Sheh and the Company or between Sheh and any subsidiary of the Company, is as expressly set forth in this Agreement. It is expressly agreed that the Severance Benefit Agreement dated July 29, 1994, as amended, and the offer of employment letter dated July 14, 1992 by and between Sheh and the Company are hereby terminated and are of no force and effect whatsoever. 12. Releases by Sheh. Sheh does hereby and forever release and discharge ---------------- the Company and the past and present parent, subsidiary and affiliated corporations of the Company as well as the successors, shareholders, officers and directors of corporate shareholders, officers, directors, heirs, predecessors, assigns, agents, employees, attorneys and representatives of each of them, past or present, from any and all cause or causes of action, actions, judgments, liens, indebtedness, damage, losses, claims, liabilities, and demands of whatsoever kind or character, known or unknown, suspected to exist or not suspected to exist, anticipated or not anticipated, whether or not heretofore brought before any state or federal court or before any state or federal agency or other governmental entity, whether statutory or common law, including without limitation on the generality of the foregoing, any and all claims, demands or causes of action attributable to, connected with, or incidental to the employment of Sheh by the Company or any subsidiary of the Company, the separation of that employment and any dealings between the parties concerning Sheh's employment or any other matter existing prior to the date of execution of this Agreement, excepting only any claims or causes of action arising out of willful misconduct, dishonesty, or gross negligence of the Company, or those obligations to be performed hereunder. This release is intended to apply to any claims arising from federal, state or local laws which prohibit discrimination on the basis of race, national origin, sex, religion, age, marital status, pregnancy, handicap, disability, ancestry, sexual orientation, family or personal leave or any other form of discrimination, or to laws such as workers' compensation laws, which provide rights and remedies for injuries sustained in the workplace or any common law claims of any kind, including, but not limited to, breach of privacy, misrepresentation, defamation, wrongful termination, tortious infliction of emotional distress, loss of consortium and breach of fiduciary duty, violation of public policy and any other common law claim of any kind whatever, any claims for severance pay, sick leave, family leave, vacation, life insurance, bonuses, health insurance, disability or medical insurance or any other fringe benefit or compensation, 3 and all rights and claims arising under the Employee Retirement Income Security Act of 1974 ("ERISA"), or pertaining to ERISA regulated benefits. 13. Releases by Company. The Company does hereby release and forever ------------------- discharge Sheh from any and all cause or causes of action, actions, judgments, liens, indebtedness, damages, losses, claims, liabilities, and demands of whatsoever kind of character, known or unknown, suspected to exist or not suspected to exist, anticipated or not anticipated, whether or not heretofore brought before any state or federal court or before any state or federal agency or other governmental entity, whether statutory or common law, heretofore or hereafter arising out of, connected with or incidental to any dealings between the parties prior to the date of this Agreement, including without limitation on the generality of the foregoing, any and all claims, demands or causes of action attributable to, connected with, or incidental to the employment of Sheh by the Company or any subsidiary of the Company, the separation of that employment and any dealings between the parties concerning Sheh's employment or any other matter existing prior to the date of execution of this Agreement, excepting only any claims or causes of action arising out of willful misconduct, dishonesty, or gross negligence of Sheh, or those obligations to be performed hereunder. 14. Unknown Claims. Sheh and Company specifically waive the benefits of -------------- the provisions of section 1542 of the Civil Code of the State of California and any other analogous state or federal law or regulation. Said Section 1542 of the California Civil Code reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 15. Continuing Fiduciary Obligations and Unfair Competition. ------------------------------------------------------- (a) Sheh acknowledges that he is obliged by contract and by operation of law to maintain the confidentiality of the Company's trade secrets and other confidential information not publicly known, and covenants and agrees that he shall not use or divulge, disclose, or communicate to any other person, firm, or corporation, any of the Company's trade secrets or confidential information except as disclosure shall be compelled by judicial process. Nothing contained in this paragraph is intended to preclude Sheh from working for a competitor of the Company or from using non-trade secrets and/or non-confidential information learned by him in the course of his employment with the Company. (b) Sheh agrees that he shall not, for a period of two years from his resignation, directly or indirectly (i) recruit, solicit or induce, or attempt to induce any officer or employee (other than employees engaged in secretarial or purely ministerial functions) of Company or any of its affiliates, to terminate or fail to renew their employment or contract with, or otherwise cease their relationship with, the Company or any of its affiliates or (ii) hire any such person recruited in violation of (i) immediately above. 4 16. Prohibition Against Defamation and Willful Disparagement. The Company -------------------------------------------------------- and Sheh agree that they will not orally or in writing defame or willfully disparage the other, or in the case of the Company, any subsidiary or affiliated corporation of the Company, the Company itself, or any employee, officer or director of the Company or any subsidiary or affiliate of the Company, except as required by compulsion of law to truthfully testify. It is the intention of the parties that any inquiries from potential employers of Sheh as to Sheh's job performance, his interpersonal and other management skills and the reason for his departure from employment at the Company be responded to by the appropriate Company officers or members of the Company's Board of Directors in a manner that provides a favorable recommendation of Sheh to such inquiring potential employer. In any such communication to a prospective employer of Sheh, the reason for Sheh's departure shall be given as "for personal reasons". 17. Litigation. Sheh agrees to cooperate with the Company in connection ---------- with any future or currently pending litigation, including without limitation, by making himself available to testify in actions as reasonably requested by the Company. In the event that Sheh is required to spend more than an insignificant amount of time in any such activities, he shall be compensated at an hourly rate of $220 per hour. In the event Sheh is named as a defendant in any litigation or other proceeding involving the Company where Sheh is required to defend himself with respect to events which relate to or occurred during his employment with the Company or any subsidiary of the Company, or to his service as an officer or director of the Company, to the extent that Sheh is not otherwise covered by any insurance policy maintained by the Company, the Company shall be responsible for providing a defense to, and indemnify, Sheh, to the same extent and under the same conditions as if he were a director or officer of the Company. 18. Legal Advice. Each party has received independent legal advice from ------------ his or its attorneys with respect to the advisability of making the settlement provided for herein, with respect to the advisability of executing this Agreement and with respect to the meaning of California Civil Code Section 1542. 19. Factual Investigation. Each party to this Agreement has made such --------------------- investigation of the facts pertaining to the matters resolved by this Agreement and of all the matters pertaining thereto as he or it deems necessary. 20. Later Discovered Facts. Each party hereto is aware that he or it may ---------------------- hereafter discover claims or facts in addition to or different from those he or it now knows or believes to be true with respect to the matters resolved herein. Nevertheless, it is the intention of each party to fully, finally and forever settle and release all such matters and all claims relative thereto which may exist or may heretofore have existed between them. 21. Confidentiality. This Agreement and its provisions are intended to be --------------- confidential. Accordingly, except as may be required to satisfy the Company's public disclosure or financial or accounting requirements or as may be compelled by court order, neither the Company nor Sheh shall disclose or publicize to any person, firm or corporation the terms of this Agreement without the consent of the other party. As 5 reasonably necessary, Sheh may discuss this Agreement with his wife, attorney, financial advisor, tax advisor, benefit advisor or compensation advisor and Company may discuss this Agreement with its attorneys, officers, directors and managers provided, however, that each agrees to be bound by the terms of this paragraph to keep the information confidential. It shall not be a breach of this confidentiality provision for Sheh to advise any employer or prospective employer of the limitations set forth in paragraph 15 above. 22. Assignment. Each of the parties represents and warrants that he or it ---------- has not heretofore assigned, transferred or granted or purported to assign, transfer or grant any claims, matters, demands or causes of action herein released, disclaimed, discharged or terminated, and agrees to indemnify and hold harmless any other party from and against any and all costs, expense, loss or liability incurred as a consequence of any such assignment. 23. Recitals and Paragraph Headings. Captions and paragraph headings are ------------------------------- used herein for convenience only, are no part of this Agreement and shall not be used in interpreting or construing it. 24. Additional Documents. The parties will execute all such further and -------------------- additional documents and undertake all such other actions as shall be reasonable, convenient, necessary or desirable to carry out the provisions of this Agreement. 25. No Admissions. This Agreement effects the settlement of claims which ------------- are denied, disputed and/or contested and nothing contained herein shall be construed as an admission by any party hereto of any liability of any kind to any other party. Each of the parties hereto denies any liability in connection with any claim and intends merely to avoid the uncertainties and costs of litigation and buy his or its peace. 26. California Law. This Agreement was negotiated, executed and delivered -------------- within the State of California, and the rights and obligations of the parties hereto shall be construed and enforced in accordance with and governed by the laws of the State of California. Should any litigation arise concerning this Agreement, it will be filed only in a court in the County of Los Angeles, State of California, and then only if consistent with the parties' obligations under paragraph 34 in regard to arbitration. 27. Entire Agreement. This Agreement constitutes a single integrated ---------------- contract expressing the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions with respect to the subject matter hereof. There are no other agreements, written or oral, express or implied, between the parties hereto, concerning the subject matter hereof, except as set forth herein. This Agreement may be amended only by an agreement in writing. 28. Binding Effect. This Agreement is binding upon and shall inure to the -------------- benefit of the parties hereto, their heirs, assignees and successors in interest (including successors in any reorganization or merger with any other entity). 29. Construction of Agreement. Each party has cooperated in the drafting ------------------------- and preparation of this Agreement, and, accordingly, in any construction or interpretation of this Agreement, the same shall not be construed against any party by reason of the source of drafting. 6 30. Costs and Attorneys' Fees. Each party is to bear its own costs and ------------------------- attorneys' fees incurred in connection with the matters resolved by this Agreement and in connection with the negotiation and the preparation of this Agreement. However, in the event of litigation or arbitration relating to or for the enforcement of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and costs actually incurred. 31. Taxes. Sheh acknowledges his responsibility for any and all taxes due ----- with respect to the sums paid to him under this Agreement, represents that he has received independent advice concerning his tax obligations, and states that he has not relied upon representations or advice, if any, of the Company or their counsel concerning the taxable or nontaxable nature of the sums payable hereunder. Sheh agrees that he will indemnify and hold the Company harmless from any and all claims for taxes, penalties and/or interest based upon the payments to be made under this Agreement. 32. Counterparts. This Agreement may be executed in counterparts. When ------------ each party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterparts, shall constitute one Agreement which shall be binding upon and effective as to all parties. No counterpart shall be effective until all parties hereto have executed and exchanged an executed counterparts hereof. 33. No Waiver. The failure to enforce at any time any of the provisions --------- of this Agreement, or to require at any time performance by the other party of any of the provisions hereof, shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement or any part hereof or the right of either party thereafter to enforce each and every provision in accordance with the terms of this Agreement. 34. Arbitration. Except in connection with an action by the Company for ----------- injunctive or other equitable relief, any controversy, dispute, or claim between the parties of this Agreement or any party released pursuant to it, including any claim arising out of, in connection with, or in relation to the interpretation, performance or breach of this Agreement shall be resolved exclusively by arbitration conducted in Los Angeles, California, in accordance with the then most applicable rules of the American Arbitration Association. In the event the parties are unable to agree upon an arbitrator, the parties shall select a single arbitrator from a list designated by the American Arbitration Association of seven arbitrators, all of whom shall either be (a) retired judges of the Superior or Appellate Courts resident in Los Angeles or Orange Counties who are members of the "independent list" of retired judges or (b) members of the National Academy of Arbitrators who are attorneys and are resident within 50 miles of the Company's headquarters. Four of the seven panel members proposed by the American Arbitration Association shall be retired judges and three shall be arbitrators, all of whom meet the qualifications set forth below. If the parties are unable to select an arbitrator from the list provided by the American Arbitration Association, then the parties shall each strike names alternatively from the list, with the first strike being determined by lot. After each party has used three strikes, the remaining name on the 7 list shall be the arbitrator. This agreement to resolve any disputes by binding arbitration shall extend to claims against any shareholder of the Company, any subsidiary or affiliate of the Company, any officers, directors, employees, or agents of the Company and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law. In the event the parties are unable to agree upon a location for the arbitration, the location (within Los Angeles County) shall be determined by the arbitrator. The parties intend that this Agreement to arbitrate be valid, enforceable and irrevocable and that it provide the exclusive remedy with respect to all disputes within its scope. 35. Sheh's Understanding. Sheh states that he has carefully read this -------------------- Agreement, that it has been fully explained to him by his attorney, that he fully understands its final and binding effect and understands that he is releasing certain rights and entitlements, that the only promises made to him to sign the Agreement are those stated above, and that he is signing this Agreement voluntarily. 36. Age Discrimination in Employment Act Waiver. The waiver given below ------------------------------------------- is given only in exchange for consideration in addition to anything of value to which Sheh is already entitled. The waiver set forth below does not waive rights or claims which may arise after the date of execution of this Agreement. Sheh acknowledges that (i) this entire Agreement is written in a manner calculated to be understood by Sheh (ii) that he has been advised in writing to consult with an attorney before executing this Agreement, and (iii) he was given a period of 21 days within which to consider the Agreement, and (iv) to the extent he executes this Agreement before the expiration of the 21 day period, he does so knowingly and voluntarily and only after consulting with an attorney. Sheh shall have the right to cancel and revoke this Agreement during a period of 7 days following his execution of the Agreement and this Agreement shall not become effective, and no money shall be paid hereunder until the expiration of such 7-day period. The 7-day period of revocation shall commence upon the date of Sheh's execution of this Agreement. In order to revoke this Agreement, Sheh shall deliver to the Company, prior to the expiration of said 7-day period, a written notice of cancellation. In addition to the release set forth at Paragraph 12 hereof, Sheh hereby voluntarily and knowingly waives all rights or claims arising under the Federal Age Discrimination in Employment Act. 37. Obligations of Company Which Survive Sheh's Death. The obligations of ------------------------------------------------- the Company set forth in paragraphs 2, 3 and 4, and no others, shall survive Sheh's death. Upon Sheh's death, the Company will make a cash payment equivalent to its cost of providing the welfare and retirement benefits Sheh would have received but for his death pursuant to paragraphs 5 and 6, subject to the exception in the following sentence. Payments pursuant to the obligations set forth in paragraphs 2, 3, 4, 5 and 6 shall be made to Sheh's wife, Mary C. Sheh, or to his estate in the event she shall no longer be living; except that in the event Mary C. Sheh shall no longer be living, the payment in respect of welfare benefits shall not be made. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. 8 EXECUTION AND ACKNOWLEDGMENT BY ROBERT B. SHEH - ---------------------------------------------- I received this Separation Agreement on July 24, 1996. I understand that I have twenty-one (21) days thereafter within which to consider this Agreement with my legal counsel. I freely choose to sign this Separation Agreement this 24 day of July, 1996. I understand that I will have seven (7) days thereafter within which to revoke my acceptance of this Separation Agreement and that the Separation Agreement shall not be effective under the expiration of that seven (7) day period. Executed at Torrance, California, this 24th day of July, 1996. /s/ Robert B. Sheh -------------------------------------- ROBERT B. SHEH EXECUTION AND ACKNOWLEDGMENT BY INTERNATIONAL TECHNOLOGY CORPORATION Dated: July 26, 1996 At: Torrance, California INTERNATIONAL TECHNOLOGY CORPORATION By: /s/ Anthony J. Deluca ________________________________ APPROVED AS TO FORM AND SUBSTANCE: Date: July 25, 1996 ___________________________________ /s/ Don M. Pearson of Argue Pearson Harbison & Myers Attorneys for Robert B. Sheh 9 EX-10.18 3 SEPARATION AGREEMENT SEPARATION AGREEMENT This Separation Agreement (hereinafter the "Agreement") is entered into by Larry M. Hart (hereafter "Hart"), an individual, and International Technology Corporation, a Delaware corporation, and its subsidiaries and affiliates (collectively referred to as the "Company"). RECITALS A. WHEREAS, Hart has been employed by the Company, has held the position of Senior Vice President and Chief Operating Officer of the Company principally supervising the Company's daily operations; B. WHEREAS, Hart and the Company wish to finally and forever resolve all matters between them relative to Hart's employment and his entitlement to severance pay and other additional forms of compensation and benefits, and to provide for the termination of the employment relationship; C. NOW, THEREFORE, in consideration of the aforementioned recitals and the mutual covenants and conditions set forth below and in full settlement of any and all claims for allegedly lost compensation including, without limitation, all claims for back pay, severance pay, accrued vacation pay, continuation of health or other benefits or any other payment in the nature of compensation allegedly attributable to Hart's employment by the Company, and any and all other claims which were or could have been raised by either party prior to the date of this Agreement, Hart and the Company hereby agree as follows: AGREEMENT 1. Resignation and Termination of Employment. Effective as of October ----------------------------------------- 1, 1995, Hart resigns as an officer of the Company. The Company accepts Hart's resignation. Hart shall perform no further duties for the Company after October 1, 1995 except such duties as may arise under the terms of this Agreement. Hart's employment by the Company will terminate upon the earlier of his resignation from employment or his obtaining full time, permanent employment with another company. In no event shall Hart's employment continue beyond November 1, 1996. 2. Salary. Effective as of October 1, 1995 through December 31, 1995, ------ the Company will pay Hart at the rate of $305,850 per annum, less payroll deductions, in equal bi-weekly payments. On January 2, 1996, the Company will pay to Hart $258,795 less applicable payroll deductions, in a lump sum. 3. Severance Pay and Bonus. The Company will pay to Hart a severance ----------------------- payment of $199,995 less payroll deductions in a lump sum on January 2, 1996. This severance payment is in lieu of and extinguishes all rights to any bonus payments for the second quarter of the fiscal year 1996 and thereafter. 4. Vacation Pay. The parties acknowledge that all accrued vacation has ------------ been used by Hart and vacation will cease to accrue on and after October 1, 1995. 5. Miscellaneous Payment. The Company will pay Hart the sum of $5,600 at --------------------- the expiration of the 7 day period of revocation contained in paragraph 44 of this Agreement. 6. Benefits. Hart shall continue, to the same extent as other executive -------- employees of the Company, to be eligible to participate in the following group of benefits. Hart and the Company shall pay their respective costs for the following group benefits in accordance with the Company's benefits plan. (a) Group Medical Insurance. The Company's group medical insurance ----------------------- plan and the corporate executive medical plan. (b) Group Life and Accidental Death and Dismemberment. ------------------------------------------------- (c) Short Term and Long Term Disability Insurance. --------------------------------------------- (d) In each case, the Company's obligation to continue to pay its costs of these benefits shall cease upon termination of Hart's employment in accordance with paragraph 1 hereof. (e) After January 2, 1996 Hart agrees to remit to the Company in a timely manner the employee's portion of any applicable insurance premium until such time as Hart terminates employment pursuant to the provisions of paragraph 1 hereof. 7. Retirement Plans. Hart shall cease to participate in Company's ---------------- qualified and non-qualified retirement plans on September 30, 1995. 8. Restricted Stock Award. The parties acknowledge that on July 5, 1995, ---------------------- pursuant to a Restricted Stock and Escrow Agreement, Hart was granted by Company 15,998 shares of restricted Common Stock of the Company. On Hart's termination of employment in accordance with paragraph 1 hereof, the shares will fully vest and all restrictions imposed upon the shares shall terminate as if Hart had retired from the Company. 9. Stock Options. The parties acknowledge that Hart has unexercised ------------- options covering 180,000 shares of common stock of the Company granted on November 15, 1993 and 100,000 shares of common stock of the Company granted on April 29, 1994 under the Company's 1991 Stock Incentive Plan. All said unvested options shall be fully vested in Hart, notwithstanding any terms to the contrary in 2 -----END PRIVACY-ENHANCED MESSAGE-----