Employment Offer Letter between Insituform Technologies, Inc. and Christian G. Farman for Vice President and CFO Position

Summary

Insituform Technologies, Inc. offers Christian G. Farman the position of Vice President and Chief Financial Officer, subject to board approval. The agreement outlines a base salary of $265,000, stock options, annual and long-term incentive plans, deferred compensation, and various employee benefits. It includes severance terms if employment is terminated without cause within the first two years, and requires Mr. Farman to sign confidentiality and non-competition agreements, and pass background checks. The offer is contingent on approval and will be effective upon Mr. Farman's start date at the company's Missouri office.

EX-10.1 3 c81393exv10w1.txt EMPLOYMENT LETTER - CHRISTIAN G. FARMAN EXHIBIT 10.1 (INSITUFORM TECHNOLOGIES LETTERHEAD) December 1, 2003 Mr. Christian G. Farman 245 East 93rd Street, Apartment 32 B New York, NY 10128 Dear Chris: Subject to Compensation Committee and Board of Director approval, we are pleased to offer you the position of Vice President and Chief Financial Officer of Insituform Technologies, Inc. ("ITI" or "Insituform"). The principal terms and conditions of the offer are as follows: 1. Base Salary. The annual base salary for the position of Vice President and Chief Financial Officer will be $265,000. Your base salary will be reviewed on an annual basis by the Compensation Committee of the Board of Directors of ITI. 2. Stock Options. You will be granted 12,500 stock options shortly after you begin fulltime employment with Insituform. Such options become exercisable with respect to 25% of such shares on the grant date and on each of the first, second and third anniversaries of the grant date. The strike price for the options will be the closing market price of the common stock on the date your options are granted by the Compensation Committee, which is expected to be the first day of your active employment with ITI. The options will expire on the seventh anniversary of the grant date. To the maximum extent permitted under the limitations contained in the Internal Revenue Code, the options will be "incentive stock options," with the remainder being non-qualified stock options. 3. Annual Incentive Bonus. During 2004, you will be entitled to receive an annual incentive bonus in an amount calculated as a percentage of your base salary determined by reference to: (i) a range of percentages identified by the Compensation Committee based upon a center point objective of 50% (intended to provide an opportunity of up to two times such center point) and (ii) the accomplishment by ITI of such annual goals attendant to such range as shall also have been determined by the Compensation Committee. The foregoing annual goals will be determined as reasonable targets given ITI's results of operations and prospects, intended to provide you with incentives to achieve such performance. The amount and criteria for your annual incentive bonus will be reviewed annually by the Compensation Committee. 4. Long Term Incentives. You are eligible to participate in the Insituform Technologies, Inc. Long-Term Incentive Plan (the "LTIP"), which includes both equity and cash compensation. Equity grants are made under the Insituform Technologies, Inc. 2001 Employee Equity Incentive Plan. LTIP grants for officers are determined by the Compensation Committee on an annual basis. Specific information concerning the actual grants will be communicated to you when approved by the Compensation Committee, anticipated to take place during the first half of 2004. Any cash award is based on the achievement of goals established by the Compensation Committee. 5. Deferred Compensation. You are eligible to participate in the Senior Management Voluntary Deferred Compensation Plan (the "DCP"). Tax deferred contributions may be made into the DCP after the maximum allowable contribution (as defined by the IRS) has been made into ITI's 401(k) plan. The first 3% of DCP contributions are matched by ITI at 100% and the next 2% of contributions are matched at a 50% rate. The maximum company match into both the 401(k) and DCP together is $8,000. Mr. Christian G. Farman December 1, 2003 Page 2 6. Additional Benefits. (a) You will be provided with a car allowance of $850 per month, subject to adjustment in accordance with ITI's policy. (b) You are eligible to participate in the company's medical, dental, vision, life insurance, and long-term disability plans, and any future plans and programs implemented by ITI for its employees generally or by the Compensation Committee for you specifically, and in the ITI 401(k) Profit Sharing Plan and any future plans or programs supplemental to the ITI 401(k) Profit Sharing Plan. Details about specific benefits will be provided to you in benefit plan documents. (d) You will receive holidays in accordance with ITI's policy. During 2004, you will receive three weeks vacation. During your fifth year of employment and beyond, you will receive four weeks vacation. (e) You will be provided relocation assistance as provided for in ITI's relocation policy, including reimbursement for the cost of temporary accommodations and weekly travel to and from your current home for a mutually agreeable period prior to relocating your family to St. Louis. Your relocation, including the sale of your home, must be handled through ITI's relocation coordinator. 7. Severance. As Vice President and Chief Financial Officer, you will report to the Chief Executive Officer and you will serve at the pleasure of the ITI Board of Directors; however, if your employment is terminated by ITI for reasons other than "cause" (as defined below) during your first twenty-four months' of employment, you will receive, upon such termination, a severance payment equal to twelve months' base salary, car allowance and medical/dental benefits, and reasonable outplacement assistance. The amount of "base salary" will be calculated as the product obtained by multiplying (i) the number of months of severance to which you are entitled by (ii) your highest monthly base salary during the twelve months prior to termination. "Cause" shall be defined as: (i) your willful and continued failure to perform substantially your duties with ITI or any of its affiliates (other than such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to you by the Chairman of the Board of Directors which specifically identifies the manner in which the Board of Directors believes that you have not substantially performed your duties; or (ii) your willful engaging in illegal conduct or gross misconduct which is materially and demonstrably injurious to ITI, whether or not subsequently discontinued or corrected; or (iii) your conviction of a crime other than misdemeanor traffic offenses or commission of an act of moral turpitude; or (iv) your inability to report for work for a period of four months or greater. No act or failure to act, on your part, shall be considered "willful" unless it is done, or omitted to be done, by you in bad faith or without reasonable belief that your action or omission was in the best interests of ITI. The Mr. Christian G. Farman December 1, 2003 Page 3 cessation of employment shall not be deemed to be for "cause" unless and until there shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of no less than a majority of the entire membership of the Board of Directors, finding that, in the good faith opinion of the Board of Directors, you are guilty of the conduct described. 8. Confidentiality and Non-Competition; Code of Conduct; Drug Testing; Background Check. You must sign ITI's standard Employee Confidentiality, Work Product and Non-Competitive Agreement. You must sign and agree to abide by ITI's Business Code of Conduct. You must successfully pass ITI's standard drug/alcohol screen, verification of academic credentials, reference and background checks. This letter (and the terms of the plans, documents and standard agreements referred to herein) contains the entire agreement of the parties with respect to the subject matter hereof, and supersedes any and all prior understandings, commitments and agreements with respect thereto. The terms of this letter (but not the standard agreements referred to herein) will expire when the severance provisions expire. Your appointment as Vice President and Chief Financial Officer will not be effective until your first day of active employment with ITI at its executive offices in Chesterfield, Missouri, which must occur within four weeks of the date of this letter. If the above terms accurately reflect your understanding and agreement, please sign this letter where indicated below and return it to me acknowledging your acceptance. Very truly yours, INSITUFORM TECHNOLOGIES, INC. /s/ Thomas S. Rooney, Jr. - ------------------------------------- Thomas S. Rooney, Jr. President and Chief Executive Officer ACCEPTED AND AGREED: /s/ Christian G. Farman - ------------------------------------- Christian G. Farman Date December 2, 2003 --------------------------------