8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  October 24, 2005

Veritas DGC Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

1-7427	76-0343152
(Commission File Number)	(I.R.S. Employer Identification No.)
10300 Town Park Drive
Houston, Texas	77072
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code:  (832) 351-8300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.Entry into a Material Definitive Agreement.

By letter agreement dated October 24, 2005, we amended the Amended and Restated Employment Agreement dated October 22, 2001, which we entered into with Stephen J. Ludlow, a director and vice chairman of Veritas DGC Inc., on October 22, 2001.  The employment agreement was previously amended on November 14, 2001.

Our employment agreement with Mr. Ludlow, as amended, continues until March 31, 2006 unless it is extended by mutual agreement or unless we elect to terminate the agreement earlier.  Until March 31, 2006, Mr. Ludlow is entitled to a minimum annual salary of $280,000 under the agreement and will continue to participate in equity compensation and incentive payment plans offered to other executive officers.  On March 31, 2006, unless the agreement is extended or earlier terminated, (other than a termination in connection with a change of control of Veritas DGC), Mr. Ludlow is entitled to a lump sum payment under his employment agreement equal to two years of annual base salary and to a lump sum payment equal to the amount payable for group insurance premiums under COBRA for a period of 12 months.  Options previously granted to Mr. Ludlow will continue to vest following the termination of Mr. Ludlow’s employment on the schedule set forth in his option grant agreements and will continue to be exercisable for the period specified in the applicable option grant agreement.  In the event a change in control of Veritas DGC occurs within two years after such termination, under certain conditions Mr. Ludlow will be entitled to a lump sum payment under his employment agreement equal to three times the sum of his annual base salary and annual bonus less certain payments previously made.  In addition, all options to purchase Common Stock of the Company granted to Mr. Ludlow will then immediately become exercisable.  Mr. Ludlow has agreed not to compete with the Company for a period of two years following the date of termination.

Item 5.02.Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

Stephen J. Ludlow, currently a director and vice chairman of the Company, has announced his intention to retire from the Company in March 2006.  Mr. Ludlow will continue to serve in his present role as a director and vice chairman until the next annual meeting of stockholders in December 2005 and will then be named an executive vice president of the Company.  He will continue in that role until his retirement to assure an orderly transition of his current duties.

Item 9.01Financial Statements and Exhibits

(c)Exhibits

Exhibit No.	Description
10.1	Amended and Restated Employment Agreement between Veritas DGC Inc. and Stephen J. Ludlow. (Exhibit 10-C to Veritas DGC Inc.’s Form 10-Q for the quarter ended October 31, 2001 is incorporated herein by reference.)

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10.2	Amendment No. 1 to Amended and Restated Employment Agreement between Veritas DGC Inc. and Stephen J. Ludlow. (Exhibit 10-D to Veritas DGC Inc.’s Form 10-Q for the quarter ended October 31, 2001 is incorporated herein by reference.)
10.3	Letter Agreement dated October 24, 2005, between Veritas DGC Inc. and Stephen J. Ludlow
99.1	Press release dated October 27, 2005

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		VERITAS DGC INC.
Date:	October 28, 2005	By:	/s/ LARRY L. WORDEN
		Name:		Larry L. Worden
		Title:		Vice President, General Counsel and
				Secretary

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Amended and Restated Employment Agreement between Veritas DGC Inc. and Stephen J. Ludlow. (Exhibit 10-C to Veritas DGC Inc.’s Form 10-Q for the quarter ended October 31, 2001 is incorporated herein by reference.)
10.2	Amendment No. 1 to Amended and Restated Employment Agreement between Veritas DGC Inc. and Stephen J. Ludlow. (Exhibit 10-D to Veritas DGC Inc.’s Form 10-Q for the quarter ended October 31, 2001 is incorporated herein by reference.)
10.3	Letter Agreement dated October 24, 2005, between Veritas DGC Inc. and Stephen J. Ludlow
99.1	Press release dated October 27, 2005

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EX-10.3

Exhibit 10.3

Veritas DGC Inc.

October 24, 2005

Mr. Stephen J. Ludlow

2719 Lakeside Village Drive

Missouri City, Texas 77459

Re:Amended and Restated Employment Agreement dated October 22, 2001, by and between Veritas DGC Inc. and Stephen J. Ludlow, as amended by Amendment No. 1 dated November 14, 2001 (collectively, the “Employment Agreement”)

Dear Steve:

As we have discussed, the Board of Directors of Veritas DGC Inc. has deemed it in the best interest of the Company to reduce the number of employee directors on the board to one.  Owing to that decision, you have not been nominated for re-election as a director at the next Annual Stockholders Meeting which is currently scheduled for December 15, 2005.  As a result, effective with the election of directors to be held at the annual meeting, you will no longer be a director of the Company nor will you retain the title “vice chairman.”  The Company acknowledges and agrees that the occurrence of these events would give you the option, should you choose to exercise it, to terminate your Employment Agreement with Good Reason and receive the benefits described in Section 6(d) of that agreement.  (Capitalized terms used in this letter and not otherwise defined herein will have the meanings given such terms in the Employment Agreement).

I have requested that you remain in our employ beyond the annual meeting to assist us in an orderly transition of your current duties, primarily in the area of investor relations, and you have agreed to do so.  We have mutually agreed that your employment beyond the annual meeting will be on the following terms and conditions and that the Employment Agreement is modified and amended accordingly:

a)Immediately following the next election of directors, your title will change to “executive vice president.”  You will continue to report to me and you will provide advice, consultation and services to the Company primarily in the area of investor relations.

b)You will continue to serve as Executive Vice President and the Employment Agreement, as amended by this letter agreement, will remain in effect until March 31, 2006 or such

later date as we mutually agree.  The Company may terminate the Employment Agreement, as amended by this letter agreement, prior to March 31, 2006 for any or no reason on two weeks’ written notice.  The Employment Agreement, as amended by this letter agreement, will terminate immediately in the event of your death.  Termination of the Employment Agreement, as amended by this letter agreement, may only occur as specified in this paragraph b).  The effective date of any termination under this paragraph b) will be the “Date of Termination” and will supersede the definition of that term in the Employment Agreement.

c)Your Base Salary will remain at $280,000.

d)You will participate in the Global Management Incentive Plan for fiscal year 2006.  To earn incentive compensation under that plan, the Company must meet its financial goals and you must meet your business goal (your business goal in this case is to insure an orderly transition of your investor relations duties).  Your incentive compensation, if earned, will be calculated in accordance with the Global Management Incentive Plan and will be prorated for the time you are actually employed; provided, however, that if the Company terminates prior to March 31, 2006 or in the event of your death prior to that date, your incentive compensation will be calculated and paid to you as if you were employed through March 31, 2006 and met your business goal.  Incentive payments, if earned, will be paid to you at the time executive officers of the Company are paid and will be paid to you regardless of whether you are an employee of the Company at the time.

e)On October 17, 2005, you were granted options in accordance with the Company’s 2006 long term equity-based incentive plan.  We have mutually agreed that you will not receive the right to earn restricted shares under that plan.  In addition, should we grant additional equity compensation to other officers of the Company prior to the Date of Termination, you will not be entitled to participate in that grant.

f)On the Date of Termination, regardless of the reason for such termination, and provided that no Change in Control has then occurred, the Company will pay or provide to you those benefits described in Section 6(d) of the Employment Agreement with the following exceptions:  your Severance Payment will be paid in a lump sum; and your payment for COBRA benefits will be paid in a lump sum as a Section 6(d)(4)(ii) Payment.  In addition, those stock options you hold as of the Date of Termination will continue to vest on the schedule set forth in the applicable stock grant, will be exercisable for the period specified in the applicable stock grant agreement, and will otherwise be treated under the applicable stock grant agreement and plan documents as if you continued to be an employee of Company after the Date of Termination.  A schedule showing the stock options you currently hold is attached to this letter.  In addition to the above payments, if the Company terminates the Employment Agreement, as modified by this letter agreement, for any reason prior to March 31, 2006 or in the event of your death prior to March 31, 2006, you will be paid an amount equal to your Base Salary through and including March 31, 2006, and your incentive compensation (as described in paragraph d) above) will be calculated and paid to you as if you were employed through March 31, 2006 and met your business goal.

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g)In the event of a Change in Control prior to the Date of Termination or if discussions commence with a third person prior to the Date of Termination that ultimately result in a Change in Control, you will then be entitled to those benefits described in Section 6(e) of the Employment Agreement.

h)The “Non-Compete Period,” as used in the Employment Agreement, will include a period of twenty-four months following the Date of Termination regardless of the reason for termination.

i)This letter agreement is intended to serve as a written amendment of the terms of the Employment Agreement and the terms hereof have been approved by the Compensation Committee of the Board of Directors acting under delegated authority of the Board of Directors.  In the event of a conflict between the terms of this letter agreement and the Employment Agreement, the terms of this letter agreement will prevail.

j)This letter agreement is also intended to serve as a written amendment to each of the stock option grant agreements issued to you to the extent specified in paragraph f) above.  In the event of a conflict between the terms of this letter agreement and the terms of any such stock grant agreement, the terms of this letter agreement will prevail.

I believe this letter accurately describes our agreement.  Please confirm your agreement by signing both copies of this letter in the space indicated below and return one signed original to me.

Yours very truly,
/s/ THIERRY PILENKO
Thierry Pilenko
Chairman & Chief Executive Officer
ACCEPTED AND AGREED:
/s/ STEPHEN J. LUDLOW
Stephen J. Ludlow
Date:	October 24, 2005

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Grant Detail Report Veritas DGC Inc.

From        /  /   to   /  /        

As of 10/19/2005

Stephen J. Ludlow

2719 Lakeside Village Drive

Missouri City, TX 77459   US

Grant	Expiration			Options	Option		Options	Options	Options
Date	Date	Plan ID	Grant Type	Granted	Price		Outstanding	Vested	Exercisable
11/11/1992	11/11/2000	1992EMP	Non-Qualified	26,667	$	13.500000	0	26,667	0
	Transactions
	Data	Type		Options	Price
	4/1/1998	Exercise		3,000	$	50.562500
	3/7/2000	Exercise		23,667	$	24.875000
9/8/1995	9/8/2005	1992EMP	Non-Qualified	16,000	$	5.250000	0	16,000	0
	Transactions
	Data	Type		Options	Price
	3/13/1998	Exercise		16,000	$	42.812500
3/11/1997	3/11/2007	1992EMP	Non-Qualified	43,225	$	19.375000	27,016	43,225	27,016
	Transactions
	Data	Type		Options	Price
	3/23/2000	Exercise		16,209	$	26.250000
3/11/1999	3/11/2009	1992EMP	Non-Qualified	24,743	$	10.710000	0	24,743	0
	Transactions
	Data	Type		Options	Price
	3/6/2001	Exercise		12,371	$	34.355700
	6/7/2004	Exercise		572	$	19.830000
	6/7/2004	Exercise		4,800	$	19.600000
	6/7/2004	Exercise		100	$	19.510000
	6/7/2004	Exercise		200	$	19.500000
	6/7/2004	Exercise		1,400	$	19.440000
	6/7/2004	Exercise		100	$	19.430000
	6/7/2004	Exercise		500	$	19.400000
	6/7/2004	Exercise		1,400	$	19.440000
	6/7/2004	Exercise		100	$	19.390000
	6/7/2004	Exercise		100	$	19.380000
	6/7/2004	Exercise		200	$	19.380000
	6/7/2004	Exercise		100	$	19.380000
	6/7/2004	Exercise		1,200	$	19.370000
	6/7/2004	Exercise		100	$	19.330000
	6/7/2004	Exercise		200	$	19.330000
	6/7/2004	Exercise		1,300	$	19.330000
3/13/2000	3/13/2010	1992EMP	Non-Qualified	15,179	$	26.187500	15,179	15,179	15,179

1

Grant Detail Report Veritas DGC Inc.

From        /  /   to   /  /        

As of 10/19/2005

Stephen J. Ludlow

2719 Lakeside Village Drive

Missouri City, TX 77459   US

Grant	Expiration			Options	Option			Options	Options	Options
Date	Date	Plan ID	Grant Type	Granted	Price			Outstanding	Vested	Exercisable
3/6/2001	3/6/2011	1992EMP	Non-Qualified	11,555	$	34.400000		11,555	11,555	11,555
8/6/2002	8/6/2007	1992EMP	Non-Qualified	36,271	$	10.960000		9,068	36,271	9,068
	Transactions
	Data	Type		Options	Price
	6/4/2004	Exercise		7,400	$	19.000000
	6/4/2004	Exercise		400	$	19.020000
	6/4/2004	Exercise		800	$	19.050000
	6/4/2004	Exercise		200	$	19.080000
	6/4/2004	Exercise		1,000	$	19.100000
	6/7/2004	Exercise		735	$	19.770000
	6/7/2004	Exercise		300	$	19.750000
	6/7/2004	Exercise		100	$	19.730000
	6/7/2004	Exercise		100	$	19.680000
	6/7/2004	Exercise		1,200	$	19.670000
	6/7/2004	Exercise		5,900	$	19.500000
	7/5/2005	Exercise		2,000	$	28.300000
	7/5/2005	Exercise		2,000	$	28.250000
	7/5/2005	Exercise		2,000	$	28.150000
	7/5/2005	Exercise		3,068	$	28.500000
3/3/2003	3/3/2008	Omnibus	Non-Qualified	24,700	$	7.950000		6,175	18,525	0
	Transactions
	Date	Type		Options	Price
	6/2/2004	Exercise		350	$	19.550000
	6/2/2004	Exercise		400	$	19.540000
	6/2/2004	Exercise		300	$	19.530000
	6/2/2004	Exercise		10,800	$		19.500000
	6/29/2005	Exercise		600	$	27.250000
	6/29/2005	Exercise		2,400	$	27.110000
	6/29/2005	Exercise		3,175	$	27.380000
	Options Becoming Exercisable
	6,176 on 3/3/2006

2

Grant Detail Report Veritas DGC Inc.

From        /  /   to   /  /        

As of 10/19/2005

Stephen J. Ludlow

2719 Lakeside Village Drive

Missouri City, TX 77459   US

Grant	Expiration			Options	Option		Options	Options	Options
Date	Date	Plan ID	Grant Type	Granted	Price		Outstanding	Vested	Exercisable
1/6/2004	1/6/2009	Omnibus	Non-Qualified	24,700	$	11.190000	12,350	12,350	0
	Transactions
	Date	Type		Options	Price
	6/7/2004	Exercise		275	$	19.350000
	6/7/2004	Exercise		600	$	19.330000
	6/7/2004	Exercise		800	$	19.300000
	6/7/2004	Exercise		800	$	19.280000
	6/7/2004	Exercise		3,700	$	19.280000
	6/30/2005	Exercise		3,175	$	27.500000
	6/30/2005	Exercise		3,000	$	27.650000
	Options Becoming Exercisable
	6,175 on 1/6/2006		6,175 on 1/6/2007
10/17/2006	10/17/2010	Omnibus	Non-Qualified	10,500	$	31.940000	10,500	0	0
	Options Becoming Exercisable
	3,500 on 10/17/2006		3,500 on 10/17/2007	3,500 on 10/17/2008
Optionee Total				233,540			91,843	204,615	62,818

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EX-99.1

Exhibit 99.1

VERITAS DGC INC. ANNOUNCES DIRECTOR AND VICE CHAIRMAN

STEPHEN J. LUDLOW TO RETIRE

Houston, Texas — October 27, 2005 — Veritas DGC Inc. (NYSE & TSX: VTS) announced today that Stephen J. Ludlow will retire from the Company in March 2006.  Mr. Ludlow will serve in his present role as a director and vice chairman until the next annual meeting of stockholders in December and will then be named an executive vice president of the Company.  He will continue in that role until his retirement to assure an orderly transition of his current duties.

Mr. Ludlow began his career with Veritas DGC, then Digicon Inc., in 1971 as a member of a marine seismic acquisition crew.  He rose through the ranks of the Company to serve in a number of executive positions, including President and CEO of Digicon Inc., President and Chief Operating Officer of Veritas DGC, and ultimately Vice Chairman of the Company.  He has served on the Board of Directors of Veritas DGC since 1994.

Thierry Pilenko, Chairman and Chief Executive Officer, commented that “Steve was a key contributor in building Veritas DGC into the global company it is today.  He helped guide the Company’s re-structuring in the early nineties, played a leading role in its business combination with Veritas Energy Services Inc. in the mid-nineties and has been a valued member of the Board and the senior management team.  We are sincerely grateful for his positive contribution to the Company in his 34 years of service and wish him and his wife Janet all the best in their future endeavors.”

The Company cautions that statements in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These include statements as to expectations, beliefs and future financial performance, such as statements regarding our business prospects.  All of these are based on current information and expectations that are subject to a number of risks, uncertainties and assumptions.  These risks and uncertainties are more fully described in our reports filed with the Securities and Exchange Commission.  Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material respect from those currently anticipated.

Veritas DGC, headquartered in Houston, Texas, is a leading provider of integrated geophysical information and services to the petroleum industry worldwide.

For additional information, please contact:

Mindy Ingle, Investor Relations (832) 351-8821