Exhibit 10 (38)
Layne Christensen Company
Key Management Deferred Compensation Plan
(As Amended and Restated for IRC Section 409A, effective January 1, 2008)
          THIS PLAN is amended and restated effective as of the 1st day of
January, 2008, by Layne Christensen Company, a Delaware corporation (the
“Company”), as follows:
RECITALS
          WHEREAS, the Company established the Layne Christensen Company Key
Management Deferred Compensation Plan (the “Plan”) to provide additional
retirement benefits and income tax deferral opportunities for a select group of
management and highly compensated employees; and
          WHEREAS, the Company intends that the Plan shall at all times be
administered and interpreted in such a manner as to constitute an unfunded
nonqualified deferred compensation plan for a select group of management or
highly compensated employees and to qualify for all available exemptions from
the provisions of ERISA;
          WHEREAS, the Company intends that the Plan shall at all times be
administered and interpreted in accordance with Code Section 409A and all
applicable regulations and guidance issued thereunder and has amended and
restated the Plan to be in compliance with the Final Treasury Regulations issued
thereunder;
          NOW, THEREFORE, the Company hereby amends and restates the Layne
Christensen Company Key Management Deferred Compensation Plan effective
January 1, 2008, as follows:
ARTICLE ONE
DEFINITIONS
          DEFINITION OF TERMS. Certain words and phrases are defined when first
used in this Plan. Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply. In
addition, the following words and phrases when used herein, unless the context
clearly requires otherwise, shall have the following respective meanings:
Accrued Benefit. The sum of (A) all amounts deferred hereunder by or on behalf
of a Participant, including (i) any contributions made by the Company, (ii) any
interest credited to the Participant or the Participant’s Beneficiary pursuant
to this Plan, and (iii) any deemed investment credited to the Participant or the
Participant’s Beneficiary, in each case as such amounts, interest and deemed
investment credits are reflected in the Deferral Account less (B) (i) any
distributions made hereunder to the Participant or the Participant’s Beneficiary
and (ii) any deemed investment losses debited to the Participant or the
Participant’s Beneficiary and reflected in the Deferral Account.
Affiliate. Any corporation, partnership, joint venture, association, or similar
organization or entity, which is a member of a controlled group of companies
which includes, or which is under common control with, the Company under Code
section 414.
Article. Means an Article of the Plan.
Base Salary. The annual compensation (excluding bonuses, commissions, overtime,
incentive payments, non-monetary awards, directors fees and other fees, income
attributable to the exercise of stock options or income attributable to the
receipt or vesting of other equity-based compensation awards relating to the
Company’s common stock and car allowances) paid to an Eligible Employee for
services rendered to the Company, before reduction for compensation deferred
pursuant to all qualified, non-qualified and Code section 125 plans of the
Company.
Beneficiary. The beneficiary or beneficiaries designated by a Participant under
Article 7, or, if the Participant has not designated one or more beneficiaries
under Article 7, the person or persons entitled to receive distributions of
benefits under Article 5.
Calendar Year. January 1 to December 31.
Cause. For purposes of this Plan “Cause” shall mean any of the following acts or
circumstances: (i) willful destruction by the Participant of property of the
Company or an Affiliate having a material value to the

 

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Company or such Affiliate; (ii) fraud, embezzlement, theft, or comparable
dishonest activity committed by the Participant (excluding acts involving a de
minimis dollar value and not related to the Company or an Affiliate); (iii) the
Participant’s conviction of or entering a plea of guilty or nolo contendere to
any crime constituting a felony or any misdemeanor involving fraud, dishonesty
or moral turpitude (excluding acts involving a de minimis dollar value and not
related to the Company or an Affiliate); (iv) the Participant’s breach, neglect,
refusal, or failure to materially discharge the Participant’s duties (other than
due to physical or mental illness) commensurate with the Participant’s title and
function or the Participant’s failure to comply with the lawful directions of
the Board or the Chief Executive Officer of the Company, or of the Board of
Directors or the Chief Executive Officer of the Affiliate that employs the
Participant, in any such case that is not cured within fifteen (15) days after
the Participant has received written notice thereof from such Board of Directors
or Chief Executive Officer; (v) any willful misconduct by the Participant which
may cause substantial economic or reputational injury to the Company, including,
but not limited to, sexual harassment, or (vi) a willful and knowing material
misrepresentation to the Board or the Chief Executive Officer of the Company or
to the Board of Directors or the Chief Executive Officer of the Affiliate that
employs the Participant.
Change in Control shall mean the occurrence of any of the following:

  (a)   Change in the Ownership of the Company. Any one person, or more than one
person acting as a group (as defined below) acquires ownership of stock of the
Company that, together with stock held by such person or group, constitutes more
than 50 percent of the total fair market value or total voting power of the
stock of the Company.     (b)   Change in the Effective Control of the Company.
Either (i) any one person, or more than one person acting as a group (as defined
below), acquire (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or persons) ownership of stock of
the Company possessing 35 percent or more of the total voting power of the stock
of the Company; or (ii) a majority of members of the Company’s board of
directors is replaced during any 12-month period by directors whose
apportionment or election is not endorsed by a majority of the members of the
Company’s board of directors prior to the date of the appointment or election.  
  (c)   Change in the Ownership of a Substantial Portion of the Company’s
Assets. Any one person, or more than one person acting as a group (as defined
below), acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value (“gross fair market value”
means the value of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets) equal to or more than 40 percent of the total gross fair market value of
all of the assets of the Company immediately prior to such acquisition or
acquisitions.

For purposes of this definition (i) a “person” shall be deemed to own all
ownership interests attributed to such person pursuant to Code section 318 and
(ii) persons will not be considered to be acting as a group solely because they
purchase or own stock, or purchase assets, of the Company at the same time, or
as a result of the same public offering. However, persons will be considered to
be acting as a group if they are owners of a corporation that enters into a
merger, consolidation, purchase or acquisition of stock or assets, or similar
business transaction with the Company. If a person, including an entity or
entity shareholder, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in a
corporation (only with respect to the ownership in that corporation in the case
of a change in the Effective Control of the Company or only to the extent of the
ownership in that corporation in the case of a Change in the Ownership of a
Substantial Portion of the Company’s Assets) prior to the transaction giving
rise to the change and not with respect to the ownership interest in the other
corporation.
Code. The Internal Revenue Code of 1986, as amended from time to time.
Compensation. The Base Salary and bonuses payable by the Company or an Affiliate
to an Eligible Employee during a Calendar Year.
Deemed Investment Alternatives means those investment vehicles made available by
the Plan Administrator and set forth on Exhibit B in which a Participant’s
Deferral Account is to be hypothetically invested in accordance with
Section 4.2.
Deemed Investment Election means the election made by a Participant from which
the Participant’s Deferral Account will be hypothetically invested in the Deemed
Investment Alternatives in accordance with Section 4.2.

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Deferral Account. Book entries maintained by the Company reflecting a
Participant’s Accrued Benefit; provided, however, that the existence of such
book entries and the Deferral Account shall not create, and shall not be deemed
to create, a trust of any kind, or a fiduciary relationship between the Company
and a Participant, the Participant’s Beneficiary, or other beneficiaries under
this Plan.
Disability or Disabled. A Participant shall be considered disabled if the
Participant: (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than 3 months under a
Company-sponsored accident and health plan.
Disability Date shall mean the date on which the Plan Administrator confirms
that a Participant has a qualifying Disability and is eligible to receive
payment hereunder.
Effective Date. The original effective date of the Plan was January 1, 2006. The
Plan was amended and restated effective January 1, 2008, for Code Section 409A.
The Plan Administrator was, prior to the original Effective Date, permitted to
solicit and accept an Election of Deferral for each Eligible Employee that began
participating in the Plan on such original Effective Date.
Election of Deferral. A written election made and filed by an Eligible Employee
with the Plan Administrator on the Participant Enrollment and Election Form in
substantially the same form attached hereto as Exhibit A, specifying both the
amount or percentage of Compensation that will be deferred during the upcoming
Calendar Year and the form in which such deferred amounts, along with Corporate
Contributions made during such Calendar Year, if any, both such types of
contributions as adjusted for deemed earnings and losses, will be distributed to
the Participant upon the Participant’s Retirement.
Eligible Employee. Any employee of the Company or an Affiliate who is selected
to participate in the Plan in accordance with the provisions of Article 2.1
hereof, and is one of a “select group of management or highly compensated
employees,” as defined by ERISA.
ERISA. The Employee Retirement Income Security Act of 1974, as amended from time
to time.
Good Reason means the occurrence of any of the following:

  (a)   The Company or any of its Affiliates reduces the Participant’s Base
Salary.     (b)   The Company discontinues its bonus plan in which the
Participant participates as in effect immediately before the Change in Control
without immediately replacing such bonus plan with a plan that is the
substantial economic equivalent of such discontinued bonus plan, or a successor
to the Company fails or refuses to assume the obligations of the Company under
such bonus plan as in effect immediately before the Change in Control or under a
plan that is the substantial economic equivalent of such bonus plan.     (c)  
Without the Participant’s express written consent, the Company or any of its
Affiliates requires the Participant to change the location of the Participant’s
job or office, so that the Participant will be based at a location more than 35
miles from the former location of the Participant’s job or office.     (d)  
Without the Participant’s express written consent, the Company or any of its
Affiliates substantially and adversely reduces the Participant’s
responsibilities or directs the Participant to report to a person of lower rank
or responsibilities than the person to whom the Participant reported before the
Change in Control.

Normal Retirement Age. The date the Participant attains 60 years of age.
Participant. An Eligible Employee who either (i) elects to participate in the
Plan by filing an Election of Deferral with the Company or (ii) although no
longer making current deferrals under the Plan, has an Accrued Benefit credited
to his or her Deferral Account.
Participant Annual Deferral. The portion of a Participant’s Compensation,
expressed either as a percentage or a stated dollar amount, that the Participant
elects to defer for the Calendar Year in question.
Plan. The Layne Christensen Company Key Management Deferred Compensation Plan,
as amended.

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Plan Administrator. The Company unless the Company designates another person or
persons to hold the position of Plan Administrator. In no event may a
Participant serve as the sole Plan Administrator. If a Participant is part of a
group or committee designated as Plan Administrator, then the Participant may
not participate in any activity or decision relating solely to his or her
individual benefits under the Plan, and such matters will be resolved by the
remaining committee members.
Plan Year. The Calendar Year.
Retires or Retirement. An Eligible Employee’s Separation from Service after the
Eligible Employee has reached Normal Retirement Age.
Separation from Service or Separates from Service means a Participant ceasing to
be employed by the Company or an Affiliate. A Separation from Service shall not
occur if the Participant is on military leave, sick leave or other bona fide
leave of absence (such as temporary employment by the government) if such leave
does not exceed six months, or if longer, as long as the Participant’s right to
reemployment with the Company is provided either by statute or by contract.
Separation from Service shall have the same definition as set forth under Code
section 409A and any applicable regulations or Treasury Department guidance
issued thereunder.
Specified Employee shall mean a Participant who is a key employee (as defined by
Code section 416(i) without regard to paragraph (5) thereof) of a corporation
the stock of which is publicly traded on an established securities market within
the meaning of Treasury Regulation Section 1.897-1(m). If a Participant is a key
employee at any time during the twelve (12) months ending on the identification
date, the Participant is a Specified Employee for the twelve (12) month period
commencing on the first day of the fourth month following the identification
date. For purposes of this definition, the identification date is December 31.
The Company, in determining whether this definition and the related restrictions
set forth in Article 5.5(c) apply, will determine whether the Company has any
publicly traded stock as of the date of a Participant’s Separation from Service.
ARTICLE TWO
ELIGIBILITY AND PARTICIPATION

2.1.   Eligibility. An employee of the Company or an Affiliate shall be an
Eligible Employee only if he or she is selected by the Plan Administrator, in
writing, to participate in the Plan.   2.2.   Participation. An Eligible
Employee may participate in the Plan by filing an Election of Deferral in
accordance with the terms and conditions set forth in Article Three. Once an
employee becomes a Participant, he or she shall remain a Participant until his
or her Separation from Service with the Company or an Affiliate, and thereafter
until all benefits to which he or she (or his or her beneficiaries) is entitled
under the Plan have been paid. Nothing contained herein shall be construed to be
a contract of employment for any term of years, nor as conferring upon a
Participant the right to continue to be employed by the Company in his or her
present capacity, or in any capacity. It is expressly understood by the parties
hereto that this Plan relates to the payment of deferred compensation for the
Participant’s services, payable after termination of employment with the
Company, and is not intended to be an employment contract.   2.3.  
Reemployment. Where an Eligible Employee has ceased being eligible to
participate in the Plan (other than the accrual of Earnings), regardless of
whether all amounts deferred under the Plan have been paid, and subsequently
becomes eligible to participate in the Plan again, the Employee may be treated
as being initially eligible to participate in the plan if the Employee had not
been eligible to participate in the Plan (other than the accrual of Earnings) at
any time during the twenty-four (24) month period ending on the date the
Employee again becomes eligible to participate in the Plan.

ARTICLE THREE
DEFERRAL ELECTIONS AND CORPORATE CONTRIBUTIONS

3.1.   Deferral Elections:

  (a)   Annual Elections. Except as provided in Section 3.1(c) in the case of an
employee first becoming eligible to participate in the Plan or as provided in
Section 3(d) in the case of performance-based compensation, an Eligible Employee
must make an election to defer Compensation under this Plan by filing, with the
Plan Administrator, an Election of Deferral prior to the end of the Calendar
Year preceding the Calendar Year in which the services that give rise to the
Eligible Employee’s Compensation will be performed. If an Eligible Employee has
made an Election of Deferral and fails

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      to make a new or different election to defer by the end of the Calendar
Year preceding the Calendar Year for which the election is effective, the
Eligible Employee shall be deemed to have made the same election as is then
currently in effect, if any. An Election of Deferral, unless cancelled or
terminated, shall continue through the date on which the Eligible Employee’s
employment terminates for any reason including death, Retirement or Disability.
All deferrals shall be accomplished by payroll deduction.     (b)   Contents of
Election of Deferral. In the Election of Deferral, the Eligible Employee shall
specify both (i) the amount Compensation to be deferred and (ii) the form of
payment such deferred amount will be made upon the Eligible Employee’s
Retirement. With respect to specification of the amount to be deferred, such
specification may be separate for the individual components of Compensation, and
may be expressed as percentages or fixed dollar amounts. However, the total
amount of the deferrals made by each Eligible Employee in any Calendar Year may
be subject to certain minimums or maximums as established by the Plan
Administrator and as then specified in the Participant Enrollment And Election
Form. The Plan Administrator and the Company shall disregard any deferral
election to the extent such deferral election does not fall within such minimums
or maximums.     (c)   Election Upon First Becoming Eligible. Notwithstanding
Section 3.1(a) above, upon an employee being notified by the Plan Administrator
for the first time that he or she is eligible to participate in the Plan and if
he or she has not in any prior Plan Year become eligible to participate in any
nonqualified deferred compensation plan of the Company with which the Plan would
be aggregated for purposes of Treasury Regulations § 1.409A-1(c)(2), the
Eligible Employee shall have thirty (30) days to make an initial deferral
election. Such initial deferral election may be made only with respect to
Compensation paid for services performed subsequent to such election. In the
event an Election of Deferral is made with respect to a bonus in the first year
of eligibility, but after the beginning of a service period, the deferral
election will apply to the portion of the bonus paid for services performed
subsequent to the election and will be calculated based on the total bonus for
the service period multiplied by the ratio of the number of days remaining in
the service period to the total days in the service period.     (d)   Election
for Performance-Based Compensation. Notwithstanding Section 3.1(a) above, any
Election of Deferral related to a bonus which constitutes performance-based
compensation (as defined in Code Section 409A and the regulations issued
thereunder), based on services performed over a period of at least 12 months,
may, if permitted by the Plan Administrator, be made no later than six months
before the end of such performance period.     (e)   Revocation of Election;
Effective Date of Election. For purposes of this Plan, an election to defer may
be changed or revoked at any time prior 5:00 p.m. Kansas City time on the last
business day of the Calendar Year preceding the Calendar Year for which the
Election of Deferral relates. Accordingly, an Election of Deferral will, for
purposes of the Plan, not be considered as having been made until such date, at
which time the Election of Deferral shall become irrevocable for that
forthcoming Calendar Year.

3.2.   Corporate Contributions:

  (a)   The Company may make contributions (either discretionary, matching or
both) (“Corporate Contributions”) to the Plan as it may determine from time to
time and may direct that such contributions be allocated among the Deferral
Accounts of those Participants that it may select. If a Participant is not
employed by the Company as of the last day of a Plan Year other than by reason
of his or her Retirement, Disability or death, the Corporate Contribution(s), if
any, for such Plan Year shall be zero. In the event of Retirement, Disability or
death, a Participant shall be credited with the Corporate Contribution(s), if
any, for the Plan Year in which he or she Retires, becomes Disabled or dies.    
(b)   No Participant shall have a right to compel the Company to make a
Corporate Contribution under this Article 3.2 and no Participant shall have the
right to share in the allocation of any such Corporate Contribution for any Plan
Year unless selected by the Company, in its sole discretion.

3.3.   Subsequent Changes in Time and Form of Payment. To the extent a
Participant desires to extend the payment date or change the form of payment,
such extension or change in form of payment may be permitted and honored by the
Plan Administrator only if the following two conditions are satisfied:

  (a)   Any election made pursuant to this Section 3.3 will not become effective
until at least 12 months after the date the election is made; and

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  (b)   Any extensions of the payment commencement date or change in form of
payment must, at a minimum, result in a deferral of any payment to be made for a
period of not less than five (5) years from the date such payment would
otherwise have been paid; provided, however, that such five year minimum
extension need not apply to distributions on account of Disability, death or
unforeseeable emergency, as defined in Article 5.6.

ARTICLE FOUR
DEFERRAL ACCOUNTS AND ALLOCATION OF FUNDS

4.1.   Deferral Account Allocations:

  (a)   Compensation that is deferred under the Plan shall be credited to the
Deferral Account on or about the date the Compensation would otherwise have been
paid.     (b)   Discretionary Corporate Contributions (if any) shall be credited
to the Participant’s Deferral Account at such time as directed by the Plan
Administrator.     (c)   Based on the Deemed Investment Elections of a
Participant made under Article 4.2, the Participant’s Deferral Account shall be
credited with deemed investment earnings, gains, losses or changes in value
effective at the end of each day during the Plan Year, except as otherwise
provided in this Plan.     (d)   The Plan Administrator may, at any time, change
the timing or methods for (i) crediting or debiting earnings, gains, losses, and
changes in value of deemed investment options, (ii) crediting Participant Annual
Deferrals and Corporate Contributions, and (iii) debiting payments of benefits
and withdrawals under this Plan; provided, however, that the times and methods
for crediting or debiting such items in effect at any particular time shall be
uniform among all Participants and Beneficiaries.

4.2.   Deemed Investment Elections and Declared Rates:

  (a)   Deemed Investment Elections may be made from any of the various Deemed
Investment Alternatives selected by the Participant from among those made
available by the Company from time to time, which are outlined in Exhibit B.    
(b)   A Participant (or, in the event of the Participant’s death, the
Participant’s Beneficiary) shall make Deemed Investment Elections for the
Participant’s Deferral Account by filing a form substantially in the same form
of Exhibit B (or another form acceptable to the Plan Administrator) with the
Plan Administrator. The number of Deemed Investment Alternatives made available
to the Participant as well as any percentage limitations shall be made at the
sole discretion of the Plan Administrator. Deemed Investment Elections shall
remain in effect until changed and may be changed at the frequency specified in
Exhibit B. Such changes in deemed investments shall be effective on the next
business day or as soon as administratively feasible thereafter.     (c)   At
the end of each calendar quarter (or such shorter period as the Plan
Administrator may determine), the Company shall compute the total return for the
quarter (or such shorter period) as to each Participant’s Deemed Investment
Elections and may reduce such returns for that quarter (or shorter period) by
items such as money management fees, cost of insurance, taxes and deemed
investment expenses associated specifically with each deemed investment
alternative. The total return for each deemed investment alternative shall be
that deemed investment alternative’s total return for that quarter (or shorter
period) reduced by applicable expenses as described above and approved by the
Plan Administrator.     (d)   From time to time, and at its sole discretion, the
Plan Administrator may change the Deemed Investment Alternatives that it makes
available to the Participant. However, notwithstanding the provisions of this
Article 4.2, the Company may invest contributions in investments other than the
deemed investments selected by such Participant but the Participant’s return
will solely be based on the results of his or her Deemed Investment Election
reduced for expenses as described in Article 4.2(c) above. Nothing in this Plan
shall require the Company to actually acquire or hold any particular investment.

4.3.   Determination of Accounts. A Participant’s Accrued Benefit as of each
date shall consist of the balance of deferrals of Compensation, Corporate
Contributions, and deemed investment earnings, gains, losses, and changes in
value in his or her Deferral Account determined in accordance with this
Article 4.

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4.4.   Separate Plan Year Tracking. So as to provide a Participant with the
opportunity each Plan Year to select the form that the upcoming year’s
deferrals, if any, (and earnings and losses thereon) will ultimately be paid
(e.g., lump sum or installment), a Participant’s Annual Deferral, Corporate
Contributions made during such Plan Year and all deemed investment earnings,
gains, losses or changes in value thereon will be tracked separately from such
contributions in other Plan Years.

ARTICLE FIVE
ENTITLEMENT TO BENEFITS

5.1.   Vesting of Benefits. The portion of a Participant’s Deferral Account that
is attributable to his or her Compensation deferral and deemed investment
earnings, gains, losses and changes in value credited thereon shall be
immediately fully vested. The portion of a Participant’s Deferral Account that
is attributable to Corporate Contributions and deemed investment earnings,
gains, losses and changes in value credited thereon (if any), shall vest based
on the table in Exhibit A. Notwithstanding the foregoing, but subject to Article
5.6(b), the portion of a Participant’s Deferral Account that is attributable to
Corporate Contributions and deemed investment earnings, gains, losses and
changes in value credited thereon (if any), shall become fully vested upon the
Participant’s Retirement, death, or Disability.

5.2.   Retirement Benefit.

  (a)   Upon the Retirement of the Participant, the Company shall thereafter pay
to the Participant his or her Accrued Benefit. Each portion of a Participant’s
Accrued Benefit that relates to the Participant’s deferred or Corporate
Contributions made during a specific Plan Year shall be payable in the manner
and frequency elected by the Participant with respect to such Plan Year or as
otherwise specified by the Plan Administrator in Exhibit A. If installment
payments are chosen for one or more Plan Years’ deferral or Corporate
Contributions, the amount of the first installment to be paid during the
Calendar Year in which payment begins shall be equal to (i) the total amount
payable in the same form of distribution to the Participant as of his or her
Retirement, divided by (ii) the total number of installment payments selected to
be made. Unless otherwise provided for under Article 5.5(c), the first payment
shall be due within the first 90-day period immediately following the
Participant’s Retirement. If the Participant fails to select a form of
distribution for purposes of distributions from such Participant’s Accounts for
a Plan Year, such distributions will default to lump sum.         For example
and for illustration purposes only, assume a Participant’s aggregate Accrued
Benefit is $250,000, $150,000 of which relates to Plan Years for which the
Participant elected a lump sum form of payment and the remaining $100,000
relates to Plan Years for which the Participant elected installments over five
(5) years. Upon the Participant’s Retirement, the Participant will be entitled
to receive (i) a $150,000 lump-sum payment and (ii) an installment payment of
$20,000 ((1/5) of the $100,000 payable in five annual installments).     (b)  
As of January 1 of each subsequent Calendar Year during the benefit payment
period, the amount of each installment to be paid during such Calendar Year
shall be recalculated and shall be equal to the remaining balance in the portion
of the Participant’s Deferral Account as of such January 1 for which the same
form of distribution election has been made; divided by the number of remaining
installment payments to be made, inclusive of the current Calendar Year in
subsequent Calendar Years.     (c)   The final installment payment for the
portion(s) of the Participant’s Deferred Account for which the same form of
distribution election has been made shall be equal to the remaining amount
payable to the Participant. In no event shall the amount of any installment
payment exceed the remaining amount payable to the Participant.     (d)  
Notwithstanding the foregoing, a Participant’s retirement benefit shall be
distributed in one lump sum rather than in installments if the balance in the
Participant’s Deferral Account and all similar plans aggregated with the Plan
under Treasury Regulations § 1.409A-1(c)(2) as of his Retirement is less than
the applicable dollar amount under Code Section 402(g)(1)(B) (ignoring any
additional contribution opportunity due to catch-up contributions).     (e)   In
the event a Participant elects to receive his or her benefits upon Retirement in
the form of installments, such series of installment payments is to be treated
as a series of separate payments.

5.3.   Disability Retirement Benefit. The Participant shall be entitled to
receive payments hereunder prior to his or her Retirement if he or she is
Disabled. If a Participant has a qualifying Disability, the benefit payable

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    hereunder shall be the same amount as would have been payable as a
Retirement benefit under Article 5.2 above had the Participant attained his or
her Normal Retirement Age on the Disability Date. Such benefit shall be payable
in a lump sum regardless of any different form of distribution method chosen by
the Participant on account of Retirement.   5.4.   Death Benefits:

  (a)   Death Benefit Prior to Commencement of Benefits. If the Participant dies
while in the employment of the Company or an Affiliate prior to the commencement
of benefit payments in the event of Disability, Separation From Service, or
Retirement, the Company shall pay a survivor benefit in an amount based on the
Participant’s Accrued Benefit at the date of death at such time stipulated in
Exhibit A. The death benefit payable under this Article shall be distributed to
the Participant’s Beneficiary in a lump sum regardless of any different form of
distribution method chosen by the Participant on account of Retirement. As
elected by the Participant on his or her Election of Deferral, such lump sum
payment shall be made either within the first 90-day period immediately
following the Participant’s death or on the first anniversary of the
Participant’s death and payable to that person listed on the last Beneficiary
designation received by the Company from the Participant prior to his or her
death. If no such designation has been received by the Company, such payment
shall be made to the Participant’s surviving legal spouse. If the Participant is
not survived by a legal spouse, the said payment shall be made to the then
living children of the Participant, if any, in equal shares. If there are no
surviving children, the balance of the Accrued Benefit shall be paid to the
estate of the Participant.     (b)   Death Benefit After Commencement of
Retirement Benefits. In the event of the Participant’s death after the
commencement of benefit payments, but prior to the completion of such payments
due to and owing hereunder, the Company shall continue to make such payments, in
installments over the remainder of the period specified in Article 5.2 hereof
that would have been applicable to the Participant had he or she survived. Such
continuing payment shall be made to the Participant’s designated Beneficiary in
accordance with the last such designation received by the Company from the
Participant prior to his death. If no such designation has been received by the
Company, such payments shall be made to the Participant’s surviving legal
spouse. If such spouse dies before receiving all payments to which he or she is
entitled hereunder, then the balance of the Accrued Benefit shall be paid to the
spouse’s estate. If the Participant is not survived by a legal spouse, then the
said payments shall be made to the then living children of the Participant, if
any, in equal shares. If there are no surviving children, the balance of the
Accrued Benefit shall be paid to the estate of the Participant.

5.5.   Benefits Upon Separation from Service:

  (a)   In the event of the Participant’s Separation from Service for any reason
other than for Cause, Disability, Retirement or death, the Company shall pay to
the Participant a termination benefit based on the vested value of the
Participant’s Accrued Benefit as of the effective date of such Separation from
Service. Such benefit shall be payable in a lump sum regardless of any different
form of distribution method chosen by the Participant on account of Retirement.
Unless otherwise provided for under Article 5.5(c), the lump sum payment shall
be made within 90 days following the Participant’s Separation from Service.    
(b)   In the event the Participant’s employment is terminated for Cause, no
benefits of any kind will be due or payable under the terms of this Plan from
amounts credited to the Participant’s Deferral Account attributable to Corporate
Contributions, and any cumulative earnings, gains, and changes in value thereon,
and all rights of the Participant, his or her designated Beneficiary, executors,
or administrators, or any other person, to receive payments thereof shall be
forfeited. Notwithstanding the manner and frequency elected by the Participant
or as otherwise specified by the Plan Administrator in Exhibit A, benefits
credited to the Participant’s Deferral Account attributable to his or her
compensation deferral and deemed investment earnings, gains, losses and changes
in value credited thereon shall be paid in a lump sum within the first 90-day
period immediately following the Participant’s Separation from Service. If,
after installment payments of benefits under this Plan have begun, the Plan
Administrator determines that Cause existed before the Participant’s Retirement
or Disability, such installment payments shall be reduced by amounts credited to
the Participant’s Deferral Account attributable to Corporate Contributions, and
any cumulative earnings, gains, and changes in value thereon.

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  (c)   Notwithstanding anything to the contrary in the Plan or in the payment
election of a Participant or the Company, the Plan may not make payment to any
Participant who is a Specified Employee on account of a Separation from Service,
earlier than six (6) months after the date of Separation from Service (or, if
earlier than the end of the six-month period, the date of death of the Specified
Employee), in accordance with Treasury Regulations §1.409A-(i)(2)(i). Any such
payment that is delayed pursuant to this Section 5.5(c) shall be made on the
first day of the seventh month following the Participant’s Separation from
Service.

5.6.   Hardship Distribution:

  (a)   Hardship Withdrawal. In the event that the Plan Administrator, under a
written request by a Participant, determines, in its sole discretion, that the
Participant has suffered an unforeseeable financial emergency, the Company shall
pay to the Participant, within the first 90-day period immediately following
such determination, an amount necessary to meet the emergency (the “Hardship
Withdrawal”), but not exceeding the vested balance of such Participant’s
Deferral Account as of the date of such payment. For purposes of Article 5.6(a),
an “unforeseeable financial emergency” shall mean (i) a severe financial
hardship to the Participant or beneficiary resulting from a sudden and
unexpected illness or accident of the Participant or Beneficiary, the
Participant’s or Beneficiary’s spouse, or the Participant or Beneficiary’s
dependent (as defined in Code Section 152(a)), (ii) loss of the Participant’s or
Beneficiary’s property due to casualty, or (iii) other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant or Beneficiary. The Company will determine whether a Participant
incurs an unforeseeable emergency based on the relevant facts and circumstances
and in accordance with Treasury Regulations §1.409A-3(a)(6)(i)(3) or applicable
guidance. However, in any case, payment on account of an unforeseeable emergency
may not be made to the extent that such emergency is or may be relieved: (i)
through reimbursement or compensation from insurance or otherwise; (ii) by
liquidation of the Participant’s assets, to the extent the liquidation of such
assets would not cause severe financial hardship; or (iii) by the cessation of
deferrals under this Plan. The amount of any payment based on an unforeseeable
emergency is limited to the amount that is reasonably necessary to satisfy the
emergency need, which may include amounts necessary to pay any Federal, state,
or local income taxes or penalties reasonably anticipated to result from the
distribution. The determination as to the amount of payment must take into
account any additional compensation that is available to the Participant if he
or she cancels a deferral election in accordance with terms of the Plan.     (b)
  Rules Adopted by Plan Administrator. The Plan Administrator shall have the
authority to adopt additional rules relating to Hardship Withdrawals. In
administering these rules, the Plan Administrator shall act in accordance with
the principle that the primary purpose of this Plan is to provide additional
retirement income, not additional funds for current consumption.     (c)   Limit
on Number of Hardship Withdrawals. No Participant may receive more than one
hardship distribution in any Calendar Year.     (d)   Prohibition of Further
Deferrals. A Participant who receives a Hardship Withdrawals, and who is still
employed by the Company or an Affiliate shall be prohibited from making
deferrals under Article 3.1 for the remainder of the Calendar Year in which the
distribution is made.

5.7.   Effect of Change in Control. A Participant shall become fully vested in
the portion of his Deferral Account that is attributable to Corporate
Contributions and deemed investment earnings, gains, losses and changes in value
credited thereon (if any) if, within one year after the occurrence of a Change
in Control, his employment is involuntarily terminated by the Company or any of
its Affiliates for any reason other than Cause, or he voluntarily terminates his
employment with the Company and all Affiliates for Good Reason. From and after
the occurrence of a Change in Control, the Plan Administrator shall consist of a
committee of the individuals who were members of the Company’s Board of
Directors 90 days before the occurrence of the Change in Control, with any
vacancy in such committee occurring thereafter being filed with a person or
persons selected by the other members of such committee. Subject to Article
5.5(c), payments due (if any) following a Change in Control shall be due on or
about the first day of the third month following the Participant’s Separation
from Service.   5.8.   Permissible Acceleration of Benefits.      
Notwithstanding any other provision hereof to the contrary, the Plan
Administrator, in its sole discretion, may allow for the acceleration of a
payment as permitted under Treasury Regulations § 1.409A-3(j)(4) such as but

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    not limited to (i) distributions pursuant to a domestic relations order (§
1.409A-3(j)(4)(ii)); (ii) distributions to comply with an ethics agreement with
the Federal government (§ 1.409A-3(j)(4)(iii)); (iii) distributions for the
payment of employment taxes (§ 1.409A-3(j)(4)(vi); and (iv) distributions upon
the inclusion of income under Section 409A (§ 1.409A-3(j)(4)(vii)).

5.9.   Excise Tax Limitation: Notwithstanding anything contained in this Plan to
the contrary, in the event that any payment or benefit (within the meaning of
Section 280G(b)(2) of the Code) to the Participant or for the Participant’s
benefit paid or payable or distributed or distributable (including, but not
limited to, the acceleration of the time for the vesting or payment of such
benefit or payment) pursuant to the terms of this Plan or otherwise in
connection with, or arising out of, the Participant’s employment with the
Company or any of its Affiliates or a change of control within the meaning of
Section 280G of the Code (a “Payment” or “Payments”), would be subject to the
excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
Payments shall be reduced (but not below zero) but only to the extent necessary
that no portion thereof shall be subject to the excise tax imposed by
Section 4999 of the Code (the “Section 4999 Limit”). Unless the Participant
shall have given prior written notice specifying a different order to the
Company to effectuate the limitations described in the preceding sentence, the
Company shall reduce or eliminate the Payments by first reducing or eliminating
those Payments or benefits which are not payable in cash and then by reducing or
eliminating cash Payments, in each case in reverse order beginning with payments
or benefits which are to be paid the farthest in time. Any notice given by the
Participant pursuant to the preceding sentence shall take precedence over the
provisions of any other plan, arrangement or agreement governing the
Participant’s rights and entitlements to any benefits or compensation.

5.10.   Benefits Not Transferable. No Participant or Beneficiary under this Plan
shall have any power or right to transfer, assign, anticipate, hypothecate or
otherwise encumber any part of all the amounts payable hereunder. No part of the
amounts payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by
operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency, or dissolution of marriage. Any such attempted
assignment shall be void.

ARTICLE SIX
DISTRIBUTION OF BENEFITS

6.1.   Benefits Payable Only From General Corporate Assets: Unsecured General
Creditor Status of Participant:

  (a)   Payment to the Participant or any Beneficiary hereunder shall be made
from assets which shall continue, for all purposes, to be part of the general,
unrestricted assets of the Company; no person shall have any interest in any
such asset by virtue of any provision of this Plan. The Company’s obligation
hereunder shall be an unfunded and unsecured promise to pay money in the future.
To the extent that any person acquires a right to receive payments from the
Company under the provisions hereof, such right shall be no greater than the
right of any unsecured general creditor of the Company; no such person shall
have or acquire any legal or equitable right, interest or claim in or to any
property or assets of the Company.     (b)   In the event that, in its
discretion, the Company purchases an insurance policy or policies insuring the
life of a Participant, or Company employee, to allow the Company to recover or
meet the cost of providing benefits in whole or in part, hereunder, no
Participant or Beneficiary shall have any rights whatsoever therein or in said
policy or the proceeds therefrom. The Company shall be the sole owner and
beneficiary of any such insurance policy or property and shall possess and may
exercise all incidents of ownership therein.     (c)   In the event that the
Company purchases an insurance policy or policies on the life of a participant
or a Company employee as provided for above, then all of such policies shall be
subject to the claims of the creditors of the Company.     (d)   If the Company
chooses to obtain insurance on the life of a Participant in connection with its
obligations under this Plan, the Participant hereby agrees to take such physical
examinations and to truthfully and completely supply such information as may be
required by the Company or the insurance company(ies) designated by the Company.
If a Participant submits information to any such insurance company(ies) and if
the Participant makes a material misrepresentation in an application for any
insurance that may be used to insure any of the Company’s obligations under this
Plan, and if as a

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      result of that material misrepresentation an insurance company is not
required to pay all or any part of the benefit provided under that insurance,
the Participant’s right to a benefit under this Plan will be reduced by the
amount of the benefit that is not paid by the insurance company because of such
material misrepresentation if applicable.

6.2.   Facility of Payment. If a distribution is to be made to a minor, or to a
person who is otherwise incompetent, then the Plan Administrator may, in its
discretion, make such distribution (i) to the legal guardian, or if none, to a
parent of a minor payee with whom the payee maintains his or her residence, or
(ii) to the conservator or committee or, if none, to the person having custody
of an incompetent payee. Any such distribution shall fully discharge the Plan
Administrator, the Company and Plan from further liability on account thereof.  
6.3.   Withholding. Any and all payments to be made to a Participant or a
Participant’s beneficiaries pursuant to this Plan shall be subject to all
federal, state and local income and employment taxes and such taxes may be
withheld accordingly by the Company from benefits under this Plan or from
salary, bonuses or other amounts due to the Participant as determined by the
Plan Administrator.

ARTICLE SEVEN
BENEFICIARIES

7.1.   Beneficiary Designation. The Participant shall have the right, at any
time, to submit in substantially the form attached hereto as Exhibit C, a
written designation of primary and secondary beneficiaries to whom payment under
this Plan shall be made in the event of his or her death prior to complete
distribution of the benefits payable. Each Beneficiary designation shall become
effective only when receipt thereof is acknowledged in writing by the Company.
The Company shall have the right, in its sole discretion, to reject any
Beneficiary designation, which is not in substantially the form attached hereto
as Exhibit C. Any attempt to designate a Beneficiary, otherwise than as provided
in this Article shall be ineffective.

7.2.   Spouse’s Interest. A Participant’s Beneficiary designation shall be
deemed automatically revoked if the Participant names a spouse as Beneficiary
and that marriage is later dissolved or the spouse dies. Without limiting the
generality of the foregoing, the interest in the benefits hereunder of a spouse
of a Participant who has predeceased the Participant or whose marriage with the
Participant has been dissolved shall automatically pass to the Participant and
shall not be transferable by such spouse in any manner, including but not
limited to such spouse’s will, nor shall such interest pass under the laws of
intestate succession.

ARTICLE EIGHT
PLAN ADMINISTRATION

8.1.   Responsibility of Administration of the Plan:

  (a)   The Plan Administrator shall be responsible for the management,
operation and administration of the Plan. The Plan Administrator may employ
others to render advice with regard to its responsibilities under this Plan. It
may also allocate its responsibilities to others and may exercise any other
powers necessary for the discharge of its duties. The Plan Administrator shall
be entitled to rely conclusively upon all tables, valuations, certifications,
opinions and reports furnished by any actuary, accountant, controller, counsel
or other person employed or engaged by the Plan Administrator with respect to
the Plan.     (b)   The primary responsibility of the Plan Administrator is to
administer the Plan for the benefit of the Participants and their beneficiaries,
subject to the specific terms of the Plan. The Plan Administrator shall
administer the Plan in accordance with its terms and shall have the power to
determine all questions arising in connection with the administration,
interpretation, and application of the Plan. Any such determination shall be
conclusive and binding upon all persons and their heirs, executors,
beneficiaries, successors and assigns. The Plan Administrator shall have all
powers necessary or appropriate to accomplish its duties under the Plan. The
Plan Administrator shall also have the discretion and authority to make, amend,
interpret, and enforce all appropriate rules and regulations for the
administration of this Plan and decide or resolve any and all questions,
including but not limited to, interpretations of this Plan and entitlement to or
amount of benefits under this Plan, as may arise in connection with the Plan.

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8.2.   Claims Procedure:

  (a)   Claim. A person who believes that he or she is being denied a benefit to
which he or she is entitled under the Plan (hereinafter referred to as a
“Claimant”) may file a written request for such benefit with the Plan
Administrator, setting forth his or her claim. The request must be addressed to
the Plan Administrator at its then principal place of business.     (b)   Claim
Decision. Upon receipt of a claim, the Plan Administrator shall advise the
Claimant that a reply will be forthcoming within 90 days and that the Plan
Administrator shall, in fact, deliver such reply within such period. The Plan
Administrator may, however, extend the reply period for an additional 90 days
for reasonable cause. If the claim is denied in whole or in part, the Plan
Administrator shall adopt a written opinion, using language calculated to be
understood by the Claimant, setting forth to the extent applicable:

  (i)   The specific reasons for such denial;     (ii)   Specific reference to
pertinent provisions of this Plan on which such denial is based;     (iii)   A
description of any additional material or information necessary for the Claimant
to perfect his or her claim and an explanation why such material or such
information is necessary;     (iv)   Appropriate information as to the steps to
be taken if the Claimant wishes to submit the claim for review, and     (v)  
The time limits for requesting a review under (iii) and for review under
(iv) hereof.

  (c)   Request for Review. Within 60 days after receipt by the Claimant of the
written opinion described above, the Claimant may request in writing that the
Company through its Board of Directors review the Plan Administrator’s
determination. Such request must be addressed to the Plan Administrator of the
Company at its then principal place of business. The Claimant or his or her duly
authorized representative may, but need not, review the pertinent documents and
submit issues and comments in writing for consideration by the Company. If the
Claimant does not request a review of the determination within such 60-day
period, he or she shall be barred and estopped from challenging the
determination.     (d)   Review of Decision. Within 60 days after the Company’s
receipt of a request for review, it will review the Plan Administrator’s
determination. After considering all materials presented by the Claimant, the
Company will render a written opinion, written in a manner calculated to be
understood by the Claimant, setting forth the specific reasons for the decision
and containing specific references to the pertinent provisions of this Plan on
which the decision is based. If special circumstances require that the 60 day
time period be extended, the Company will so notify the Claimant and will render
the decision as soon as possible, but no later than 120 days after receipt of
the request for review. The decision of the Board of Directors shall be final
and binding on all parties and may not be further appealed by any party.

8.3.   Arbitration. Any claim or controversy between the parties which the
parties are unable to resolve themselves, and which is not resolved through the
claims procedure set forth in Article 8.2, including any claim arising out of a
Participant’s employment or the termination of that employment, and including
any claim arising out of, connected with, or related to the formation,
interpretation, performance or breach of any provision of this Plan, any claim
or dispute as to whether a claim is subject to arbitration and any claims of
statutory violation including, but not limited to, those arising under ERISA,
shall be submitted to and resolved exclusively by expedited arbitration by a
single arbitrator in accordance with the following procedures:

  (a)   In the event of a claim or controversy subject to this arbitration
provision, the complaining party shall promptly send written notice to the other
party identifying the matter in dispute and the proposed remedy. Following the
giving of such notice, the parties shall meet and attempt in good faith to
resolve the matter. In the event the parties are unable to resolve the matter
within 21 days, the parties shall meet and attempt in good faith to select a
single arbitrator acceptable to both parties. If a single arbitrator is not
selected by mutual consent within 10 business days following the giving of the
written notice of dispute, an arbitrator shall be selected from a list of nine
persons each of whom shall be an attorney who is either engaged in the active
practice of law or a recognized arbitrator and who, in either event, is
experienced in serving as an arbitrator in disputes between employers and
employees, which list shall be provided by the office of the American
Arbitration Association (“AAA”) or of the

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      Federal Mediation and Conciliation Service. If, within three business days
of the parties’ receipt of such list, the parties are unable to agree upon an
arbitrator from the list, then the parties shall each strike names alternatively
from the list, with the first to strike being determined by the flip of a coin.
After each party has had four strikes, the remaining name on the list shall be
the arbitrator. If such person is unable to serve for any reason, the parties
shall repeat this process until an arbitrator is selected.     (b)   Unless the
parties agree otherwise, within 60 days of the selection of the arbitrator, a
hearing shall be conducted before such arbitrator at a time and a place agreed
upon by the parties. In the event the parties are unable to agree upon the time
or place of the arbitration, the time and place shall be designated by the
arbitrator after consultation with the parties. Within 30 days of the conclusion
of the arbitration hearing, the arbitrator shall issue an award, accompanied by
a written decision explaining the basis for the arbitrator’s award, references
to the specific provisions of the Plan on which the appeal decision is based and
recitation of the particular facts on which the decision is based.     (c)   In
any arbitration hereunder, the Company shall pay all administrative fees of the
arbitration and all fees of the arbitrator, except that the Participant or
Beneficiary may, if he wishes, pay up to one-half of those amounts. Each party
shall pay its own attorneys’ fees, costs, and expenses. The arbitrator shall
have no authority to add to or to modify this Plan, shall apply all applicable
law, and shall have no lesser and no greater remedial authority than would a
court of law resolving the same claim or controversy. The arbitrator shall, upon
an appropriate motion, dismiss any claim without an evidentiary hearing if the
party bringing the motion establishes that it would be entitled to summary
judgment if the matter had been pursued in court litigation. The parties shall
be entitled to reasonable discovery subject to the discretion of the arbitrator.
    (d)   The decision of the arbitrator shall be final, binding, and
non-appealable, and may be enforced as a final judgment in any court of
competent jurisdiction.     (e)   This arbitration provision of the Plan shall
extend to claims against any parent, subsidiary, or affiliate of each party,
and, when acting within such capacity, any officer, director, shareholder,
Participant, Beneficiary, or agent of each party, or of any of the above, 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 or under this
Plan.

          Notwithstanding the foregoing, and unless otherwise agreed between the
parties, either party may, in an appropriate manner, apply to a court for
provisional relief, including a temporary restraining order or preliminary
injunction, on the ground that the arbitration award to which the applicant may
be entitled may be rendered ineffectual without provisional relief.
          Any arbitration hereunder shall be conducted in accordance with the
employee benefit plan claims rules and procedures of the AAA then in effect;
provided, however, that, in the event of any inconsistency between the employee
benefit plan claims rules and procedures of the AAA and the terms of this Plan,
the terms of this Plan shall prevail.
          If any of the provisions of this Article 8.3 are determined to be
unlawful or otherwise unenforceable, in whole or in part, such determination
shall not affect the validity of the remainder of this Article 8.3, and this
Article 8.3 shall be reformed to the extent necessary to carry out its
provisions to the greatest extent possible and to ensure that the resolution of
all conflicts between the parties, including those arising out of statutory
claims, shall be resolved by neutral, binding arbitration. If a court should
find that the provisions of this Article 8.3 are not absolutely binding, then
the parties intend any arbitration decision and award to be fully admissible in
evidence in any subsequent action, given great weight by any finder of fact, and
treated as determinative to the maximum extent permitted by law.

8.4.   Notice. Any notice, consent or demand required or permitted to be given
under the provisions of this Plan shall be in writing and shall be signed by the
party giving or making the same. If such notice, consent or demand is mailed, it
shall be sent by United States certified mail, postage prepaid, addressed to the
addressee’s last known address as shown on the records of the Company. The date
of such mailing shall be deemed the date of notice consent or demand. Any person
may change the address to which notice is to be sent by giving notice of the
change of address in the manner aforesaid.

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ARTICLE NINE
AMENDMENT OR TERMINATION

9.1.   Plan Amendment.       The Company reserves the right to amend this Plan
at any time to comply with Section 409A and other applicable guidance or for any
other purpose, provided that such amendment will not cause the Plan to violate
the provisions of Section 409A. Except to the extent necessary to bring this
Plan into compliance with Section 409A: (i) no amendment or modification shall
be effective to decrease the value or vested percentage of a Participant’s
Account(s) in existence at the time an amendment or modification is made, and
(ii) no amendment or modification shall materially and adversely affect the
Participant’s rights to be credited with additional amounts on such Account(s),
or otherwise materially and adversely affect the Participant’s rights with
respect to such Account(s).   9.2.   Termination. The Company reserves the right
to terminate this Plan in accordance with one of the following, subject to the
restrictions imposed by Section 409A and authoritative guidance:

  (a)   Corporation Dissolution or Bankruptcy. This Plan may be terminated
within twelve (12) months of a corporate dissolution taxed under Code § 331, or
with the approval of a bankruptcy court pursuant to 11 U.S.C.
Section 503(b)(1)(A), and distributions may then be made to Participants
provided that the amounts deferred under this Plan are included in the
Participants’ gross income in the latest of:

  (i)   The calendar year in which the Plan termination occurs;     (ii)   The
calendar year in which the amount is no longer subject to a substantial risk of
forfeiture; or     (iii)   The first calendar year in which the payment is
administratively practicable.

  (b)   Change in Control. This Plan may be terminated within the thirty (30)
days preceding or the twelve (12) months following a Change in Control. This
Plan will then be treated as terminated only if all substantially similar
arrangements sponsored by the Company are terminated so that all participants in
all similar arrangements are required to receive all amounts of Compensation
deferred under the terminated arrangements within twelve (12) months of the date
of termination of the arrangements.     (c)   Discretionary Termination. The
Company may also terminate this Plan and make distributions provided that:

  (i)   All plans sponsored by the Company that would be aggregated with any
terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated;
    (ii)   No payments, other than payments that would be payable under the
terms of this plan if the termination had not occurred, are made within twelve
(12) months of this plan termination;     (iii)   All payments are made within
twenty-four (24) months of this plan termination; and     (iv)   Neither the
Company nor any of its affiliates adopts a new plan that would be aggregated
with any terminated plan if the same Participant participated in both
arrangements at any time within three (3) years following the date of
termination of this Plan.     (v)   The termination does not occur proximate to
a downturn in the financial health of the Company.

      The Company also reserves the right to suspend the operation of this Plan
for a fixed or indeterminate period of time.

ARTICLE TEN
THE TRUST

10.1.   Establishment of Trust. The Company may establish a grantor trust, of
which the Company is the grantor, within the meaning of subpart E, part I,
subchapter J, subtitle A of the Code, to pay benefits under this Plan (the
“Trust”).

10.2.   Interrelationship of the Plan and the Trust. The provisions of the Plan
shall govern the rights of a Participant to receive distributions pursuant to
the Plan. The provisions of the Trust (if established) shall govern

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    the rights of the Participant and the creditors of the Company to the assets
transferred to the Trust. The Company shall at all times remain liable to carry
out its obligations under the Plan. The Company’s obligations under the Plan may
be satisfied with Trust assets distributed pursuant to the terms of the Trust.

10.3.   Contribution to the Trust. Amounts may be contributed by the Company to
the Trust in the sole discretion of the Company.

ARTICLE ELEVEN
MISCELLANEOUS

11.1.   Entire Plan. The Plan and the Deemed Investment Alternatives,
Beneficiary designation, and other administrative forms shall constitute the
total agreement between the Company and the Participant. No oral statement
regarding the Plan may be relied upon by the Participant. In the event that
there is a discrepancy between this Plan, the administrative forms and any
summary of the Plan, this Plan will control.   11.2.   Invalidity of Provisions.
If any provision of this Plan shall be for any reason invalid or unenforceable,
the remaining provisions shall nevertheless be carried into effect.   11.3.  
Unclaimed Benefits. In the case of a benefit payable on behalf of such
Participant, if the Plan Administrator is unable to locate the Participant or
beneficiary to whom such benefit is payable, such Plan benefit may be forfeited
to the Company upon the Plan Administrator’s determination. Notwithstanding the
foregoing, if, subsequent to any such forfeiture, the Participant or beneficiary
to whom such Plan benefit is payable makes a valid claim for such Plan benefit,
such forfeited Plan benefit shall be paid by the Plan Administrator to the
Participant or beneficiary, without interest from the date it would have
otherwise been paid.   11.4.   Offset For Obligations To Company. If, at such
time as the Plan Participant becomes entitled to benefit payments hereunder, the
Plan Participant has any debt, obligation or other liability representing an
amount owing to the Company or an Affiliate of Company, and if such debt,
obligation, or other liability is due and owing at the time benefit payments are
payable hereunder, the Company may offset the amount owing it or an Affiliate
against the amount of benefits otherwise distributable hereunder. Unless
otherwise permitted under Code Section 409A, the entire amount of reduction
under this Section 11.4 may not exceed $5,000.   11.5.   409A Transition
Election. All Participants in the Plan are permitted to amend their current
elections relating to both timing and form of payment before December 31, 2008
provided that no change in a timing or form election made during 2008 may either
(1) apply to payments the Participant otherwise would have received in 2008 or
(2) cause a Plan benefit to be paid in 2008 which otherwise would not have been
paid in 2008.   11.6.   Compliance with Code Section 409A. Notwithstanding
anything contained in this Plan or to the contrary, it is the intent of the
Company to have this Plan interpreted and construed to comply with any and all
provisions of Internal Revenue Code section 409A including any subsequent
amendments, rulings or interpretations from appropriate governmental agencies.  
11.7.   Governing Law. The Plan and the rights and obligations of all persons
hereunder shall be governed by and construed in accordance with the laws of the
State of Kansas, other than its laws regarding choice of law, to the extent that
such state law is not preempted by federal law.

          In Witness Whereof, the Company has executed this Plan as of the day
and year first written above.

            Layne Christensen Company
      By:   /s/ A. B. Schmitt         Andrew B. Schmitt, President             

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