Exhibit 10.17

 

Layne Christensen Company
Executive Short-Term Incentive Plan

Amended and Restated by the Board of Directors as of July 6, 2015

 

 

 

 

Compensation Philosophy

Layne Christensen Company’s (“Layne”) compensation philosophy is to structure
compensation to drive financial and strategic growth and build long-term
stockholder value while attracting and retaining valued talent in the markets
and industries Layne serves.

ESTI Plan Objective

The intent of the Layne Christensen Company Executive Short-Term Incentive Plan
(the "ESTI Plan") is to provide competitive cash compensation ("ESTI Bonuses")
that rewards Participants for their performance and their contributions to
Layne's overall performance. The ESTI Plan is an important component of a
Participant's total compensation package, designed to communicate key annual
corporate and individual objectives, reward efforts that achieve these
objectives and align employee performance bonuses with Layne's shareholders'
interests in a manner that motivates executives and employees to maximize
shareholder value.

ESTI Plan Overview

This ESTI Plan is a bonus plan for certain Corporate Executives and Division
Presidents selected by Layne to participate in the ESTI Plan ("Participants").
The ESTI Plan is designed to reward Participants for their roles in the
achievement of Layne’s goals for the one-year performance period. All ESTI
Bonuses under the ESTI Plan are conditioned upon achievement of one or more
"Primary Goal(s)" and the achievement of one or more "Secondary Goal(s)."  All
Participants will have the same Primary Goal(s).  If the Primary Goals(s) are
not achieved, no ESTI Bonuses under the ESTI Plan will be made to any
Participant even if there is achievement of one or more Secondary Goal(s).

Each Participant in the ESTI Plan has a target-level ESTI Bonus opportunity
("Target ESTI Opportunity"), expressed as a percentage of that Participant's
actual base earnings (i.e., which excludes bonuses) during the performance
period, based on the Participant's job position and level within the Company.
The Target ESTI Opportunity for each Secondary Goal is reduced (down to 65% of
the Participant's weighted targeted bonus for that Secondary Goal) if
achievement is less than 100% but over a minimum required threshold, and
increased (up to 200% of the Participant's weighted targeted bonus for that
Secondary Goal) if achievement is more than 100%. See Appendix B.

 

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Eligibility

The Compensation Committee (the "Compensation Committee") of Layne's Board of
Directors (the "Board"), in consultation with Layne's Chief Executive Officer
("CEO"), shall select and recommend to the Board the Participants from the group
of Layne's Corporate Executives and Division Presidents it desires to
participate in the ESTI Plan.  An eligible employee will only become a
Participant if the Board approves the Compensation Committee's recommendation.
Participation in the ESTI Plan in one year does not automatically guarantee
participation in a future year.

Performance Period

Each fiscal year is a separate performance period ("Performance Period").

Establishment of Performance Period Primary Goal(s) and Secondary Goal(s)

For each Performance Period, the applicable person(s) described below shall
establish:

 

·

The Primary Goal(s); and

 

·

The Secondary Goal(s) at one or more of a Corporate Level, Division Level, and
individual performance level.

"Corporate Level" goals are based on consolidated financial results of Layne and
its subsidiaries. "Division Level" goals are based on the financial results of
that division.

The Primary Goal(s) for each Performance Period will be determined by the
Compensation Committee based upon recommendations from the CEO and then reviewed
and approved by the Board. Except as otherwise provided herein, each
Participant's Target ESTI Opportunity will be recommended by the CEO to the
Compensation Committee and, if approved by the Compensation Committee, the
Compensation Committee shall recommend such Target ESTI Opportunity to the Board
for its approval. Except with respect to the CEO or as provided herein, all
Secondary Goal(s) will be developed by the CEO, submitted to the Compensation
Committee for approval and recommendation, and if the Compensation Committee
approves of such Secondary Goal(s), submitted to the Board for its review and
approval. The Compensation Committee will recommend the Secondary Goal(s)
relating to the CEO to the Board, and for approval by the Board. All Primary
Goal(s) and Secondary Goal(s) for a Performance Period will be established by
the end of the first quarter of each Performance Period.

All Participants' Secondary Goal(s) will include:

 

·

A specific, measurable Corporate Level and/or Division Level goal for which
determination as to whether such goal has been attained can be made solely by
reference to Layne's and/or the division's performance during the Performance
Period; and

 

·

As many as four different individual level performance goals for which
determination as to whether such goals have been attained and the level of such
attainment (i.e., threshold,

 

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target, maximum or in between these levels) can be made solely by reference to
the individual's performance during the Performance Period.  

The applicable weighting for each Secondary Goal for Participants is based on
their job position and level and is attached as Appendix A to this ESTI Plan.
The weighting among the individual-level goals shall be determined by the
Participant's manager.

Targeted ESTI Opportunity and Payout of Performance Awards

If the Primary Goal(s) are achieved for a Performance Period and the
Participant's relevant threshold level of achievement for one or more Secondary
Goals are attained, then the Participant shall be eligible for payment of an
ESTI Bonus. Performance at the minimum threshold for at least one of the
Secondary Goals shall result in payment of 65% of the Participant's weighted
Targeted ESTI Opportunity for that Secondary Goal.  Performance at or above the
maximum goal level shall result in payment of 200% of the Participant's weighted
Targeted ESTI Opportunity for that Secondary Goal. The eligible bonus amount for
each Secondary Goal shall be determined by multiplying (i) the Participant's
Targeted ESTI Opportunity, (ii) such Secondary Goal's applicable weighting
percentage, (iii) the Participant's actual base earnings, and (iv) the
applicable payout percentage determined through linear interpolation between
that Secondary Goal's threshold and target values or linear interpolation
between that Secondary Goal's target and maximum values.  The eligible bonus
amounts for each Secondary Goal are then added to determine the Participant's
total ESTI Bonus, subject to being increased or decreased as discussed below.
The applicable Targeted ESTI Opportunity and applicable weighting factors are
set forth in Appendices A and B to this ESTI Plan.  

Attainment of performance awards is to be determined by the Compensation
Committee after the end of the Performance Period and then recommended to the
Board for its approval. All payouts under the ESTI Plan will be based on the
Executive's actual base earnings (i.e., which excludes bonuses) during the
Performance Period.  Unless the Compensation Committee elects to make payments
under the ESTI Plan in the form of bonus shares or another type of equity award
granted under Layne's 2006 Equity Incentive Plan (or another
shareholder-approved stock plan maintained by Layne), all payouts under the ESTI
Plan will be made in cash.  Once determined pursuant to the terms and conditions
set forth herein, the Board has the ability to increase or decrease individual
Participant bonuses by up to 50%. A Participant must be employed by Layne on the
last day of the Performance Period to be eligible to receive payout of a
performance award; provided, however, the Board may, in its sole discretion,
agree to waive such employment requirement if in its judgment such waiver is
warranted and/or such acceleration is in the best interests of the
Company.  Payout of performance awards will occur no later than two and one-half
(2-1/2) months following the end of the Performance Period.

Illustration

To illustrate how ESTI Bonuses under the Plan are determined, assume (i) a
Corporate Executive has actual base earnings of $300,000, (ii) a Target ESTI
Opportunity of 60%, (iii) Primary Goals are achieved, (iv) the Corporate
Executive achieved 100% of his/her individual Secondary Goal, (v) the Company
achieved 80% of its "One Layne" goal and (vi) the Board does not elect to
increase or decrease the Corporate Executive's ESTI Bonus.

 

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Mechanically, the Corporate Executive's ESTI Bonus is determined by adding the
applicable weighted bonus amounts for each of the Secondary Goals (after each
Secondary Goal's applicable payout percentage based on performance has been
determined) as follows:

A..60 (Target ESTI Opportunity)  x  .80 (80% goal weighting factor) x $300,000
(Participant's base earnings) x .65 (determined payout percentage based on level
of goal achievement)

(i.e., .6 x .8 x $300,000 x .65 = $93,600)

+

B..60 (Target ESTI Opportunity) x .20 (20% goal weighting factor) x $300,000
(Participant's base earnings) x 1.0 (determined payout percentage based on level
of goal achievement)

(i.e., .6 x .2 x $300,000 x 1.0 = $36,000)

For a total ESTI Bonus of $129,600 (i.e., $93,600 + $36,000).

Administration

The Compensation Committee is responsible for overseeing the administration of
the ESTI Plan for Participants and reviewing and recommending to the Board the
payments pursuant to the ESTI Plan.  The Board shall have complete discretion
over the ESTI Plan and shall determine the final ESTI Plan performance goals and
performance awards for the CEO, based upon recommendations from the Compensation
Committee. The Board shall have the sole authority to interpret and construe the
ESTI Plan and decisions made by the Board shall be final and binding upon all
parties concerned.

The Compensation Committee determines whether the applicable performance
thresholds and performance goals have been attained, based upon audited
financial results for the Performance Period and shall make recommendations as
to such attainment to the Board for its approval.  Where needed, the
Compensation Committee will receive reports from Finance/Accounting regarding
the calculation and tracking of financial performance which relates to
performance goals, and will receive reports from Layne's human resources
department regarding performance goals that are not based upon financial
measures.

The Board retains the right to reassess performance goals and performance awards
in light of unanticipated extenuating circumstances, or other reasons, and to
increase or decrease the conditions of a performance goal or the value of a
performance award as the result of its reassessment.

The Board may amend or terminate the ESTI Plan at any time, in its sole
discretion.

This ESTI Plan confers no right to continued employment or otherwise change a
Participant's status as an "at-will" employee.

 

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The law of the state of Delaware shall be controlling in all matters relating to
the ESTI Plan, unless superseded by Federal law.

 

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APPENDIX A – Performance Drivers and Weights

 

Performance Drivers and Weights

 

 

Performance Drivers

Title / Band

Level

One Layne

Cons.

Division

Individual

Total

CEO

0

80%

 

20%

100%

Corporate Executives (COO, CFO, GC, CAO)

1 Corp.

80%

 

20%

100%

Division Presidents

1 Div.

20%

60%

20%

100%

 

 

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APPENDIX B - Targeted ESTI Opportunities

 

Title

Level

 

Threshold

65% of Target ESTI bonus PAYABLE IF 80% OF gOAL ACHIEVED

TARGET

100% of Target ESTI bonus PAYABLE IF 100% OF gOAL ACHIEVED

Maximum

200% of Target ESTI bonus PAYABLE IF 150% OR MORE OF gOAL ACHIEVED

CEO

0

65%

100%

200%

CFO

1

48.75%

75%

140%

Corporate Executives (other than CFO)

1 Corp.

39%

60%

120%

Division Presidents

1 Div.

39%

60%

120%