Exhibit 10.1

 

VERITAS DGC INC.

KEY CONTRIBUTOR INCENTIVE PLAN

(As amended and restated March 3, 2003)

 

A.            Plan Objectives

 

The overall objective of the Key Contributor Incentive Plan (herein after
referred to as the “Plan”) is to provide short-term rewards paid as incentives
to designated Key Contributors.  Key Contributors are those individuals who have
the responsibility of leading a diverse or complex team or function.  The work
produced from that team or function significantly impacts the operations of the
Company up to and including bottom line results.  Within the overall objectives,
the following are the specific goals of the Plan:

 

•                  Reward Key Contributors for achieving Veritas DGC Inc.’s
business strategies in the area of net income before taxes (NIBT)

 

•                  Focus participants on key business goals that they can
directly impact

 

•                  Create payout opportunities that balance the appropriate
return to the Company with reward to the participants

 

B.            Eligibility

 

Eligibility for participation in the Plan is recommended by managers and
approved by the respective division executive.  Plan participants must meet the
following eligibility criteria:

 

•                  A minimum annual base salary of $50,000

 

•                  Job responsibilities that have a major impact on the
accomplishment of Veritas DGC Inc.’s business strategies

 

•                  Regular full-time employment with Veritas DGC Inc.

 

Variations from the guidelines may be made for individuals as recommended by
Corporate or Division executives and approved by the CEO.

 

C.            Plan Year

 

The Plan year for the Key Contributor Incentive Plan coincides with the Veritas
DGC Inc. fiscal year:  August 1 through July 31.

 

Annex 1

 

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D.  Performance Measures and Payout Targets

Performance Measures and Weights

 

Seventy-five percent (75%) of the payment will be based upon attainment of net
income before taxes (hereinafter referred to as “NIBT”). NIBT is based on the
profit plan for VDGC Consolidated and for each division as approved by Veritas
DGC Inc.’s Board of Directors.

 

Twenty-five percent (25%) of the award will be based on equally weighted
strategic individual objectives as determined by the participant’s immediate
supervisor.  These individual objectives are to be in addition to the
participant’s day-to-day responsibilities and shall present a challenge to the
participant.

 

The following incentive weights apply for both Corporate and Division
participants:

 

 

 

VDGC
Consolidated
NIBT

 

Division
NIBT

 

Individual
Objectives

 

Corporate

 

75

%

 

 

25

%

Division

 

25

%

50

%

25

%

 

The impact level of the participant’s position determines incentive target
payout percentage as follows:

 

BONUS LEVELS PRIOR TO FY 2004:

 

Base Salary (in thousands)

 

Target
Payout*

 

CEO

 

50

%

$150+ (Corporate leadership and Division Sr. Executive Mgt. Only)

 

40

%

$100+

 

30

%

$75-$99

 

20

%

$50-$74

 

10

%

 

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BONUS LEVELS AS OF FY 2004:

 

Base Salary/Position

 

Target
Payout*

 

CEO

 

60

%

Executive Officers

 

50

%

$150+ (Other Corporate Officers & Division Presidents Only)

 

45

%

$100+

 

35

%

$75-$99

 

25

%

$50-$74

 

15

%

 

$ reported in thousands

 

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*Target payout is the percentage of base salary that the Plan intends to pay to
the participant assuming that the profit and strategic individual objectives are
met for the corporation and his/her division.

 

E.              Award Calculation

 

The actual incentive award calculation will be comprised of the following
components:

 

•                  Financial Results:  Incentive payouts will increase or
decrease from target as dictated by NIBT.  Maximum payout is two times (2X)
target.

 

•                  Individual Objectives:  This portion of the incentive award
will be increased or decreased from target as determined by financial results.

 

NOTE:  If the annual NIBT plan as submitted to and approved by the Board (either
Veritas DGC Inc. or a division plan) generates an NIBT plan of $0 or less, the
following then applies:

 

a)                          If planned negative NIBT is attained, a maximum of
target incentive will be earned.

 

Employment Status

 

Participants must be actively employed on the dates that the award payments are
made; otherwise the award is forfeited. In addition, if the participant leaves
before the award payment date, all moneys previously paid will be retained by
the participant; however, no additional bonuses will be calculated or paid.  The
CEO must approve any exceptions to this rule.

 

F.              Method of Payment

Incentive awards will be paid in cash unless otherwise determined by the Veritas
DGC Inc. Board of Directors or the Compensation Committee of the Veritas DGC
Inc. Board of Directors.

 

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Stock in Lieu of Incentive Award

 

Prior to payment of either the mid-year or the year-end incentive, the Veritas
DGC Inc. Board of Directors or the Compensation Committee of the Veritas DGC
Inc. Board of Directors may determine that some or all participants in the Plan
shall receive all or a portion of their mid-year or year-end incentive award in
shares of Veritas DGC Inc. Common Stock.  In those periods when incentive
payments would otherwise be made in cash, the Board of Directors or the
Compensation Committee may allow participants the opportunity to receive all or
part of their mid-year or year-end incentive in shares of Veritas DGC Inc.
Common Stock.  Participants who receive all or a specified portion of the
mid-year or year-end incentive award in Common Stock rather than cash will
receive their shares on a date following the mid-year or year-end incentive
payment.  Numbers of shares will be calculated as follows:

 

 

Portion of incentive used to purchase stock ($)

 

=

# of shares

 

Fair market value per share ($)

 

 

 

 

For the purposes of this Plan, “fair market value” shall be the closing price
for the Common Stock on the New York Stock Exchange on a date fixed by the Board
of Directors or the Compensation Committee.

 

G.            Award Frequency

Incentive awards will be made semi-annually.  The mid-year award will be based
on the achievement of the applicable NIBT plan.  The Board of Directors or the
Compensation Committee shall have the discretion to adjust some or all of the
mid-year incentive awards based on projected performance through the end of the
fiscal year.  The award at the end of the fiscal year will be based on both
achievement of applicable NIBT plan and the attainment of individual objectives.

 

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H.            Plan Administration

The Plan is administered by the CEO and Corporate Vice President of Human
Resources in accordance with the Key Contributor Incentive Plan Administration
Document.

 

Any exceptions to the Plan must be approved by the Board of Directors and/or the
Compensation Committee of the Board of Directors of Veritas DGC Inc.  At any
time, the Board of Directors (and/or the Compensation Committee of the Board of
Directors) may, in its discretion, adjust, amend or terminate the plan.

 

This Plan is a voluntary incentive program and continuance of the Plan is not
assumed as an obligation of Veritas DGC Inc.  Veritas DGC Inc. reserves the
right to terminate the Plan or to amend the Plan at any time and in any respect.
 Participation in this Plan shall not impose upon the Company any obligation
whatsoever to employ or to continue to employ any Plan participant, and the
right of the Company to terminate the employment of any officer or other
employee shall not be diminished or affected by reason of the fact that the
employee is a Plan participant.

 

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