Exhibit 10.2
Form of NQSO Agreement for Employees
LAYNE ENERGY, INC.
2007 STOCK OPTION PLAN
Nonqualified Stock Option Agreement

     
Date of Grant:
   
 
   
 
   
Number of Shares to Which Option Relates:
   
 
   
 
   
Option Exercise Price per Share:
   
 
   
(Representing 100% of the Fair Market Value on the Date of Grant)
   

 
          This Agreement dated                                         , is made
by and between Layne Energy, Inc., a Delaware corporation (the “Company”), and
                                         (the “Optionee”).
RECITALS:
          A. Effective June 7, 2007, the Company and the Company’s stockholders
approved the Layne Energy, Inc. 2007 Stock Option Plan (the “Plan”) pursuant to
which the Company may, from time to time, grant options to key employees,
non-employee directors, and consultants of the Company or an Affiliate thereof
to purchase shares of the Company’s common stock.
          B. The Optionee is an employee of the Company or an Affiliate thereof
and the Company desires to grant to the Optionee a nonqualified stock option to
purchase shares of the Company’s common stock on the terms and conditions
reflected in this Option Agreement, the Plan and as otherwise established by the
Committee.
AGREEMENT:
          In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties agree as follows:
          1. Incorporation of Plan. All provisions of this Option Agreement and
the rights of the Optionee are subject in all respects to the provisions of the
Plan and the powers of the Committee therein provided. Capitalized terms used in
this Option Agreement but not defined will have the meaning set forth in the
Plan.
          2. Grant of Nonqualified Stock Option. As of the Date of Grant
identified above, the Company grants the Optionee, subject to this Agreement and
the Plan, the right, privilege and option (the “Option”) to purchase, in one or
more exercises, all or any part of that number of Shares of Stock identified
above opposite the heading “Number of Shares to Which Option Relates” (the
“Option Shares”), at the per Share price specified above opposite the heading
“Option Exercise Price per Share.”
          3. Consideration to the Company. In consideration of the granting of
this Option by the Company, the Optionee agrees to render faithful and efficient
services as an employee of the Company. Nothing in this Agreement or in the Plan
will confer upon the Optionee any right to continue as an employee of the
Company or will interfere with or restrict in any way the rights of the Company,
which are hereby expressly reserved, to terminate the Optionee’s employment with
the Company at any time for any reason whatsoever, with or without cause.
          4. Exercisability of Option. This Option, unless it has otherwise
expired in accordance with Section 6 or Section 7, may be exercised in
accordance with the parameters and conditions set forth in Section 5, according
to the following schedule:
Years Elapsed from Date of Grant         Percentage Exercisable
[To be determined by Committee and set forth in Optionee’s Option Agreement.]

 

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          For purposes of this Section 4 a year means a period of 365 days (or
366 days in the event of a leap year). Notwithstanding the above Option vesting
schedule, this Option will become fully exercisable upon the Optionee’s death or
Disability provided the Option has not otherwise expired, been cancelled or
terminated.
          5. Method of Exercise. Provided this Option has not expired, been
terminated or cancelled in accordance with the terms of the Plan and if this
Option is otherwise exercisable pursuant to Section 4 above, the Option may be
exercised in whole or in part, from time to time as provided below:
     (a) All or a portion of the Option may be exercised on either or both of
April 30th and October 31st of a specific year (each an “Eligible Exercise Date”
and collectively the “Eligible Exercise Dates”) by providing to the Company no
less than 90 calendar days before the Eligible Exercise Date, a written notice
that:

  (i)   sets forth the number of Shares with respect to which the Option is to
be exercised; provided, however, that such number cannot be less than the
greater of 1/4th of the total number of Shares originally subject to this Option
or the remaining Share(s) subject to this Option which have not been purchased
on account of an earlier Option exercise; and

  (ii)   if the person exercising this Option is not the Optionee, is
accompanied by satisfactory evidence of such person’s right to exercise this
Option.

     (b) Subject to Optionee’s right to withdraw his request to exercise the
Option in accordance with Section 5(c) below, to the extent the proper notice
has timely been delivered to the Company informing it of the Optionee’s desire
to exercise the Option, the Option (or designated portion thereof), to the
extent exercisable, may be exercised by the Optionee by paying in full the
Option Exercise Price in the form of cash, or a certified bank check made
payable to the order of the Company or any other means allowable under the Plan
which the Company in its sole discretion determines will provide legal
consideration for the Shares.
     (c) Notwithstanding the Optionee having provided a written notice to the
Company indicating Optionee’s desire to exercise all or a portion of the Option,
the Optionee may withdraw his request to exercise the Option on the Eligible
Exercise Date at any time within the 10 business day period immediately
following the Optionee’s receipt of the Fair Market Value determination made by
the independent appraisal of the Shares relating to the upcoming Eligible
Exercise Date.
          6. Expiration of Option. Unless terminated earlier in accordance with
the terms of this Option Agreement or the Plan, the Option granted herein will
expire at 5:00 P.M., Central Standard Time, on the 10th Anniversary of the Date
of Grant (the “Expiration Date”). If the Expiration Date is a day on which the
Company is not open for business, then the Option granted herein will expire,
unless earlier terminated in accordance with the terms of this Option Agreement
or the Plan, at 5:00 P.M., Central Standard Time, on the first business day
before such Expiration Date.
          7. Effect of Separation from Service. If the Optionee ceases to be an
employee of the Company for any reason, including cessation by death or
Disability, the effect of such termination of employment on this Option is as
provided below. Notwithstanding anything below to the contrary, in no event may
the Option be exercised after the Expiration Date.
          (a) If the Optionee’s employment is terminated for Cause, the Option
will immediately be forfeited as of the time of such termination.
          (b) If the Optionee ceases to be an employee of the Company due to the
Optionee’s resignation or termination of employment by the Company not for
Cause, if the Option was otherwise exercisable pursuant to Section 4 on the date
of such termination of employment, the Option may be exercised by the Optionee
at any time before 5:00 P.M., Central Standard Time, on the thirtieth (30th)
calendar day following the effective date of the Optionee’s termination of
employment. If such thirtieth (30th) day is not a business day, then the Option
will expire at 5:00 P.M., Central Standard Time, on the first business day
immediately following such thirtieth (30th) day. For purposes of this
Section 7(b), the notice requirements set forth above in Section 5(a) will be
waived; provided,

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however, if the Company is not reasonably able to accurately determine the Fair
Market Value of the Shares subject to the Option for calculating and reporting
the applicable income and payroll tax withholding amounts due upon the exercise
of the Option within the 30-day time period reflected above, the Company may, in
its sole discretion, inform the Optionee that the Option exercise date will be
postponed to a later date during the same calendar year when the Fair Market
Value of the Shares can appropriately be determined.
          (c) If the Optionee ceases to be an employee of the Company due to the
Optionee’s death or Disability, the Option may be exercised by the Optionee (or
the Optionee’s beneficiary) at any time prior to 5:00 P.M., Central Standard
Time, on the ninetieth (90th) calendar day following the effective date of the
Optionee’s termination of employment. If such ninetieth (90th) day is not a
business day, then the Option will expire at 5:00 P.M., Central Standard Time,
on the first business day immediately following such ninetieth (90th) day. For
purposes of this Section 7(c), the notice requirements set forth above in
Section 5(a) will be waived; provided, however, if the Company is not reasonably
able to accurately determine the Fair Market Value of the Shares subject to the
Option for calculating and reporting the applicable income and payroll tax
withholding amounts (if any) due upon the exercise of the Option on the 90th
calendar day reflected above, the Company may, in its sole discretion, inform
the Optionee that the Option exercise date will be postponed to a later date
during the same calendar year when the Fair Market Value of the Shares can
appropriately be determined.
          8. Put Right.
     (a) Grant of Put Right. Subject to Section 8(d) below and the terms and
conditions relating to the exercise of a Put Right set forth in Section 8(b)
below, the Company hereby irrevocably grants and issues to the Optionee the
right and option to sell to the Company (hereinafter referred to as the “Put
Right”) all or any portion of the Shares acquired pursuant to the exercise of
this Option at a per Share purchase price equal to the then Fair Market Value of
the Shares.
     (b) Exercise of Put. Subject to the provisions of this Section 8, the
Optionee may exercise the Put Right and sell to the Company, and the Company
agrees to purchase from Optionee, all or any portion of the Shares subject to
the Put Right. The time and manner pursuant to which the Optionee may exercise a
Put Right are as follows:

  (i)   Optionee’s right to exercise the Put Right shall apply only to those
Shares that have been purchased by the Optionee in exercising the Option and
only then with respect to such Shares if they have been held by the Optionee for
at least six months from the date the Shares were purchased.

  (ii)   Optionee may exercise the Put Right up to two times per calendar year,
on May 1st and November 1st (each an “Eligible Put Date” and collectively the
“Eligible Put Dates”).

  (iii)   Optionee must provide written notice (the “Put Notice”) to the Company
at least 90 calendar days before the Eligible Put Date for which Optionee
desires to sell the Shares to the Company. The Put Notice must specify the
number of Shares to the purchased by the Company and the Eligible Put Date.

     (c) Withdrawal of Put Right. Before an Eligible Put Date and within the 10
business day period following Optionee’s receipt of the Fair Market Value
determination set forth in the independent appraisal of the Shares, Optionee may
withdraw, in full or in part, his Put Notice and either have less than all of
the Shares originally designated to be put back to the Company purchased on the
Eligible Put Date or none of the Shares purchased by the Company on the Eligible
Put Date. If the Optionee does not withdraw his Put Notice within the
aforementioned 10 business day period, Optionee must sell all of the Shares
originally designated to be purchased by the Company in the Put Notice to the
Company on the related Eligible Put Date.
     (d) Payment and Delivery of Shares. Subject to Section 8(e) below, if the
Optionee has submitted the Put Notice and not withdrawn such notice in
accordance with Section 8(c) above, on the Eligible Put Date specified in the
Put Notice the Company shall, as provided below, pay to Optionee in cash or by
certified, cashier’s or other check acceptable to Optionee, the Fair Market
Value for each Share

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put by Optionee and purchased by the Company. Notwithstanding the prior
sentence, if any payment to be made by the Company is prohibited by any
applicable law, then such payment shall be made by the Company at the earliest
time, and to the extent possible, when compliance with the law may be effected,
and the Company agrees that it will execute all such documents and take all
reasonable other steps as may be necessary to expedite and effectuate to the
extent possible such compliance.
     (e) No Put Right while Company is Public. During the period of time
(i) commencing upon the closing of an initial underwritten public offering by
the Company of its Stock pursuant to an effective registration statement that
results in the Stock trading on a national securities exchange and (ii) ending
upon the date the Company shall cease to have its Stock traded on a national
securities exchange, the Optionee will not have any Put Right for the Shares
purchased pursuant to this Option and instead may, subject to any additional
blackout periods, Company trading policy restrictions, or restrictions under
applicable securities laws, freely transfer the shares on the public markets.
     (f) Amendment. Except as otherwise provided in Section 8(e) above, this Put
Right may not be amended, terminated or otherwise modified unless evidenced in
writing and signed by the Company and the Optionee.
          9. Call Right.
     (a) Grant of Call Right. Subject to the terms and conditions relating to
the exercise of a Call Right set forth in Section 9(b) below, the Optionee
hereby irrevocably grants and issues to the Company or its parent corporation,
Layne Christensen Company, an option (hereinafter referred to as the “Call
Right”) to purchase the Shares purchased by the Optionee under this Agreement.
     (b) Exercise of Call Right. The Company or Layne Christensen Company may
exercise the Call Right and acquire from the Optionee the Shares purchased under
this Agreement in connection with (i) a Change in Control of the Company or
(ii) a “Change in Control” of Layne Christensen Company (as the term “Change in
Control” is defined in the Layne Christensen Company 2006 Equity Incentive
Plan). In connection with either of the aforementioned two events, the Company
or Layne Christensen Company may notify the Optionee of its intention to
purchase one or more Shares pursuant to this Call Right and, upon the closing of
such specified change in control event, the Company or Layne Christensen Company
will purchase the Share(s) from the Optionee.
     (c) Determination of Fair Market Value. In the event either Layne
Christensen Company or the Company exercises its Call Right for the Shares held
by the Optionee and such purchase is in connection with:

  (i)   A Change in Control of Layne Christensen Company, then the Fair Market
Value of the Shares shall be determined based on an independent appraisal of the
Company obtained from an independent qualified appraisal retained by the
Committee; or

  (ii)   A Change in Control of the Company, then, notwithstanding the value of
the Shares determined by a qualified independent appraisal, the per Share Fair
Market Value shall be equivalent to the per Share consideration received by
Layne Christensen Company in connection with the Change in Control of the
Company.

          10. Notices. Any notice to be given under the terms of this Agreement
to the Company will be addressed to the Secretary of the Company at Layne
Energy, Inc., 1900 Shawnee Mission Parkway, Mission Woods, Kansas 66205, and any
notice to be given to the Optionee will be addressed to him or her at the
address given beneath his or her signature hereto. By a notice given pursuant to
this Section 10, either party may hereafter designate a different address for
notices to be given to him or her. Any notice which is required to be given to
the Optionee will, if the Optionee is then deceased, be given to the Optionee’s
personal representative if such representative has previously informed the
Company of his or her status and address by written notice under this
Section 10. Any notice will be deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as

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aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.
          11. Nontransferability. Except as otherwise provided in this Agreement
or in the Plan, or as may be mutually agreed to in writing by the Company and
Optionee, the Option and the rights and privileges conferred hereby, including
the Put Right, may not be transferred, assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) and may not be subject to
execution, attachment, or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of the Option, or of any right or
privilege conferred hereby, or upon the levy of any attachment or similar
process upon the rights and privileges conferred hereby, this Option and the
rights and privileges conferred hereby will immediately become null and void.
          12. Status of Optionee. The Optionee shall not be deemed a stockholder
of the Company with respect to any of the Shares subject to this Option, except
for those Shares that have been purchased and issued to him or her. The Company
shall not be required to issue or transfer any certificates for Shares purchased
upon exercise of this Option until all applicable requirements of law have been
complied with and, if applicable, such Shares shall have been duly listed on any
securities exchange on which the Shares may then be listed.
          13. Titles. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of this Agreement.
          14. Amendment. This Agreement may be amended only by a writing
executed by the parties hereto which specifically states that it is amending
this Agreement.
          15. Post-Recapitalization Basis. In 2007, the Company adopted a Plan
of Recapitalization pursuant to which 90 shares of common stock and 100 shares
of preferred stock were issued for each outstanding share of the Company’s
common stock (the “2007 Recapitalization”). For the avoidance of doubt, the
Shares covered by this Option reflect Shares on a post-2007 Recapitalization
basis.
          16. Governing Law. The laws of the State of Delaware will govern the
interpretation, validity and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of
laws.
          17. Binding Effect. Except as expressly stated herein to the contrary,
this Agreement will be binding upon and inure to the benefit of the respective
heirs, legal representatives, successors and assigns of the parties hereto.
          This Agreement has been executed and delivered by the parties hereto.

                  The Company:

      The Optionee:
Layne Energy, Inc.

       
By:
                             
 
   
           

 
  Name:            
 
     
 
     
 
 
  Title:           Address of the Optionee:

 
     
 
       

 
             
 
 
               

 
               

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