Exhibit 10 (16)
Layne Christensen Company
Corporate Staff Incentive Compensation Plan

 
Section I. Purpose of the Plan.
          Layne Christensen Company (hereinafter referred to as the “Company”)
desires to effect a program of making annual awards to those corporate staff
employees of the Company who, in the judgment of the administrative committee of
this program (the “Committee”) have made significant contributions to the
Company during the most recent fiscal year. The purpose of this program is to
provide additional incentive for such corporate staff employees to promote the
best interests and most profitable operation of the Company.
          This program shall be known as the “Layne Christensen Company
Corporate Staff Incentive Compensation Plan” (hereinafter referred to as the
“Plan”). The existence of the Plan shall not be in lieu of or otherwise affect
or be affected by any other compensation plan or arrangement of the Company.
Section II. Administration.
          The Plan shall be administered by the Committee. The Committee shall
consist of at least three disinterested persons appointed by the Board of
Directors of the Company. During the one year period prior to the commencement
of service of a Committee member on the Committee, such member shall not have
participated in, and while serving and for one year after serving on the
Committee, such member shall not be eligible for participation in, the Plan.
          The Committee shall have full power, in its sole discretion, to
interpret, construe and administer the Plan and adopt rules and regulations
relating to the Plan.
          Decisions made by the Committee in good faith and in the exercise of
its powers and duties hereunder shall be binding upon all parties concerned. No
member of the Committee shall be liable to anyone for any action taken or
decision made in good faith pursuant to the power or discretion vested in such
person under the Plan.
Section III. Participation.
          Any corporate staff employee of the Company who is approved for
inclusion in the Plan by the Committee shall participate in the Plan and shall
hereinafter be referred to as a “Participant”; provided, however, that no
participant in the Layne Christensen Company Executive Incentive Compensation
Plan shall be eligible to participate in this Plan. At such time as the
Committee approves an individual employee for inclusion in the Plan, it shall
designate whether such employee will participate as a member of Group I, Group
II, Group III, Group IV or Group V.
Section IV. Selection of Targets.
          As soon as practicable after the commencement of each fiscal year the
Committee shall establish one or more performance targets, which collectively
shall constitute the “Target” hereunder, upon which the incentive compensation
of each Participant shall be calculated for such fiscal year. If more than one
performance target is selected for the Target, the Committee shall assign
relative calculation weights to each performance target in determining the
Target. Incentive compensation awards hereunder for each Participant are to be
based on that Participant’s performance during that fiscal year as compared to
the Target. The Target may vary among Participants at the sole discretion of the
Committee.
Section V. Determination of Amount of Award.
          Subject to the last paragraph of this Section V, the amount of the
incentive compensation award for a fiscal year shall be equal to a percentage
(the “Base Salary Percentage”) of a Participant’s annual regular salary (as
determined by the Committee) as of the beginning of the fiscal year for which
the Target is established (the “Base Salary”). The Base Salary Percentage shall
be determined as follows:
GROUP I
     If 100% of the Target is achieved, then the Base Salary Percentage shall be
40%. If more than 100% of the Target is achieved, then for each 1% increase
above the Target, the Base Salary Percentage shall be

 

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increased by 1.5%; provided, however, that in no event shall the Base Salary
Percentage exceed 80%. If less than 100% of the Target is achieved, then for
each 1% decrease below the Target, the Base Salary Percentage shall be decreased
by 1%; provided, however, that if 80% or less of Target is achieved then the
Base Salary Percentage shall be 0.
GROUP II
          If 100% of the Target is achieved, then the Base Salary Percentage
shall be 25%. If more than 100% of the Target is achieved, then for each 1%
increase above the Target, the Base Salary Percentage shall be increased by
1.5%; provided, however, that in no event shall the Base Salary Percentage
exceed 50%. If less than 100% of the Target is achieved, then for each 1%
decrease below the Target, the Base Salary Percentage shall be decreased by 1%;
provided, however, that if 80% or less of Target is achieved then the Base
Salary Percentage shall be 0.
GROUP III
          If 100% of the Target is achieved, then the Base Salary Percentage
shall be 20%. If more than 100% of the Target is achieved, then for each 1%
increase above the Target, the Base Salary Percentage shall be increased by
1.5%; provided, however, that in no event shall the Base Salary Percentage
exceed 40%. If less than 100% of the Target is achieved, then for each 1%
decrease below the Target, the Base Salary Percentage shall be decreased by 1%;
provided, however, that if 80% or less of Target is achieved then the Base
Salary Percentage shall be 0.
GROUP IV
          If 100% of the Target is achieved, then the Base Salary Percentage
shall be 15%. If more than 100% of the Target is achieved, then for each 1%
increase above the Target, the Base Salary Percentage shall be increased by
1.5%; provided, however, that in no event shall the Base Salary Percentage
exceed 30%. If less than 100% of the Target is achieved, then for each 1%
decrease below the Target, the Base Salary Percentage shall be decreased by 1%;
provided, however, that if 80% or less of Target is achieved then the Base
Salary Percentage shall be 0.
GROUP V
          If 100% of the Target is achieved, then the Base Salary Percentage
shall be 7.5%. If more than 100% of the Target is achieved, then for each 1%
increase above Target, the Base Salary Percentage shall be increased by 1.5%;
provided, however, that in no event shall the Base Salary Percentage exceed 15%.
If less than 100% of the Target is achieved, then for each 1% decrease below the
Target, the Base Salary Percentage shall be decreased by 1%; provided, however,
that if 80% or less of Target is achieved then the Base Salary Percentage shall
be 0.
ILLUSTRATION
          The percentage of the Target achieved and the corresponding Base
Salary Percentage are illustrated as follows:

                                              Group I   Group II   Group III  
Group IV   Group V Percentage of   Base Salary   Base Salary   Base Salary  
Base Salary   Base Salary Target Achieved   Percentage   Percentage   Percentage
  Percentage   Percentage
130
    58       36.25       29       21.75       10.875  
120
    52       32.5       26       19.5       9.75  
110
    46       28.75       23       17.25       8.625  
Target 100
    40       25       20       15       7.5  
90
    22.5       22.5       18       13.5       6.75  
80 or less
    0       0       0       0       0  

          Notwithstanding the foregoing, the amount of the incentive
compensation award for a fiscal year may be increased or decreased in the sole
discretion of the Committee by an amount not greater than one third of the

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incentive compensation award which would be determined under the preceding
provisions of this Section V if 100% of the Target were achieved.
Section VI. Method of Payment.
          The incentive compensation award will be paid in cash, common stock of
the Company, or a combination of both, in the sole discretion of the Board of
Directors.
Section VII. Termination of Employment or Change in Award Level
          In the event a Participant’s employment with the Company terminates
(for reasons other than retirement, disability or death) said termination being
instituted by the Participant or by the Company for cause, prior to the close of
a fiscal year, such Participant shall not be entitled to any incentive
compensation award for that fiscal year.
          In the event a Participant’s employment with the Company terminates,
said termination being by the Company without cause or on account of retirement,
disability or death, prior to the close of a fiscal year, such Participant shall
be entitled to the incentive compensation award set forth in Section V,
pro-rated as of the date of termination.
          If a Participant becomes eligible to participate under the Plan as of
a date other than the beginning of a fiscal year (by reason of commencement of
employment or otherwise), then such Participant’s incentive compensation award
for the fiscal year in which he or she becomes eligible to participate shall be
calculated by prorating the award by the number of days (based on a 365 day
year) for which such Participant was a Participant under the Plan. If at the
beginning of a fiscal year the Participant is in one Group under the Plan, and
during the fiscal year the Participant is assigned to a different Group, the
Participant’s incentive compensation award for that fiscal year shall be
calculated by prorating the award by the number of months for which the
Participant was a member of each Group.
Section VIII. Miscellaneous.
          There shall be deducted from each cash payment made under the Plan the
amount of any tax required by any governmental authority to be withheld by the
Company with respect to such payment. A Participant receiving common stock
hereunder shall be required to pay to the Company the amount of any taxes which
the Company is required by any governmental authority to withhold with respect
to such common stock.
          Nothing in the Plan shall be construed to give any person any benefit,
right or interest except as expressly provided herein, and nothing in the Plan
shall obligate the Company with respect to the duration of employment of any
employee.
          A Participant’s rights and interests under the Plan may not be
assigned or transferred. In the case of a Participant’s death, payment of the
Participant’s incentive compensation award shall be made to the Participant’s
designated beneficiary or beneficiaries, or in the absence of such designation,
by will or the laws of descent and distribution.
          The Board of Directors of the Company may discontinue the Plan, in
whole or in part, at any time, or may, from time to time, amend the Plan in any
respect that such Board may deem advisable; provided, however, that no such
amendment shall be effective to modify or change any right or obligation with
respect to any award of incentive compensation theretofore made by the
Committee.
SECTION IX. Effective Date.
     The Plan, as amended, shall be effective as of February 1, 2007.

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