Exhibit 10.1

 

GREAT LAKES DREDGE & DOCK COMPANY, LLC

 

ANNUAL CASH BONUS PLAN

 

Amended and Restated Effective January 1, 2009

 

Purpose

 

The Great Lakes Dredge & Dock Company, LLC (the “Company”) Annual Cash Bonus
Plan (the “Plan”) is established to provide annual cash bonuses to employees of
the Company upon satisfaction of certain performance criteria.  Different bonus
levels are utilized to compensate employees appropriately based on their ability
to influence the profitability of the Great Lakes Dredge & Dock Corporation (the
“Corporation”) and its subsidiaries.

 

Administration

 

The Plan is administered by the Corporation’s Compensation Committee of the
Board of Directors (the “Compensation Committee”), which subject to its
oversight may delegate responsibilities for administering the Plan to the
Company’s Chief Executive Officer (“CEO”), Chief Operating Officer (“COO”) and
Chief Financial Officer (“CFO”) (collectively, the “Management Committee”) to
the extent such responsibilities do not relate to determining bonus awards for
members of the Management Committee.

 

Eligibility for Participation

 

The Compensation Committee or the Management Committee, as applicable, in its
sole discretion, shall designate each year those employees of the Company who
shall participate in the Plan (the “Participants”).  Except as otherwise set
forth in an applicable employment agreement or similar arrangement, a
Participant whose employment by the Company terminates for any reason during a
calendar year performance period (a “Performance Year”) shall not be entitled to
receive a bonus for such Performance Year and, following such termination, the
Company shall have no further obligation hereunder to that Participant.

 

Determination of Bonus Awards

 

“Budgeted EBITDA” for purposes of the Plan is defined as the budgeted amount of
earnings before interest, taxes, depreciation and amortization attributable to
the Company’s dredging segment approved by the Board of Directors of the
Corporation for each Performance Year.  For determination of bonus awards, the
Compensation Committee may in its sole discretion adjust actual EBITDA
attributable to the Company’s dredging segment (“Actual EBITDA”) for any
extraordinary or non-recurring items. All bonus awards shall be distributed to
Participants by March 15 following the Performance Year in which they are
earned.

 

Bonus awards are determined as follows:

 

1.             Holiday Bonus Program – Annual holiday bonuses, if any, are
payable to non-management employees.  Awards are based solely on Company
performance during a Performance Year.  Holiday bonuses for a Performance Year
are payable only if Actual EBITDA

 

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equals or exceeds 70% of Budgeted EBITDA for such Performance Year.  Each
Participant eligible for an annual holiday bonus is classified by the Management
Committee among one of four categories, based upon the Participant’s level of
responsibility.  The Management Committee will set three levels for each
category (minimum, budget and maximum).  To the extent annual bonuses are
payable for a Performance Year, the amount of the bonus payable to a Participant
depends on (i) the category in which the Participant is classified and (ii) the
bonus level achieved, as determined in the discretion of the Management
Committee.  The budget bonus is payable when Actual EBITDA is in the discretion
of the Management Committee equal to or sufficiently close to Budgeted EBITDA. 
When the Actual EBITDA is sufficiently below the Budgeted EBITDA, as determined
by the Management Committee in its discretion, but at least equal to 70% of
Budgeted EBITDA, the minimum bonus is payable.  When the Actual EBITDA is
sufficiently above Budgeted EBITDA, as determined by the Management Committee in
its discretion, the maximum bonus is payable.

 

2.             Performance Bonus Program – Annual performance bonuses, if any,
are awarded to management employees other than the Company’s CEO, COO, CFO and
Senior Vice Presidents (“SVPs”).  Annual performance bonuses are allocated to
such management employees from a bonus pool expressed as a percentage of the
aggregate eligible salaries of such management employees (as of the end of the
Performance Year).  The size of the bonus pool for a Performance Year depends on
Company performance, which is measured by comparing Actual EBITDA with Budgeted
EBITDA for the Performance Year.  No annual performance bonuses are payable for
a Performance Year if Actual EBITDA is less than 70% of Budgeted EBITDA for such
Performance Year.  Allocations of annual performance bonuses from the bonus pool
among eligible Participants will be based on individual Participant performance,
as determined by the Compensation Committee (or the Management Committee) in its
sole discretion.

 

The bonus pool is determined as follows:

 

Actual EBITDA

 

Bonus Pool

‹ 70% of Budgeted EBITDA

 

No bonus pool

= 70% of Budgeted EBITDA

 

5.75% of eligible salaries

= 100% of Budgeted EBITDA

 

11.5% of eligible salaries

>= 130% of Budgeted EBITDA

 

23% of eligible salaries

 

To the extent Actual EBITDA falls between EBITDA thresholds, the bonus pool is
determined by interpolation.

 

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3.             Senior Management Bonus Program – The Company’s CEO, COO, CFO and
SVPs are eligible to receive bonuses based upon Company performance as follows:

 

Actual EBITDA

 

Bonus Award
CEO and COO

 

Bonus Award
CFO and SVPs

‹ 90% of Budgeted EBITDA

 

No bonus

 

No bonus

= 90% of Budgeted EBITDA

 

35% of annual salary

 

23.75% of annual salary

= 100% of Budgeted EBITDA

 

70% of annual salary

 

47.5% of annual salary

>= 120% of Budgeted EBITDA

 

140% of annual salary

 

95% of annual salary

 

To the extent Actual EBITDA falls between EBITDA thresholds, the bonus award is
determined by interpolation.

 

Miscellaneous

 

a)                                      Although it is the present intention of
the Compensation Committee to continue the Plan for a indefinite period of time,
the Compensation Committee reserves the right to terminate the Plan in its
entirety at any time or to modify the Plan as it exists from time to time,
provided that no such action shall adversely affect any bonus previously awarded
under the Plan with respect to a prior Performance Year and provided further,
that except as otherwise permitted under the Plan, no termination or
modification which would adversely affect a Participant hereunder shall take
effect with respect to a Performance Year in progress at the time of such
action.

 

b)                                     No bonus payable under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge prior to actual receipt thereof by the payee; and
any attempt to so anticipate, alienate, sell transfer, assign, pledge, encumber
or charge prior to such receipt shall be void.  The Company shall not be liable
in any manner for or subject to the debts, contracts, liabilities, engagements
or torts of any person entitled to any bonus under the Plan.

 

c)                                      Nothing contained herein shall confer
upon any Participant the right to be retained in the service of the Corporation
or any subsidiary thereof, nor limit the right of the Corporation or any
subsidiary thereof to discharge or otherwise deal with any Participant without
regard to the existence of the Plan.

 

d)                                     The Plan shall at all times be entirely
unfunded and no provision shall at any time be made with respect to segregating
assets of the Corporation or any subsidiary thereof for payment of any bonuses
hereunder.  No Participant or any other person shall have any interest in any
particular assets of the Corporation or any subsidiary thereof by reason of the
right to receive a bonus under the Plan and any such Participant or any other
person shall have only the rights of a general

 

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unsecured creditor of the Corporation or any subsidiary thereof with respect to
any rights under the Plan.

 

e)                                      The Plan is intended to be exempt from
the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended, and any ambiguity in the Plan shall be interpreted to this effect.

 

f)                                        To the extent required by law, the
Company will withhold from payments otherwise due hereunder such taxes required
to be withheld by the federal or any state or local government.

 

g)                                     The Plan shall be governed by and
construed in accordance with the laws of the State of Illinois.

 

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