Exhibit 10.1



 






Exhibit 10.1




LAYNE CHRISTENSEN COMPANY

KEY MANAGEMENT DEFERRED COMPENSATION PLAN




     THIS PLAN is adopted effective as of the 1st day of January, 2006, by Layne Christensen
Company, a Delaware corporation (the “Company”), as follows:



RECITALS




     WHEREAS, the Company wishes to establish the Layne Christensen Company Key Management Deferred
Compensation Plan (the “Plan”) to provide additional retirement benefits and income tax deferral
opportunities for a select group of management and highly compensated employees; and



     WHEREAS, the Company intends that the Plan shall at all times be administered and interpreted
in such a manner as to constitute an unfunded nonqualified deferred compensation plan for a select
group of management or highly compensated employees and to qualify for all available exemptions
from the provisions of ERISA;



     WHEREAS, the Company intends that the Plan shall at all times be administered and interpreted
in accordance with Code Section 409A and all applicable regulations and guidance issued thereunder;



     NOW, THEREFORE, the Company hereby adopts the following Layne Christensen Company Key
Management Deferred Compensation Plan.



ARTICLE ONE




DEFINITIONS




     DEFINITION OF TERMS. Certain words and phrases are defined when first used in this Plan.
Whenever any words are used herein in the masculine, they shall be construed as though they were in
the feminine in all cases where they would so apply; and whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply. In addition, the following
words and phrases when used herein, unless the context clearly requires otherwise, shall have the
following respective meanings:




	 	1.1.	 	Accrued Benefit. The sum of (A) all amounts deferred hereunder by or on behalf of
a Participant, including (i) any contributions made by the Company, (ii) any interest
credited to the Participant or the Participant’s Beneficiary pursuant to this Plan, and (iii)
any deemed investment credited to the Participant or the Participant’s Beneficiary, in each
case as such amounts, interest and deemed investment credits are reflected in the Deferral
Account less (B) (i) any distributions made hereunder to the Participant or the Participant’s
Beneficiary and (ii) any deemed investment losses debited to the Participant or the
Participant’s Beneficiary and reflected in the Deferral Account.
	 
	 	1.2.	 	Affiliate. Any corporation, partnership, joint venture, association, or similar
organization or entity, which is a member of a controlled group of companies which includes,
or which is under common control with, the Company under Code section 414.
	 
	 	1.3.	 	Article. Means an Article of the Plan.
	 
	 	1.4.	 	Base Salary. The annual compensation (excluding bonuses, commissions, overtime,
incentive payments, non-monetary awards, directors fees and other fees, stock options and
grants, and car allowances) paid to an Eligible Employee for services rendered to the
Company, before reduction for compensation deferred pursuant to all qualified, non-qualified
and Code section 125 plans of the Company.
	 
	 	1.5.	 	Beneficiary. The beneficiary or beneficiaries designated by a Participant under
Article 7, or, if the Participant has not designated one or more beneficiaries under Article
7, the person or persons entitled to receive distributions of benefits under Article 5.
	 
	 	1.6.	 	Calendar Year. January 1 to December 31.
	 
	 	1.7.	 	Cause. For purposes of this Plan “Cause” shall mean any of the following acts or
circumstances: (i) willful destruction by the Participant of property of the Company or an
Affiliate having a material




 









 






	 	 	 	value to the Company or such Affiliate; (ii) fraud, embezzlement, theft, or comparable
dishonest activity committed by the Participant (excluding acts involving a de minimis
dollar value and not related to the Company or an Affiliate); (iii) the Participant’s
conviction of or entering a plea of guilty or nolo contendere to any crime constituting a
felony or any misdemeanor involving fraud, dishonesty or moral turpitude (excluding acts
involving a de minimis dollar value and not related to the Company or an Affiliate); (iv)
the Participant’s breach, neglect, refusal, or failure to materially discharge the
Participant’s duties (other than due to physical or mental illness) commensurate with the
Participant’s title and function or the Participant’s failure to comply with the lawful
directions of the Board or the Chief Executive Officer of the Company, or of the Board of
Directors or the Chief Executive Officer of the Affiliate that employs the Participant, in
any such case that is not cured within fifteen (15) days after the Participant has
received written notice thereof from such Board of Directors or Chief Executive Officer;
(v) any willful misconduct by the Participant which may cause substantial economic or
reputational injury to the Company, including, but not limited to, sexual harassment, or
(vi) a willful and knowing material misrepresentation to the Board or the Chief Executive
Officer of the Company or to the Board of Directors or the Chief Executive Officer of the
Affiliate that employs the Participant.
	 
	 	1.8.	 	Change in Control shall mean the occurrence of any of the following:






	 	(a)	 	Change in the Ownership of the Company. Any one person, or more
than one person acting as a group (as defined below) acquires ownership of stock of
the Company that, together with stock held by such person or group, constitutes more
than 50 percent of the total fair market value or total voting power of the stock of
the Company.
	 
	 	(b)	 	Change in the Effective Control of the Company. Either (i) any
one person, or more than one person acting as a group (as defined below), acquire (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company possessing
35 percent or more of the total voting power of the stock of the Company; or (ii) a
majority of members of the Company’s board of directors is replaced during any
12-month period by directors whose apportionment or election is not endorsed by a
majority of the members of the Company’s board of directors prior to the date of the
appointment or election.
	 
	 	(c)	 	Change in the Ownership of a Substantial Portion of the Company’s
Assets. Any one person, or more than one person acting as a group (as defined
below), acquires (or has acquired during the 12-month period ending on the date of
the most recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value (“gross fair market value” means the value of
the assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets) equal to or more than
40 percent of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions.






	 	 	 	For purposes of this definition (i) a “person” shall be deemed to own all ownership
interests attributed to such person pursuant to Code section 318 and (ii) persons will not
be considered to be acting as a group solely because they purchase or own stock, or purchase
assets, of the Company at the same time, or as a result of the same public offering.
However, persons will be considered to be acting as a group if they are owners of a
corporation that enters into a merger, consolidation, purchase or acquisition of stock or
assets, or similar business transaction with the Company. If a person, including an entity
or entity shareholder, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is
considered to be acting as a group with other shareholders in a corporation (only with
respect to the ownership in that corporation in the case of a change in the Effective
Control of the Company or only to the extent of the ownership in that corporation in the
case of a Change in the Ownership of a Substantial Portion of the Company’s Assets) prior to
the transaction giving rise to the change and not with respect to the ownership interest in
the other corporation
	 
	 	1.9.	 	Code. The Internal Revenue Code of 1986, as amended from time to time.
	 
	 	1.10.	 	Compensation. The Base Salary and bonuses payable by the Company or an Affiliate
to an Eligible Employee during a Calendar Year.




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	 	1.11.	 	Deemed Investment Alternatives means those investment vehicles made available by
the Plan Administrator and set forth on Exhibit B in which a Participant’s Deferral Account
is to be hypothetically invested in accordance with Section 4.2.
	 
	 	1.12.	 	Deemed Investment Election means the election made by a Participant from which the
Participant’s Deferral Account will be hypothetically invested in the Deemed Investment
Alternatives in accordance with Section 4.2.
	 
	 	1.13.	 	Deferral Account. Book entries maintained by the Company reflecting a
Participant’s Accrued Benefit; provided, however, that the existence of such book entries and
the Deferral Account shall not create, and shall not be deemed to create, a trust of any
kind, or a fiduciary relationship between the Company and a Participant, the Participant’s
Beneficiary, or other beneficiaries under this Plan.
	 
	 	1.14.	 	Disability or Disabled. A Participant shall be considered disabled if the
Participant: (i) is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by
reason of any medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than 3 months under a
Company-sponsored accident and health plan.
	 
	 	1.15.	 	Disability Date shall mean the date on which the Plan Administrator confirms that
a Participant has a qualifying Disability and is eligible to receive payment hereunder.
	 
	 	1.16.	 	Effective Date. The effective date of the Plan shall be January 1, 2006;
provided, however, the Plan Administrator may, prior to the Effective Date, solicit and
accept an Election of Deferral for each Eligible Employee that will begin participating in
the Plan on such Effective Date.
	 
	 	1.17.	 	Election of Deferral. A written election made and filed by an Eligible Employee
with the Plan Administrator on the Participant Enrollment and Election Form in substantially
the same form attached hereto as Exhibit A, specifying both the amount or percentage of
Compensation that will be deferred during the upcoming Calendar Year and the form in which
such deferred amounts, along with Corporate Contributions made during such Calendar Year, if
any, both such types of contributions as adjusted for deemed earnings and losses, will be
distributed to the Participant upon the Participant’s Retirement.
	 
	 	1.18.	 	Eligible Employee. Any employee of the Company or an Affiliate who is selected to
participate in the Plan in accordance with the provisions of Article 2.1 hereof, and is one
of a “select group of management or highly compensated employees,” as defined by ERISA.
	 
	 	1.19.	 	ERISA. The Employee Retirement Income Security Act of 1974, as amended from time
to time.
	 
	 	1.20.	 	Good Reason means the occurrence of any of the following:






	 	(a)	 	The Company or any of its Affiliates reduces the Participant’s Base Salary.
	 
	 	(b)	 	The Company discontinues its bonus plan in which the Participant
participates as in effect immediately before the Change in Control without
immediately replacing such bonus plan with a plan that is the substantial economic
equivalent of such discontinued bonus plan, or a successor to the Company fails or
refuses to assume the obligations of the Company under such bonus plan as in effect
immediately before the Change in Control or under a plan that is the substantial
economic equivalent of such bonus plan.
	 
	 	(c)	 	Without the Participant’s express written consent, the Company or any of
its Affiliates requires the Participant to change the location of the Participant’s
job or office, so that the Participant will be based at a location more than 35 miles
from the former location of the Participant’s job or office.
	 
	 	(d)	 	Without the Participant’s express written consent, the Company or any of
its Affiliates substantially and adversely reduces the Participant’s responsibilities
or directs the Participant to report to a person of lower rank or responsibilities
than the person to whom the Participant reported before the Change in Control.




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	 	1.21.	 	Normal Retirement Age. The date the Participant attains 60 years of age.
	 
	 	1.22.	 	Participant. An Eligible Employee who either (i) elects to participate in the
Plan by filing an Election of Deferral with the Company or (ii) although no longer making
current deferrals under the Plan, has an Accrued Benefit credited to his or her Deferral
Account.
	 
	 	1.23.	 	Participant Annual Deferral. The portion of a Participant’s Compensation,
expressed either as a percentage or a stated dollar amount, that the Participant elects to
defer for the Calendar Year in question.
	 
	 	1.24.	 	Plan. The Layne Christensen Company Key Management Deferred Compensation Plan, as
amended.
	 
	 	1.25.	 	Plan Administrator. The Company unless the Company designates another person or
persons to hold the position of Plan Administrator. In no event may a Participant serve as
the sole Plan Administrator. If a Participant is part of a group or committee designated as
Plan Administrator, then the Participant may not participate in any activity or decision
relating solely to his or her individual benefits under the Plan, and such matters will be
resolved by the remaining committee members.
	 
	 	1.26.	 	Plan Year. The Calendar Year.
	 
	 	1.27.	 	Retires or Retirement. An Eligible Employee’s Separation from Service after the
Eligible Employee has reached Normal Retirement Age.
	 
	 	1.28.	 	Separation from Service means a Participant ceasing to be employed by the Company
or an Affiliate. A Separation from Service shall not occur if the Participant is on military
leave, sick leave or other bona fide leave of absence (such as temporary employment by the
government) if such leave does not exceed six months, or if longer, as long as the
Participant’s right to reemployment with the Company is provided either by statute or by
contract. Separation from Service shall have the same definition as set forth under Code
section 409A and any applicable regulations or Treasury Department guidance issued
thereunder.
	 
	 	1.29.	 	Specified Employee shall mean a key employee (as defined by Code section 416(i)
without regard to paragraph (5) thereof) of a corporation the stock of which is publicly
traded on an established securities market within the meaning of Treasury Regulation Section
1.897-1(m). Notwithstanding other provisions of this Plan to the contrary, distributions by
the Company to Specified Employees (if any) may not be made before the date which is 6 months
after the date of Separation from Service (or, if earlier, the date of death of the Specified
Employee).





ARTICLE TWO




ELIGIBILITY AND PARTICIPATION





	 	2.1.	 	Eligibility. An employee of the Company or an Affiliate shall be an Eligible
Employee only if he or she is selected by the Plan Administrator, in writing, to participate
in the Plan.
	 
	 	2.2.	 	Participation. An Eligible Employee may participate in the Plan by filing an
Election of Deferral in accordance with the terms and conditions set forth in Article Three.
Once an employee becomes a Participant, he or she shall remain a Participant until his or her
termination of employment with the Company or an Affiliate, and thereafter until all benefits
to which he or she (or his or her beneficiaries) is entitled under the Plan have been paid.
Nothing contained herein shall be construed to be a contract of employment for any term of
years, nor as conferring upon a Participant the right to continue to be employed by the
Company in his or her present capacity, or in any capacity. It is expressly understood by
the parties hereto that this Plan relates to the payment of deferred compensation for the
Participant’s services, payable after termination of employment with the Company, and is not
intended to be an employment contract.





ARTICLE THREE




DEFERRAL ELECTIONS AND CORPORATE CONTRIBUTIONS





	 	3.1.	 	Deferral Elections:






	 	(a)	 	Annual Elections. Except as provided in Section 3.1(c) in the case
of an employee first becoming eligible to participate in the Plan or as provided in
Section 3(d) in the case of




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	 	 	 	performance-based compensation, an Eligible Employee must make an election to
defer Compensation under this Plan by filing, with the Plan Administrator, an
Election of Deferral prior to the end of the Calendar Year preceding the Calendar
Year in which the services that give rise to the Eligible Employee’s Compensation
will be performed. If an Eligible Employee has made an Election of Deferral and
fails to make a new or different election to defer pursuant by the end of the
Calendar Year preceding the Calendar Year for which the election is effective, the
Eligible Employee shall be deemed to have made the same election as is then
currently in effect, if any. An Election of Deferral, unless cancelled or
terminated, shall continue through the date on which the Eligible Employee’s
employment terminates for any reason including death, Retirement or Disability.
All deferrals shall be accomplished by payroll deduction.
	 
	 	(b)	 	Contents of Election of Deferral. In the Election of Deferral, the
Eligible Employee shall specify both (i) the amount Compensation to be deferred and
(ii) the form of payment such deferred amount will be made upon the Eligible
Employee’s Retirement. With respect to specification of the amount to be deferred,
such specification may be separate for the individual components of Compensation, and
may be expressed as percentages or fixed dollar amounts. However, the total amount
of the deferrals made by each Eligible Employee in any Calendar Year may be subject
to certain minimums or maximums as established by the Plan Administrator and as then
specified in the Participant Enrollment And Election Form. The Plan Administrator
and the Company shall disregard any deferral election to the extent such deferral
election does not fall within such minimums or maximums.
	 
	 	(c)	 	Election Upon First Becoming Eligible. Notwithstanding Section
3.1(a) above, upon an employee being notified by the Plan Administrator for the first
time that he or she is eligible to participate in the Plan, the Eligible Employee
shall have thirty (30) days to make an initial deferral election. Such initial
deferral election may be made only with respect to Compensation paid for services
performed subsequent to such election.
	 
	 	(d)	 	Election for Performance-Based Compensation. Notwithstanding
Section 3.1(a) above, any Election of Deferral related to a bonus which constitutes
performance-based compensation (as defined in Code Section 409A and the regulations
issued thereunder), based on services performed over a period of at least 12 months,
may, if permitted by the Plan Administrator, be made no later than six months before
the end of such performance period.
	 
	 	(e)	 	Revocation of Election; Effective Date of Election. For purposes
of this Plan, an election to defer may be changed or revoked at any time prior 5:00
p.m. CST on the last business day of the Calendar Year preceding the Calendar Year
for which the Election of Deferral relates. Accordingly, an Election of Deferral
will, for purposes of the Plan, not be considered as having been made until such
date, at which time the Election of Deferral shall become irrevocable for that
forthcoming Calendar Year.






	 	3.2.	 	Corporate Contributions:






	 	(a)	 	The Company may make contributions (either discretionary, matching or both)
(“Corporate Contributions”) to the Plan as it may determine from time to time and may
direct that such contributions be allocated among the Deferral Accounts of those
Participants that it may select. If a Participant is not employed by the Company as
of the last day of a Plan Year other than by reason of his or her Retirement,
Disability or death, the Corporate Contribution(s), if any, for such Plan Year shall
be zero. In the event of Retirement, Disability or death, a Participant shall be
credited with the Corporate Contribution(s), if any, for the Plan Year in which he or
she Retires, becomes Disabled or dies.
	 
	 	(b)	 	No Participant shall have a right to compel the Company to make a Corporate
Contribution under this Article 3.2 and no Participant shall have the right to share
in the allocation of any such Corporate Contribution for any Plan Year unless
selected by the Company, in its sole discretion.






	 	3.3.	 	Subsequent Changes in Time and Form of Payment. To the extent a Participant
desires to extend the payment date or change the form of payment, such extension or change in
form of payment may be permitted and honored by the Plan Administrator only if the following
two conditions are satisfied:




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	 	(a)	 	Any election made pursuant to this Section 3.3 will not become effective
until at least 12 months after the date the election is made; and
	 
	 	(b)	 	Any extensions of the payment commencement date or change in form of
payment must, at a minimum, result in a deferral of any payment to be made for a
period of not less than five (5) years from the date such payment would otherwise
have been paid; provided, however, that such five year minimum extension need not
apply to distributions on account of Disability, death or unforeseeable emergency.





ARTICLE FOUR




DEFERRAL ACCOUNTS AND ALLOCATION OF FUNDS





	 	4.1.	 	Deferral Account Allocations:






	 	(a)	 	Compensation that is deferred under the Plan shall be credited to the
Deferral Account on or about the date the Compensation would otherwise have been
paid.
	 
	 	(b)	 	Discretionary Corporate Contributions (if any) shall be credited to the
Participant’s Deferral Account at such time as directed by the Plan Administrator.
	 
	 	(c)	 	All amounts paid from a Deferral Account are assumed to be paid on the
first day of the month.
	 
	 	(d)	 	Based on the Deemed Investment Elections of a Participant made under
Article 4.2, the Participant’s Deferral Account shall be credited with deemed
investment earnings, gains, losses or changes in value effective at the end of each
day during the Plan Year, except as otherwise provided in this Plan.
	 
	 	(e)	 	The Plan Administrator may, at any time, change the timing or methods for
(i) crediting or debiting earnings, gains, losses, and changes in value of deemed
investment options, (ii) crediting Participant Annual Deferrals and Corporate
Contributions, and (iii) debiting payments of benefits and withdrawals under this
Plan; provided, however, that the times and methods for crediting or debiting such
items in effect at any particular time shall be uniform among all Participants and
Beneficiaries.






	 	4.2.	 	Deemed Investment Elections and Declared Rates:






	 	(a)	 	Deemed Investment Elections may be made from any of the various Deemed
Investment Alternatives selected by the Participant from among those made available
by the Company from time to time, which are outlined in Exhibit B.
	 
	 	(b)	 	A Participant (or, in the event of the Participant’s death, the
Participant’s Beneficiary) shall make Deemed Investment Elections for the
Participant’s Deferral Account by filing a form substantially in the same form of
Exhibit B (or another form acceptable to the Plan Administrator) with the Plan
Administrator. The number of Deemed Investment Alternatives made available to the
Participant as well as any percentage limitations shall be made at the sole
discretion of the Plan Administrator. Deemed Investment Elections shall remain in
effect until changed and may be changed at the frequency specified in Exhibit B.
Such changes in deemed investments shall be effective on the next business day or as
soon as administratively feasible thereafter.
	 
	 	(c)	 	At the end of each calendar quarter (or such shorter period as the Plan
Administrator may determine), the Company shall compute the total return for the
quarter (or such shorter period) as to each Participant’s Deemed Investment Elections
and may reduce such returns for that quarter (or shorter period) by items such as
money management fees, mortality charges, cost of insurance, taxes and deemed
investment expenses associated specifically with each Deemed Investment Alternative.
The total return for each Deemed Investment Alternative shall be that Deemed
Investment Alternative’s total return for that quarter (or shorter period) reduced by
applicable expenses as described above and approved by the Plan Administrator.
	 
	 	(d)	 	From time to time, and at its sole discretion, the Plan Administrator may
change the Deemed Investment Alternatives that it makes available to the Participant.
However, notwithstanding




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	 	 	 	the provisions of this Article 4.2, the Company may invest contributions in
investments other than the deemed investments selected by such Participant but the
Participant’s return will solely be based on the results of his or her Deemed
Investment Election reduced for expenses as described in Article 4.2(c) above.
Nothing in this Plan shall require the Company to actually acquire or hold any
particular investment.






	 	4.3.	 	Determination of Accounts. A Participant’s Accrued Benefit as of each date shall
consist of the balance of deferrals of Compensation, Corporate Contributions, and deemed
investment earnings, gains, losses, and changes in value in his or her Deferral Account
determined in accordance with this Article 4.
	 
	 	4.4.	 	Separate Plan Year Tracking. So as to provide a Participant with the opportunity
each Plan Year to select the form that the upcoming year’s deferrals, if any, (and earnings
and losses thereon) will ultimately be paid (e.g., lump sum or installment), a Participant’s
Annual Deferral, Corporate Contributions made during such Plan Year and all deemed investment
earnings, gains, losses or changes in value thereon will be tracked separately from such
contributions in other Plan Years.





ARTICLE FIVE




ENTITLEMENT TO BENEFITS





	 	5.1.	 	Vesting of Benefits. The portion of a Participant’s Deferral Account that is
attributable to his or her Compensation deferral and deemed investment earnings, gains,
losses and changes in value credited thereon shall be immediately fully vested. The portion
of a Participant’s Deferral Account that is attributable to Corporate Contributions and
deemed investment earnings, gains, losses and changes in value credited thereon (if any),
shall vest based on the table in Exhibit A. Notwithstanding the foregoing, but subject to
Article 5.6(b), the portion of a Participant’s Deferral Account that is attributable to
Corporate Contributions and deemed investment earnings, gains, losses and changes in value
credited thereon (if any), shall become fully vested upon the Participant’s Retirement,
death, or Disability.
	 
	 	5.2.	 	Retirement Benefit:






	 	(a)	 	Upon the Retirement of the Participant, the Company shall thereafter pay to
the Participant his or her Accrued Benefit. Each portion of a Participant’s Accrued
Benefit that relates to the Participant’s deferred or Corporate Contributions made
during a specific Plan Year shall be payable in the manner and frequency elected by
the Participant with respect to such Plan Year or as otherwise specified by the Plan
Administrator in Exhibit A. If installment payments are chosen for one or more Plan
Years’ deferral or Corporate Contributions, the amount of the first installment to be
paid during the Calendar Year in which payment begins shall be equal to (i) the total
amount payable in the same form of distribution to the Participant as of his or her
Retirement, divided by (ii) the total number of installment payments selected to be
made. Unless otherwise provided for under Article 1.29, the first payment shall be
due on or about the first day of the first month following the Participant’s
Retirement.
	 
	 	 	 	For example and for illustration purposes only, assume a Participant’s aggregate
Accrued Benefit is $250,000, $150,000 of which relates to Plan Years for which the
Participant elected a lump sum form of payment and the remaining $100,000 relates
to Plan Years for which the Participant elected installments over five (5) years.
Upon the Participant’s Retirement, the Participant will be entitled to receive (i)
a $150,000 lump-sum payment and (ii) an installment payment of $20,000 ((1/5) of
the $100,000 payable in five annual installments).
	 
	 	(b)	 	As of January 1 of each subsequent Calendar Year during the benefit payment
period, the amount of each installment to be paid during such Calendar Year shall be
recalculated and shall be equal to the remaining balance in the portion of the
Participant’s Deferral Account as of such January 1 for which the same form of
distribution election has been made; divided by the number of remaining installment
payments to be made, inclusive of the current Calendar Year in subsequent Calendar
Years.
	 
	 	(c)	 	The final installment payment for the portion(s) of the Participant’s
Deferred Account for which the same form of distribution election has been made shall
be equal to the remaining amount payable to the Participant. In no event shall the
amount of any installment payment exceed the remaining amount payable to the
Participant.




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	 	(d)	 	Notwithstanding the foregoing, a Participant’s retirement benefit shall be
distributed in one lump sum rather than in installments if the balance in the
Participant’s Deferral Account as of his Retirement is less than $10,000.00.
	 
	 	(e)	 	In the event a Participant elects to receive his or her benefits upon
Retirement in the form of installments, such series of installment payments is to be
treated as a series of separate payments.






	 	5.3.	 	Disability Retirement Benefit. The Participant shall be entitled to receive
payments hereunder prior to his or her Retirement if he or she is Disabled. If a Participant
has a qualifying Disability, the benefit payable hereunder shall be the same amount as would
have been payable as a Retirement benefit under Article 5.2 above had the Participant
attained his or her Normal Retirement Age on the Disability Date. Such benefit shall be
payable in a lump sum regardless of any different form of distribution method chosen by the
Participant on account of Retirement.
	 
	 	5.4.	 	Death Benefits:






	 	(a)	 	Death Benefit Prior to Commencement of Benefits. If the
Participant dies while in the employment of the Company or an Affiliate prior to the
commencement of benefit payments in the event of Disability, Separation From Service,
or Retirement, the Company shall pay a survivor benefit in an amount based on the
Participant’s Accrued Benefit at the date of death or in such other amount as may be
stipulated in Exhibit A. The death benefit payable under this Article shall be
distributed to the Participant’s Beneficiary in a lump sum regardless of any
different form of distribution method chosen by the Participant on account of
Retirement. Such lump sum payment shall be made on or about the first day of the
third month following the Participant’s date of death and based on the last
Beneficiary designation received by the Company from the Participant prior to his or
her death. If no such designation has been received by the Company, such payment
shall be made to the Participant’s surviving legal spouse. If the Participant is not
survived by a legal spouse, the said payment shall be made to the then living
children of the Participant, if any, in equal shares. If there are no surviving
children, the balance of the Accrued Benefit shall be paid to the estate of the
Participant.
	 
	 	(b)	 	Death Benefit After Commencement of Retirement Benefits. In the
event of the Participant’s death after the commencement of benefit payments, but
prior to the completion of such payments due to and owing hereunder, the Company
shall continue to make such payments, in installments over the remainder of the
period specified in Article 5.2 hereof that would have been applicable to the
Participant had he or she survived. Such continuing payment shall be made to the
Participant’s designated Beneficiary in accordance with the last such designation
received by the Company from the Participant prior to his death. If no such
designation has been received by the Company, such payments shall be made to the
Participant’s surviving legal spouse. If such spouse dies before receiving all
payments to which he or she is entitled hereunder, then the balance of the Accrued
Benefit shall be paid to the spouse’s estate. If the Participant is not survived by
a legal spouse, then the said payments shall be made to the then living children of
the Participant, if any, in equal shares. If there are no surviving children, the
balance of the Accrued Benefit shall be paid to the estate of the Participant.






	 	5.5.	 	Benefits Upon Separation from Service:






	 	(a)	 	In the event of the Participant’s Separation from Service for any reason
other than for Cause, Disability, Retirement or death, the Company shall pay to the
Participant a termination benefit based on the vested value of the Participant’s
Accrued Benefit as of the effective date of such Separation from Service. Such
benefit shall be payable in a lump sum regardless of any different form of
distribution method chosen by the Participant on account of Retirement. Unless
otherwise provided for under Article 1.29, the lump sum payment shall be made on or
about the first day of the third month following the effective date of the
Participant’s Separation from Service.
	 
	 	(b)	 	In the event the Participant’s employment is terminated for Cause, no
benefits of any kind will be due or payable under the terms of this Plan from amounts
credited to the Participant’s Deferral Account attributable to Corporate
Contributions, and any cumulative earnings, gains, and changes in value thereon, and
all rights of the Participant, his or her designated Beneficiary,




8









 






	 	 	 	executors, or administrators, or any other person, to receive payments thereof
shall be forfeited. Notwithstanding the manner and frequency elected by the
Participant or as otherwise specified by the Plan Administrator in Exhibit A,
benefits credited to the Participant’s Deferral Account attributable to his or her
compensation deferral and deemed investment earnings, gains, losses and changes in
value credited thereon shall be paid in a lump sum as soon as practicable
following the Participant’s Separation from Service. If, after installment
payments of benefits under this Plan have begun, the Plan Administrator determines
that Cause existed before the Participant’s Retirement or Disability, such
installment payments shall be reduced by amounts credited to the Participant’s
Deferral Account attributable to Corporate Contributions, and any cumulative
earnings, gains, and changes in value thereon.






	 	5.6.	 	Hardship Distribution:






	 	(a)	 	Hardship Withdrawal. In the event that the Plan Administrator,
under a written request by a Participant, determines, in its sole discretion, that
the Participant has suffered an unforeseeable financial emergency, the Company shall
pay to the Participant, as soon as practicable following such determination, an
amount necessary to meet the emergency (the “Hardship Withdrawal”), but not exceeding
the vested balance of such Participant’s Deferral Account as of the date of such
payment. For purposes of Article 5.6(a), an “unforeseeable financial emergency”
shall mean a severe financial hardship to the Participant or beneficiary resulting
from a sudden and unexpected illness or accident of the Participant or Beneficiary,
the Participant’s or Beneficiary’s spouse, or the Participant or Beneficiary’s
dependent (as defined in Code Section 152(a)), loss of the Participant’s or
Beneficiary’s property due to casualty, or similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant or
Beneficiary. The amounts distributed with respect to an emergency may not exceed the
amounts necessary to satisfy such emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Participant’s or
Beneficiary’s assets (to the extent liquidation of such assets would not itself cause
severe financial hardship).
	 
	 	(b)	 	Rules Adopted by Plan Administrator. The Plan Administrator shall
have the authority to adopt additional rules relating to hardship distributions. In
administering these rules, the Plan Administrator shall act in accordance with the
principle that the primary purpose of this Plan is to provide additional retirement
income, not additional funds for current consumption.
	 
	 	(c)	 	Limit on Number of Hardship Distributions. No Participant may
receive more than one hardship distribution in any Calendar Year.
	 
	 	(d)	 	Prohibition of Further Deferrals. A Participant who receives a
Hardship Distribution, and who is still employed by the Company or an Affiliate shall
be prohibited from making deferrals under Article 3.1 for the remainder of the
Calendar Year in which the distribution is made.






	 	5.7.	 	Effect of Change in Control. A Participant shall become fully vested in the
portion of his Deferral Account that is attributable to Corporate Contributions and deemed
investment earnings, gains, losses and changes in value credited thereon (if any) if, within
one year after the occurrence of a Change in Control, his employment is involuntarily
terminated by the Company or any of its Affiliates for any reason other than Cause or his
death or Disability, or he voluntarily terminates his employment with the Company and all
Affiliates for Good Reason. From and after the occurrence of a Change in Control, the Plan
Administrator shall consist of a committee of the individuals who were members of the
Company’s Board of Directors 90 days before the occurrence of the Change in Control, with any
vacancy in such committee occurring thereafter being filed with a person or persons selected
by the other members of such committee. Unless otherwise provided for under Article 1.29,
payments due (if any) following a Change in Control shall be due on or about the first day of
the third month following the Participant’s Separation from Service.
	 
	 	5.8.	 	Adverse Action on Participant or Plan:






	 	(a)	 	Notwithstanding any other provision hereof, in the event there is a
determination by the Internal Revenue Service, or in the event of a final
determination by a court or competent jurisdiction, that amounts credited to the
Participants’ Deferral Accounts hereunder are includable in the




9









 






	 	 	 	gross incomes of the Participants or Beneficiaries, the Plan Administrator may in
its sole discretion distribute the entire amount credited to the Participants’
Deferral Accounts to the Participants or Beneficiaries and cause the termination
of future deferrals of Compensation by the Participants.
	 
	 	(b)	 	In the event that there is a determination by the Department of Labor, or a
final determination of a court of competent jurisdiction, that the Plan is subject to
Part 2, 3 or 4 of Title I of ERISA, the Plan Administrator may in its sole discretion
distribute the entire amount credited to the Participants’ Deferral Accounts to the
Participants or Beneficiaries and cause the termination of future deferrals of
Compensation by the Participants.






	 	5.9.	 	Excise Tax Limitation: Notwithstanding anything contained in this Plan to the
contrary, in the event that any payment or benefit (within the meaning of Section 280G(b)(2)
of the Code) to the Participant or for the Participant’s benefit paid or payable or
distributed or distributable (including, but not limited to, the acceleration of the time for
the vesting or payment of such benefit or payment) pursuant to the terms of this Plan or
otherwise in connection with, or arising out of, the Participant’s employment with the
Company or any of its Affiliates or a change of control within the meaning of Section 280G of
the Code (a “Payment” or “Payments”), would be subject to the excise tax imposed by Section
4999 of the Code (the “Excise Tax”), then the Payments shall be reduced (but not below zero)
but only to the extent necessary that no portion thereof shall be subject to the excise tax
imposed by Section 4999 of the Code (the “Section 4999 Limit”). Unless the Participant shall
have given prior written notice specifying a different order to the Company to effectuate the
limitations described in the preceding sentence, the Company shall reduce or eliminate the
Payments by first reducing or eliminating those Payments or benefits which are not payable in
cash and then by reducing or eliminating cash Payments, in each case in reverse order
beginning with payments or benefits which are to be paid the farthest in time. Any notice
given by the Participant pursuant to the preceding sentence shall take precedence over the
provisions of any other plan, arrangement or agreement governing the Participant’s rights and
entitlements to any benefits or compensation.
	 
	 	5.10.	 	Benefits Not Transferable. No Participant or Beneficiary under this Plan shall
have any power or right to transfer, assign, anticipate, hypothecate or otherwise encumber
any part of all the amounts payable hereunder. No part of the amounts payable shall, prior
to actual payment, be subject to seizure or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency, or dissolution of marriage. Any such attempted assignment shall be
void.





ARTICLE SIX




DISTRIBUTION OF BENEFITS





	 	6.1.	 	Benefits Payable Only From General Corporate Assets: Unsecured General Creditor Status
of Participant:






	 	(a)	 	Payment to the Participant or any Beneficiary hereunder shall be made from
assets which shall continue, for all purposes, to be part of the general,
unrestricted assets of the Company; no person shall have any interest in any such
asset by virtue of any provision of this Plan. The Company’s obligation hereunder
shall be an unfunded and unsecured promise to pay money in the future. To the extent
that any person acquires a right to receive payments from the Company under the
provisions hereof, such right shall be no greater than the right of any unsecured
general creditor of the Company; no such person shall have or acquire any legal or
equitable right, interest or claim in or to any property or assets of the Company.
	 
	 	(b)	 	In the event that, in its discretion, the Company purchases an insurance
policy or policies insuring the life of a Participant, or Company employee, to allow
the Company to recover or meet the cost of providing benefits in whole or in part,
hereunder, no Participant or Beneficiary shall have any rights whatsoever therein or
in said policy or the proceeds therefrom. The Company shall be the sole owner and
beneficiary of any such insurance policy or property and shall possess and may
exercise all incidents of ownership therein.




10









 






	 	(c)	 	In the event that the Company purchases an insurance policy or policies on
the life of a participant or a Company employee as provided for above, then all of
such policies shall be subject to the claims of the creditors of the Company.
	 
	 	(d)	 	If the Company chooses to obtain insurance on the life of a Participant in
connection with its obligations under this Plan, the Participant hereby agrees to
take such physical examinations and to truthfully and completely supply such
information as may be required by the Company or the insurance company(ies)
designated by the Company. If a Participant submits information to any such
insurance company(ies) and if the Participant makes a material misrepresentation in
an application for any insurance that may be used to insure any of the Company’s
obligations under this Plan, and if as a result of that material misrepresentation an
insurance company is not required to pay all or any part of the benefit provided
under that insurance, the Participant’s right to a benefit under this Plan will be
reduced by the amount of the benefit that is not paid by the insurance company
because of such material misrepresentation if applicable.






	 	6.2.	 	Facility of Payment. If a distribution is to be made to a minor, or to a person
who is otherwise incompetent, then the Plan Administrator may, in its discretion, make such
distribution (i) to the legal guardian, or if none, to a parent of a minor payee with whom
the payee maintains his or her residence, or (ii) to the conservator or committee or, if
none, to the person having custody of an incompetent payee. Any such distribution shall
fully discharge the Plan Administrator, the Company and Plan from further liability on
account thereof.
	 
	 	6.3.	 	Withholding. Any and all payments to be made to a Participant or a Participant’s
beneficiaries pursuant to this Plan shall be subject to all federal, state and local income
and employment taxes and such taxes may be withheld accordingly by the Company from benefits
under this Plan or from salary, bonuses or other amounts due to the Participant as determined
by the Plan Administrator.





ARTICLE SEVEN




BENEFICIARIES





	 	7.1.	 	Beneficiary Designation. The Participant shall have the right, at any time, to
submit in substantially the form attached hereto as Exhibit C, a written designation of
primary and secondary beneficiaries to whom payment under this Plan shall be made in the
event of his or her death prior to complete distribution of the benefits payable. Each
Beneficiary designation shall become effective only when receipt thereof is acknowledged in
writing by the Company. The Company shall have the right, in its sole discretion, to reject
any Beneficiary designation, which is not in substantially the form attached hereto as
Exhibit C. Any attempt to designate a Beneficiary, otherwise than as provided in this
Article shall be ineffective.
	 
	 	7.2.	 	Spouse’s Interest. A Participant’s Beneficiary designation shall be deemed
automatically revoked if the Participant names a spouse as Beneficiary and that marriage is
later dissolved or the spouse dies. Without limiting the generality of the foregoing, the
interest in the benefits hereunder of a spouse of a Participant who has predeceased the
Participant or whose marriage with the Participant has been dissolved shall automatically
pass to the Participant and shall not be transferable by such spouse in any manner, including
but not limited to such spouse’s will, nor shall such interest pass under the laws of
intestate succession.





ARTICLE EIGHT




PLAN ADMINISTRATION





	 	8.1.	 	Responsibility of Administration of the Plan:






	 	(a)	 	The Plan Administrator shall be responsible for the management, operation
and administration of the Plan. The Plan Administrator may employ others to render
advice with regard to its responsibilities under this Plan. It may also allocate its
responsibilities to others and may exercise any other powers necessary for the
discharge of its duties. The Plan Administrator shall be entitled to rely
conclusively upon all tables, valuations, certifications, opinions and reports
furnished by any actuary, accountant, controller, counsel or other person employed or
engaged by the Plan Administrator with respect to the Plan.




11









 






	 	(b)	 	The primary responsibility of the Plan Administrator is to administer the
Plan for the benefit of the Participants and their beneficiaries, subject to the
specific terms of the Plan. The Plan Administrator shall administer the Plan in
accordance with its terms and shall have the power to determine all questions arising
in connection with the administration, interpretation, and application of the Plan.
Any such determination shall be conclusive and binding upon all persons and their
heirs, executors, beneficiaries, successors and assigns. The Plan Administrator
shall have all powers necessary or appropriate to accomplish its duties under the
Plan. The Plan Administrator shall also have the discretion and authority to make,
amend, interpret, and enforce all appropriate rules and regulations for the
administration of this Plan and decide or resolve any and all questions, including
but not limited to, interpretations of this Plan and entitlement to or amount of
benefits under this Plan, as may arise in connection with the Plan.






	 	8.2.	 	Claims Procedure:






	 	(a)	 	Claim. A person who believes that he or she is being denied a
benefit to which he or she is entitled under the Plan (hereinafter referred to as a
“Claimant”) may file a written request for such benefit with the Plan Administrator,
setting forth his or her claim. The request must be addressed to the Plan
Administrator at its then principal place of business.
	 
	 	(b)	 	Claim Decision. Upon receipt of a claim, the Plan Administrator
shall advise the Claimant that a reply will be forthcoming within 90 days and that
the Plan Administrator shall, in fact, deliver such reply within such period. The
Plan Administrator may, however, extend the reply period for an additional 90 days
for reasonable cause. If the claim is denied in whole or in part, the Plan
Administrator shall adopt a written opinion, using language calculated to be
understood by the Claimant, setting forth to the extent applicable:






	 	(i)	 	The specific reasons for such denial;
	 
	 	(ii)	 	Specific reference to pertinent provisions of this Plan on
which such denial is based;
	 
	 	(iii)	 	A description of any additional material or information
necessary for the Claimant to perfect his or her claim and an explanation why
such material or such information is necessary;
	 
	 	(iv)	 	Appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review, and
	 
	 	(v)	 	The time limits for requesting a review under (iii) and for
review under (iv) hereof.






	 	(c)	 	Request for Review. Within 60 days after receipt by the Claimant
of the written opinion described above, the Claimant may request in writing that the
Company through its Board of Directors review the Plan Administrator’s determination.
Such request must be addressed to the Plan Administrator of the Company at its then
principal place of business. The Claimant or his or her duly authorized
representative may, but need not, review the pertinent documents and submit issues
and comments in writing for consideration by the Company. If the Claimant does not
request a review of the determination within such 60-day period, he or she shall be
barred and estopped from challenging the determination.
	 
	 	(d)	 	Review of Decision. Within 60 days after the Company’s receipt of
a request for review, it will review the Plan Administrator’s determination. After
considering all materials presented by the Claimant, the Company will render a
written opinion, written in a manner calculated to be understood by the Claimant,
setting forth the specific reasons for the decision and containing specific
references to the pertinent provisions of this Plan on which the decision is based.
If special circumstances require that the 60 day time period be extended, the Company
will so notify the Claimant and will render the decision as soon as possible, but no
later than 120 days after receipt of the request for review. The decision of the
Board of Directors shall be final and binding on all parties and may not be further
appealed by any party.






	 	8.3.	 	Arbitration. Any claim or controversy between the parties which the parties are
unable to resolve themselves, and which is not resolved through the claims procedure set
forth in Article 8.2, including any claim arising out of a Participant’s employment or the
termination of that employment, and including any




12









 






	 	 	 	claim arising out of, connected with, or related to the formation, interpretation,
performance or breach of any provision of this Plan, any claim or dispute as to whether a
claim is subject to arbitration and any claims of statutory violation including, but not
limited to, those arising under ERISA, shall be submitted to and resolved exclusively by
expedited arbitration by a single arbitrator in accordance with the following procedures:






	 	(a)	 	In the event of a claim or controversy subject to this arbitration
provision, the complaining party shall promptly send written notice to the other
party identifying the matter in dispute and the proposed remedy. Following the
giving of such notice, the parties shall meet and attempt in good faith to resolve
the matter. In the event the parties are unable to resolve the matter within 21
days, the parties shall meet and attempt in good faith to select a single arbitrator
acceptable to both parties. If a single arbitrator is not selected by mutual consent
within 10 business days following the giving of the written notice of dispute, an
arbitrator shall be selected from a list of nine persons each of whom shall be an
attorney who is either engaged in the active practice of law or a recognized
arbitrator and who, in either event, is experienced in serving as an arbitrator in
disputes between employers and employees, which list shall be provided by the office
of the American Arbitration Association (“AAA”) or of the Federal Mediation and
Conciliation Service. If, within three business days of the parties’ receipt of such
list, the parties are unable to agree upon an arbitrator from the list, then the
parties shall each strike names alternatively from the list, with the first to strike
being determined by the flip of a coin. After each party has had four strikes, the
remaining name on the list shall be the arbitrator. If such person is unable to
serve for any reason, the parties shall repeat this process until an arbitrator is
selected.
	 
	 	(b)	 	Unless the parties agree otherwise, within 60 days of the selection of the
arbitrator, a hearing shall be conducted before such arbitrator at a time and a place
agreed upon by the parties. In the event the parties are unable to agree upon the
time or place of the arbitration, the time and place shall be designated by the
arbitrator after consultation with the parties. Within 30 days of the conclusion of
the arbitration hearing, the arbitrator shall issue an award, accompanied by a
written decision explaining the basis for the arbitrator’s award, references to the
specific provisions of the Plan on which the appeal decision is based and recitation
of the particular facts on which the decision is based.
	 
	 	(c)	 	In any arbitration hereunder, the Company shall pay all administrative fees
of the arbitration and all fees of the arbitrator, except that the Participant or
Beneficiary may, if he wishes, pay up to one-half of those amounts. Each party shall
pay its own attorneys’ fees, costs, and expenses. The arbitrator shall have no
authority to add to or to modify this Plan, shall apply all applicable law, and shall
have no lesser and no greater remedial authority than would a court of law resolving
the same claim or controversy. The arbitrator shall, upon an appropriate motion,
dismiss any claim without an evidentiary hearing if the party bringing the motion
establishes that it would be entitled to summary judgment if the matter had been
pursued in court litigation. The parties shall be entitled to reasonable discovery
subject to the discretion of the arbitrator.
	 
	 	(d)	 	The decision of the arbitrator shall be final, binding, and non-appealable,
and may be enforced as a final judgment in any court of competent jurisdiction.
	 
	 	(e)	 	This arbitration provision of the Plan shall extend to claims against any
parent, subsidiary, or affiliate of each party, and, when acting within such
capacity, any officer, director, shareholder, Participant, Beneficiary, or agent of
each party, or of any of the above, and shall apply as well to claims arising out of
state and federal statutes and local ordinances as well as to claims arising under
the common law or under this Plan.






	 	 	 	Notwithstanding the foregoing, and unless otherwise agreed between the parties, either
party may, in an appropriate manner, apply to a court for provisional relief, including a
temporary restraining order or preliminary injunction, on the ground that the arbitration
award to which the applicant may be entitled may be rendered ineffectual without
provisional relief.
	 
	 	 	 	Any arbitration hereunder shall be conducted in accordance with the employee benefit plan
claims rules and procedures of the AAA then in effect; provided, however, that, in the
event of any inconsistency between the employee benefit plan claims rules and procedures
of the AAA and the terms of this Plan, the terms of this Plan shall prevail.




13









 






	 	 	 	If any of the provisions of this Article 8.3 are determined to be unlawful or otherwise
unenforceable, in whole or in part, such determination shall not affect the validity of
the remainder of this Article 8.3, and this Article 8.3 shall be reformed to the extent
necessary to carry out its provisions to the greatest extent possible and to ensure that
the resolution of all conflicts between the parties, including those arising out of
statutory claims, shall be resolved by neutral, binding arbitration. If a court should
find that the provisions of this Article 8.3 are not absolutely binding, then the parties
intend any arbitration decision and award to be fully admissible in evidence in any
subsequent action, given great weight by any finder of fact, and treated as determinative
to the maximum extent permitted by law.






	 	8.4.	 	Notice. Any notice, consent or demand required or permitted to be given under the
provisions of this Plan shall be in writing and shall be signed by the party giving or making
the same. If such notice, consent or demand is mailed, it shall be sent by United States
certified mail, postage prepaid, addressed to the addressee’s last known address as shown on
the records of the Company. The date of such mailing shall be deemed the date of notice
consent or demand. Any person may change the address to which notice is to be sent by giving
notice of the change of address in the manner aforesaid.





ARTICLE NINE




AMENDMENT OR TERMINATION





	 	9.1.	 	Amendment or Termination:






	 	(a)	 	This Plan may be amended or terminated by the Company at any time, without
notice to or consent of any person. Any such amendment or termination shall take
effect as of the date specified therein and, to the extent permitted by law.
However, no such amendment or termination shall reduce:






	 	(i)	 	the amount then credited to the Participant’s Deferral Account, or
	 
	 	(ii)	 	his or her vested percentage under Article 5.1.






	 	 	 	If the Plan is terminated, except as may otherwise be permitted under Code section
409A and the applicable guidance issued thereunder, such termination shall be
prospective in nature only. All benefits accrued as of the date of Termination
shall continue to be paid solely at those times specified in Article V as if the
Plan had not been so Terminated.
	 
	 	(b)	 	Any other provision of this Plan to the contrary notwithstanding, the Plan
may be amended by the Company at any time, to the extent that, in the opinion of the
Company, such amendment shall be necessary in order to ensure that the Plan will be
characterized as a plan maintained for a select group of management or highly
compensated employees, as described in Sections 201(2), 301(a)(3) and 401(a)(1) of
ERISA, or to conform the Plan to the requirements of any applicable law, including
ERISA and the Code. No such amendment shall be considered prejudicial to any
interest of a Participant or Beneficiary hereunder.





ARTICLE TEN




THE TRUST





	 	10.1.	 	Establishment of Trust. The Company may establish a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I, subchapter J, subtitle A of
the Code, to pay benefits under this Plan (the “Trust”).
	 
	 	10.2.	 	Interrelationship of the Plan and the Trust. The provisions of the Plan shall
govern the rights of a Participant to receive distributions pursuant to the Plan. The
provisions of the Trust (if established) shall govern the rights of the Participant and the
creditors of the Company to the assets transferred to the Trust. The Company shall at all
times remain liable to carry out its obligations under the Plan. The Company’s obligations
under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the
Trust.
	 
	 	10.3.	 	Contribution to the Trust. Amounts may be contributed by the Company to the Trust
in the sole discretion of the Company.




14









 











ARTICLE ELEVEN




MISCELLANEOUS





	 	11.1.	 	Entire Plan. The Plan and the Deemed Investment Alternatives, Beneficiary
designation, and other administrative forms shall constitute the total agreement between the
Company and the Participant. No oral statement regarding the Plan may be relied upon by the
Participant. In the event that there is a discrepancy between this Plan, the administrative
forms and any summary of the Plan, this Plan will control.
	 
	 	11.2.	 	Invalidity of Provisions. If any provision of this Plan shall be for any reason
invalid or unenforceable, the remaining provisions shall nevertheless be carried into effect.
	 
	 	11.3.	 	Unclaimed Benefits. In the case of a benefit payable on behalf of such
Participant, if the Plan Administrator is unable to locate the Participant or beneficiary to
whom such benefit is payable, such Plan benefit may be forfeited to the Company upon the Plan
Administrator’s determination. Notwithstanding the foregoing, if, subsequent to any such
forfeiture, the Participant or beneficiary to whom such Plan benefit is payable makes a valid
claim for such Plan benefit, such forfeited Plan benefit shall be paid by the Plan
Administrator to the Participant or beneficiary, without interest from the date it would have
otherwise been paid.
	 
	 	11.4.	 	Offset For Obligations To Company. If, at such time as the Plan Participant
becomes entitled to benefit payments hereunder, the Plan Participant has any debt, obligation
or other liability representing an amount owing to the Company or an Affiliate of Company,
and if such debt, obligation, or other liability is due and owing at the time benefit
payments are payable hereunder, the Company may offset the amount owing it or an Affiliate
against the amount of benefits otherwise distributable hereunder.
	 
	 	11.5.	 	Compliance with Code Section 409A. Notwithstanding anything contained in this
Plan or to the contrary, it is the intent of the Company to have this Plan interpreted and
construed to comply with any and all provisions of Internal Revenue Code section 409A
including any subsequent amendments, rulings or interpretations from appropriate governmental
agencies.
	 
	 	11.6.	 	Governing Law. The Plan and the rights and obligations of all persons hereunder
shall be governed by and construed in accordance with the laws of the State of Kansas, other
than its laws regarding choice of law, to the extent that such state law is not preempted by
federal law.





            IN WITNESS WHEREOF, the Company has executed this Plan as of the day and year first written
above.



	 	 	 	 	 
	 	LAYNE CHRISTENSEN COMPANY

 	 
	 	By:  	
/s/ A. B. Schmitt 	 
	 	 	Name:  	Andrew B. Schmitt 	 
	 	 	Title:  	President 	 



15









 






	 	 	 	 	 



EXHIBIT A




Layne Christensen Company

Key Management Deferred Compensation Plan

Participant Enrollment And Election Form





     This
Agreement is entered into this ___ day of ______, 20___ between Layne Christensen
Company, hereinafter referred to as the “Company”, and ______, hereinafter referred
to as the “Participant”.



     I acknowledge that as an Eligible Employee of the Company I have been offered an opportunity
to participate in the Company’s Key Management Deferred Compensation Plan for the Plan year
beginning ______, 20___. I am electing the alternatives set forth as indicated below:



ELECTION TO DEFER:




(Please check all that apply)




     I WILL participate in the Company’s Key Management Deferred Compensation Plan for the
forthcoming Plan Year and duly authorize the Company to make the appropriate deductions from my
paycheck.









I hereby elect to defer receipt of Compensation for the forthcoming Plan Year
as set forth below (subject to a minimum of $ 2,500.00 and/or a maximum of 25%
of salary and 50% of bonus.):




     ___% or $___of my base annual salary to be withdrawn from my
salary in approximately equal amounts during the year.




     ___% or $___of my bonus(es) which would have otherwise been
paid during the Plan Year, to be withdrawn as applicable during the
year.







     I will NOT participate in the Company’s Key Management Deferred Compensation Plan for the
forthcoming Plan Year.




			
	NOTE:	 	This election may be modified at any time prior to 5:00 p.m. CST on the last business
day of the Calendar Year preceding the Plan Year for which this election relates. At 5:00
p.m. CST on the last business day of the year, this election is irrevocable for the
forthcoming Plan Year.








16









 








EXHIBIT A

(continued)




Layne Christensen Company

Key Management Deferred Compensation Plan

Participant Enrollment and Election Form



DISTRIBUTION OF BENEFITS: I hereby elect to have my benefits relating to the particular
year to which this Election Form relates distributed to me in the following manner:




	 	 	 	 	 	 	 
	Retirement Benefit Per	 	Disability Benefit Per	 	Death Benefit Per	 	Benefit Upon
	Article 5.2*	 	Article 5.3	 	Article 5.4(a)	 	Separation from	Service
	 	 	 	 	 	 	Per Article 5.5(a)
	Lump Sum

	 	Lump Sum
	 	Lump Sum
	 	Lump Sum
	 

	 	 
	 	 
	 	 
	 
	Over 2 Years
	 	 	 	 	 	 
	 
	Over 5 Years
	 	 	 	 	 	 
	 
	Over 10 Years
	 	 	 	 	 	 
	 
	Frequency of Payments:
	 	 	 	 	 	 
	 
	Quarterly

	 	N/A
	 	N/A
	 	N/A







			
	NOTE:	 	This election may be changed to extend the payment commencement date to a later date so
long as: (a) the election to extend the date or to change the selected form of distribution
will not become effective until at least 12 months after the date the election is made, and
(b) the change must, at a minimum, result in a deferral of any payment to be made for a period
of not less than five (5) years from the date of your retirement. Such dates may not be
accelerated.








17









 








EXHIBIT A

(continued)




Layne Christensen Company

Key Management Deferred Compensation Plan

Participant Enrollment and Election Form




VESTING OF BENEFITS (PER ARTICLE 5.1):



The portion of the Participant’s Deferral Account that is attributable to Corporate Contributions
and deemed investment earnings, gains, losses and changes in value credited thereon (if any), shall
vest based on the following table:



Vesting shall apply to ALL Corporate Contributions without regard to the Plan Year in which they
were made. All portions of the Participant’s Deferral Account that are attributable to deferral
from a Participant’s Compensation (and all deemed investment earnings, gains, losses and changes in
value credited thereon (if any)), shall always be fully vested.




	 	 	 	 	 
	Completed Years of Plan Participation	 	Percent Vested	 
	Less than 2
	 	 	—	%
	2 but less than 3
	 	 	—	%
	3 but less than 4
	 	 	—	%
	4 but less than 5
	 	 	—	%
	5 or more
	 	 	—	%






AGREED AND ACCEPTED BY THE PARTICIPANT




	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	AGREED AND ACCEPTED BY THE COMPANY
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Signature of Corporate Officer

	 	 	 	Date	 	 






18









 






EXHIBIT B




Layne Christensen Company

Key Management Deferred Compensation Plan

—Deemed Investment Elections—



I elect to have my Deferral Account credited with a rate of return based on the following Deemed
Investment Alternatives. This Deemed Investment Election shall supersede any prior election that I
have made and shall continue until such time as I make a new Deemed Investment Election in
accordance with the terms of the Plan. (Deemed Investment Elections may be changed by a
Participant once each calendar quarter or on such other basis as may be determined by the Plan
Administrator). Please see the Plan Administrator for additional information, to include a
prospectus and/or other detailed explanation of Deemed Investment Alternatives.




	 	 	 	 	 	 	 
	Deemed Investment Alternative	 	%	 	Deemed Investment Alternative	 	%
	 
	 	 	 	 	 	 





AGREED AND ACCEPTED BY THE PARTICIPANT




	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	AGREED AND ACCEPTED BY THE COMPANY
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Signature of Corporate Officer

	 	 	 	Date	 	 






19









 






EXHIBIT C




Layne Christensen Company

Key Management Deferred Compensation Plan

Designation of Beneficiary





			
	TO:	 	Layne Christensen Company (hereinafter referred to as the “Company”),







In accordance with the rights granted to me in the Layne Christensen Company “Deferred Compensation
Plan” Agreement, I do hereby designate as Beneficiary thereunder to receive payments thereunder in
the event of my death:



Primary Beneficiary:                                                                                                    



Relationship:                                                            



1st Contingent Beneficiary:                                                                                                    



Relationship:                                                            



I further reserve the privilege of changing the Beneficiary herein named at any time or times
without the consent of any such beneficiary.



This designation is made upon the following terms and conditions:





	 	1.	 	The word “Beneficiary” as used herein shall include the plural, Beneficiaries,
wherever the Agreement permits.
	 
	 	2.	 	For purposes of this Beneficiary Designation, no person shall be deemed to have
survived the Participant if that person dies within thirty (30) days of the
Participant’s death.
	 
	 	3.	 	Beneficiary shall mean the Primary Beneficiary if such Primary Beneficiary
survives the Participant by at least thirty (30) days, and shall mean the 1st
Contingent Beneficiary if the Primary Beneficiary does not survive the Participant by
at least thirty (30) days.
	 
	 	4.	 	If the Primary Beneficiary shall be deceased on any annual payment date
provided in said Agreement, any and all remaining annual payments shall be payable to
the 1st Contingent Beneficiary unless the executors or administrators of said deceased
Beneficiary are named as Primary Beneficiary hereinabove.
	 
	 	5.	 	If more than one Beneficiary is named within the same class (i.e., Primary or
1st Contingent), then annual payments shall be made equally to such Beneficiaries
unless otherwise provided hereinabove. If any such Beneficiary dies while receiving
annual payments under said Agreement, any and all remaining payments shall continue to
be made to the surviving Beneficiaries of such class and to the legal heirs of the
deceased Beneficiary, which legal heirs shall receive the amount which was being
received by said deceased Beneficiary. If all of the Beneficiaries of a class shall
die, any and all remaining payments shall be made to the next class of Beneficiaries,
as provided under Paragraph 4 above.
	 
	 	6.	 	If none of the Beneficiaries named hereinabove is living on any said annual
payment date, any and all remaining payments shall be made to my executors or
administrators, or upon their written request, to any person or persons so designated
by them.
	 
	 	7.	 	If any such annual payments shall be payable to any trust, the Company shall
not be liable to see to the application by the Trustee of any payment hereunder at any
time, and may rely upon the sole signature of the Trustee to any receipt, release or
waiver, or to any transfer or other instrument to whomsoever made purporting to affect
this nomination or any right hereunder.
	 
	 	8.	 	A Participant’s Beneficiary designation shall be deemed automatically revoked
if the Participant names a spouse as Beneficiary and that marriage is later dissolved
or the spouse dies. Without




20









 






	 	 	 	limiting the generality of the foregoing, the interest in the benefits hereunder of
a spouse of a Participant who has predeceased the Participant or whose marriage with
the Participant has been dissolved shall automatically pass to the Participant and
shall not be transferable by such spouse in any manner, including but not limited to
such spouse’s will, nor shall such interest pass under the laws of intestate
succession.




This designation cancels and supersedes any Designation of Beneficiary heretofore made by me with
respect to said Agreement and the right to receive payments thereunder.




	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Participant:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 





     I am the spouse of the Participant/Executive named above. I have read and understood the foregoing
Designation of Beneficiary, and especially paragraph 8 thereof. I understand that the Plan does
not permit the assignment of my spouse’s benefits to me in the event of the dissolution of my
marriage. I also understand that, even if my spouse names me as a Beneficiary, my rights may be
impaired in the event of the dissolution of my marriage or my death before my spouse.



	 	 	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Spouse	 	 	 	 






	 	 	 	 	 	 	 
	Received this ___ day of ______, 20___

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(for the Company)	 	 






21









 






Annual Election To Defer Compensation

for the

Layne Christensen Company Key Management Deferred Compensation Plan




IMPORTANT: TO BE EFFECTIVE, THIS ELECTION MUST BE DELIVERED

TO THE PLAN ADMINISTRATOR BEFORE 5:00 P.M. CST ON THE LAST

BUSINESS DAY OF THE YEAR PRECEDING THE YEAR OF DEFERRAL.



Name of Participant:                                                                                                     




ELECTION TO DEFER:




     I WILL participate in the Company’s Key Management Deferred Compensation Plan for the
forthcoming Plan Year and duly authorize the Company to make the appropriate deductions from my
paycheck.






I hereby elect to defer receipt of Compensation for the forthcoming Plan Year
as set forth below (subject to a minimum of $ 2,500.00 and a maximum of 25% of
salary and 50% of bonus):




     ___%
or $___ of my base annual salary to be withdrawn from my
salary in approximately equal amounts during the year.



     ___%
or $___ of my bonus(es) which would have otherwise been
paid during the Plan Year, to be withdrawn as applicable during the
year.







     I will NOT participate in the Company’s Key Management Deferred Compensation Plan for the
forthcoming Plan Year.




			
	NOTE:	 	This election may be modified at any time prior to 5:00 p.m. CST on the last business
day of the Calendar Year preceding the Plan Year for which this election relates. At 5:00
p.m. CST on the last business day of the year, this election is irrevocable for the
forthcoming Plan Year.








AGREED AND ACCEPTED BY THE PARTICIPANT




	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	AGREED AND ACCEPTED BY THE COMPANY
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Signature of Corporate Officer

	 	 	 	Date	 	 






22









 






Deemed Investment Election Change Form

for the

Layne Christensen Company Key Management Deferred Compensation Plan




(Deemed Investment elections may be changed by a Participant once each calendar quarter or on such

other basis as may be determined by the Plan Administrator)



For the period beginning:                                                             



Participant’s Name:                                                                                                     



Date Received:                                                             



I hereby request that my prior period account balances and current period deferrals
be allocated as follows:




	 	 	 	 	 	 	 
	Deemed Investment Alternative	 	%	 	Deemed Investment Alternative	 	%
	 
	 	 	 	 	 	 




IMPORTANT: This Deemed Investment Election shall supersede any prior election that I have made and
shall continue until such time as I make a new Deemed Investment Election in accordance with the
terms of the Plan. I acknowledge that I have received information regarding each of the above
funds, and I understand that the Plan Administrator has discretion as to whether my deferrals will
actually be invested in the funds selected above.




AGREED AND ACCEPTED BY THE PARTICIPANT




	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	AGREED AND ACCEPTED BY THE COMPANY
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Signature of Corporate Officer

	 	 	 	Date	 	 







23