EX-10.16






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



 









 




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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