EX-10.38






Exhibit 10 (38)




Layne Christensen Company

Key Management Deferred Compensation Plan




(As Amended and Restated for IRC Section 409A, effective January 1, 2008)




          THIS PLAN is amended and restated effective as of the 1st day of January, 2008, by Layne
Christensen Company, a Delaware corporation (the “Company”), as follows:




RECITALS




          WHEREAS, the Company established 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
and has amended and restated the Plan to be in compliance with the Final Treasury Regulations
issued thereunder;




          NOW, THEREFORE, the Company hereby amends and restates the Layne Christensen Company Key
Management Deferred Compensation Plan effective January 1, 2008, as follows:




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:





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.




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.




Article. Means an Article of the Plan.




Base Salary. The annual compensation (excluding bonuses, commissions, overtime,
incentive payments, non-monetary awards, directors fees and other fees, income attributable
to the exercise of stock options or income attributable to the receipt or vesting of other
equity-based compensation awards relating to the Company’s common stock 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.




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.




Calendar Year. January 1 to December 31.




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.




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.




Code. The Internal Revenue Code of 1986, as amended from time to time.




Compensation. The Base Salary and bonuses payable by the Company or an Affiliate to
an Eligible Employee during a Calendar Year.




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.




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.



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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.




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.




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.




Effective Date. The original effective date of the Plan was January 1, 2006. The
Plan was amended and restated effective January 1, 2008, for Code Section 409A. The Plan
Administrator was, prior to the original Effective Date, permitted to solicit and accept an
Election of Deferral for each Eligible Employee that began participating in the Plan on such
original Effective Date.




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.




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.




ERISA. The Employee Retirement Income Security Act of 1974, as amended from time to
time.




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.






Normal Retirement Age. The date the Participant attains 60 years of age.




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.




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.




Plan. The Layne Christensen Company Key Management Deferred Compensation Plan, as
amended.



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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.




Plan Year. The Calendar Year.




Retires or Retirement. An Eligible Employee’s Separation from Service after the
Eligible Employee has reached Normal Retirement Age.




Separation from Service or Separates 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.




Specified Employee shall mean a Participant who is 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). If a Participant is a key employee at any time during the
twelve (12) months ending on the identification date, the Participant is a Specified
Employee for the twelve (12) month period commencing on the first day of the fourth month
following the identification date. For purposes of this definition, the identification date
is December 31. The Company, in determining whether this definition and the related
restrictions set forth in Article 5.5(c) apply, will determine whether the Company has any
publicly traded stock as of the date of a Participant’s Separation from Service.



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
Separation from Service 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.
	 
	2.3.	 	Reemployment. Where an Eligible Employee has ceased being eligible to participate in
the Plan (other than the accrual of Earnings), regardless of whether all amounts deferred
under the Plan have been paid, and subsequently becomes eligible to participate in the Plan
again, the Employee may be treated as being initially eligible to participate in the plan if
the Employee had not been eligible to participate in the Plan (other than the accrual of
Earnings) at any time during the twenty-four (24) month period ending on the date the Employee
again becomes eligible to participate in the Plan.





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 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




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	 	 	 	to make a new or different election to defer 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 and if he or she has not in any
prior Plan Year become eligible to participate in any nonqualified deferred
compensation plan of the Company with which the Plan would be aggregated for purposes
of Treasury Regulations § 1.409A-1(c)(2), 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. In the event an Election of Deferral is made with respect to a bonus in the
first year of eligibility, but after the beginning of a service period, the deferral
election will apply to the portion of the bonus paid for services performed subsequent
to the election and will be calculated based on the total bonus for the service period
multiplied by the ratio of the number of days remaining in the service period to the
total days in the service period.
	 
	 	(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.
Kansas City time 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:






	 	(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




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	 	(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, as defined in
Article 5.6.





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)	 	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.
	 
	 	(d)	 	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, 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 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.




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	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 5.5(c), the first payment shall be
due within the first 90-day period immediately following the Participant’s Retirement.
If the Participant fails to select a form of distribution for purposes of distributions
from such Participant’s Accounts for a Plan Year, such distributions will default to
lump sum.
	 
	 	 	 	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.
	 
	 	(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 and all similar plans aggregated with the Plan under
Treasury Regulations § 1.409A-1(c)(2) as of his Retirement is less than the applicable
dollar amount under Code Section 402(g)(1)(B) (ignoring any additional contribution
opportunity due to catch-up contributions).
	 
	 	(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




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	 	 	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 at such time 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. As elected by the Participant on
his or her Election of Deferral, such lump sum payment shall be made either within the
first 90-day period immediately following the Participant’s death or on the first
anniversary of the Participant’s death and payable to that person listed 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 5.5(c), the lump sum payment shall be made within 90 days following 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, 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 within the
first 90-day period immediately 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.




8









 












	 	(c)	 	Notwithstanding anything to the contrary in the Plan or in the payment election
of a Participant or the Company, the Plan may not make payment to any Participant who
is a Specified Employee on account of a Separation from Service, earlier than six (6)
months after the date of Separation from Service (or, if earlier than the end of the
six-month period, the date of death of the Specified Employee), in accordance with
Treasury Regulations §1.409A-(i)(2)(i). Any such payment that is delayed pursuant to
this Section 5.5(c) shall be made on the first day of the seventh month following the
Participant’s Separation from Service.






	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, within the first 90-day period immediately 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 (i) 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)), (ii) loss of the
Participant’s or Beneficiary’s property due to casualty, or (iii) other similar
extraordinary and unforeseeable circumstances arising as a result of events beyond the
control of the Participant or Beneficiary. The Company will determine whether a
Participant incurs an unforeseeable emergency based on the relevant facts and
circumstances and in accordance with Treasury Regulations §1.409A-3(a)(6)(i)(3) or
applicable guidance. However, in any case, payment on account of an unforeseeable
emergency may not be made to the extent that such emergency is or may be relieved: (i)
through reimbursement or compensation from insurance or otherwise; (ii) by liquidation
of the Participant’s assets, to the extent the liquidation of such assets would not
cause severe financial hardship; or (iii) by the cessation of deferrals under this
Plan. The amount of any payment based on an unforeseeable emergency is limited to the
amount that is reasonably necessary to satisfy the emergency need, which may include
amounts necessary to pay any Federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution. The determination as to the
amount of payment must take into account any additional compensation that is available
to the Participant if he or she cancels a deferral election in accordance with terms of
the Plan.
	 
	 	(b)	 	Rules Adopted by Plan Administrator. The Plan Administrator shall have
the authority to adopt additional rules relating to Hardship Withdrawals. 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 Withdrawals. No Participant may receive
more than one hardship distribution in any Calendar Year.
	 
	 	(d)	 	Prohibition of Further Deferrals. A Participant who receives a
Hardship Withdrawals, 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 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. Subject to Article
5.5(c), 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.	 	Permissible Acceleration of Benefits.
	 
	 	 	Notwithstanding any other provision hereof to the contrary, the Plan Administrator, in its
sole discretion, may allow for the acceleration of a payment as permitted under Treasury
Regulations § 1.409A-3(j)(4) such as but




9









 






	 	 	not limited to (i) distributions pursuant to a domestic relations order (§
1.409A-3(j)(4)(ii)); (ii) distributions to comply with an ethics agreement with the Federal
government (§ 1.409A-3(j)(4)(iii)); (iii) distributions for the payment of employment taxes
(§ 1.409A-3(j)(4)(vi); and (iv) distributions upon the inclusion of income under Section
409A (§ 1.409A-3(j)(4)(vii)).






	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.
	 
	 	(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




10









 






	 	 	 	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.
	 
	 	(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.




11









 












	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 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




12









 












	 	 	 	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.




          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.




13









 











ARTICLE NINE




AMENDMENT OR TERMINATION





	9.1.	 	Plan Amendment.
	 
	 	 	The Company reserves the right to amend this Plan at any time to comply with Section 409A
and other applicable guidance or for any other purpose, provided that such amendment will
not cause the Plan to violate the provisions of Section 409A. Except to the extent
necessary to bring this Plan into compliance with Section 409A: (i) no amendment or
modification shall be effective to decrease the value or vested percentage of a
Participant’s Account(s) in existence at the time an amendment or modification is made, and
(ii) no amendment or modification shall materially and adversely affect the Participant’s
rights to be credited with additional amounts on such Account(s), or otherwise materially
and adversely affect the Participant’s rights with respect to such Account(s).
	 
	9.2.	 	Termination. The Company reserves the right to terminate this Plan in accordance
with one of the following, subject to the restrictions imposed by Section 409A and
authoritative guidance:






	 	(a)	 	Corporation Dissolution or Bankruptcy. This Plan may be terminated
within twelve (12) months of a corporate dissolution taxed under Code § 331, or with
the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A), and
distributions may then be made to Participants provided that the amounts deferred under
this Plan are included in the Participants’ gross income in the latest of:






	 	(i)	 	The calendar year in which the Plan termination occurs;
	 
	 	(ii)	 	The calendar year in which the amount is no longer subject to a
substantial risk of forfeiture; or
	 
	 	(iii)	 	The first calendar year in which the payment is administratively
practicable.






	 	(b)	 	Change in Control. This Plan may be terminated within the thirty (30)
days preceding or the twelve (12) months following a Change in Control. This Plan will
then be treated as terminated only if all substantially similar arrangements sponsored
by the Company are terminated so that all participants in all similar arrangements are
required to receive all amounts of Compensation deferred under the terminated
arrangements within twelve (12) months of the date of termination of the arrangements.
	 
	 	(c)	 	Discretionary Termination. The Company may also terminate this Plan
and make distributions provided that:






	 	(i)	 	All plans sponsored by the Company that would be aggregated with
any terminated arrangements under Treasury Regulations §1.409A-1(c) are
terminated;
	 
	 	(ii)	 	No payments, other than payments that would be payable under the
terms of this plan if the termination had not occurred, are made within twelve
(12) months of this plan termination;
	 
	 	(iii)	 	All payments are made within twenty-four (24) months of this
plan termination; and
	 
	 	(iv)	 	Neither the Company nor any of its affiliates adopts a new plan
that would be aggregated with any terminated plan if the same Participant
participated in both arrangements at any time within three (3) years following
the date of termination of this Plan.
	 
	 	(v)	 	The termination does not occur proximate to a downturn in the
financial health of the Company.






	 	 	 	The Company also reserves the right to suspend the operation of this Plan for a fixed
or indeterminate period of time.





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




14









 






	 	 	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.





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. Unless otherwise permitted under Code Section
409A, the entire amount of reduction under this Section 11.4 may not exceed $5,000.
	 
	11.5.	 	409A Transition Election. All Participants in the Plan are permitted to amend their
current elections relating to both timing and form of payment before December 31, 2008
provided that no change in a timing or form election made during 2008 may either (1) apply to
payments the Participant otherwise would have received in 2008 or (2) cause a Plan benefit to
be paid in 2008 which otherwise would not have been paid in 2008.
	 
	11.6.	 	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.
	 
	11.7.	 	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
 	 
	 	 	Andrew B. Schmitt, President 	 
	 	 	 	 
	 




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