Exhibit 10.1


 


VERITAS DGC INC.


KEY CONTRIBUTOR INCENTIVE PLAN


(As amended and restated March 3, 2003)


 


A.            Plan
Objectives


 


The overall objective of
the Key Contributor Incentive Plan (herein after referred to as the “Plan”) is
to provide short-term rewards paid as incentives to designated Key
Contributors.  Key Contributors are those
individuals who have the responsibility of leading a diverse or complex team or
function.  The work produced from that
team or function significantly impacts the operations of the Company up to and
including bottom line results.  Within
the overall objectives, the following are the specific goals of the Plan:


 


•                  Reward
Key Contributors for achieving Veritas DGC Inc.’s business strategies in the
area of net income before taxes (NIBT)


 


•                  Focus
participants on key business goals that they can directly impact


 


•                  Create
payout opportunities that balance the appropriate return to the Company with
reward to the participants


 


B.            Eligibility


 


Eligibility for
participation in the Plan is recommended by managers and approved by the
respective division executive.  Plan
participants must meet the following eligibility criteria:


 


•                  A
minimum annual base salary of $50,000


 


•                  Job
responsibilities that have a major impact on the accomplishment of Veritas DGC
Inc.’s business strategies


 


•                  Regular
full-time employment with Veritas DGC Inc.


 


Variations from the
guidelines may be made for individuals as recommended by Corporate or Division
executives and approved by the CEO.


 


C.            Plan
Year


 


The Plan year for the Key Contributor Incentive Plan
coincides with the Veritas DGC Inc. fiscal year:  August 1 through July 31.


 


Annex 1


 





















 


D.  Performance Measures and Payout Targets


Performance
Measures and Weights


 


Seventy-five percent
(75%) of the payment will be based upon attainment of net income before taxes
(hereinafter referred to as “NIBT”). NIBT is based on the profit plan for VDGC
Consolidated and for each division as approved by Veritas DGC Inc.’s Board of
Directors.


 


Twenty-five percent (25%)
of the award will be based on equally weighted strategic individual objectives
as determined by the participant’s immediate supervisor.  These individual objectives are to be in
addition to the participant’s day-to-day responsibilities and shall present a
challenge to the participant.


 


The following incentive
weights apply for both Corporate and Division participants:


 




	
   

  	
   

  	
  VDGC

  Consolidated

  NIBT

  	
   

  	
  Division

  NIBT

  	
   

  	
  Individual

  Objectives

  	
   

  
	
  Corporate

  	
   

  	
  75

  	
  %

  	
   

  	
   

  	
  25

  	
  %

  
	
  Division

  	
   

  	
  25

  	
  %

  	
  50

  	
  %

  	
  25

  	
  %

  






 


The impact level of the
participant’s position determines incentive target payout percentage as
follows:


 


Bonus Levels Prior to FY
2004:


 




	
  Base Salary (in thousands)

  	
   

  	
  Target

  Payout*

  	
   

  
	
  CEO

  	
   

  	
  50

  	
  %

  
	
  $150+ (Corporate leadership and Division Sr.
  Executive Mgt. Only)

  	
   

  	
  40

  	
  %

  
	
  $100+

  	
   

  	
  30

  	
  %

  
	
  $75-$99

  	
   

  	
  20

  	
  %

  
	
  $50-$74

  	
   

  	
  10

  	
  %

  






 


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Bonus Levels as of FY
2004:


 




	
  Base Salary/Position

  	
   

  	
  Target

  Payout*

  	
   

  
	
  CEO

  	
   

  	
  60

  	
  %

  
	
  Executive Officers

  	
   

  	
  50

  	
  %

  
	
  $150+ (Other Corporate Officers & Division
  Presidents Only)

  	
   

  	
  45

  	
  %

  
	
  $100+

  	
   

  	
  35

  	
  %

  
	
  $75-$99

  	
   

  	
  25

  	
  %

  
	
  $50-$74

  	
   

  	
  15

  	
  %

  






 


$ reported in thousands


 










*Target
payout is the percentage of base salary that the Plan intends to pay to the
participant assuming that the profit and strategic individual objectives are
met for the corporation and his/her division.


 


E.              Award
Calculation


 


The actual incentive
award calculation will be comprised of the following components:


 


•                  Financial
Results:  Incentive payouts will
increase or decrease from target as dictated by NIBT.  Maximum payout is two times (2X) target.


 


•                  Individual
Objectives:  This portion of the
incentive award will be increased or decreased from target as determined by
financial results.


 


NOTE:  If the annual NIBT plan as submitted to and
approved by the Board (either Veritas DGC Inc. or a division plan) generates an
NIBT plan of $0 or less, the following then applies:


 


a)                          If
planned negative NIBT is attained, a maximum of target incentive will be
earned.


 


Employment
Status


 


Participants must be
actively employed on the dates that the award payments are made; otherwise the
award is forfeited. In addition, if the participant leaves before the award
payment date, all moneys previously paid will be retained by the participant;
however, no additional bonuses will be calculated or paid.  The CEO must approve any exceptions to this
rule.


 


F.              Method
of Payment


Incentive awards will be
paid in cash unless otherwise determined by the Veritas DGC Inc. Board of
Directors or the Compensation Committee of the Veritas DGC Inc. Board of
Directors.


 


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Stock
in Lieu of Incentive Award


 


Prior to payment of
either the mid-year or the year-end incentive, the Veritas DGC Inc. Board of
Directors or the Compensation Committee of the Veritas DGC Inc. Board of
Directors may determine that some or all participants in the Plan shall receive
all or a portion of their mid-year or year-end incentive award in shares of
Veritas DGC Inc. Common Stock.  In those
periods when incentive payments would otherwise be made in cash, the Board of
Directors or the Compensation Committee may allow participants the opportunity
to receive all or part of their mid-year or year-end incentive in shares of
Veritas DGC Inc. Common Stock. 
Participants who receive all or a specified portion of the mid-year or
year-end incentive award in Common Stock rather than cash will receive their
shares on a date following the mid-year or year-end incentive payment.  Numbers of shares will be calculated as
follows:


 


	
   

  	
  Portion of incentive used to purchase stock ($)

  	
   

  	
  =

  	
  # of shares

  
	
   

  	
  Fair market value per share ($)

  	
   

  	
   

  	
   

  



 


For the purposes of this
Plan, “fair market value” shall be the closing price for the Common Stock on
the New York Stock Exchange on a date fixed by the Board of Directors or the
Compensation Committee.


 


G.            Award
Frequency


Incentive awards will be
made semi-annually.  The mid-year award
will be based on the achievement of the applicable NIBT plan.  The Board of Directors or the Compensation
Committee shall have the discretion to adjust some or all of the mid-year
incentive awards based on projected performance through the end of the fiscal
year.  The award at the end of the fiscal
year will be based on both achievement of applicable NIBT plan and the
attainment of individual objectives.


 


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H.            Plan
Administration


The Plan is administered
by the CEO and Corporate Vice President of Human Resources in accordance with
the Key Contributor Incentive Plan Administration Document.


 


Any exceptions to the
Plan must be approved by the Board of Directors and/or the Compensation
Committee of the Board of Directors of Veritas DGC Inc.  At any time, the Board of Directors (and/or
the Compensation Committee of the Board of Directors) may, in its discretion,
adjust, amend or terminate the plan.


 


This Plan is a voluntary
incentive program and continuance of the Plan is not assumed as an obligation
of Veritas DGC Inc.  Veritas DGC Inc.
reserves the right to terminate the Plan or to amend the Plan at any time and
in any respect.  Participation in this
Plan shall not impose upon the Company any obligation whatsoever to employ or
to continue to employ any Plan participant, and the right of the Company to
terminate the employment of any officer or other employee shall not be diminished
or affected by reason of the fact that the employee is a Plan participant.


 


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