Document:

EX-10(27)

 

Exhibit 10
(27)

Layne Christensen Company

Mineral Exploration Division Incentive Compensation Plan

Effective February 1, 2008

SECTION I. Definitions.

          In addition to the terms defined elsewhere throughout this Plan (as defined in Section II
below), the following terms shall have the following meanings:

          “Committee” shall mean the administrative committee of this Plan (as defined in Section III
below).

          “Company” shall mean Layne Christensen Company and its subsidiaries.

          “District” shall mean a separate profit center of the Company within the Division (as defined
below) as determined from the Company’s internal financial records and as set forth in Exhibit A
attached hereto; provided, however, that the Committee shall have the authority in its discretion
to group one or more profit centers into one “District” for purposes of this Plan.

          “Division” shall mean that portion of the Company which forms the Mineral Exploration Division
as determined by the Committee in its sole discretion from time to time.

          “EBIT” shall mean earnings before interest and taxes exclusive of any of the Company’s general
and administrative expenses as determined by the Committee in its sole discretion from time to
time.

          “EBIT Benchmark” shall mean the performance benchmark assigned to a certain District, Region
(as defined below) and/or the Division and based on the EBIT of such respective District, Region or
the Division.

          “Pool” shall mean the bonus pool established for each District, Region and/or the Division for
each fiscal year.

          “Region” shall mean a separate grouping of Districts within the Division identified on Exhibit
B; provided, however, that the Committee shall have the authority in its discretion to change the
grouping of Districts and the makeup of all or any Regions from time to time.

SECTION II. Purpose of the Plan.

          The Company desires to effect a program of making awards as soon as practicable after the end
of each fiscal year, as provided below, to certain employees of the Division who during such fiscal
year, in the judgment of the Committee, have significantly contributed to the achievement of
certain objectives of the Division and of the Districts or Regions in which such employees perform
services. The purpose of this program is to provide additional incentive for the eligible
employees to promote the best interests and most profitable operation of the Division.

          This program shall be known as the “Layne Christensen Company Mineral Exploration Division
Incentive Compensation Plan” (hereinafter referred to as the “Plan”). This Plan supersedes the
Layne Christensen Company Mineral Exploration Division Incentive Compensation Plan effective
February 1, 2007. No participant of this Plan shall be eligible to participate in the Layne
Christensen Company District Incentive Compensation Plan after February 1, 2007. 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 III. Administration.

          The Plan shall be administered by the Committee. The Committee shall consist of at least
three persons appointed by the Board of Directors of the Company. Except as otherwise permitted

 

 

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 IV. Participation.

          All salaried, non-clerical employees of the Division shall be eligible for participation in
the Plan (and shall hereinafter be referred to as “Participants”).

          In addition to the Participants and at the discretion of the Committee, a portion of the Pool
may be set aside for payment to Division employees who do not participate in any other Company
bonus or incentive program.

SECTION V. Calculation of Benchmarks.

          The incentive compensation to be allocated to the Pool for each District, Region and the
Division shall be based on certain performance benchmarks. Each fiscal year, each District, Region
and the Division will be assigned an EBIT Benchmark. The EBIT Benchmark for each District, Region
and the Division shall be calculated by adding the EBIT for each respective District, Region and
the Division for the three (3) immediately preceding fiscal years and dividing the sum of those
three (3) numbers by three (3); provided, however, with respect to the EBIT Benchmark calculation
for any fiscal year commencing after fiscal year 2008, the EBIT for any of such three (3)
immediately preceding fiscal years shall not be less than three percent (3%) of the revenue, nor
more than one hundred twenty-five percent (125%) of the EBIT Benchmark, for such fiscal year.

SECTION VI. Generation of Bonus Pools.

          As soon as practical following the end of each fiscal year, a Pool shall be established for
each District, Region and the Division in an amount equal to (i) $0.03 for each $1.00 of EBIT
generated during such fiscal year to the extent such District, Region or the Division achieves
eighty percent (80%) to one hundred percent (100%) of its respective EBIT Benchmark; or (ii) $0.045
for each $1.00 of EBIT generated during such fiscal year to the extent such District, Region or the
Division achieves more than one hundred, but less than one hundred twenty-five percent (125%) of
its respective EBIT Benchmark (in which case no amount shall be credited to any Pool under clause
(i) above); or (iii) $0.065 for each $1.00 of EBIT generated during such fiscal year to the extent
such District, Region or the Division achieves more than one hundred twenty-five percent (125%) of
its respective EBIT Benchmark (in which case no amount shall be credited to any Pool under clauses
(i) or (ii) above); provided, however, in no case shall the combined Pools for the districts,
regions or Division exceed fifteen percent (15%) of the EBIT earned by the Division in such fiscal
year.

SECTION VII. Determination of Amount of Award.

          The amount of incentive award to be granted from the Pool to a Participant shall be determined
by the Committee.

          The amount of the individual awards shall be discretionary and in the sole judgment of the
Committee, based upon the Participant’s performance for the fiscal year in which the incentive
award is based, provided, however, that the amount of any cash incentive award shall not exceed:
(i) 100% of the Participant’s annual regular salary for Participants included in Group I (as set
forth in Exhibit C), (ii) 75% of

2

 

the Participant’s annual regular salary for Participants included
in Group II (as set forth in Exhibit C) and (iii) 50% of the Participant’s annual regular salary
for Participants included in Group III (as set forth in Exhibit C). The term “annual regular
salary” shall mean the annual regular salary of the Participant as of the first day of such fiscal
year.

SECTION VIII. Type of Award.

          The incentive compensation award will be paid in cash or, as permitted under the Company’s
2006 Equity Incentive Plan, in shares of restricted or unrestricted common stock of the Company, or
a combination of any of the foregoing as determined by the Board of Directors of the Company or the
Compensation Committee thereof. To the extent such award is payable in stock, the Participant shall
receive the Company’s common stock, par value $.01 per share.

SECTION IX. Termination of Employment.

          In the event a Participant voluntarily terminates his or her employment with the Company at
any time prior to the close of the fiscal year, the Participant will not be eligible for any award
otherwise payable for the fiscal year.

          In the event a Participant is involuntarily terminated (without cause) prior to the close of
the fiscal year, the Participant will be considered for receipt of the award he or she would have
otherwise received (as determined by the Committee in its sole discretion) and, if awarded,
prorated to reflect the length of the Participant’s service during the relevant fiscal year. The
Committee will take into consideration the circumstances of the termination in determining the
propriety and amount of the award. The Company’s payment of severance or post-employment salary
support to a Participant will not be considered part of the Participant’s annual regular salary for
purposes of the Plan.

SECTION X. 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 stock hereunder shall have deducted by the Company from the award the
amount of
any taxes which the Company is required by any governmental authority to withhold with respect to
such stock prior to calculation of the number of shares of stock to be awarded.

          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 be construed as establishing any
right of continued employment by the Company.

          A Participant’s rights and interests under the Plan may not be assigned or transferred. In
the case of a Participant’s death prior to payment of a Participant’s award, payment in an amount
equal to what the Participant would have otherwise received had he or she been employed on the last
day of the fiscal year (as determined by the Committee in its sole discretion), prorated to reflect
the length of the Participant’s service during the relevant fiscal year, shall be made to the
personal representatives of the Participant’s estate or such other person or persons as the
Committee deems appropriate.

          The Board of Directors of the Company, or the Compensation Committee thereof, 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 (or Committee) may deem advisable. In the event the Plan is terminated, no
further payments will be made under the Plan.

SECTION XI. Effective Date.

          The Plan, as amended, shall be effective as of February 1, 2008.

3EX-10(33)

 

Exhibit 10(33)

SUMMARY OF 2008 SALARIES OF NAMED EXECUTIVE OFFICERS

The following table sets forth the current base salaries provided to the Company’s CEO and four
most highly compensated executive officers (the “Named Executive Officers”):

	 	 	 	 	 
	Executive Officer	 	Current Salary
	Andrew B. Schmitt
	 	$	620,000	 
	Eric R. Despain
	 	$	300,000	 
	Jerry W. Fanska
	 	$	365,000	 
	Jeffrey J. Reynolds
	 	$	239,000	 
	Gregory F. Aluce
	 	$	275,000	 

Andrew B. Schmitt, President and CEO, and Jerry W. Fanska, Senior Vice President—Finance and
Treasurer, are also eligible to receive a bonus each year under the Company’s Executive Incentive
Compensation Plan (the “Executive IC Plan”). Eric R. Despain, Senior Vice President and President
of the Minerals Division, participates in the Company’s Mineral Exploration Division Incentive
Compensation Plan (the “Mineral IC Plan”). Jeffrey J. Reynolds, Executive Vice President of the
Company overseeing the Water Infrastructure Division, participates in the Reynolds Division of
Layne Christensen Company Cash Bonus Plan (the “Reynolds Plan”), and Gregory F. Aluce, Senior Vice
President—Water Infrastructure Division, participates in the Water Infrastructure
Division Incentive Compensation Plan (the “Water IC Plan”). The bonuses paid to the Company’s CEO
and four most highly compensated executive officers under the respective plans in which they
participated for the fiscal year ended January 31, 2008 are as shown in the following table:

	 	 	 	 	 
	Executive Officer	 	FY 2008 Bonus
	Andrew B. Schmitt
	 	$	645,000	 
	Eric R. Despain
	 	$	250,000	 
	Jerry W. Fanska
	 	$	238,669	 
	Jeffrey J. Reynolds
	 	$	375,000	 
	Gregory F. Aluce
	 	$	225,000	 

Under the Executive IC Plan, each participant is eligible for an annual cash bonus in a target
amount (the “Target Bonus”) equal to a percentage (85% in the case of Mr. Schmitt and 60% in the
case of Mr. Fanska) of such participant’s base compensation. The Target Bonus is adjusted (up or
down) based upon the performance of the Company as compared to certain goals included in the
business plan adopted and approved by the Board of Directors. In no event, however, can a
participant’s annual cash bonus under the Executive IC Plan exceed 100% of such participant’s base
compensation for the relevant year. No bonus will be payable should performance be equal to or
below 80% of the relevant goals established by the business plan. In addition, the formula bonus
derived as described in the preceding sentences can be further adjusted (up or down) at the
discretion of the Board of Directors by up to one-third of the Target Bonus. All or part of an
employee’s incentive compensation under the Executive IC Plan may, at the discretion of the Board
of Directors, be paid in the form of shares of the Company’s common stock which may consist of
authorized but unissued shares of common stock or shares of common stock reacquired by the Company
on the open market.

Under the Minerals IC Plan, each district and region within the Minerals Division and the Minerals
Division as a whole is assigned a benchmark for each fiscal year based on the earnings before
interest and taxes (“EBIT”) of such respective district, region or Division as a whole. The amount
of the bonus pool established for a fiscal year will be calculated based on the percentage of the
EBIT benchmark achieved by each respective district, region, or the Division as a whole. The
amount of the incentive award to be granted from the bonus pool to each participant in the Minerals
IC Plan is then determined by the

 

 

committee administering the Minerals IC Plan, subject to certain maximum awards. For example, Mr.
Despain cannot receive a cash incentive award in excess of 100% of his annual regular salary.
Furthermore, the amount of Mr. Despain’s incentive award under the Minerals IC Plan is determined
by the Compensation Committee of the Board of Directors, rather than the committee administering
the Minerals IC Plan. The incentive compensation awards payable under the Minerals IC Plan will be
paid in cash or, as permitted under the Company’s 2006 Equity Incentive Plan, in shares of
restricted or unrestricted common stock of the Company, or a combination of any of the foregoing as
determined by the Board of Directors of the Company or the Compensation Committee thereof.

Under the Reynolds Plan, the Company accrued and reserved a bonus pool for fiscal 2008 equal to 20%
of the net income earned by the Reynolds division, subject to reduction in the event the Reynolds
division does not generate earnings before interest, taxes depreciation and amortization (EBITDA)
in excess of its EBITDA target for that year. The EBITDA target for the Reynolds division for each
plan year through January 31, 2009, is $16,500,000. The Compensation Committee of the Board of
Directors of the Company then determines the amount of the bonus paid to Mr. Reynolds out of the
bonus pool reserved.

Under the Water IC Plan, each district and region within the Water Infrastructure Division and the
Water Infrastructure Division as a whole is assigned a benchmark for each fiscal year based on the
EBIT of such respective district, region or Division as a whole. The amount of the bonus pool
established for a fiscal year will be calculated based on the percentage of the EBIT benchmark
achieved by each respective district, region, or the Division as a whole. The amount of the
incentive award to be granted from the bonus pool to each participant in the Water IC Plan is then
determined by the committee administering the Water IC Plan, subject to certain maximum awards.
For example, Mr. Aluce cannot receive a cash incentive award in excess of 100% of his annual
regular salary. Furthermore, the amount of Mr. Aluce’s incentive award under the Water IC Plan is
determined by the Compensation Committee of the Board of Directors, rather than the committee
administering the Water IC Plan. The incentive compensation awards payable under the Water IC Plan
will be paid in cash or, as permitted under the Company’s 2006 Equity Incentive Plan, in shares of
restricted or unrestricted common stock of the Company, or a combination of any of the foregoing as
determined by the Board of Directors of the Company or the Compensation Committee thereof.

Beginning on February 1, 2008, Messrs. Schmitt, Despain, Fanska and Aluce will all participate in
the Executive IC Plan for the fiscal year ended January 31, 2009. Mr. Reynolds will continue to
participate in the Reynolds Plan for the year ended January 31, 2009.

At a meeting of the Board of Directors of the Company, held on January 23, 2008, the Board set the
goals for the executive officers who participate in the Executive IC Plan to qualify for a bonus
for the fiscal year ended January 31, 2009. Awards under the Plan for the fiscal year ended
January 31, 2009, will be based upon the achievement of various EBIT goals, with the EBIT goal for
Messrs. Schmitt and Fanska based on the entire Company, the EBIT goal for Mr. Despain based on the
Minerals Division and the EBIT goal for Mr. Aluce based on the Company’s legacy water business.
Mr. Reynolds’ bonus for the fiscal year ended January 31, 2009, if any, will again be determined by
the Compensation Committee out of the bonus pool accrued under the Reynolds Plan for fiscal 2009.
The bonus pool accrued under the Reynolds Plan for fiscal 2009 will again be equal to 20% of the
net income earned by the Reynolds division, subject to reduction in the event the Reynolds division
does not generate earnings before interest, taxes depreciation and amortization (EBITDA) in excess
of its EBITDA target for fiscal 2009. The EBITDA target for the Reynolds division for fiscal 2009
is $16,500,000.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]