Document:

EX-10.3

 

EXHIBIT
10.3

Layne Christensen Company

Mineral Exploration Division Incentive Compensation Plan

Effective February 1, 2007

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 District Incentive Compensation Plan effective February 1, 2003 (the
“District Incentive Compensation Plan”) as it relates to participants of this Plan and no
participant of this Plan shall be eligible to participate in the 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.

     Subject to the provisions of the second paragraph of this Section VI below, 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) $0.02 for each $1.00 of EBIT generated during
such fiscal year to the extent such District, Region or the Division achieves less than eighty
percent (80%) of its respective EBIT Benchmark; or (ii) $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 (in which case no amount shall
be credited to any Pool under clause (i) above); or (iii) $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 clauses (i) or (ii) above); or (iv) $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

2

 

(125%) of its respective EBIT Benchmark
(in which case no amount shall be credited to any Pool under clauses (i), (ii) or (iii) above).

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 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

3

 

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, 2007.

4EX-10.4

 

Exhibit 10.4

Layne Christensen Company

Executive Incentive Compensation Plan

(As Amended and Restated, Effective February 1, 2007)

 

 

SECTION I. Purpose of the Plan.

     Layne Christensen Company (hereinafter referred to as the “Company”) desires to effect a
program of making awards as soon as practicable after the end of each fiscal year to certain
executive employees of the Company who, in the judgment of the Board of Directors of the Company
(the “Board”) have made significant contributions to the Company during the most recent fiscal
year. The purpose of this program is to provide additional incentive for the executive employees
to promote the best interests and most profitable operation of the Company.

     This program shall be known as the “Layne Christensen Company Executive Incentive Compensation
Plan” (hereinafter referred to as the “Plan”). This Plan amends and supersedes the Layne, Inc.
Executive Incentive Compensation Plan previously approved and adopted by the Board of Directors on
February 1, 1994; the Layne Christensen Company Executive Incentive Compensation Plan effective May
1, 1997; and the Layne Christensen Company Executive Incentive Compensation Plan effective January
1, 2005. The existence of the Plan shall not be in lieu of or otherwise affect or be affected by
any other compensation plan or arrangement of the Company.

SECTION II. Administration.

     The Plan shall be administered by the Board. The Board 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 Board in good faith and in the exercise of its powers and
duties hereunder shall be binding upon all parties concerned. No member of the Board shall be
liable to anyone for any action taken or decision made in good faith pursuant to the power or
discretion vested in such person under the Plan.

SECTION III. Participation.

     The following officers, and such other key executive employees of the Company as shall be
determined by the Board from time-to-time, shall be eligible to participate in the Plan (and shall
hereinafter be referred to as “Participants”);

	 	 	 
	Group I

	 	Group II
	 
	 	 
	President

	 	Chief Financial Officer

General Counsel

SECTION IV. Selection of Targets.

     As soon as practicable after the commencement of each fiscal year, the Board shall establish
one or more performance targets, which collectively shall constitute the “Target” hereunder, upon
which the incentive compensation of each Participant shall be calculated for such fiscal year. If
more than one performance target is selected for the Target, the Board shall assign relative
calculation weights to each performance target in determining the Target. Incentive compensation
awards hereunder for each Participant are to be based on that Participant’s performance during that
fiscal year as compared to the Target. The Target may vary among Participants at the sole
discretion of the Board.

SECTION V. Determination of Amount of Award.

     Subject to the last sentence of this Section V, the amount of the incentive compensation award
for a fiscal year shall be equal to a percentage (the “Base Salary Percentage’”) of a Participant’s
annual regular salary (as determined by the Board) as of the beginning of the fiscal year for which
the Target is established (the “Base Salary”). The Base Salary Percentage shall he determined as
follows:

 

 

GROUP I

     If 100% of the Target is achieved, then the Base Salary Percentage shall be 85%. If more than
100% of the Target is achieved, then for each 1% increase above the Target, the Base Salary
Percentage shall be increased by 1.5%; provided, however, that in no event shall the Base Salary
Percentage exceed 100%. If less than 100% of the Target is achieved, then for each 1% decrease
below the Target, the Base Salary Percentage shall be decreased by 1 %; provided, however, that if
80% or less of Target is achieved then the Base Salary Percentage shall be 0.

GROUP II

     If 100% of the Target is achieved, then the Base Salary Percentage shall be 60%. If more than
100% of the Target is achieved, then for each 1 % increase above Target, the Base Salary Percentage
shall be increased by 1.5%; provided, however, that in no event shall the Base Salary Percentage
exceed 100%. If less than 100% of the Target is achieved, then for each 1% decrease below the
Target, the Base Salary Percentage shall be decreased by 1%; provided, however, that if 80% or less
of Target is achieved then the Base Salary Percentage shall be 0.

ILLUSTRATION

     The percentage of the Target achieved and the corresponding Base Salary Percentage are
illustrated as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Percentage	 	 	 	Group I	 	Group II
	 	 	Target	 	 	 	Base Salary	 	Base Salary
	 	 	Achieved	 	 	 	Percentage	 	Percentage
	 

	 	 	130	%	 	 	 	 	100	%	 	 	87	%
	 

	 	 	120	%	 	 	 	 	100	%	 	 	78	%
	 

	 	 	110	%	 	 	 	 	97.75	%	 	 	69	%
	Target

	 	 	100	%	 	 	 	 	85	%	 	 	60	%
	 

	 	 	90	%	 	 	 	 	76.5	%	 	 	54	%
	 

	 	 	80	%	 	or less
	 	 	0	%	 	 	0	%

     Notwithstanding the foregoing, the amount of the incentive compensation award for a fiscal
year may be increased or decreased in the sole discretion of the Board by an amount not greater
than one third of the incentive compensation award which would be determined under the preceding
provisions of this Section V if 100% of the Target were achieved.

SECTION VI. Methods of Payment.

     The incentive compensation award will be paid in cash, common stock of the Company, or a
combination of both, in the sole discretion of the Board. Unless a Participant properly makes a
deferral election in accordance with Section VII, payment shall be made during the April
immediately after the close of the fiscal year for which the award is made.

SECTION VII. Deferred Accounts.

     (a) Deferral Account. The Company shall maintain in its records an account, called the
Deferred Account, for each Participant as to whom any payment of incentive compensation awarded
under the Plan is deferred in accordance with this Section VII. All amounts deferred pursuant to
Section VI above shall bear interest from the date of deferral until the date of payment at the
average of the 26-week U.S. Treasury Bill interest rate in effect during said period. All amounts
credited to the Deferred Account shall be paid in accordance with Section VII(c), below.

     (b) Timing of Deferral Election. If a Participant desires to defer the receipt of the
incentive compensation award, if any, that, absent such a deferral would otherwise be paid to the
Participant, the Participant must make such deferral election by filing a written deferral election
with the Board no later than the close of the taxable year immediately preceding the taxable year
in which the services for which such incentive compensation award would relate. Notwithstanding
the foregoing, if the compensation paid in the form of an incentive compensation award would
qualify as “performance-based compensation based on services performed over a period of at least 12
months” as referred to in Section 409A(a)(4)(B)(iii) of the Internal Revenue Code, as amended (the
“Code”), the Participant may be permitted to defer the payment of the incentive compensation award,
if any, that

2

 

would otherwise be paid to the Participant at the end of the current fiscal year if such
deferral election is made no later than six months prior to the end of such current fiscal year.

     (c) Payment of Deferred Account. As soon as reasonably practicable following the Participant’s
separation from service, as defined below, the amount in the Deferred Account (with interest as
required by Section (a), above), shall be paid to the Participant in a lump sum. Notwithstanding
the above, in the event that the Participant is a “specified employee”, as defined in Code Section
409A(a)(2)(B)(i), no payment may be made any earlier than the date which is six (6) months after
the date of the Participant’s separation from service (or, if earlier, the date of the
Participant’s death.) A “separation from service” shall have the same meaning as the term is
defined under Code Section 409A(a)(2)(A)(i) and interpreted pursuant to the applicable guidance
issued thereunder.

SECTION VIII. Termination of Employment or Change in Control Group

     In the event a Participant’s employment with the Company terminates (for reasons other than
retirement, disability or death) said termination being instituted by the Participant or by the
Company for cause, prior to the close of a fiscal year, such Participant shall not be entitled to
any incentive compensation award for that fiscal year.

     In the event a Participant’s employment with the Company terminates, said termination being by
the Company without cause or on account of retirement, disability or death, prior to the close of a
fiscal year, such Participant shall be entitled to the incentive compensation award set forth in
Section V, pro-rated as of the date of termination.

     If at the beginning of a fiscal year the Participant is in one Group under the Plan, and
during the fiscal year the Participant is assigned to a different Group, the Participant’s
incentive compensation award for that fiscal year shall be calculated by prorating the award by the
number of months for which the Participant was a member of each Group.

SECTION IX. Miscellaneous.

     There shall be deducted from each cash payment made under the Plan the amount of any tax
required by any governmental authority to be withheld by the Company with respect to such payment.
A Participant receiving common stock hereunder shall be required to pay to the Company the amount
of any taxes which the Company is required by any governmental authority to withhold with respect
to such common stock.

     Nothing in the Plan shall be construed to give any person any benefit, right or interest
except as expressly provided herein, and nothing in the Plan shall obligate the Company with
respect to the duration of employment of any employee.

     A Participant’s rights and interests under the Plan may not be assigned or transferred. In
the case of a Participant’s death, payment of the Participant’s incentive compensation award shall
be made to the Participant’s designated beneficiary or beneficiaries, or in the absence of such
designation, by will or the laws of descent and distribution.

     The Board of Directors of the Company may discontinue the Plan, in whole or in part, at any
time, or may, from time to time, amend the Plan in any respect that such Board may deem advisable;
provided, however, (i) that no such amendment shall be effective to modify or change any right or
obligation with respect to any award of incentive compensation theretofore made by the Board, (2)
that such Board may not, without approval by the holders of a majority of the issued and
outstanding shares of common stock of the Company, materially increase the benefits accruing to
Participants under the Plan or materially increase the class of Participants under the Plan and (3)
that no such discontinuation of the Plan shall result in any Deferred Account being paid to a
Participant until such time as the Participant is otherwise entitled to a payment from his or her
deferred account in accordance with Section VII.

SECTION X. Effective Date.

     The Plan shall be effective as of February 1, 2007.

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]