þ | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware
(State or other jurisdiction of incorporation or organization) |
48-0920712
(I.R.S. Employer Identification No.) |
Title of each class | Name of each exchange on which registered | |
Common stock, $.01 par value
Preferred Share Purchase Rights |
NASDAQ Global Select Market
NASDAQ Global Select Market |
Large accelerated filer þ | Accelerated filer o |
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
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Conventional and reverse circulation rotary drilling is used primarily in water well
applications for drilling large diame-
ter wells and employs air or drilling fluid circulation
for removal of cuttings and borehole stabilization.
Dual tube drilling, an innovation advanced by the Company primarily for mineral exploration
and environmental drilling, conveys the drill cuttings to the surface inside the drill pipe.
This drilling method is critical in mineral exploration drilling and environmental sampling
because it provides immediate representative samples and because the drill cuttings do not
contact the surrounding formation thus avoiding contamination of the borehole while providing
reliable, uncontaminated samples. Because this method involves circulation of the drilling
fluid inside the casing, it is highly suitable for penetration of underground voids or faults
where traditional drilling methods would result in the loss of circulation of the drilling
fluid, thereby preventing further penetration.
Diamond core drilling is used in mineral exploration drilling to core solid rock, thereby
providing geologists and engineers with solid rock samples for evaluation.
Cable tool drilling, which requires no drilling fluid, is used primarily in water well
drilling for larger diameter wells. While slower than other drilling methods, it is well
suited for penetrating boulders, cobble and rock.
Auger drilling is used principally in environmental drilling applications for efficient
completion of relatively small diameter, shallow borings or monitoring wells. Auger rigs are
equipped with a variety of auger sizes and soil sampling equipment.
Sonic drilling provides continuous core samples of any overburden formation without the use
of water or drilling additives and is able to core and drill through virtually any formation
or obstruction, including bedrock. Applications include site assessments, underground storage
tank investigation, delineation of contaminants, installation of monitoring wells and recovery
wells, construction, geotech investigations, mineral and sand exploration, and discreet water
sampling.
global and domestic economic considerations;
the economic feasibility of mineral exploration and production;
the discovery rate of new mineral reserves;
national and international political conditions; and
the ability of mining companies to access or generate sufficient funds to finance capital
expenditures for their activities.
the timing of the award and completion of contracts;
the recording of related revenue; and
unanticipated additional costs incurred on projects.
our ability to obtain any necessary financing in the future for working capital, capital
expenditures, debt service requirements or other purposes may be limited or financing may be
unavailable;
a portion of our cash flow must be dedicated to the payment of principal and interest on
our indebtedness and other obligations and will not be available for use in our business;
our level of indebtedness could limit our flexibility in planning for, or reacting to,
changes in our business and the markets in which we operate; and
our credit agreements contain various operating and financial covenants that could restrict
our ability to incur additional indebtedness and liens, make investments and acquisitions,
transfer or sell assets, and transact with affiliates.
political, social and economic instability;
war and civil disturbances;
the taking of property through nationalization or expropriation without fair compensation;
changes in government policies and regulations;
tariffs, taxes and other trade barriers;
exchange controls and limitations on remittance of dividends or other payments to us by our
foreign subsidiaries and affiliates; and
devaluations and fluctuations in currency exchange rates.
the strength of the U.S. economy and the economies of other industrialized and developing
nations;
global or regional political or economic crises;
the relative strength of the U.S. dollar and other currencies;
expectations with respect to the rate of inflation;
interest rates;
sales of gold by central banks and other holders;
demand for jewelry containing gold; and
speculation.
non-performance of institutions with whom we negotiate gas forward pricing contracts;
viability of institutions holding our cash deposits in excess
of FDIC insurance limits; and
ability of institutions with whom we have lines of credit to allow access to those funds.
a constant level of future natural gas prices;
geological conditions;
production levels;
capital expenditures;
operating and development costs;
the effects of regulation; and
availability of funds.
the actual prices we receive for natural gas;
our actual operating costs in producing natural gas;
the amount and timing of actual production;
the amount and timing of our capital expenditures;
the supply of and demand for natural gas; and
changes in governmental regulations or taxation.
contract costs and profit and application of percentage-of-completion accounting and
revenue recognition of contract claims;
recoverability of inventory and application of lower of cost or market accounting;
provisions for uncollectible receivables and customer claims and recoveries of costs from
subcontractors, vendors and others;
provisions for income taxes and related valuation allowances;
recoverability of goodwill;
recoverability of other intangibles and related estimated lives;
valuation of assets acquired and liabilities assumed in connection with business
combinations;
accruals for estimated liabilities; including litigation and insurance reserves; and
calculation of estimated gas reserves.
our operating performance and the performance of other similar companies;
actual or anticipated differences in our operating results;
changes in our revenue or earnings estimates or recommendations by securities analysts;
publication of research reports about us or our industry by securities analysts;
additions and departures of key personnel;
strategic decisions by us or our competitors, such as acquisitions, divestments, spin-offs,
joint ventures, strategic investments or changes in business strategy;
the passage of legislation or other regulatory developments that adversely affect us or our
industry;
speculation in the press or investment community;
actions by institutional stockholders;
changes in accounting principles;
terrorist acts; and
general market conditions, including factors unrelated to our performance.
2009
2008
16,289
22,794
274
27,258
16,563
50,052
$
40,176
$
86,484
Fiscal Years Ended January 31,
2009
2008
2007
$
7.30
$
6.45
$
5.95
1.81
1.71
1.46
2.43
2.06
1.88
0.20
0.18
0.16
Gross
Net
Acres
Acres
18,697
18,697
34,047
34,047
20,263
20,263
66,986
66,986
31,859
31,859
157
157
Acres
Fiscal Years Ended January 31,
2009
2008
102,009
66,044
101,802
65,836
172,509
192,473
172,509
192,473
Fiscal Years Ended January 31,
2009
2008
2007
Gross
Net
Gross
Net
Gross
Net
116
116
92
104
148
147
14
13
116
116
92
104
162
160
Name
Age
Position
60
President, Chief Executive Officer and Director
42
Executive Vice President and Director
53
Senior Vice President and
Division President Water Resources
60
Senior Vice President and
Division President Mineral Exploration
52
Senior Vice President, Secretary and
General Counsel
60
Senior Vice President-Finance and Treasurer
Fiscal Year 2009
High
Low
$
45.83
$
32.08
53.37
38.79
58.26
16.54
27.80
10.36
Fiscal Year 2008
High
Low
$
41.81
$
30.21
46.17
36.36
59.19
38.09
58.49
33.83
Fiscal Years Ended January 31,
2009
2008
2007
2006
2005
$
1,008,063
$
868,274
$
722,768
$
463,015
$
343,462
756,083
638,003
536,373
344,628
250,244
136,687
119,937
102,603
69,979
60,214
52,840
43,620
32,853
20,024
14,441
28,704
14,089
8,076
4,452
4,345
2,637
(3,614
)
(8,730
)
(9,781
)
(5,773
)
(3,221
)
3,214
1,229
2,557
900
1,220
47,438
67,289
48,167
27,856
19,199
21,266
30,178
21,915
13,121
9,215
362
145
(50
)
(17
)
26,534
37,256
26,252
14,685
9,967
(4
)
(213
)
$
26,534
$
37,256
$
26,252
$
14,681
$
9,754
$
1.38
$
2.23
$
1.71
$
1.08
$
0.79
(0.01
)
$
1.38
$
2.23
$
1.71
$
1.08
$
0.78
$
1.37
$
2.20
$
1.68
$
1.05
$
0.77
(0.02
)
$
1.37
$
2.20
$
1.68
$
1.05
$
0.75
$
128,610
$
127,696
$
66,989
$
69,996
$
54,455
719,357
696,955
547,164
449,335
245,380
26,667
46,667
151,600
128,900
60,000
456,022
423,372
205,034
171,626
104,697
Fiscal Years Ended January 31,
Period-to-Period Change
2009
2008
Revenues:
2009
2008
2007
vs. 2008
vs. 2007
76.1
%
73.7
%
73.6
%
19.9
%
20.2
%
18.7
20.5
20.6
5.8
19.9
4.6
4.6
3.7
16.6
46.8
0.6
1.2
2.1
(44.2
)
(29.6
)
100.0
%
100.0
%
100.0
%
16.1
%
20.1
75.0
73.5
74.2
18.5
18.9
13.6
13.8
14.2
14.0
16.9
5.2
5.0
4.5
21.1
32.8
2.8
*
1.4
0.9
0.6
74.5
81.4
(0.4
)
(1.0
)
(1.4
)
(58.6
)
(10.7
)
0.3
0.2
0.3
*
(51.9
)
4.7
7.8
6.6
(29.5
)
39.7
2.1
3.5
3.0
(29.5
)
37.7
*
*
2.6
%
4.3
%
3.6
%
(28.8
)%
41.9
%
*
not meaningful
Revenues, equity in earnings of affiliates and income before income taxes and minority interest
pertaining to the Companys operating segments are presented on the next page.
Unallocated corporate expenses primarily consist of general and administrative functions performed
on a company-wide basis and benefiting all operating segments.
(in thousands)
Fiscal Years Ended January 31,
2009
2008
2007
$
766,957
$
639,584
$
531,916
188,918
178,482
148,911
46,352
39,749
27,081
5,836
10,459
14,860
$
1,008,063
$
868,274
$
722,768
$
14,089
$
8,076
$
4,452
$
48,399
$
42,995
$
35,000
39,260
37,452
26,557
(12,401
)
13,075
10,680
1,280
3,696
4,094
(25,486
)
(21,199
)
(18,383
)
(3,614
)
(8,730
)
(9,781
)
$
47,438
$
67,289
$
48,167
(in thousands)
Fiscal Years Ended January 31,
2009
2008
$
766,957
$
639,584
48,399
42,995
(in thousands)
Fiscal Years Ended January 31,
2009
2008
$
188,918
$
178,482
39,260
37,452
(in thousands)
Fiscal Years Ended January 31,
2009
2008
$
46,352
$
39,749
(12,401
)
13,075
(in thousands)
Fiscal Years Ended January 31,
2009
2008
$
5,836
$
10,459
1,280
3,696
(in thousands)
Fiscal Years Ended January 31,
2008
2007
$
639,584
$
531,916
42,995
35,000
(in thousands)
Fiscal Years Ended January 31,
2008
2007
$
178,482
$
148,911
37,452
26,557
(in thousands)
Fiscal Years Ended January 31,
2008
2007
$
39,749
$
27,081
13,075
10,680
(in thousands)
Fiscal Years Ended January 31,
2008
2007
$
10,459
$
14,860
3,696
4,094
Actual
Required
Actual
Required
(in thousands)
2009
2009
2008
2008
4.22
1.50
5.65
1.50
0.44
3.00
0.57
3.25
$
340,280
$
291,237
$
313,571
$
274,647
Payments/Expiration by Period
Less than
More than
(in thousands)
Total
1 year
1-3 years
4-5 years
5 years
$
$
$
$
$
46,667
20,000
26,667
6,511
3,500
3,011
1,105
482
623
35,657
12,902
14,283
8,472
656
111
363
159
23
174
174
90,770
37,169
44,947
8,631
23
15,841
15,841
1,305
1,305
$
107,916
$
53,010
$
44,947
$
8,631
$
1,328
Page
32
33
34
35
36
37
38
57
59
/s/ Jerry W. Fanska
President and
Chief Executive Officer
Jerry W. Fanska
Senior Vice President and
Chief Financial Officer
Layne Christensen Company
Mission Woods, Kansas
March 31, 2009
Consolidated Balance Sheets
(in thousands, except per share data)
January 31,
2009
2008
ASSETS
$
67,165
$
73,068
116,234
125,091
63,638
60,796
31,329
21,020
16,561
18,711
6,806
866
774
500
10,063
5,288
312,570
305,340
8,586
8,643
27,209
21,868
336,166
299,642
39,825
30,266
92,497
76,844
21,248
18,165
525,531
455,428
(278,786
)
(208,061
)
246,745
247,367
40,973
29,835
90,029
85,706
21,002
20,930
1,155
505
6,883
7,272
160,042
144,248
$
719,357
$
696,955
$
62,575
$
67,777
20,000
13,333
36,252
36,763
9,173
8,158
17,626
15,222
824
550
3,254
4,200
34,256
31,641
183,960
177,644
26,667
46,667
9,947
9,736
29,063
28,329
1,155
505
12,468
10,304
79,300
95,541
75
398
194
192
337,528
328,301
128,353
101,866
(10,053
)
(6,987
)
456,022
423,372
$
719,357
$
696,955
Consolidated Statements of Income
(in thousands, except per share data)
Years Ended January 31,
2009
2008
2007
$
1,008,063
$
868,274
$
722,768
756,083
638,003
536,373
136,687
119,937
102,603
52,840
43,620
32,853
28,704
14,089
8,076
4,452
(3,614
)
(8,730
)
(9,781
)
3,214
1,229
2,557
47,438
67,289
48,167
21,266
30,178
21,915
362
145
$
26,534
$
37,256
$
26,252
$
1.38
$
2.23
$
1.71
$
1.37
$
2.20
$
1.68
19,191
16,670
15,320
195
268
311
19,386
16,938
15,631
Consolidated Statements of Stockholders Equity
Accumulated
Capital In
Other
Common Stock
Excess of
Retained
Comprehensive
(in thousands, except share data)
Shares
Amount
Par Value
Earnings
Income (Loss)
Total
15,233,472
152
141,023
37,893
(7,442
)
171,626
26,252
26,252
291
291
26,543
1,000
(1,302
)
(1,302
)
45,563
1
1,262
1,263
237,689
2
3,008
3,010
1,654
1,654
2,240
2,240
15,517,724
155
149,187
64,145
(8,453
)
205,034
37,256
37,256
760
760
38,016
73,863
1
(1
)
465
465
706
706
3,105,000
31
159,848
159,879
249,023
3
10,979
10,982
215,106
2
2,902
2,904
2,360
2,360
3,026
3,026
19,160,716
192
328,301
101,866
(6,987
)
423,372
26,534
26,534
(2,549
)
(2,549
)
(96
)
(96
)
(421
)
(421
)
23,468
38,584
(5,357
)
(245
)
(245
)
(47
)
(47
)
189,033
2
3,321
3,323
2,067
2,067
4,084
4,084
19,382,976
$
194
$
337,528
$
128,353
$
(10,053
)
$
456,022
(in thousands)
Years Ended January 31,
2009
2008
2007
$
26,534
$
37,256
$
26,252
52,840
43,620
32,853
3,166
2,364
(2,985
)
(14,089
)
(8,076
)
(4,452
)
2,951
2,521
1,502
(362
)
(145
)
(30
)
(671
)
(994
)
28,704
(920
)
4,084
3,026
2,240
(1,911
)
(2,313
)
(1,382
)
13,735
(9,616
)
(7,691
)
(1,531
)
(9,205
)
(10,044
)
(10,867
)
(1,788
)
462
(4,949
)
602
598
(8,478
)
27,512
27,522
2,615
(2,648
)
12,312
(386
)
(2,276
)
(597
)
92,026
80,163
74,676
(51,416
)
(44,177
)
(36,150
)
(6,739
)
(5,327
)
(12,413
)
(19,786
)
(18,216
)
(23,075
)
(3,082
)
(5,650
)
(3,174
)
(33
)
(2,270
)
(6,120
)
1,172
3,333
4,646
920
(7,070
)
(20,470
)
(31,305
)
(1,988
)
(15,200
)
(2,075
)
(4,473
)
16,126
9,627
5,597
(926
)
(9,627
)
411
(86,954
)
(94,852
)
(107,124
)
483,800
425,925
(575,400
)
(403,225
)
(13,333
)
159,879
3,323
2,904
3,010
1,911
2,313
1,382
(245
)
39
543
(8,305
)
74,039
27,092
(2,670
)
711
380
(5,903
)
60,061
(4,976
)
73,068
13,007
17,983
$
67,165
$
73,068
$
13,007
Years
15 35
3 10
15
(in thousands)
2009
2008
2007
$
18,843
$
20,704
$
15,489
3,054
8,721
9,564
Unrealized
Accumulated
Cumulative
Unrecognized
Loss On
Other
Translation
Pension
Exchange
Comprehensive
(in thousands)
Adjustment
Liability
Contracts
Loss
$
(7,151
)
$
(1,302
)
$
$
(8,453
)
760
706
1,466
$
(6,391
)
$
(596
)
$
$
(6,987
)
(2,549
)
(421
)
(96
)
(3,066
)
$
(8,940
)
$
(1,017
)
$
(96
)
$
(10,053
)
On October 24, 2008, the Company acquired 100% of the stock of Meadors Construction Co.,
Inc. (Meadors), a construction company operating primarily in Florida. The operation will be
combined with similar service lines and will serve to foster our further expansion into
Florida and the southeast.
On August 7, 2008, the Company acquired certain assets and liabilities of Moore & Tabor, a
geotechnical construction firm operating in California.
On May 5, 2008, the Company acquired certain assets and liabilities of Wittman Hydro
Planning Associates (WHPA), a water consulting firm specializing in hydrologic systems
modeling and analysis.
(in thousands)
Meadors
Moore & Tabor
WHPA
Total
$
4,536
$
1,785
$
2,494
$
8,815
53
33
25
111
$
4,589
$
1,818
$
2,519
$
8,926
$
700
$
150
$
300
$
1,150
(in thousands)
Meadors
Moore & Tabor
WHPA
Total
$
2,072
$
427
$
394
$
2,893
592
798
40
1,430
1,865
593
1,832
4,290
60
250
310
3
3
$
4,589
$
1,818
$
2,519
$
8,926
On December 31, 2007 (the Tierdael Closing Date), the Company acquired certain assets and
liabilities of Tierdael Construction (Tierdael), a pipeline and utility construction
contractor in Denver which was combined with similar service lines.
On November 30, 2007 (the SolmeteX Closing Date), the Company acquired certain assets and
liabilities of SolmeteX, Inc. (SolmeteX), a water and wastewater research and development
business and a supplier of wastewater filtration products to the dental market.
(in thousands)
Tierdael
Solmetex
Total
$
6,646
$
13,500
$
20,146
226
226
238
86
324
$
7,110
$
13,586
$
20,696
$
665
$
1,000
$
1,665
(in thousands)
Tierdael
Solmetex
Total
$
3,983
$
64
$
4,047
3,127
115
3,242
7,270
7,270
2,962
2,962
2,543
2,543
551
551
81
81
$
7,110
$
13,586
$
20,696
(in thousands, except per share data)
2008
2007
$
890,755
$
758,310
38,052
28,250
$
2.28
$
1.84
$
2.25
$
1.81
(in thousands, except per share data)
2008
2007
$
872,427
$
726,575
36,307
25,211
$
2.18
$
1.65
$
2.14
$
1.61
On November 20, 2006, the Company acquired 100% of the stock of American Water Services
Underground Infrastructure, Inc. (UIG), a wholly owned subsidiary of American Water (USA),
Inc. UIG is engaged in the business of providing trenchless pipeline rehabilitation services
for sewer and storm water systems and was combined with a similar service line acquired.
On June 16, 2006 (the CWI Closing Date), the Company acquired 100% of the stock of
Collector Wells International, Inc. (CWI), a privately held specialty water services company
that designs and constructs water supply systems. CWI was combined with a similar service
line.
(in thousands)
UIG
CWI
Total
$
27,524
$
3,150
$
30,674
1,263
1,263
138
1,029
1,167
$
27,662
$
5,442
$
33,104
(in thousands)
UIG
CWI
Total
$
11,723
$
1,016
$
12,739
13,602
1,580
15,182
3,891
3,436
7,327
143
143
69
69
(1,766
)
(590
)
(2,356
)
$
27,662
$
5,442
$
33,104
(in thousands)
2007
$
760,752
25,199
1.64
$
1.61
Percentage
Owned
50.00
%
50.00
50.00
29.49
35.38
35.38
50.00
50.00
50.00
50.00
25.00
42.69
40.00
50.00
50.00
(in thousands)
2009
2008
2007
$
99,533
$
78,165
$
42,584
62,570
42,682
29,696
59,844
48,496
19,857
13,319
9,373
4,755
301,268
202,649
130,090
58,933
36,234
23,274
40,081
24,074
14,319
32,626
18,762
10,862
2009
2008
Gross
Gross
Carrying
Accumulated
Carrying
Accumulated
(in thousands)
Amount
Amortization
Amount
Amortization
$
90,029
$
$
85,706
$
$
18,962
$
(2,275
)
$
18,962
$
(1,464
)
332
(332
)
332
(340
)
3,152
(569
)
2,902
(307
)
439
(387
)
379
(273
)
2,590
(910
)
1,292
(553
)
$
25,475
$
(4,473
)
$
23,867
$
(2,937
)
Water
Energy
Infrastructure
Total
$
950
$
64,234
$
65,184
20,522
20,522
950
84,756
85,706
4,323
4,323
$
950
$
89,079
$
90,029
(in thousands)
2009
2008
2007
$
30
$
671
$
994
2,173
920
1,065
953
187
91
(430
)
95
(145
)
35
361
$
3,214
$
1,229
$
2,557
(in thousands)
2009
2008
$
811,011
$
586,459
175,308
147,796
986,319
734,255
956,937
705,100
$
29,382
$
29,155
$
63,638
$
60,796
(34,256
)
(31,641
)
$
29,382
$
29,155
(in thousands)
2009
2008
2007
$
25,962
$
46,649
$
31,928
21,476
20,640
16,239
$
47,438
$
67,289
$
48,167
(in thousands)
2009
2008
2007
$
7,696
$
17,226
$
13,150
1,820
3,125
2,541
8,433
7,099
8,615
17,949
27,450
24,306
1,355
1,632
(941
)
1,085
288
(649
)
877
808
(801
)
3,317
2,728
(2,391
)
$
21,266
$
30,178
$
21,915
(in thousands)
2009
2008
Assets
Liabilities
Total
Assets
Liabilities
Total
$
659
$
$
659
$
4,545
$
$
4,545
1,912
(339
)
1,573
2,125
(271
)
1,854
4,395
4,395
2,809
2,809
1,720
1,720
2,234
2,234
(718
)
(718
)
(684
)
(684
)
3,028
3,028
2,866
2,866
5,010
5,010
4,905
4,905
916
(22
)
894
481
(299
)
182
17,640
(1,079
)
16,561
19,965
(1,254
)
18,711
5,508
5,508
4,665
4,665
336
(19,035
)
(18,699
)
440
(16,251
)
(15,811
)
(6,471
)
(6,471
)
(3,799
)
(3,799
)
(9,024
)
(9,024
)
(14,702
)
(14,702
)
731
(5,478
)
(4,747
)
744
(5,788
)
(5,044
)
1,069
1,069
2,831
2,831
4,051
4,051
3,988
3,988
936
(337
)
599
781
(689
)
92
2,169
2,169
1,352
1,352
(4,878
)
(4,878
)
(3,036
)
(3,036
)
1,547
(187
)
1,360
1,230
(95
)
1,135
16,347
(45,410
)
(29,063
)
16,031
(44,360
)
(28,329
)
$
33,987
$
(46,489
)
$
(12,502
)
$
35,996
$
(45,614
)
$
(9,618
)
2009
2008
2007
Effective
Effective
Effective
(in thousands)
Amount
Rate
Amount
Rate
Amount
Rate
$
16,603
35.0
%
$
23,551
35.0
%
$
16,858
35.0
%
1,888
4.0
2,219
3.3
1,230
2.6
972
2.0
1,041
1.5
842
1.8
(2,873
)
(6.1
)
(1,370
)
(2.0
)
(774
)
(1.6
)
4,357
9.2
5,033
7.5
3,461
7.2
319
0.7
(296
)
(0.5
)
298
0.5
$
21,266
44.8
%
$
30,178
44.8
%
$
21,915
45.5
%
(in thousands)
2009
2008
$
6,642
$
6,152
3,033
3,248
353
772
(582
)
79
27
(162
)
(1,031
)
(2,995
)
(830
)
(452
)
$
7,612
$
6,642
Pension Plan
Prior to
Post
Adoption
Adoption
of SFAS
of SFAS
(in thousands)
158
Adjustments
158
$
2,979
$
(2,121
)
$
858
$
$
(2,121
)
$
(2,121
)
819
819
$
$
(1,302
)
$
(1,302
)
(in thousands)
2009
2008
$
7,326
$
8,191
513
450
(195
)
(902
)
(450
)
(413
)
7,194
7,326
9,109
9,049
(553
)
473
(450
)
(413
)
8,106
9,109
$
912
$
1,783
(in thousands)
2009
2008
2007
$
105
$
96
$
86
513
450
452
(592
)
(536
)
(529
)
149
215
271
$
175
$
225
$
280
2009
2008
2007
6.92
%
6.49
%
5.90
%
7.0
%
7.0
%
7.0
%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Smoothed
Smoothed
Smoothed
value
value
value
As of
January 31,
December 31,
2009
2007
%
60
%
13
13
87
27
Normal
Policy
Weighting
Range
60
%
40-70
%
35
20-60
5
0-15
Equity Securities
Allowable equity securities include common stocks listed on any U.S.
stock exchange or over-the-counter common stocks, preferred and convertible securities. The
equity holdings of any single issuer should aggregate to no more than 10% of the total market
value of the plan.
International Securities
Allowable international securities include common stocks,
preferred stocks, warrants, convertible securities, as well as government and corporate debt
securities.
Mutual Funds
Mutual funds may be utilized for investments in fixed income, equity and
international securities to enhance diversification and performance.
Fixed Income Securities
Allowable fixed income securities include U.S. Treasury
securities, U.S. Agency securities and corporate bonds. All fixed income securities shall be
rated A or better at the time of purchase. No fixed income security shall continue to be
held if its rating falls below BBB. The securities of any single issuer, with the exception
of U.S. Treasuries and Agencies, should aggregate to no more than 10% of the total market value of the Plan.
The fixed income segment of the portfolio will generally have an intermediate average maturity
(five to 10 years)
and a maximum permitted maturity for an individual issue
of 15 years.
(in thousands)
2009
2008
2007
$
269
$
176
$
100
142
103
88
$
411
$
279
$
188
Actual
Required
Actual
Required
(in thousands)
2009
2009
2008
2008
4.22
1.50
5.65
1.50
0.44
3.00
0.57
3.25
$
340,280
$
291,237
$
313,571
$
274,647
(in thousands)
2009
2008
$
$
46,667
60,000
46,667
60,000
(20,000
)
(13,333
)
$
26,667
$
46,667
Weighted
Aggregate
Average
Intrinsic
Number of
Grant Date
Value (in
Shares
Fair Value
thousands)
8,598
$
15.26
1,000
29.70
(8,598
)
15.26
1,000
$
29.70
73,863
42.76
(1,000
)
29.70
73,863
$
42.76
38,584
37.39
(22,638
)
42.76
89,809
$
40.48
$
1,417
Remaining
Contractual
Grant
Options
Options
Exercise
Term
Date
Outstanding
Exercisable
Price
(Months)
7,741
7,741
4.125
3
1,900
1,900
5.500
13
13,794
13,794
3.495
15
20,000
20,000
16.600
65
77,376
77,376
16.650
65
10,000
10,000
17.540
77
157,000
94,500
23.050
80
191,481
138,922
27.870
84
10,000
10,000
29.290
89
70,000
35,000
29.290
89
65,625
13,125
42.260
101
33,000
8,250
42.760
102
3,000
750
55.480
104
74,524
35.710
108
6,000
6,000
24.010
119
741,441
437,358
Shares Under Option
Weighted
Weighted
Average
Aggregate
Average
Remaining
Intrinsic
Number of
Exercise
Contractual Term
Value (in
Shares
Price
(years)
thousands)
1,116,718
$
17.728
455,640
10.603
87,000
29.318
(237,689
)
12.656
$
4,422
(2,500
)
16.650
30
963,529
$
20.028
413,356
$
15.202
106,000
42.790
(215,106
)
13.632
6,890
(3,750
)
16.650
151
(723
)
11.400
19
849,950
$
24.541
392,585
$
19.944
80,524
34.838
(189,033
)
17.578
6,385
741,441
$
27.435
6.99
279
437,358
$
23.659
6.39
279
(in thousands)
As of and for the Year Ended January 31,
2009
2008
2007
$
766,957
$
639,584
$
531,916
188,918
178,482
148,911
46,352
39,749
27,081
5,836
10,459
14,860
$
1,008,063
$
868,274
$
722,768
$
14,089
$
8,076
$
4,452
$
48,399
$
42,995
$
35,000
39,260
37,452
26,557
(12,401
)
13,075
10,680
1,280
3,696
4,094
(25,486
)
(21,199
)
(18,383
)
(3,614
)
(8,730
)
(9,781
)
$
47,438
$
67,289
$
48,167
$
40,973
$
29,835
$
24,280
$
422,383
$
388,491
$
321,406
125,588
110,064
89,826
100,309
112,363
91,552
2,482
2,449
4,112
68,595
83,588
40,268
$
719,357
$
696,955
$
547,164
$
27,924
$
22,029
$
23,777
20,944
18,451
11,607
30,891
30,345
40,737
237
1,037
483
1,027
1,508
196
$
81,023
$
73,370
$
76,800
$
23,741
$
21,978
$
17,691
13,362
10,523
8,260
14,644
10,704
6,531
935
237
229
158
178
142
$
52,840
$
43,620
$
32,853
(in thousands)
Fiscal Years Ended January 31,
2009
2008
2007
$
841,542
$
712,098
$
595,959
88,967
89,739
78,640
37,775
42,242
32,749
39,779
24,195
15,420
$
1,008,063
$
868,274
$
722,768
$
213,408
$
218,047
$
191,797
18,663
19,530
16,655
9,379
8,555
5,279
5,295
1,235
786
$
246,745
$
247,367
$
214,517
(in thousands, except per share data)
2009
First
Second
Third
Fourth
$
244,544
$
269,638
$
264,483
$
229,398
10,562
15,096
12,227
(11,351
)
0.55
0.79
0.64
(0.59
)
0.55
0.78
0.63
(0.59
)
2008
First
Second
Third
Fourth
$
201,615
$
217,844
$
225,226
$
223,589
8,153
9,568
9,929
9,606
0.53
0.61
0.60
0.50
0.52
0.60
0.59
0.50
(in thousands)
2009
2008
2007
$
92,497
$
76,844
$
58,458
21,248
18,165
12,515
113,745
95,009
70,973
(54,859
)
(16,353
)
(7,848
)
$
58,886
$
78,656
$
63,125
(in thousands)
2009
2008
2007
$
39,825
$
30,266
$
24,939
(6,831
)
(4,355
)
(2,353
)
$
32,994
$
25,911
$
22,586
(in thousands)
2009
2008
2007
$
2,061
$
5,647
$
4,249
5
1,501
25
20,802
16,718
23,719
22,868
23,866
27,993
185
170
243
$
23,053
$
24,036
$
28,236
(in thousands, except per Mcf)
2009
2008
2007
$
24,994
$
20,861
$
14,014
1,034
872
552
10,194
8,242
5,051
11,816
8,504
4,917
76
60
43
28,704
(10,666
)
1,196
1,286
41,158
18,874
11,849
$
(16,164
)
$
1,987
$
2,165
$
2.30
$
1.80
$
1.46
Proved Developed and Undeveloped Reserves
(MMcf):
2009
2008
50,052
57,078
(33,238
)
(5,697
)
4,881
3,403
(5,132
)
(4,732
)
16,563
50,052
16,289
22,794
(in thousands)
2009
2008
$
82,261
$
376,955
(33,514
)
(148,069
)
(467
)
(44,077
)
(2,196
)
(52,961
)
46,084
131,848
(5,908
)
(45,364
)
$
40,176
$
86,484
(in thousands)
2009
2008
$
86,484
$
89,012
(22,214
)
(17,454
)
(65,507
)
18,399
20,565
(19,353
)
12,799
8,189
(17,183
)
(17,294
)
11,319
11,762
(33,398
)
(15,308
)
30,761
3,413
16,550
25,118
(46,308
)
(2,528
)
$
40,176
$
86,484
Additions
Balance at
Charges to
Charges to
Balance
Beginning
Costs and
Other
at End
(in thousands)
of Period
Expenses
Accounts
Deductions
of Period
$
5,573
$
1,700
$
666
$
(919
)
$
7,020
7,020
1,205
336
(990
)
7,571
7,571
2,082
608
(2,383
)
7,878
Layne Christensen Company
Mission Woods, Kansas
March 31, 2009
(a)
Financial Statements, Financial Statement Schedules and Exhibits:
Exhibit
Number
Description
Corrected Certificate of Restated Certificate of Incorporation of the Registrant (filed as
Exhibit 3(1) with the Registrants Registration Statement on Form S-1 which was filed on
September 20, 2007 (File No.333-146184), and incorporated herein by this reference)
Amended and Restated Bylaws of the Registrant (as adopted October 9, 2008) (filed as Exhibit
3.2 to the Registrants Form 8-K filed October 14, 2008, and incorporated herein by this
reference)
Certificate of Designations of Series A Junior Participating Preferred Stock of Layne
Christensen Company (filed with the Registrants Annual Report on Form 10-K for the fiscal
year ended January 31, 2007 as Exhibit 4(2) and incorporated herein by this reference)
Rights Agreement, dated as of October 14, 2008, between the Registrant and National City Bank
as Rights Agent, which includes as Exhibit C, the Summary of Rights to Purchase Preferred
Shares (filed as Exhibit 4.1 to the Registrants Form 8-K filed October 14, 2008, and
incorporated herein by this reference)
Specimen Common Stock Certificate (filed with Amendment No. 3 to the Registrants
Registration Statement on Form S-1 (File No. 33-48432) as Exhibit 4(1) and incorporated herein
by reference)
Amended and Restated Loan Agreement, dated as of September 28, 2005, by and among Layne
Christensen Company, LaSalle Bank National Association, as Administrative Agent and as Lender,
and the other Lenders listed therein (filed as Exhibit 4.1 to the Companys Form 8-K, dated
September 28, 2005, and incorporated herein by this reference)
Amendment No. 1 to Amended and Restated Loan Agreement, dated June 16, 2006, by and among
Layne Christensen Company and LaSalle Bank National Association (LaSalle) as Administrative
Agent, and LaSalle and the other Lenders a party thereto (filed as Exhibit 10(1) to the
Companys Form 10-Q for the quarter ended July 31, 2006, and incorporated herein by this
reference)
Amendment No. 2 to the Amended and Restated Loan Agreement, dated as of November 20, 2006, by
and among Layne Christensen Company and LaSalle, as Administrative Agent, and LaSalle and the
other Lenders a party thereto (filed as Exhibit 4(1) to the Companys Form 8-K, dated November
20, 2006, and incorporated herein by this reference)
Amendment No. 3 to Amended and Restated Loan Agreement, dated October 15, 2007, by and among
the Company, LaSalle Bank National Association, as Administrative Agent and Lender, and the
other Lenders listed therein (filed as Exhibit 10(1) to the Companys Form 10-Q for the
quarter ended October 31, 2007, and incorporated herein by this reference)
Master Shelf Agreement, dated as of July 31, 2003, by and among Layne Christensen Company,
Prudential Investment Management, Inc., The Prudential Insurance Company of America, Pruco
Life Insurance Company, Security Life of Denver Insurance Company and such other Purchasers of
the Notes as may be named in the Master Shelf Agreement from time to time (filed with the
Registrants 10-Q for the quarter ended July 31, 2003 (File No. 0-20578) as Exhibit 4(5) and
incorporated herein by reference)
Exhibit
Number
Description
Letter Amendment No. 1 to Master Shelf Agreement, dated as of May 15, 2004, by and among
Layne Christensen Company, Prudential Investment Management, Inc., The Prudential Insurance
Company of America, Pruco Life Insurance Company, Security Life of Denver Insurance Company
and such other Purchasers of the Notes as may be named in the Master Shelf Agreement from time
to time (filed as Exhibit 4(6) to the Companys Form 10-K for the fiscal year ended January
31, 2006, and incorporated herein by this reference)
Letter Amendment No. 2 to Master Shelf Agreement, dated as of September 28, 2005, by and
among Layne Christensen Company, Prudential Investment Management, Inc., The Prudential
Insurance Company of America, Pruco Life Insurance Company, Security Life of Denver Insurance
Company and such other Purchasers of the Notes as may be named in the Master Shelf Agreement
from time to time (filed as Exhibit 4.2 to the Companys Form 8-K, dated September 28, 2005,
and incorporated herein by this reference)
Letter Amendment No. 3 to Master Shelf Agreement, dated as of June 16, 2006, by and among
Layne Christensen Company, Prudential Investment Management, Inc., The Prudential Insurance
Company of America, Pruco Life Insurance Company, Security Life of Denver Insurance Company
and such other Purchasers of the Notes as may be named in the Master Shelf Agreement from time
to time (filed as Exhibit 10(2) to the Companys Form 10-Q for the quarter ended July 31,
2006, and incorporated herein by this reference)
Letter Amendment No. 4 to Master Shelf Agreement, dated as of November 20, 2006, by and
among Layne Christensen Company, Prudential Investment Management, Inc., The Prudential
Insurance Company of America, Pruco Life Insurance Company, Security Life of Denver Insurance
Company and such other Purchasers of the Notes as may be named in the Master Shelf Agreement
from time to time (filed as Exhibit 4(2) to the Companys Form 8-K, dated November 20, 2006,
and incorporated herein by this reference)
Letter Amendment No. 5 to Master Shelf Agreement, dated as of October 15, 2007, by and among
Layne Christensen Company, Prudential Investment Management, Inc., The Prudential Insurance
Company of America, Pruco Life Insurance Company, Security Life of Denver Insurance Company
and such other Purchasers of the Notes as may be named in the Master Shelf Agreement from time
to time (filed as Exhibit 10(2) to the Companys Form 10-Q for the quarter ended October 31,
2007, and incorporated herein by this reference)
Tax Liability Indemnification Agreement between the Registrant and The Marley Company (filed
with Amendment No. 3 to the Registrants Registration Statement (File No. 33-48432) as Exhibit
10(2) and incorporated herein by reference)
Lease Agreement between the Registrant and Parkway Partners, L.L.C. dated December 21, 1994
(filed with the Registrants Annual Report on Form 10-K for the fiscal year ended January 31,
1995 (File No. 0-20578) as Exhibit 10(2) and incorporated herein by reference)
First Modification & Ratification of Lease, dated as of February 26, 1996, between Parkway
Partners, L.L.C. and the Registrant (filed with the Registrants Annual Report on Form 10-K
for the fiscal year ended January 31, 1996 (File No. 0-20578), as Exhibit 10(2.1) and
incorporated herein by this reference)
Second Modification and Ratification of Lease Agreement between Parkway Partners, L.L.C.
and Layne Christensen Company dated April 28, 1997 (filed with the Registrants Annual Report
on Form 10-K for the fiscal year ended January 31, 1999 (File No. 0-20578), as Exhibit 10(2.2)
and incorporated herein by this reference)
Third Modification and Extension Agreement between Parkway Partners, L.L.C. and Layne
Christensen Company dated November 3, 1998 (filed with the Companys 10-Q for the quarter
ended October 31, 1998 (File No. 0-20578) as Exhibit 10(1) and incorporated herein by
reference)
Fourth Modification and Extension Agreement between Parkway Partners, L.L.C. and Layne
Christensen Company executed May 17, 2000, effective as of December 29, 1998 (filed with the
Companys 10-Q for the quarter ended July 31, 2000 (File No. 0-20578) as Exhibit 10.1 and
incorporated herein by reference)
Fifth Modification and extension Agreement between Parkway Partners, L.L.C. and Layne
Christensen Company dated March 1, 2003 (filed as Exhibit 10(2.5) to the Registrants Annual
Report on Form 10-K for the fiscal year ended January 31, 2003 (File No. 0-20578) and
incorporated herein by this reference)
Sixth Modification Agreement, dated February 29, 2008, between 1900 Associates L.L.C. and
the Company (filed as Exhibit 10(2.6) to the Registrants Annual Report on Form 10-K for the
fiscal year ended January 31, 2008, filed April 15, 2008, and incorporated herein by this
reference)
Exhibit
Number
Description
Form of Stock Option Agreement between the Company and management of the Company (filed
with Amendment No. 3 to the Registrants Registration Statement (File No. 33-48432) as Exhibit
10(7) and incorporated herein by reference)
Insurance Liability Indemnity Agreement between the Company and The Marley Company (filed
with Amendment No. 3 to the Registrants Registration Statement (File No. 33-48432) as Exhibit
10(10) and incorporated herein by reference)
Agreement between The Marley Company and the Company relating to tradename (filed with the
Registrants Registration Statement (File No.33-48432) as Exhibit 10(10) and incorporated
herein by reference)
Form of Subscription Agreement for management of the Company
(filed with Amendment No. 3 to the Registrants Registration
Statement (File No. 33-48432) as Exhibit 10(16) and incorporated
herein by reference)
Form of Subscription Agreement between the Company and Robert J.
Dineen (filed with Amendment No. 3 to the Registrants
Registration Statement (File No. 33-48432) as Exhibit 10(17) and
incorporated herein by reference)
Letter Agreement between Andrew B. Schmitt and the Company (as
amended and restated to comply with Section 409A) dated December
2, 2008
Form of Incentive Stock Option Agreement between the Company and
Management of the Company (filed with the Companys Annual Report
on Form 10-K for the fiscal year ended January 31, 1996 (File No.
0-20578), as Exhibit 10(15) and incorporated herein by this
reference)
Registration Rights Agreement, dated as of November 30, 1995, between the Company and Marley
Holdings, L.P. (filed with the Companys Annual Report on Form 10-K for the fiscal year ended
January 31, 1996 (File No. 0-20578), as Exhibit 10(17) and incorporated herein by this
reference)
Form of Incentive Stock Option Agreement between the Company and
Management of the Company effective February 1, 1998 (filed with
the Companys Form 10-Q for the quarter ended April 30, 1998
(File No. 0-20578) as Exhibit 10(1) and incorporated herein by
reference)
Form of Incentive Stock Option Agreement between the Company and
Management of the Company effective April 20, 1999 (filed with
the Companys Form 10-Q for the quarter ended April 30, 1999
(File No. 0-20578) as Exhibit 10(2) and incorporated herein by
reference)
Form of Non Qualified Stock Option Agreement between the Company
and Management of the Company effective as of April 20, 1999
(filed with the Companys Form 10-Q for the quarter ended April
30, 1999 (File No. 0-20578) as Exhibit 10(3) and incorporated
herein by reference)
Layne Christensen Company District Incentive Compensation Plan
(revised effective February 1, 2000) (filed as Exhibit 10(17) to
the Registrants Annual Report on Form 10-K for the fiscal year
ended January 31, 2003 (File No. 0-20578) and incorporated herein
by this reference)
Layne Christensen Company Executive Incentive Compensation Plan (as amended and restated,
effective November 3, 2008)
Layne Christensen Company Corporate
Staff Incentive Compensation Plan (as amended, effective
February 1, 2007)
Standstill Agreement, dated March 26, 2004, by and among Layne Christensen Company,
Wynnefield Partners Small Cap Value, L.P., Wynnefield Small Cap Value Offshore Fund, Ltd.,
Wynnefield Partners Small Cap Value L.P.I., Channel Partnership II, L.P., Wynnefield Capital
Management, LLC, Wynnefield Capital, Inc., Wynnefield Capital, Inc. Profit Sharings Money
Purchase Plan, Nelson Obus and Joshua Landes (filed as Exhibit 10(19) to the Registrants
Annual Report on Form 10-K for the fiscal year ended January 31, 2004 (File No. 0-20578) and
incorporated herein by this reference)
Layne Christensen Company 2006 Equity Incentive Plan, as amended
(filed as Exhibit 10.1 to the Companys Form 8-K, filed June 14,
2006, and incorporated herein by this reference)
Form of Incentive Stock Option Agreement between the Company and
management of the Company for use with the 2006 Equity Incentive
Plan (filed as Exhibit 4(e) to the Companys Form S-8 (File No.
333-135683), filed July 10, 2006, and incorporated herein by this
reference)
Exhibit
Number
Description
Form of Nonqualified Stock Option Agreement between the Company
and management of the Company for use with the 2006 Equity
Incentive Plan, as amended effective January 26, 2009
Form of Nonqualified Stock Option Agreement between the Company
and non-employee directors of the Company for use with the 2006
Equity Incentive Plan, as amended effective January 26, 2009
Form of Restricted Stock Award Agreement between the Company and
management of the Company for use with the 2006 Equity Incentive
Plan, as amended effective January 23, 2008
Form of Restricted Stock Award Agreement between the Company and
non-employee directors of the Company for use with the Companys
2006 Equity Incentive Plan, as amended effective January 26, 2009
Layne Christensen Company Water Infrastructure Division Incentive
Compensation Plan (as amended and restated, effective February 1,
2008) (incorporated by reference to Exhibit 10(24) to the
Companys Annual Report on Form 10-K for the fiscal year ended
January 31, 2008, filed April 15, 2008)
Layne Energy, Inc. 2007 Stock Option Plan (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form
8-K filed June 13, 2007)
Form of Nonqualified Stock Option Agreement under the Layne
Energy, Inc. 2007 Stock Option Plan (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on Form 8-K filed
June 13, 2007)
Layne Christensen Company Mineral Exploration Division
Incentive Compensation Plan (as amended and restated effective
February 1, 2008) (incorporated by reference to Exhibit 10(27) to
the Companys Annual Report on Form 10-K for the fiscal year
ended January 31, 2008, filed April 15, 2008)
Severance Agreement, dated March 13, 2008, by and between
Andrew B. Schmitt and Layne Christensen Company (incorporated by
reference to Exhibit 10(1) to the Companys Current Report on
Form 8-K filed March 19, 2008)
Severance Agreement, dated March 13, 2008, by and between
Gregory F. Aluce and Layne Christensen Company (incorporated by
reference to Exhibit 10(2) to the Companys Current Report on
Form 8-K filed March 19, 2008)
Severance Agreement, dated March 13, 2008, by and between Steven
F. Crooke and Layne Christensen Company (incorporated by
reference to Exhibit 10(3) to the Companys Current Report on
Form 8-K filed March 19, 2008)
Severance Agreement, dated March 13, 2008, by and between Jerry
W. Fanska and Layne Christensen Company (incorporated by
reference to Exhibit 10(4) to the Companys Current Report on
Form 8-K filed March 19, 2008)
Severance Agreement, dated March 13, 2008, by and between Jeffrey
J. Reynolds and Layne Christensen Company (incorporated by
reference to Exhibit 10(5) to the Companys Current Report on
Form 8-K filed March 19, 2008)
Severance Agreement dated July 10, 2008, by and between Eric R.
Despain and Layne Christensen Company (incorporated by reference
to Exhibit 10(1) to the Companys Current Report on Form 8-K
filed July 14, 2008)
Summary of 2009 Salaries of Named Executive Officers
Agreement and Plan of Merger, dated August 30, 2005, among Layne Christensen Company, Layne
Merger Sub 1, Inc., Reynolds, Inc. and the Stockholders of Reynolds, Inc. listed on the
signature pages thereto (filed as Exhibit 10.2 to the Companys Form 8-K, dated September 28,
2005, and incorporated herein by this reference)
Amendment to Agreement and Plan of Merger, dated July 30, 2007, by and among the Company and
Jeffrey Reynolds, individually and as Agent of the Stockholders listed on the signature pages
thereto (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K
filed August 3, 2007)
Layne Christensen Company Deferred
Compensation Plan for Directors (Amended and Restated, effective as
of January 1, 2009)
Amended and Restated Layne Christensen Company Key Management Deferred Compensation Plan,
effective as of January 1, 2008
Reynolds Division of Layne Christensen Company Cash Bonus Plan, dated September 28, 2005
(filed as Exhibit 10.1 to the Companys Form 8-K, dated September 28, 2005, and incorporated
herein by this reference)
Settlement Agreement, dated March 31, 2006, by and among Layne Christensen Company, Steel
Partners II, L.P., Steel Partners, L.L.C. and Warren G. Lichtenstein (filed as Exhibit 10.1 to
the Companys Form 8-K, dated April 5, 2006, and incorporated herein by this reference)
Exhibit
Number
Description
Form of Indemnification Agreement for use in connection with the Rights Agreement dated
October 14, 2008 (filed as Exhibit 10.1 to the Registrants Form 8-K filed October 14, 2008,
and incorporated herein by this reference)
List of Subsidiaries
Consent of Deloitte & Touche LLP
Consent of Cawley, Gillespie & Associates, Inc.
Section 302 Certification of Principal Executive Officer of the Company
Section 302 Certification of Principal Financial Officer of the Company
Section 906 Certification of Principal Executive Officer of the Company
Section 906 Certification of Principal Financial Officer of the Company
**
Management contracts or compensatory plans or arrangements required to be identified by Item
14(a)(3).
Layne Christensen Company
By
/s/ A. B. Schmitt
Andrew B. Schmitt
President and Chief Executive
Officer:
Dated March 31, 2009
Signature and Title
Date
President, Chief Executive Officer
and Director (Principal Executive Officer)
March 31, 2009
Senior Vice President-Finance and Treasurer
(Principal Financial and Accounting Officer)
March 31, 2009
Director
March 31, 2009
Director
March 31 , 2009
Director
March 31, 2009
Director
March 31, 2009
Director
March 31, 2009
Director
March 31, 2009
Director
March 31, 2009
Director
March 31, 2009
Re: |
Retirement Benefit (as Amended and
Restated to Comply with Section 409A) |
Sincerely,
|
||||
/s/ Jerry W. Fanska | ||||
Jerry W. Fanska | ||||
/s/ A.B. Schmitt | ||||
Andrew B. Schmitt | ||||
Age at Separation from Service | Percentage of Annual Benefit | |||
|
||||
55
|
48.81 | % | ||
56
|
52.06 | % | ||
57
|
55.59 | % | ||
58
|
59.45 | % | ||
59
|
63.68 | % | ||
60
|
68.32 | % | ||
61
|
73.43 | % | ||
62
|
79.06 | % | ||
63
|
85.31 | % | ||
64
|
92.26 | % |
I. | Initial Claim | |
A. Submitting the Claim. Upon request, Layne shall provide you or your beneficiary (Claimant) with a claim form which the Claimant can use to request benefits. In addition, Layne will consider any written request for benefits under the Agreement to be a claim. | ||
B. Approval of Initial Claim. If a claim for benefits is approved, Layne shall provide the Claimant with written or electronic notice of such approval. The notice shall include: |
1. | The amount of benefits to which the Claimant is entitled. | ||
2. | The duration of such benefit. | ||
3. | The time the benefit is to commence. | ||
4. | Other pertinent information concerning the benefit. |
C. Denial of Initial Claim. If a claim for benefits is denied (in whole or in part) by Layne, Layne shall provide the Claimant with written or electronic notification of such denial within ninety (90) days (forty-five (45) days in the case of a claim for disability benefit) after receipt of the claim, unless special circumstances require an extension of time for processing the claim. (See Section III of this Claims Procedure concerning extensions of time.) The notice of denial of the claim shall include: |
1. | The specific reason that the claim was denied. | ||
2. | A reference to the specific Agreement provisions on which the denial was based. | ||
3. | A description of any additional material or information necessary to perfect the claim, and an explanation of why this material or information is necessary. | ||
4. | A description of the agreements appeal procedures and the time limits that apply to such procedures, including a statement of the Claimants right to bring a civil action under ERISA Section 502(a) if the claim is denied on appeal. | ||
5. | Any materials required under 29 C.F.R. § 2560.503-1(g)(1)(v). |
II. | Appeal Procedures | |
A. Filing the Appeal. In the event that a claim is denied (in whole or in part), the Claimant may appeal the denial by giving written notice of the appeal to Layne within 60 days (one hundred eighty (180) days in the case of a claim for disability benefit) after the Claimant receives the notice of denial of the claim. At the same time the Claimant submits a notice of appeal, the Claimant may also submit written comments, documents, records, and other information relating to the claim. Layne (or its designee) shall review and consider this information without regard to whether the information was submitted or considered in conjunction with the initial claim. | ||
B. General Appeal Procedure. Layne may hold a hearing or otherwise ascertain such facts as it deems necessary and shall render a decision which shall be binding upon both parties. Layne shall render a decision on appeal within sixty (60) days (forty-five (45) days in the case of a claim involving disability) after the receipt by Layne of the notice of appeal, unless special circumstances require an extension of time. (See Section III for the procedures concerning extensions of time.) The appeal decision of Layne shall be provided in written or electronic form to the Claimant. If the appeal decision is adverse to the Claimant, then the written decision shall include the following: |
1. | The specific reason or reasons for the appeal decision. | ||
2. | Reference to the specific Agreement provisions on which the appeal decision is based. | ||
3. | A statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimants |
claim for benefits. (Whether a document, record, or other information is relevant to a claim for benefits shall be determined by reference to 29 C.F.R. § 2560.503-1 (m)(8).) | |||
4. | A statement describing any voluntary appeal procedures offered by the Agreement and the Claimants right to obtain the information about such procedures. | ||
5. | A statement of the Claimants right to bring an action under Section 502(a) of the Employee Retirement Income Security Act. |
C. Special Appeal Procedure for Disability Claims. For the purpose of any appeal of an adverse benefit determination regarding a disability benefit, in addition to the procedures set forth in Section II.B., the following procedures shall also apply: |
1. | The appeal will be conducted by an appropriate named fiduciary (a Fiduciary) designated by Layne. The Fiduciary will be neither the individual who denied the claim initially, nor a subordinate of such individual. | ||
2. | In deciding the appeal, the Fiduciary shall not give any deference to the initial determination that was made concerning the claim. | ||
3. | If the initial claim was denied based in whole or in part on a medical judgment (including a judgment as to whether a particular treatment, drug, or other item is experimental, investigational, or not medically necessary or appropriate), then the Fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment. Any such professional shall be neither an individual who was consulted in connection with the initial claim, nor the subordinate of any such individual. | ||
4. | If the Fiduciary obtains the advice of medical or vocational experts in connection with the appeal, then the Fiduciary must identify the expert(s), without regard to whether the fiduciary relied upon the advice when deciding the appeal. | ||
5. | In the event of an adverse determination on appeal: |
a. | If an internal rule, guideline, protocol, or other similar criterion was relied upon in making decision on appeal, then the written decision on appeal shall include either (a) the specific rule, guideline, protocol, or other similar criterion, or (b) a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided to the Claimant free of charge upon request. | ||
b. | If the decision on appeal was based on a medical necessity or experimental treatment or similar exclusion or limit, then the written decision on appeal shall include either (a) an explanation of the scientific or clinical judgment for the determination, applying the terms of the Agreement to the Claimants medical circumstances, or (b) a statement that such explanation will be provided free of charge upon request. | ||
c. | The written decision on appeal shall include the following statement: You and your Agreement may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency. |
III. | Extensions of Time | |
A. Notice of Extension. If Layne requires an extension of time, Layne shall provide the Claimant with written or electronic notice of the extension before the first day of the extension. The notice of the extension shall include: |
1. | An explanation of the circumstances requiring the extension. These circumstances must be matters beyond the control of the Agreement or Layne. | ||
2. | The date by which Layne expects to render a decision. | ||
3. | The standard on which the Claimants entitlement to a benefit is based. | ||
4. | The unresolved issues, if any, that prevent a decision on the claim or on appeal, and the information needed to resolve those issues. In the event that such information is needed: |
a. | The Claimant shall have at forty-five (45) days in which to provide the specified information. | ||
b. | The time for determining an initial claim shall be tolled from the date on which the notice of extension is sent to the Claimant, until the date on which the Claimant responds to the request for additional information. |
2
B. Length of Extension. For purposes of an initial claim not involving disability, no more than one extension of ninety (90) days shall be allowed. For purposes of an initial claim involving disability, no more than two extensions of thirty (30) days each shall be allowed. For purposes of an appeal not involving disability, no more than one extension of sixty (60) days shall be allowed. For purposes of an appeal involving disability, no more than one extension of forty-five (45) days shall be allowed. |
3
Group I | Group II | |
|
||
|
Gregory F. Aluce | |
Andrew B. Schmitt
|
Steven F. Crooke | |
|
Eric R. Despain | |
|
Jerry W. Fanska | |
|
Jeffrey J. Reynolds | |
|
Phil Winner |
Percentage | Group I | Group II | ||||||||
of | Base Salary | Base Salary | ||||||||
Target Achieved | Percentage | Percentage | ||||||||
120 | % or more | 160 | % | 120 | % | |||||
115 | % | 140 | % | 105 | % | |||||
110 | % | 120 | % | 90 | % | |||||
105 | % | 100 | % | 75 | % | |||||
100 | % (Target) | 80 | % | 60 | % | |||||
96 | % | 72 | % | 54 | % | |||||
92 | % | 64 | % | 48 | % | |||||
88 | % | 56 | % | 42 | % | |||||
84 | % | 48 | % | 36 | % | |||||
80 | % | 40 | % | 30 | % | |||||
79 | % or less | 0 | % | 0 | % |
2
3
Group I | Group II | Group III | Group IV | Group V | ||||||||||||||||
Percentage of | Base Salary | Base Salary | Base Salary | Base Salary | Base Salary | |||||||||||||||
Target Achieved | Percentage | Percentage | Percentage | Percentage | Percentage | |||||||||||||||
130
|
58 | 36.25 | 29 | 21.75 | 10.875 | |||||||||||||||
120
|
52 | 32.5 | 26 | 19.5 | 9.75 | |||||||||||||||
110
|
46 | 28.75 | 23 | 17.25 | 8.625 | |||||||||||||||
Target 100
|
40 | 25 | 20 | 15 | 7.5 | |||||||||||||||
90
|
22.5 | 22.5 | 18 | 13.5 | 6.75 | |||||||||||||||
80 or less
|
0 | 0 | 0 | 0 | 0 |
2
3
Date of Grant:
|
February 1, 2009 | |||
|
||||
Number of Shares to Which Option Relates:
|
||||
|
||||
|
||||
Option Exercise Price per Share:
|
||||
(Representing 100% of the Fair Market Value on the Date of Grant)
|
$ | |||
|
Years Elapsed from Date of Grant | Percentage Exercisable | |
|
||
One (1) | One-third | |
Two (2) | Two-thirds | |
Three (3) | Three-thirds |
2
The Company: | The Option Holder: | |||||||||
|
||||||||||
Layne Christensen Company | ||||||||||
|
||||||||||
By:
|
||||||||||
|
|
|||||||||
|
Name: | |||||||||
|
|
|
||||||||
|
Title: | Address of the Option Holder: | ||||||||
|
|
|
|
|||||||||
|
||||||||||
|
|
3
Date of Grant:
|
February 1, 2009 | |||
|
||||
Number of Shares to Which Option Relates:
|
( ) | |||
|
||||
Option Exercise Price per Share:
|
||||
(Representing 100% of the Fair Market
Value on the Date of Grant)
|
$ | [Based on Closing Price as of January 31, 2009] |
2
The Company: | The Option Holder: | |||||||||
|
||||||||||
Layne Christensen Company | ||||||||||
|
||||||||||
By:
|
||||||||||
|
|
|||||||||
|
Name: | [ ] | ||||||||
|
|
|||||||||
|
Title: | Address of the Option Holder: | ||||||||
|
|
|||||||||
|
|
|||||||||
|
|
3
Date of Grant:
|
||
|
||
Number of Restricted Shares Granted:
|
( ) |
2
Date of Grant:
|
February 1, 2009 | |
|
||
Number of Restricted Shares Granted:
|
||
|
2
Executive Officer | Current Salary | |||
Andrew B. Schmitt
|
$ | 620,000 | ||
Jerry W. Fanska
|
$ | 365,000 | ||
Steven F. Crooke
|
$ | 310,000 | ||
Eric R. Despain
|
$ | 300,000 | ||
Gregory F. Aluce
|
$ | 275,000 |
Executive Officer | FY 2009 Bonus | |||
Andrew B. Schmitt
|
$ | 562,437 | ||
Jerry W. Fanska
|
$ | 248,334 | ||
Steven F. Crooke
|
$ | 210,914 | ||
Eric R. Despain
|
$ | 272,098 | ||
Gregory F. Aluce
|
$ | 186,030 |
(a) | Board means the Companys Board of Directors. | ||
(b) | Closing Price means the closing price of the Companys Common Stock as reported in The Wall Street Journal. | ||
(c) | Common Stock means the common stock of Layne Christensen Company. | ||
(d) | Company means Layne Christensen Company. | ||
(e) | Compensation means all remuneration payable to a Director for service as a Director other than reimbursement for expenses and shall include, but not be limited to, fees for service and fees for attendance at meetings of the Board and of its committees. | ||
(f) | Director means any individual serving on the Board who is not an employee of the Company or any of its subsidiaries. | ||
(g) | Effective Date for this amended and restated plan is January 1, 2009. | ||
(h) | Participant means a Director who has filed an election to participate under Section 3.1 with regard to any Plan Year. | ||
(i) | Plan Administrator means a committee consisting of at least two of the employees of the Company designated by the Chief Executive Officer of the Company. | ||
(j) | Plan Year means the calendar year. | ||
(k) | Separates from Service or Separation from Service means a Director ceasing to serve as a director of the Company . A Director incurs a Separation from Service upon the effective date of the directors cessation as a director of the Company. If a Participant is both a Director and a Company employee, the services provided as a Director shall be disregarded in determining whether there has been a Separation from Service as an employee, and the services provided as an employee shall be disregarded in determining whether there has been a Separation from Service as a Director. Separation from Service shall have the same meaning as set forth under Code section 409A and any applicable regulations or Treasury Department guidance issued thereunder. |
(a) | Cash Credits . If the deferral is wholly or partly by means of a cash credit, the Company shall credit the Participants cash credit account at the same time, and with the same amount, that the Director would have otherwise been paid in cash had no deferral election been made. As of the last day of each calendar quarter and after subtracting any distributions from the account made during the quarter, the Participants cash credit account shall also be credited with interest using an interest rate equal to the annual rate of yield on the longest term United States Treasury Bond outstanding at the end of the preceding year. Interest shall be calculated on the actual number of days in the quarter based upon a 365 day year. | ||
(b) | Stock Credits . If the deferral is wholly or partly by means of a stock credit, the Company shall credit the Participants stock credit account, at the same time that the Director would have otherwise been paid in cash had no deferral election been made, with a hypothetical number of shares of Common Stock (including fractions of a share) equal to the number of shares of Common Stock that could have been purchased with the Compensation deferred assuming the per share hypothetical purchase price is equal to the average of the Closing Prices on each of the ten (10) business days immediately preceding the date such stock credit is made. As of the date any dividend is paid to shareholders of Common Stock, the Participants stock credit account shall also be credited with an additional hypothetical number of shares of Common Stock equal to the number of shares of Common Stock (including fractions of a share) that could have been purchased at the Closing Price on such date if the dividend had been paid on the hypothetical number of shares of Common Stock then credited to the Participants stock credit account. In case of dividends paid in property, the dividend shall be deemed to be the fair market value of the property at the time of distribution of the dividend, as determined by the Plan Administrator, and |
2
the Company shall credit the Participants stock credit account in the same manner as set forth above in this Section 3.2(b). |
3
(a) | All plans sponsored by the Company that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated; | ||
(b) | 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; | ||
(c) | All payments are made within twenty-four (24) months of this Plan termination; | ||
(d) | 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. | ||
(e) | The termination does not occur proximate to a downturn in the financial health of the Company. |
4
(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 Companys 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 Companys board of directors prior to the date of the appointment or election. | ||
(c) | Change in the Ownership of a Substantial Portion of the Companys 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. |
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(a) | The Company or any of its Affiliates reduces the Participants 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 Participants express written consent, the Company or any of its Affiliates requires the Participant to change the location of the Participants job or office, so that the Participant will be based at a location more than 35 miles from the former location of the Participants job or office. | ||
(d) | Without the Participants express written consent, the Company or any of its Affiliates substantially and adversely reduces the Participants 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. |
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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 Participants 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. |
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 Employees 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 Employees 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 Employees 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. |
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 Participants 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 Participants 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 Participants death, the Participants Beneficiary) shall make Deemed Investment Elections for the Participants 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 Participants 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 alternatives 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 Participants 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 Participants 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 years deferrals, if any, (and earnings and losses thereon) will ultimately be paid (e.g., lump sum or installment), a Participants 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. |
5.1. | Vesting of Benefits . The portion of a Participants 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 Participants 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 Participants 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 Participants 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 Participants Accrued Benefit that relates to the Participants 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 Participants Retirement. If the Participant fails to select a form of distribution for purposes of distributions from such Participants Accounts for a Plan Year, such distributions will default to lump sum. | ||
For example and for illustration purposes only, assume a Participants 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 Participants 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 Participants 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 Participants 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 Participants retirement benefit shall be distributed in one lump sum rather than in installments if the balance in the Participants 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 Participants 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 Participants 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 Participants death or on the first anniversary of the Participants 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 Participants 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 Participants 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 Participants 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 Participants 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 spouses 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 Participants 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 Participants 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 Participants Separation from Service. | ||
(b) | In the event the Participants 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 Participants 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 Participants 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 Participants Separation from Service. If, after installment payments of benefits under this Plan have begun, the Plan Administrator determines that Cause existed before the Participants Retirement or Disability, such installment payments shall be reduced by amounts credited to the Participants Deferral Account attributable to Corporate Contributions, and any cumulative earnings, gains, and changes in value thereon. |
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(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 Participants 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 Participants 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 Participants or Beneficiarys spouse, or the Participant or Beneficiarys dependent (as defined in Code Section 152(a)), (ii) loss of the Participants or Beneficiarys 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 Participants 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 Companys 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 Participants 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 |
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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 Participants 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 Participants 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 Participants 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 Participants or any other persons bankruptcy or insolvency, or dissolution of marriage. Any such attempted assignment shall be void. |
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 Companys 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 Companys obligations under this Plan, and if as a |
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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 Participants 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 Participants 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. |
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. | Spouses Interest . A Participants 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 spouses will, nor shall such interest pass under the laws of intestate succession. |
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. |
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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 Administrators 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 Companys receipt of a request for review, it will review the Plan Administrators 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 Participants 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 arbitrators 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. |
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 addressees 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
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 Participants 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 Participants rights to be credited with additional amounts on such Account(s), or otherwise materially and adversely affect the Participants 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. |
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 Companys 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. |
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 Administrators 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. |
Layne Christensen Company
|
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By: | /s/ A. B. Schmitt | |||
Andrew B. Schmitt, President | ||||
15
Percentage of | ||||||
Voting Stock | ||||||
Jurisdiction | owned by | |||||
Name of Subsidiary | of Incorporation | Company ¨ | ||||
Ausdrill Burkina SARL
|
Burkina | 100 | % | |||
Boyles Bros. Drilling Company
|
Utah | 100 | % | |||
Camken-Reynolds, LLC
|
Delaware | 51 | % | |||
Cherryvale Pipeline, LLC
|
Kansas | 100 | % | |||
Christensen Boyles Corporation
|
Delaware | 100 | % | |||
Collector Wells International, Inc.
|
Ohio | 100 | % | |||
Discretionary Trust
|
Zimbabwe | 100 | % | |||
ESEMES (Mauritius) Limited
|
Mauritius | 100 | % | |||
G&K Properties Pty Ltd
|
Australia | 100 | % | |||
Inliner American, Inc.
|
Delaware | 100 | % | |||
Inliner Technologies, LLC
|
Indiana | 100 | % | |||
International Directional Services, L.L.C.
|
Delaware | 100 | % | |||
International Directional Services of Canada, Ltd.
|
Ontario, Canada | 100 | % | |||
International Mining Services Pty Ltd
|
Western Australia | 100 | % | |||
International Water Consultants, Inc.
|
Ohio | 100 | % | |||
Inversiones Layne Energy Limitada (a/k/a Layne Energy Limitada)
|
Chile | 100 | % | |||
Layne Christensen Australia Pty Limited
|
Australia | 100 | % | |||
Layne Christensen Canada Limited
|
Calgary, Alberta, Canada | 100 | % | |||
Layne de Bolivia S.R.L.
|
Bolivia | 100 | % | |||
Layne de Mexico, S.A. de C.V.
|
Hermosillo, Sonora, Mexico | 100 | % | |||
Layne do Brasil Sondagens Ltda
|
Brazil | 100 | % | |||
Layne Drilling Pty Ltd (f/k/a Glindemann & Kitching Pty Ltd)
|
Australia | 100 | % | |||
Layne Drilling (RDC) SPRL
|
Democratic Republic of Congo | 100 | % | |||
Layne Energia Chile S.A.
|
Chile | 85 | % | |||
Layne Energy, Inc.
|
Delaware | 100 | % | |||
Layne Energy Cherryvale, LLC
|
Delaware | 100 | % | |||
Layne Energy Cherryvale Pipeline, LLC
|
Delaware | 100 | % | |||
Layne Energy Dawson, LLC
|
Delaware | 100 | % | |||
Layne Energy Dawson Pipeline, LLC
|
Delaware | 100 | % | |||
Layne Energy Holding, LLC
|
Delaware | 100 | % | |||
Layne Energy Operating, LLC
|
Delaware | 100 | % | |||
Layne Energy Osage, LLC
|
Delaware | 100 | % | |||
Layne Energy Pipeline, LLC
|
Delaware | 100 | % | |||
Layne Energy Production, LLC
|
Delaware | 100 | % | |||
Layne Energy Resources, Inc.
|
Delaware | 100 | % | |||
Layne Energy Sycamore, LLC
|
Delaware | 100 | % |
¨ | directly or indirectly through its subsidiaries, nominees or trustees |
Percentage of | ||||||
Voting Stock | ||||||
Jurisdiction | owned by | |||||
Name of Subsidiary | of Incorporation | Company ¨ | ||||
Layne Energy Sycamore Pipeline, LLC
|
Delaware | 100 | % | |||
Layne Texas, Incorporated
|
Delaware | 100 | % | |||
Layne Water Development and Storage, LLC
|
Delaware | 100 | % | |||
Lenity Investments (Private) Limited
|
Zimbabwe | 100 | % | |||
Liner Products, LLC
|
Indiana | 100 | % | |||
Mag Con, Inc.
|
Louisiana | 100 | % | |||
Meadors Construction Co., Inc.
|
Florida | 100 | % | |||
Mid-Continent Drilling Company
|
Delaware | 100 | % | |||
PT Layne Christensen Indonesia
|
Indonesia | 100 | % | |||
Reynolds, Inc. (f/k/a Layne Merger Sub 2, Inc.).
|
Indiana | 100 | % | |||
Reynolds Inliner, LLC
|
Indiana | 100 | % | |||
Reynolds Transport Co.
|
Indiana | 100 | % | |||
Reynolds-Rogers, LLC
|
Delaware | 51 | % | |||
Reynolds-SABAS, LLC
|
Delaware | 66.66 | % | |||
Shawnee Oil & Gas, L.L.C.
|
Delaware | 100 | % | |||
SMS Holdings Pty Ltd
|
Australia | 100 | % | |||
SMS Offshore Pty Ltd
|
Western Australia | 100 | % | |||
Stamm-Scheele Incorporated
|
Louisiana | 100 | % | |||
Stanley Mining Services Pty Limited
|
Australia | 100 | % | |||
Stanley Mining Services (Botswana) (Pty) Ltd. (f/k/a Whitfield
(Proprietary) Limited)
|
Botswana | 100 | % | |||
Stanley Mining Services (Tanzania) Limited
|
Tanzania | 100 | % | |||
Stanley Mining Services (Uganda) Limited
|
Uganda | 100 | % | |||
Stanley Mining Services Zimbabwe (Private) Limited
|
Zimbabwe | 100 | % | |||
Tecniwell S.r.l.
|
Italy | 100 | % | |||
Vibration Technology, Inc.
|
Delaware | 100 | % | |||
West African Drilling Services (Burkina) SARL
|
Burkina | 100 | % | |||
West African Drilling Services (Guinea) SARL
|
Guinea | 100 | % | |||
West African Drilling Services (MALI) SARL
|
Mali | 100 | % | |||
West African Drilling Services Pty Ltd
|
Australia | 100 | % | |||
West African Drilling Services (No. 2) Pty Ltd
|
Australia | 100 | % | |||
West African Holdings Pty Ltd
|
Australia | 100 | % | |||
Windsor Resources, LLC
|
Delaware | 100 | % | |||
Windsor Resources Pipeline, LLC
|
Delaware | 100 | % |
¨ | directly or indirectly through its subsidiaries, nominees or trustees |
/s/ A. B. Schmitt | ||||
Andrew B. Schmitt | ||||
President and Chief Executive Officer |
/s/ Jerry W. Fanska | ||||
Jerry W. Fanska | ||||
Senior Vice President Finance and Treasurer |
Dated: March 31, 2009 | /s/ A. B. Schmitt | |||
Andrew B. Schmitt | ||||
President and Chief Executive Officer |
Dated: March 31, 2009 | /s/ Jerry W. Fanska | |||
Jerry W. Fanska | ||||
Senior Vice President Finance and Treasurer | ||||