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REYNOLDS DIVISION OF
LAYNE CHRISTENSEN COMPANY
Layne Christensen
Company (“ Layne ”) desires to reward key
employees for contributions made to the profitability and overall
improvement of the business operations of the Reynolds Division.
The purpose of the Reynolds Division Cash Bonus Plan (the “
Plan ”) is to provide a continuing incentive to key
employees of the Reynolds Division and a method to share the
results of their efforts and success following the merger of
Reynolds, Inc. with Layne Merger Sub 1, Inc. pursuant to that
certain Agreement and Plan of Merger dated August 30, 2005
(the “ Agreement ”).
All employees of
the Reynolds Division shall be eligible for participation in the
Plan.
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III.
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CONTRIBUTIONS TO THE
PLAN
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Layne will
establish and contribute to the Plan pursuant to the following
terms and conditions:
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A.
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January 1, 2005 through
December 31, 2005.
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1.
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January 1, 2005 through the
Closing Date of the Agreement (the “Closing
Date”) : Layne will accrue and reserve an
amount to be paid pursuant to the Plan equal to the amount that has
been accrued by Reynolds, Inc. on its Closing Date Balance Sheet
(as defined in the Agreement) for its employee cash bonus
plan.
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2.
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Closing Date through
December 31, 2005 : Layne will accrue and reserve an
amount to be paid pursuant to the Plan equal to twenty percent
(20%) of the net income earned by the Reynolds Division
*
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*
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In determining
net income earned by the Reynolds Division , Layne will not, and
will use commercially reasonable efforts to cause its Affiliates to
not, do any of the following: (1) charge the Reynolds Division
any management fee or administrative fee or similar fee on the
Reynolds Division for any charge imposed on the Reynolds Division
related to Layne’s overhead or the overhead of any of
Layne’s Affiliates (for clarity, the foregoing does not
prevent Layne from allocating costs for benefits, workers
compensation and
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(before giving effect to an amounts
paid pursuant to the Plan) from the Closing Date through
December 31, 2005.
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3.
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The
sum of the amounts set forth in Subsections (1) and (2) above
shall be available for distribution to employees of the Reynolds
Division pursuant to Article IV below on or before
March 1, 2006. In the event that the net income of the
Reynolds Division for the period from the Closing Date through
December 31, 2005 is a negative number, the absolute value of
such amount will be subtracted from the amount accrued and reserved
pursuant to Subsection (1) above.
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B.
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January 1, 2006 through
January 31, 2009.
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1.
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Layne will accrue and reserve an
amount to be paid pursuant to the Plan equal to twenty percent
(20%) of the net income earned by the Reynolds Division (before
giving effect to an any amounts paid pursuant to the Plan) for
eac
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