EXHIBIT 4.4
LAYNE CHRISTENSEN COMPANY
1996 DISTRICT STOCK OPTION PLAN
Layne Christensen Company, a Delaware corporation (the
"Company"), desires to provide additional incentive for key
employees to promote the success of the Company and its
subsidiaries by allowing such employees to share in the future
growth of the business and to participate in the ownership of the
Company. Accordingly, the Company hereby establishes the 1996
District Stock Option Plan of Layne Christensen Company (the
"Plan") to offer eligible employees the opportunity to become
owners of capital stock of the Company under stock options which
are intended to be Nonqualified Stock Options. The Plan is
adopted, as follows, effective July 16, 1996, as amended
effective April 20, 1999.
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Plan,
they shall have the meaning specified below unless the context
clearly indicates to the contrary. The masculine pronoun shall
include the feminine and neuter, and the singular the plural,
where the context so indicates.
1.1 BOARD--"Board" shall mean the Board of Directors
of the Company. Members of the Board shall be referred to as
"Directors."
1.2 CODE--"Code" shall mean the Internal Revenue Code
of 1986, as amended.
1.3 COMMITTEE--The "Committee" shall mean the
administrative committee of the Plan selected by the Board.
1.4 COMPANY--"Company" shall mean Layne Christensen
Company, a Delaware corporation.
1.5 EMPLOYEE--An individual employed by the Company or
a Subsidiary.
1.6 KEY EMPLOYEE--"Key Employee" shall mean any
Employee of the Company who, in the sole discretion of the
Committee, has made or is expected to make, a significant
contribution to the Company; provided, however, that Directors
who are not also Employees of the Company shall not be eligible
to participate in this Plan.
1.7 NONQUALIFIED STOCK OPTION--"Nonqualified Stock
Option" shall mean an option granted hereunder which is not
qualified under Section 422 of the Code as an incentive stock
option.
1.8 OFFICER--"Officer" shall mean an officer of the
Company or any Subsidiary as defined in the Securities and
Exchange Commission Rule 16a - 1(f), as amended.
1.9 OPTION--"Option" shall mean an option to purchase
common stock of the Company granted under the Plan.
1.10 OPTIONEE--"Optionee" shall mean an Employee to
whom an Option has been granted under the Plan.
1.11 OPTION PERIOD--"Option Period" shall mean the
period during which an Option may be exercised as determined by
the Committee under the terms of Section 4.3(a) hereof.
1.12 PERMANENT DISABILITY--"Permanent Disability" shall
mean a condition of permanent disability as determined in good
faith by a majority of the Committee.
1.13 PLAN--"Plan" shall mean the 1996 District Stock
Option Plan of the Company.
1.14 RETIREMENT--"Retirement" shall mean retirement
from the Company at age 62 or older (or such earlier age as may
be approved by the Board).
1.15 SECURITIES ACT--"Securities Act" shall mean the
Securities Act of 1933, as amended.
1.16 STOCK--"Stock" or "shares" shall mean shares of
the common stock of the Company.
1.17 SUBSIDIARY--"Subsidiary" or "Subsidiaries" shall
mean subsidiary corporations or a subsidiary corporation of the
Company within the meaning of Section 424(f) of the Code.
1.18 TERMINATION OF EMPLOYMENT--"Termination of
Employment" shall mean the time when the employer-employee
relationship between the Company or a Subsidiary and the Optionee
ceases for any reason. The Committee, in its absolute
discretion, shall determine the effect of all matters and
questions relating to Termination of Employment including, but
not limited to, whether a particular leave of absence constitutes
a Termination of Employment.
ARTICLE II
STOCK SUBJECT TO PLAN
2.1 STOCK SUBJECT TO PLAN--Options granted under this
Plan shall be granted solely with respect to shares of Stock.
Subject to any adjustments made pursuant to the provisions of
Section 2.3 hereof, the aggregate number of shares of stock which
may be issued under this Plan shall not exceed 650,000. The
shares of Stock issuable and deliverable upon the exercise of an
Option, or any portion thereof, may be either previously
authorized but unissued shares or issued shares which have been
reacquired by the Company.
2.2 UNEXERCISED OPTIONS--If any Option expires or is
canceled without having been fully exercised, the number of
shares subject to such Option but as to which such Option was not
exercised prior to its expiration or cancellation may again be
made available for grant hereunder, subject to the limitations of
Section 2.1.
2.3 ADJUSTMENTS IN COMPANY'S SHARES--In the event the
Stock is changed into or exchanged for a different number or kind
of securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend
or combination of shares, the Committee shall make an appropriate
and equitable adjustment in the number and kind of shares (a) as
to which Options may be granted, including adjustments of the
limitation in Section 2.1; and (b) as to which Options, or
portions thereof unexercised, shall be exercisable, to the end
that after such event each Optionee's proportionate interest
shall be maintained as before the occurrence of such event. Such
adjustment in an outstanding Option shall be made with any
necessary corresponding adjustment in the Option exercise price
per share and without change in the total price applicable to the
Options or the unexercised portion of the Options (except for any
change in the aggregate price resulting from rounding-off of
share quantities or prices). Any such adjustment made by the
Committee shall be final and binding upon all Optionees, the
Company and all other interested persons.
ARTICLE III
ELIGIBILITY AND GRANTING OF OPTIONS
3.1 ELIGIBILITY--Options to purchase shares of Stock
shall be granted under this Plan only to Key Employees of the
Company and its Subsidiaries.
3.2 GRANTING OF OPTIONS--
(a) The Committee shall from time to time and in
its absolute discretion:
(i) Determine which Key Employees
(including those to whom Options have been previously
granted under the Plan) should be granted Options;
(ii) Determine the number of shares to
be subject to such Options granted to such selected Key
Employees;
(iii) Determine the terms and
conditions of such Options, consistent with the Plan.
(b) Upon the selection of a Key Employee to be
granted an Option, the Committee shall grant such Option and
may impose such conditions on the grant of such Option as it
deems appropriate. Without limiting the generality of the
preceding sentence, the Committee may, in its discretion and
on such terms as it deems appropriate, require as a
condition on the grant of an Option to an Optionee that the
Optionee deliver to the
Company cash consideration for such option and/or surrender
for cancellation some or all of the unexercised Options
which have been previously granted to him. An Option, the
grant of which is conditioned upon such surrender, may have
an option exercise price lower (or higher) than the option
exercise price of the surrendered Option, may cover the same
(or a lesser or greater) number of shares as the surrendered
Option, may contain such other terms as the Committee deems
appropriate and shall be exercisable in accordance with its
terms, without regard to the number of shares, exercise
price, option period or any other term or condition of the
surrendered Option.
(c) No Option may be granted hereunder after ten
(10) years from the date the Plan is adopted by the Board.
(d) An Option shall be deemed granted on the date
the Committee approves the granting of such Option;
provided, however, that any Option shall terminate thirty
(30) days after the date upon which it shall have been
granted unless a Stock Option Agreement duly executed by the
Optionee shall have been redelivered to the Company within
such thirty (30) day period.
ARTICLE IV
TERMS OF OPTION
4.1 OPTION AGREEMENT--Each Option shall be evidenced
by a written Stock Option Agreement, which shall be executed by
the Optionee and an authorized officer of the Company. The terms
and conditions of a Stock Option Agreement shall be consistent
with the Plan, but the Committee shall have the power and
authority to include such other terms and conditions which are
not inconsistent with the Plan. The Committee may, in its
discretion, incorporate different terms and conditions in the
Stock Option Agreement offered to each Optionee consistent with
this Section 4.1.
4.2 OPTION EXERCISE PRICE--The exercise price of the
shares subject to each Option shall be determined by the
Committee and set forth in the respective Stock Option Agreement.
4.3 PERIOD AND EXERCISE OF OPTION--
(a) PERIOD--Subject to the provisions of the
Stock Option Agreement and the other restrictions contained
in the Plan, an Option shall become exercisable at such
times and in such installments (which may be cumulative) as
the Committee shall provide in the terms of each individual
Option, and the period during which such Option (or
installment) may be exercised shall terminate at such times
as the Committee shall provide in the terms of each
individual Option. The Committee may adopt a resolution
after an Option is granted and on such terms and conditions
as it deems appropriate whereby the time during which such
Option or any portion thereof may be exercised is
accelerated. No
Option may be exercised to any extent by anyone after the
first to occur of the following events:
(i) the expiration of ten (10) years
from the date the Option is granted;
(ii) the time of the Optionee's
Termination of Employment unless such Termination of
Employment results from his death, Permanent Disability
or Retirement;
(iii) the expiration of thirty (30) days
from the time of the Optionee's Termination of
Employment by reason of his Permanent Disability or
Retirement;
(iv) the expiration of ninety (90) days
from the time of the Optionee's Termination of
Employment by reason of his death; or
(v) the Optionee shall engage in
willful misconduct which injures the Company or any of
its Subsidiaries as determined by the Committee.
Except as set forth in subsections (ii), (iii) and
(iv) above, an Option shall not be exercisable during the
Option Period unless the Optionee shall have been
continuously employed by the Company or a Subsidiary from
the date the Option was granted until its date of exercise.
Upon expiration of the Option Period, as
accelerated if applicable, the Option shall terminate with
respect to all shares of Stock not already actually
purchased and paid for in full by the Optionee.
(b) PERSONS ELIGIBLE TO EXERCISE--An Option
granted hereunder (or portion thereof) shall be exercisable
only by the Optionee; provided, however, that in the event
of an Optionee's death, the heirs, executors or personal
representatives of such Optionee may exercise the Option.
(c) PARTIAL EXERCISE--Any exercisable portion of
the Option or the entire Option, if then wholly exercisable,
may be exercised in whole or in part during the applicable
Option Period; provided, however, that the Company shall not
be required to issue fractional shares and the Committee
may, by the terms of the Option, require any partial
exercise to be with respect to a specified minimum number of
shares.
(d) MANNER OF EXERCISE--An exercisable Option, or
any exercisable portion thereof, may be exercised solely by
delivery to the Secretary of the Company or his office of
all of the following prior to the time when such Option or
portion thereof becomes unexercisable under the terms of
this Plan or the applicable Stock Option Agreement:
(i) Notice in writing signed by the
Optionee or other person then entitled to exercise such
Option or portion thereof, stating that such Option or
portion thereof is exercised, such notice complying
with all applicable rules established by the Committee;
(ii) Full payment (in cash or by check)
of the exercise price for the shares with respect to
which such Option or portion thereof is exercised;
(iii) Such representations and documents as
the Committee, in its absolute discretion, deems
necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any
other federal or state securities laws or regulations.
The Committee may, in its absolute discretion, also
take whatever additional actions it deems appropriate
to effect such compliance including, without
limitation, placing legends on share certificates and
issuing stop-transfer orders to transfer agents and
registrars;
(iv) Full payment (in cash or by check) to
the Company of all amounts which, under federal, state
or local law, it is required to withhold in connection
with the exercise of the Option; and
(v) In the event the Option or portion
thereof shall be exercised by any person or persons
other than the Optionee, appropriate proof of the right
of such person or persons to exercise the Option.
4.4 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES--The
Company shall not be required to issue or deliver any certificate
or certificates for shares of Stock purchased upon the exercise
of any Option or portion thereof prior to fulfillment of all of
the following conditions:
(a) The completion of any registration or other
qualification of or notice regarding such shares under any
state or federal law or under the rules or regulations of
the Securities and Exchange Commission or any other
governmental regulatory body, which the Committee shall, in
its absolute discretion, deem necessary or advisable;
(b) The obtaining of any approval or other
clearance from any state or federal governmental agency
which the Committee shall, in its absolute discretion,
determine to be necessary or advisable; and
(c) The lapse of such reasonable period of time
following the exercise of the Option as the Committee may
establish from time to time for reasons of administrative
convenience, provided that, upon issuance, the shares shall
be considered issued and outstanding as of the date such
Option was exercised.
4.5 RIGHTS AS STOCKHOLDERS--The holders of Options
shall not be, nor have any of the rights or privileges of,
stockholders of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the
Company to such holders.
4.6 MERGER, CONSOLIDATION, ACQUISITION, LIQUIDATION OR
DISSOLUTION--In the event the Company shall not be the surviving
corporation in any merger, consolidation, or reorganization, or
in the event of acquisition by another corporation of all or
substantially all of the assets of the Company, every Option
outstanding hereunder may be assumed (with appropriate changes)
by the surviving, continuing, successor or purchasing
corporation, as the case may be, subject to any applicable
provisions of the Code or replaced with new Options of comparable
value (in accordance with Section 424(a) of the Code). In the
event (i) that such surviving, continuing, successor or
purchasing corporation, as the case may be, does not assume or
replace the outstanding Options hereunder, or (ii) of liquidation
or dissolution of the Company, the Committee may provide that
each Optionee shall have the right, within a period commencing
not more than thirty (30) days immediately prior to and ending on
the day immediately prior to such merger, consolidation,
reorganization or acquisition by another corporation of all or
substantially all of the assets of the Company or the liquidation
or dissolution of the Company, to exercise the Optionee's
outstanding Options to the extent of all or any part of the
aggregate number of shares subject to such Option(s). In the
event of a "Change of Control" (as defined below), the Committee
may accelerate the time at which Options granted under this Plan
may be exercised by the Optionee. For purposes of this Section
4.6, "Change of Control" shall mean a change in control of a
nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A (in effect on the date
hereof) promulgated under the Securities Exchange Act of 1934, as
in effect on the date hereof; provided, however, that, without
limitation, such a Change of Control shall be deemed to occur
when either (i) a person (other than KKR Associates, L.P. and/or
any of its affiliates, or a Director nominated or selected by the
Board or an Officer elected by the Board) acquires beneficial
ownership (as defined by Securities and Exchange Commission Rule
13d-3) of 25% or more of the combined voting power of the
Company's voting securities, or (ii) less than a majority of the
Directors are persons who were either nominated or selected by
the Board.
4.7 TRANSFER RESTRICTIONS--The Committee, in its
absolute discretion, may impose such restrictions on the
transferability of the shares purchasable upon the exercise of an
Option as it deems appropriate. Any such restriction shall be
set forth in the respective Stock Option Agreement and may be
referred to on the certificates evidencing such shares.
ARTICLE V
ADMINISTRATION
5.1 DUTIES AND POWERS OF COMMITTEE--The Committee
shall have the power to interpret this Plan and any Stock Option
Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent
herewith and to interpret, amend, or revoke any such rules. No
member of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with
respect to this Plan or an Option.
5.2 MAJORITY RULE--The Committee shall act by a
majority of its members in office. The Committee may act either
by a vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.
5.3 EXPENSES: INDEMNIFICATION--All reasonable
expenses and liabilities actually incurred in connection with the
administration of the Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company
and its Officers and Directors shall be fully justified in
relying, or acting in good faith upon the advice, opinion,
valuations or information furnished by such persons. All actions
taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all
Optionees, the Company and all other interested persons. Each
person who is or shall have been a member of the Committee shall
be indemnified and held harmless by the Company against and from
any and all loss, cost, liability or expense that may be imposed
upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit or proceeding to which
such person may be or becomes a party or in which such person may
be or becomes involved by reason of any action taken or failure
to act under the Plan and against and from any and all amounts
paid by such person in settlement thereof (with the Company's
written approval) or paid by such person in satisfaction of a
judgment in any such action, suit or proceeding, except a
judgment in favor of the Company based upon a finding of such
person's lack of good faith; subject, however, to the condition
that upon the institution of any claim, action, suit or
proceeding against such person, such person shall, in writing,
give the Company notice and an opportunity, at its own expense,
to handle his own defense. The foregoing right of
indemnification shall not be exclusive of any other right to
which such person may be entitled as a matter of law or otherwise
or any other right or power that the Company may have to
indemnify or hold such person harmless.
ARTICLE VI
MISCELLANEOUS
6.1 OPTIONS NOT TRANSFERABLE--Neither an Option nor
any interest or right therein or part thereof shall be liable for
the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition is
voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition
thereof shall be null and void and of no effect; provided,
however, that this Section 6.1 shall not prevent transfers by
will or by the applicable laws of descent and distribution.
6.2 AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN--
No Option shall be granted pursuant to this Plan after July 16,
2006, on which date this Plan will terminate except as to Options
then outstanding under the Plan. Options outstanding as of July
16, 2006, shall remain in effect until they are exercised or they
expire. The Committee may at any time before such date amend,
modify or terminate the Plan.
No amendment, modification or termination of this Plan may
adversely affect the rights of any Optionee under any then
outstanding Option granted hereunder without the consent of such
Optionee.
6.3 EFFECT OF PLAN UPON OTHER COMPENSATION PLANS--
Nothing in this Plan shall be construed to limit the right of the
Company (a) to establish any other forms of incentive or other
compensation for Employees, or (b) to grant or assume options
otherwise than under this Plan in connection with any proper
corporate purpose including, without limitation, the grant or
assumption of options in connection with the acquisition by
purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or
association.
6.4 EFFECT OF PLAN UPON EMPLOYMENT--Nothing in this
Plan shall be construed as an obligation of the Company or its
Subsidiaries to continue the employment of any Employee.
6.5 TITLES--Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or
construction of this Plan.
6.6 GOVERNING LAW--The laws of the State of Kansas
shall govern the interpretation, validity and performance of the
terms of this Plan regardless of the law that might be applied
under principles of conflicts of laws.
6.7 CONFORMITY TO SECURITIES LAWS--The Plan is
intended to conform to the extent necessary with all provisions
of the Securities Act and the Securities Exchange Act of 1934, as
amended, and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder. Notwithstanding
anything herein to the contrary, the Plan shall be administered,
and Options shall be granted and may be exercised, only in such
manner as to conform to such laws, rules and regulations. To the
extent permitted by applicable law, the Plan and Options granted
hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.