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BJ SERVICES COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Addendum or Modifications

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Title: BJ SERVICES COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Governing Law: Texas     Date: 2/9/2009
Industry: Oil Well Services and Equipment     Sector: Energy

BJ SERVICES COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, Parties: bj services company
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Exhibit 10.6

BJ SERVICES COMPANY

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(As Amended and Restated Effective as of December 5, 2008)

WITNESSETH:

WHEREAS , BJ SERVICES COMPANY (the “Company”), has heretofore adopted the BJ SERVICES COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (the “SERP”) for the benefit of certain of its employees;

WHEREAS , since January 1, 2005, the Company has operated and administered the SERP in good faith compliance with the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), bifurcating the SERP into two separate component plans, one that is subject to the requirements of section of 409A of the Code (“409A SERP Component”) and one that is not (“Pre-409A SERP Component”); and

WHEREAS , the Company desires to amend and restate the 409A SERP Component, effective December 5, 2008 (the “Effective Date”), with such amended and restated 409A SERP Component being referred to herein as the “Plan”;

NOW, THEREFORE , the SERP is bifurcated effective as of January 1, 2005, with the Pre-409A SERP Component being continued, with no interruption in time, as it was in effect on October 3, 2004 and as the same was subsequently amended effective June 1, 2007; and further, by this instrument, the Plan is hereby amended and restated in its entirety as follows, with no interruption in time, as of the Effective Date:

ARTICLE I

Purpose

1.1 Purpose of Plan . The purpose of the Plan is to advance the interests of the Company, its subsidiaries and affiliates, and its owners by attracting and retaining in its employ highly qualified individuals for the successful conduct of its business. The Employer hopes to accomplish these objectives by helping to provide for the retirement of its key employees selected to participate in the Plan.

1.2 ERISA Status . The Plan is intended to qualify for certain exemptions under Title I of the Employee Retirement Income Security Act of 1974, as amended, provided for plans that are unfunded and maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.

ARTICLE II

Definitions and Construction

2.1 Definitions . Where the following words and phrases appear in the Plan, they shall have the respective meanings set forth below, unless their context clearly indicates to the contrary.

 

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(1)

Acting as a Group . “Acting as a group” within the meaning of Treasury regulation section 1.409A-3(i)(5)(v)(B), (vi)(D), or (vii)(C), as applicable.

 

(2)

Actuarial Equivalent . The lump sum amount that is equal in value to a Participant’s Pension determined pursuant to Article IV, based on an interest rate equal to the average Applicable Interest Rate for the longer of (a) the period beginning on the Original Effective Date and ending upon the month preceding the Applicable Date or (b) the five-year period ending on the month preceding the Applicable Date (or some other prevailing interest rate selected by the Committee) and on mortality rate assumptions determined by using the male rates from the 1983 Group Annuity Mortality Table (or some other prevailing mortality table selected by the Committee).

 

(3)

Affiliate : With respect to a person, any other person with whom the person would be considered a single employer under section 414(b) of the Code (employees of controlled group of corporations) and any other person with whom the person would be considered a single employer under section 414(c) of the Code (employees of partnerships, proprietorships, etc., under common control); provided, however, that (a) in applying section 1563(a)(1), (2), and (3) of the Code for purposes of determining a controlled group of corporations under section 414(b) of the Code, the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in section 1563(a)(1), (2), and (3) of the Code, and (b) in applying Treasury regulation section 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of section 414(c) of the Code, the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Treasury regulation section 1.414(c)-2.

 

(4)

Applicable Date . The earlier of (a) the date the Participant ceases to participate in the Plan, (b) the date the Participant dies, (c) the date the Participant becomes Disabled, (d) the date of the Participant’s Termination, (e) in the event the Committee, in its sole discretion, determines to pay benefits under the Plan in a lump sum following a Change of Control or a Section 409A Change of Control, the date of such Change of Control or Section 409A Change of Control, or (f) in the event that the Board, in its sole discretion, terminates the Plan for any other reason and accelerates the payment of benefits under the Plan in accordance with any of clauses (a), (c), or (d) of Section 8.2, the date the payment of Plan benefits is made pursuant to such termination of the Plan.

 

(5)

Applicable Interest Rate . The annual rate of interest on 30-year Treasury securities for any month as published by the Federal Reserve Board.

 

(6)

As soon as administratively practicable . For purposes of benefit distributions, a date of distribution that is as soon as administratively practicable as determined by the Committee following the date of payment specified under the Plan, but in no event later than the later of (a) the 15th day of the third calendar month following the specified payment date or (b) December 31st of the calendar year in which the specified payment date occurs; provided, however, that for lump sum payments made pursuant to Section 4.8(b), such distribution may be made within the 30-day period preceding the date of the Section 409A Change of Control. In no event will a Participant or his Beneficiary be permitted to designate the taxable year of the payment.

 

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(7)

Base Contribution Benefit . The annual benefit derived by accumulating the Employer Base Contributions (as such term is defined in the Thrift Plan) that would have been made on behalf of a Participant under the Thrift Plan (or any predecessor thereto sponsored or maintained by the Employer or any predecessor or affiliate thereof) without regard to the limitations imposed by the Code at an interest rate for each calendar year equal to the average Applicable Interest Rate for the twelve months preceding such calendar year (or some other prevailing interest rate selected by the Committee), compounded annually to the Applicable Date. A Participant’s Base Contribution Benefit shall be adjusted in the event that the Participant’s Employer Base Contributions under the Thrift Plan are reduced as a result of the limitations imposed by the Code and there is no corresponding contribution under the DCP Plan.

 

(8)

Beneficiary . The person designated by each Participant, on a form provided by the Employer for this purpose, to receive the Participant’s distribution under Article V in the event of the Participant’s death prior to receiving complete payment of his account. In order to be effective under this Plan, any form designating a Beneficiary must be delivered to the Committee before the Participant’s death. In the absence of such an effective designation of a Beneficiary, “Beneficiary” means the Participant’s spouse, or if there is no spouse on the date of the Participant’s death, the Participant’s executor or administrator or heirs at law if there is no administration of the Participant’s estate.

 

(9)

Board . The Board of Directors of the Company.

 

(10)

Change of Control . A “Change of Control” shall be deemed to have occurred upon, and shall mean (a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of either (i) the then outstanding shares of Common Stock, $.10 par value per share, of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan(s) (or related trust(s)) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, immediately following such reorganization, merger or consolidation, the conditions described in clause (i), (ii) and (iii) of clause (c) of this Section are satisfied; (b) the approval by the Company’s stockholders of the sale or disposition of all or substantially all of the Company’s assets or the dissolution or liquidation of the Company; or (c) the approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, unless immediately following such reorganization, merger or consolidation (i) more than 60% of, respectively, the then outstanding shares of common stock of the

 

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corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding the Company, any employee benefit plan(s) (or related trust(s) of the Company and/or its subsidiaries or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 25% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 25% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board (as defined below) at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation. The “Incumbent Board” shall mean individuals who, as of the date the Plan is adopted by the Board, constitute the Board; provided, however, that any individual becoming a director subsequent to such date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either (1) an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act), or an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or (2) a plan or agreement to replace a majority of the members of the Board then comprising the Incumbent Board.

 

(11)

Code . The Internal Revenue Code of 1986, as amended.

 

(12)

Committee . The Compensation Committee of the Board, or such other administrative committee that is appointed by the Board to administer the Plan.

 

(13)

Company . BJ Services Company, a corporation organized and existing under the laws of the State of Delaware, or its successor or successors.

 

(14)

Compensation . The sum of base salary and bonuses received by a Participant during a calendar year.

 

(15)

DCP Plan . The BJ Services Deferred Compensation Plan, as amended from time to time.

 

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(16)

Disability or Disabled . A Participant is considered Disabled if he is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, either (1) unable to engage in any substantial gainful activity or (2) receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.

 

(17)

Early Retirement . A Participant’s Termination on or after the later of (i) his fifty-fifth birthday or (ii) the date he becomes vested pursuant to Article V, but prior to eligibility for Normal Retirement.

 

(18)

Effective Date . The effective date of this restatement of the Plan, which is December 5, 2008.

 

(19)

Eligible Employee . A highly compensated or management employee of the Company or an Affiliate.

 

(20)

Employer . The Company, its subsidiaries, and affiliates.

 

(21)

ERISA . The Employee Retirement Income Security Act of 1974, as amended.

 

(22)

Exchange Act . The Securities Exchange Act of 1934, as amended.

 

(23)

Highest Average Compensation . The average Compensation received by a Participant during the three consecutive complete calendar years of employment (or, if less, his complete calendar years of employment) within the last ten complete calendar years of employment (or, if less, his complete calendar years of employment) prior to the Applicable Date that yield the highest average Compensation.

 

(24)

Normal Retirement . A Participant’s Termination on or after the later of (i) his sixtieth birthday or (ii) the date he becomes vested pursuant to Article V.

 

(25)

Original Effective Date . The Plan origination date of October 1, 2000.

 

(26)

Participant . An Eligible Employee who has been selected by the Committee as a Participant in the Plan until such Eligible Employee ceases to be a Participant in accordance with Article III of the Plan.

 

(27)

Pension . With respect to a Participant eligible to receive benefits under the Plan, a series of annual payments for the life of the Participant determined pursuant to Article IV.

 

(28)

Plan . The BJ Services Company Supplemental Executive Retirement Plan set forth in this document, as the same may be amended from time to time.

 

(29)

Plan Year . The twelve-consecutive month period commencing January 1 of each year.

 

(30)

Prior Pension Benefit . The annual benefit, if any, payable to a Participant from or with respect to a defined benefit plan sponsored or maintained at any time by the Employer or any predecessor or affiliate thereof, determined as if payable at Normal Retirement in the form of a Pension.

 

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(31)

Section 409A Change of Control . The occurrence of any one of the following events:

(a) Any one person, or more than one person Acting as a Group, acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; provided, however, that if any one person, or more than one person Acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or group does not cause a Section 409A Change of Control within the meaning of this Section 2.1(31)(a); and provided, further, that an increase in the percentage of stock owned by any one person, or persons Acting as a Group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this Section 2.1(31)(a); and provided, further, that this Section 2.1(31)(a) applies to cause a Section 409A Change of Control only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction; and provided, further, that, if any person, or more than one person Acting as a Group, is considered to have met the control requirements of Section 2.1(31)(b) below, the acquisition of additional stock by the same person or group will not cause a Section 409A Change of Control within the meaning of this Section 2.1(31)(a); or

(b) Either:

(i) Any one person, or more than one person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company; provided, however, that if one person, or more than one person Acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or group will not cause a Section 409A Change of Control within the meaning of this Section 2.1(31)(b); and provided, further, that, if any person, or more than one person Acting as a Group is considered to have met the control requirements of this Section 2.1(31)(b), the acquisition of additional stock by the same person or group will not cause a Section 409A Change of Control within the meaning of this Section 2.1(31)(b); or

(ii) A majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of such appointment or election; or

(c) Any one person, or more than one person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) assets from the Company that have a total “gross fair market value” equal to all or substantially all of the total “gross fair market value” of all the assets of the Company immediately before such acquisition or acquisitions; provided, however, that there is no Section

 

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409A Change of Control under this Section 2.1(31)(c) where there is a Transfer to a Related Person. For purposes of this Section 2.1(31)(c), “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.

For purposes of this Section 2.1(31), section 318(a) of the Code applies to determine stock ownership. The definition of Section 409A Change of Control under this Section 2.1(31) is intended to comply with the applicable definitions and requirements of section 409A(a)(2)(A)(v) of the Code and Treasury regulation section 1.409A-3(i)(5) that correspond to the change of control events described above and shall be interpreted consistently therewith.

 

(32)

Severance Agreement . An agreement between the Company and a Participant that provides for benefits in the event of certain terminations of employment following a Change of Control.

 

(33)

Social Security Benefit . Twelve (12) times the projected monthly primary insurance amount under the federal Social Security Act the Participant will be eligible to receive at age 62, calculated under the provisions of the federal Social Security Act as in effect at the time of such calculation and using assumptions and indices approved by the Committee.

 

(34)

Termination . A Participant’s “separation from service” with the Company and its Affiliates, within the meaning of section 409A(a)(2)(A)(i) of the Code (and applicable administrative guidance issued thereunder).

 

(35)

Thrift Plan . The BJ Services Retirement Thrift Plan, as amended from time to time.

 

(36)

Transfer to a Related Person . A transfer of assets by the Company where the assets are transferred to a transferee who is, determined immediately after the transfer of assets except where otherwise specified, either:

(a) A shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;

(b) An entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company;

(c) A person, or one or more persons Acting as a Group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or

(d) An entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in Paragraph (c) of this Section 2.1(36).

 

(37)

Vested Percentage . The percentage of a Participant’s benefit which, pursuant to the Plan, is nonforfeitable.

 

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(38)

Years of Service . The number of years of a Participant’s employment with the Employer from his last date of hire to the Applicable Date, including any fractional years rounded to the nearest one-hundredth of one year. In addition, the Committee, in its sole discretion, may credit a Participant with Years of Service for service with the Employer prior to his last date of hire. The Committee shall notify the Participant in writing of any such credit for prior service with the Employer.

ARTICLE III

Participation

The Committee, in its sole discretion, shall select and notify in writing those Eligible Employees who shall participate in the Plan. An Eligible Employee who has been selected by the Committee as a Participant shall continue to participate in the Plan until the earlier of (a) the date the Committee notifies the Participant that he is no longer eligible to participate in the Plan or (b) the date of his Termination. A Participant who ceases to participate in the Plan pursuant to clause (a) of the preceding sentence shall be treated as if he had terminated employment with the Employer, but his benefit shall not be payable until after his Termination. An Eligible Employee who is rehired by the Employer following his Termination shall become a Participant only if such Eligible Employee is again selected to participate in the Plan by the Committee.

ARTICLE IV

Benefits

4.1 Provision for Benefits . Benefits under the Plan shall constitute general obligations of the Employer in accordance with the terms of the Plan. No amounts in respect of such benefits shall be set aside or held in trust, and no recipient of any benefit shall have any right to have the benefit paid out of any particular assets of the Employer. (However, the Board may establish a trust(s) out of which the benefits hereunder may be paid, provided that the principal and income of such trust(s) are subject to the claims of the creditors of the Employer in the event of insolvency as provided for under the terms of such trust(s).)

4.2 Normal Retirement Benefit . The benefit in the event of Normal Retirement shall be equal to the Actuarial Equivalent of the Pension, which shall be derived from the following formula: Highest Average Compensation times the lesser of: i) 2% times Years of Service, or ii) 60%, the product of which is multiplied by the Participant’s Vested Percentage, the product of which is then offset in all years by the sum of: i) the Base Contribution Benefit, ii) the Prior Pension Benefit, and iii) the Social Security Benefit. Such Normal Retirement benefit shall be paid in the form provided in Article VI. Payment of the Normal Retirement benefit shall begin as of the date that is six months following the Participant’s Termination (or the date of the Participant’s death, if earlier), and such payment will be deemed made on such date if it is made as soon as administratively practicable following such date.

4.3 Early Retirement Benefit . The benefit in the event of Early Retirement shall be equal to the Actuarial Equivalent of the Pension, which shall be derived from the following formula: Highest Average Compensation times the lesser of: i) 2% times Years of Service, or ii) 60%, the product of which is multiplied by the Participant’s Vested Percentage, reduced by 5% times the number of years that the Participant’s Early Retirement precedes his eligibility for

 

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Normal Retirement, and then offset in all years by the sum of: i) the Base Contribution Benefit, ii) the Prior Pension Benefit, and iii) the Social Security Benefit. Such Normal Retirement benefit shall be paid in the form provided in Article VI. Payment of the Early Retirement benefit shall begin as of the date that is six months following the Participant’s Termination (or the date of the Participant’s death, if earlier), and such payment will be deemed made on such date if it is made as soon as administratively practicable following such date.

4.4 Pre-Termination Cessation of Participation Benefit . The benefit in the event a Participant ceases to participate in the Plan prior to his Termination shall be equal to the Actuarial Equivalent of the Pension, calculated as of the date of such cessation using the Participant’s age as of such date, which shall be derived from the following formula: Highest Average Compensation times the lesser of: i) 2% times Years of Service, or ii) 60%, the product of which is multiplied by the Participant’s Vested Percentage, reduced by 5% times the number of years that the cessation of participation precedes his eligibility for Normal Retirement, but no more than 25%, and then offset in all years by the sum of: i) the Base Contribution Benefit, ii) the Prior Pension Benefit, and iii) the Social Security Benefit. The cessation benefit shall be accumulated at an interest rate for each calendar year equal to the average Applicable Interest Rate for the 12 months preceding such calendar year (or some other prevailing interest rate selected by the Committee) until payment of such benefit is made. Notwithstanding the foregoing, no cessation benefit shall be paid pursuant to this Section 4.4 unless the Participant’s Termination occurs on or after his eligibility for Early Retirement. The cessation benefit shall be paid in a lump sum on the date that is six months following the Participant’s Termination (or the date of the Participant’s death, if earlier), and such payment will be deemed made on such date if it is made as soon as administratively practicable following such date.

4.5 Pre-Termination Death Benefit . In the event the Participant dies prior to his Termination but after eligibility for Early Retirement or Normal Retirement, the benefit payable to his Beneficiary shall be calculated as if the Participant’s Termination was an Early Retirement or Normal Retirement that occurred on the date of his death. In the event the Participant dies prior to his Termination and prior to eligibility for Early Retirement, the benefit payable to his Beneficiary shall be equal to the Actuarial Equivalent of the Pension calculated as of the date the Partici


 
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