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.
-1-
|
(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.
|
-2-
|
(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
|
-3-
|
|
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.
|
-4-
|
(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.
|
-5-
|
(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
-6-
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.
|
-7-
|
(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
-8-
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
|