Exhibit 10.5
BJ SERVICES
DEFERRED COMPENSATION
PLAN
As Amended and Restated
Effective December 5, 2008
TABLE OF
CONTENTS
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PAGE
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I.
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DEFINITIONS AND
CONSTRUCTION
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2
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II.
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PARTICIPATION
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6
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III.
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DEFERRALS AND
ALLOCATIONS OF INCOME OR LOSS EQUIVALENTS
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6
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IV.
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DEEMED
INVESTMENT OF FUNDS
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11
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V.
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BENEFITS
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12
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VI.
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ADMINISTRATION
OF THE PLAN
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18
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VII.
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ADMINISTRATION
OF FUNDS
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20
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VIII.
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DESIGNATION OF
OTHER EMPLOYERS
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20
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IX.
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DISCONTINUANCE
OR TERMINATION
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21
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X.
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NATURE OF THE
PLAN
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22
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XI.
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MISCELLANEOUS
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22
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BJ SERVICES
DEFERRED COMPENSATION
PLAN
WITNESSETH:
WHEREAS, BJ Services Company, U.S.A. (the
“Company” ), has heretofore adopted the BJ
SERVICES DEFERRED COMPENSATION PLAN (the
“Plan” ) to provide deferred compensation for a
select group of management or highly-compensated
employees;
WHEREAS, the Company desires to amend and restate the
Plan to comply with the final Treasury regulations under section
409A of the Internal Revenue Code of 1986, as amended, and in
certain other respects;
NOW THEREFORE,
the Plan is hereby amended and
restated in its entirety as follows, with no interruption of time,
effective as of December 5, 2008, except as otherwise
indicated in specific provisions of the Plan:
I.
DEFINITIONS AND
CONSTRUCTION
1.1 Definitions
. The capitalized words or terms
used in the Plan that are not otherwise defined herein shall have
the same meanings as such words or terms have in the BJ Services
Retirement Thrift Plan, as the same may be amended from time to
time. 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)
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409A
Effective Date :
January 1, 2005.
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(2)
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Account(s) : A Member’s Grandfathered Account and/or
Deferral Account and the amounts credited thereto.
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(3)
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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)
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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, “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.
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(4)
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Basic
Compensation : For
Eligible Employees who are Members, an amount equal to a
Member’s “Compensation,” as such term is
defined under the Thrift Plan.
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(5)
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Board : The Board of Directors of the
Company.
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(6)
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Bonus : The amount, if any, received by the Member
under the annual bonus plan in which Eligible Employees
participate, but only to the extent such bonus amount constitutes
“performance-based compensation” within the meaning of
section 409A(a)(4)(B)(iii) of the Code (and applicable
administrative guidance issued thereunder).
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(7)
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Chairman : The Chairman of the Board.
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(8)
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Code : The Internal Revenue Code of 1986, as
amended.
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(9)
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Committee : The Benefits Committee established by the
President of the Company.
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(10)
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Company : BJ Services Company, U.S.A.
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(11)
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Compensation : For Eligible Employees who become Members, the
term “Compensation” shall have the same meaning
as is assigned to such term under the Thrift Plan except that a
Member’s Compensation (A) shall include amounts which he
could have received in cash in lieu of contributions made on his
behalf by the Employer to this Plan pursuant to Section 3.1
and Section 3.4(a), (B) for purposes other than for
Section 3.1(b), shall not be limited to the maximum amount of
compensation that can be considered by the Thrift Plan pursuant to
section 401(a)(17) of the Code and (C) shall include any
increases as a result of job transfers or wage rate changes during
the Plan Year. For Directors who become Members, the term
“Compensation” shall mean a Director’s
fees, including a Director’s annual retainer, meeting fees,
committee fees, and all other fees paid in cash for his services as
a Director, but excluding any reimbursements. All Compensation is
limited to those amounts payable by an Employer for services
rendered after an Eligible Employee or Director first becomes
eligible to participate in the Plan and during the period through
which such participation continues.
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(12)
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Deferral
Account : An
individual account for each Member to which is credited and/or
vested, from and after the 409A Effective Date, amounts determined
in accordance with Article III of the Plan. Each Deferral Account
shall be divided into subaccounts to reflect (a) the
Member’s deferrals pursuant to Section 3.1 and/or
Section 3.3, (b) the Employer’s deferrals pursuant
to Section 3.2 and/or Section 3.4, and (c) the
allocation of net income or net loss equivalents thereto pursuant
to Section 3.6. Such subaccounts shall be further divided as
necessary to reflect the Member’s elections pursuant to
Article V.
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(13)
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Director : A non-employee member of the Board.
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(14)
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Effective
Date :
December 5, 2008 as to this restatement of the Plan, except as
otherwise indicated in specific provisions of the Plan. The Prior
Effective Date of the Plan was October 1, 2000, and the
original effective date of the Plan was December 1,
1990.
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(15)
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Eligible
Employee : Any
individual who is employed by an Employer.
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(16)
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Employer : The Company and any other entity that has been
designated to participate in the Plan pursuant to the provisions of
Article VIII.
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(17)
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ERISA : The Employee Retirement Income Security Act of
1974, as amended.
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(18)
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Excess
Compensation : For an
Eligible Employee who is a Member, Excess Compensation for a Plan
Year shall be equal to the amount by which the Member’s
Compensation for such year exceeds the maximum amount of
compensation that can be considered by the Thrift Plan for such
year pursuant to section 401(a)(17) of the Code.
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(19)
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Grandfathered Account
: An individual account for each
Member to which is credited all amounts, if any, deferred under the
Plan by or on behalf of such Member and vested prior to the 409A
Effective Date, plus all allocations of net income or net loss
equivalents on such amounts. From and after the 409A Effective
Date, a Member’s Grandfathered Account shall not be credited
with any Member’s deferrals pursuant to Section 3.1
and/or Section 3.3 or with any Employer’s deferrals
pursuant to Section 3.2 and/or Section 3.4, but such
Grandfathered Account shall be adjusted to reflect such
Grandfathered Account’s allocation of net income or net loss
equivalents thereto. Each Grandfathered Account shall be divided
into subaccounts to reflect (a) the Member’s deferrals
pursuant to Section 3.1 and/or Section 3.3, (b) the
Employer’s deferrals pursuant to Section 3.2 and/or
Section 3.4, (c) if applicable, a Member’s OSCA
Subaccount, and (d) the allocation of net income or net loss
equivalents thereto pursuant to Section 3.6. Such subaccounts
shall be further divided as necessary to reflect the Member’s
elections pursuant to Article V.
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(20)
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Fiscal
Year : The
Employer’s fiscal year, which is the twelve consecutive month
period commencing October 1 of each year.
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(21)
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Fund : The investment funds designated from time to
time for the deemed investment of Accounts pursuant to Article
IV.
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(22)
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Limitation : For each Plan Year, the dollar limitation in
effect under section 415(c)(1)(A) of the Code for such
year.
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(23)
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Member : Any Eligible Employee or Director who has
become a Member pursuant to Article II until such Eligible Employee
or Director ceases to be a Member pursuant to
Section 2.2.
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(24)
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Monthly
Excess Compensation :
A Member’s Monthly Excess Compensation for a Plan Year shall
be equal to one-twelfth of his Excess Compensation for such
year.
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(25)
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OSCA
Plan : The OSCA, Inc.
Amended and Restated Supplemental Deferred Compensation Plan, as in
effect on March 3, 2003.
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(26)
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OSCA
Subaccount : A
separate subaccount established under a Member’s
Grandfathered Account, to which amounts credited (and earnings
thereon) to any participant of the OSCA Plan under such plan were
transferred to the Plan effective as of March 3,
2003.
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(27)
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Plan : The BJ Services Deferred Compensation Plan, as
amended from time to time.
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(28)
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Plan
Year : The twelve
consecutive month period commencing January 1 of each
year.
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(29)
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Prior
Effective Date :
October 1, 2000. The original effective date of the Plan was
December 1, 1990.
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(30)
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Separation from Service
: A Member’s separation from
service with the Employer and its Affiliates within the meaning of
section 409A(a)(2)(A)(i) of the Code (and applicable administrative
guidance issued thereunder).
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(31)
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Thrift
Plan : The BJ
Services Retirement Thrift Plan, as amended from time to
time.
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(32)
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Trust : The trust established for the Plan under the
Trust Agreement.
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(33)
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Trust
Agreement : The
agreement entered into between the Company and the Trustee
establishing the Trust.
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(34)
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Trust
Fund : The funds and
properties held pursuant to the provisions of the Trust Agreement,
together with all income, profits, and increments
thereto.
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(35)
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Trustee : The trustee or trustees qualified and acting
under the Trust Agreement at any time.
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(36)
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Unforeseeable Financial Emergency
: A severe financial hardship of the
Member resulting from an illness or accident of the Member or the
Member’s spouse, beneficiary, or dependent (within the
meaning of section 152 of the Code, but without regard to sections
152(b)(1), (b)(2), and (d)(1)(B) of the Code); loss of the
Member’s property due to casualty (including the need to
rebuild a home following damage to a home not otherwise covered by
insurance); or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of
the Member, each as determined by the Committee in accordance with
Treasury regulation section 1.409A-3(i)(3).
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(37)
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Valuation
Dates : Each day that
the New York Stock Exchange is open for business.
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1.2 Number and
Gender . Wherever
appropriate herein, words used in the singular shall be considered
to include the plural and the plural to include the singular. The
masculine gender, where appearing in this Plan, shall be deemed to
include the feminine gender.
1.3 Headings
. The headings of Articles and
Sections herein are included solely for convenience and if there is
any conflict between such headings and the text of the Plan, the
text shall control.
II.
PARTICIPATION
2.1 Eligibility
. On or after the Prior Effective
Date, the Chairman, in his sole discretion, shall select and notify
in writing those Eligible Employees of the Employer who shall
become Members. If an Eligible Employee who was a Member prior to a
termination of employment with the Employer is rehired, such
Eligible Employee shall become a Member only if such Eligible
Employee is again selected to participate in the Plan by the
Chairman. Effective as of January 1, 2009, Directors
automatically shall be eligible to participate.
2.2 Cessation of Active
Participation .
Notwithstanding any provision herein to the contrary, an Eligible
Employee who has become a Member of the Plan shall cease to be an
active participant in the Plan upon the earlier of (a) the
first day of the Plan Year following the date the Chairman notifies
the Eligible Employee he is no longer eligible to participate in
the Plan or (b) the date he incurs a Separation from Service.
A Director who is a Member of the Plan shall cease to be an active
participant in the Plan upon the date he incurs a Separation from
Service.
III.
DEFERRALS
AND
ALLOCATIONS OF INCOME OR LOSS
EQUIVALENTS
3.1 Member
Deferrals .
(a) An Eligible Employee who is a
Member may elect to defer receipt of an integral percentage from 1%
to 100% of his Excess Compensation for a Plan Year.
(b) An Eligible Employee who is a
Member and who makes the maximum Cash or Deferred Contributions
allowable under the Thrift Plan may elect to defer receipt of
amount not to exceed 20% of his Compensation, less his Cash or
Deferred Contributions to the Thrift Plan, for a Plan
Year.
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(c) An Eligible Employee who is a
Member may elect to defer receipt of an amount of his Compensation
for a Plan Year equal to the amount of the Member’s Cash or
Deferred Contributions under the Thrift Plan distributed from the
Thrift Plan during such Plan Year as a result of the limitations
contained in section 401(k)(3) of the Code.
(d) Effective January 1, 2009,
a Director who is a Member may elect to defer receipt of an
integral percentage from 1% to 100% of his Compensation for a Plan
Year.
(e) A Member’s election to
defer receipt of an amount of his Compensation pursuant to this
Section shall be made by executing and filing with the Employer the
forms prescribed by the Committee. If a Member makes a deferral
election for a Plan Year, a corresponding reduction shall be made
to his Compensation during such Plan Year. Compensation for a Plan
Year not deferred pursuant to this Section shall be received by
such Member in cash.
(f) A Member’s election to
defer receipt of a portion of his Compensation shall become
effective as of the first day of the Plan Year that begins after
the election is executed by the Member and filed with the Employer.
Notwithstanding the foregoing, if an Eligible Employee or Director
initially becomes a Member other than on the first day of a Plan
Year, such Member’s election to defer receipt of a portion of
his Compensation for such Plan Year may be made no later than 30
days after he becomes a Member, but such election shall be
prospective only and apply only with respect to Compensation paid
for services to be performed following the election. A
Member’s election shall remain effective as
follows:
(1) Except as otherwise provided in
Paragraph (2) below, a Member’s election shall remain in
force and effect for the entire Plan Year (or portion thereof) to
which such election relates and shall be irrevocable for such Plan
Year.
(2) If permitted in accordance with
the administrative procedures implemented by the Committee, the
Committee may establish procedures to provide that a Member’s
election to defer a portion of his Compensation will remain in
force and effect for more than one Plan Year following the date of
its execution until modified or terminated by the Member, in which
case a Member’s election will cease to apply effective as of
the earlier of the first day of the Plan Year following the close
of the Plan Year in which such election is permitted to remain
effective or the date of the Member’s Separation from
Service. Under such procedures, (i) a Member who has elected
to defer a portion of his Compensation may change his deferral
election (within the limits set forth above in this
Section 3.1), effective as of the first day of any subsequent
Plan Year, by executing and delivering to the Employer a new
election within the time period prescribed by the Committee (which
period shall end no later than the day preceding the first day of
such subsequent Plan Year); (ii) a Member may cancel his
election to defer receipt of a portion of his Compensation,
effective as of the first day of any subsequent Plan Year, by
executing and delivering to the Employer the form prescribed by the
Committee within the time period prescribed by the Committee; and
(iii) a Member who so cancels his election may again elect to
defer a portion of his Compensation,
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effective as of the first day of any
subsequent Plan Year, by executing and delivering to the Employer a
new election within the time period prescribed by the Committee
(which period shall end no later than the day preceding the first
day of such subsequent Plan Year).
3.2 Employer
Deferrals .
(a) For each calendar month, the
Employer shall credit a Deferral Account of a Member who is an
Eligible Employee as follows:
(1) Effective January 1, 2009,
for each calendar month, the Employer shall credit a Deferral
Account of a Member who is an Eligible Employee with an amount
which equals 100% of the deferrals made pursuant to
Section 3.1(a) on behalf of such Member during such month not
in excess of 6% of such Member’s Excess Compensation for the
payroll periods in such month with respect to which deferrals
pursuant to Section 3.1(a) were made. Further, for each
calendar month, the Employer shall credit a Member’s Deferral
Account with an amount which equals 100% of the deferrals made
pursuant to Section 3.1(b) on behalf of such Member during
such month not in excess of 6% of such Member’s Compensation
for the payroll periods in such month with respect to which
deferrals pursuant to Section 3.1(b) were made.
(2) Prior to January 1, 2009,
for each calendar month, the Employer shall credit a Deferral
Account of a Member who is an Eligible Employee with an amount
which equals 50% of the deferrals made pursuant to
Section 3.1(a) on behalf of such Member during such month not
in excess of 6% of such Member’s Excess Compensation for the
payroll periods in such month with respect to which deferrals
pursuant to Section 3.1(a) were made. Further, for each
calendar month, the Employer shall credit a Member’s Deferral
Account with an amount which equals 50% of the deferrals made
pursuant to Section 3.1(b) on behalf of such Member during
such month not in excess of 6% of such Member’s Compensation
for the payroll periods in such month with respect to which
deferrals pursuant to Section 3.1(b) were made.
(b) For each Plan Year, the Employer
shall credit a Deferral Account of a Member who is an Eligible
Employee with an amount equal to the amount forfeited by such
Member under the Thrift Plan during such Plan Year as a result of
the limitations contained in sections 401(k)(3) or 401(m)(2) of the
Code.
(c) For each calendar month, the
Employer shall also credit an additional amount to the Deferral
Account of each Member who is an Eligible Employee and who is
entitled to an allocation of Employer Base Contributions under the
Thrift Plan for such month. The amount credited each month shall be
a percentage of such Member’s Monthly Excess Compensation, if
any, with such percentage being equal to the percentage utilized
under the Thrift Plan to determine the Member’s Employer Base
Contribution for such month under such plan.
(d) For each calendar month, the
Employer shall also credit an additional amount to the Deferral
Account of each Member who is an Eligible Employee and who is
entitled to an allocation of Employer Supplemental Base
Contributions under the Thrift Plan for such month. The
amount
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credited each month shall be a percentage of
such Member’s Monthly Excess Compensation, if any, with such
percentage being equal to the percentage utilized under the Thrift
Plan to determine the Member’s Employer Supplemental Base
Contribution for such month under such plan.
(e) Notwithstanding any provision of
the Plan to the contrary, amounts credited to a Member’s
Deferral Account pursuant to Paragraph (c) and/or Paragraph
(d) above shall become nonforfeitable in the same manner as
amounts allocated to the Member’s Employer Non-Matching
Accounts under the Thrift Plan. Therefore, if any portion of a
Member’s Employer Non-Matching Accounts under the Thrift Plan
is forfeited for any reason, a corresponding portion of the amounts
credited to the Member’s Deferral Account pursuant to
Paragraph (c) and/or Paragraph (d) above shall be debited
from such Deferral Account.
3.3 Member Deferrals
Attributable to Bonus .
(a) A Member who is an Eligible
Employee may elect to defer receipt of an integral percentage of
from 1% to 100% of his Bonus for any Fiscal Year under the Plan. A
Member’s election to defer receipt of a portion of his Bonus
under the Plan shall be made by executing and filing with the
Employer the forms prescribed by the Committee prior to the first
day of the Plan Year that begins immediately following the first
day of the Fiscal Year during which such Bonus is earned (or such
other date prescribed by the Committee that complies with section
409A of the Code and administrative guidance issued thereunder),
provided that (1) the Member performs services continuously
from the later of the beginning of the performance period or the
date the performance criteria are established through the date such
election is made, and (2) no election is made after such Bonus
has become readily ascertainable within the meaning of Treasury
regulation section 1.409A-2(a)(8). Such election shall become
irrevocable on the required election date described above. A
Member’s deferral election pursuant to this Section shall be
effected at the time such Bonus is paid. Bonus for a Fiscal Year
not deferred pursuant to this Section shall be received by such
Member in cash.
(b) Notwithstanding the foregoing,
if an Eligible Employee initially becomes a Member other than on a
date on which a Member’s deferral election attributable to
Bonus is required to be filed, as prescribed under
Section 3.3(a), such Member’s election to defer receipt
of a portion of his Bonus for that Fiscal Year may be made no later
than 30 days after he becomes a Member, provided that the election
shall be prospective only and apply only with respect to the
portion of the Bonus that is paid for services to be performed
following the election, which amount shall be determined in
accordance with Treasury regulation section
1.409A-2(a)(7).
3.4 Deferrals for Members
Whose Annual Additions under the Thrift Plan Equal the
Limitation .
(a) For each calendar month in which
the Employer determines that a Member’s Annual Additions
under the Thrift Plan equal the Limitation in effect for the Plan
Year in which such month occurs, the Employer shall reduce such
Member’s Basic Compensation by the amount by which such
Member’s Cash or Deferred Contributions and/or Voluntary
Contributions to the Thrift Plan must be reduced solely in order
for such member’s Annual Additions under the Thrift Plan to
equal such Limitation. The amount by which a Member’s Basic
Compensation is reduced pursuant to this
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Paragraph shall be (1) determined based
upon the Member’s elections in effect at the relevant times
under the Thrift Plan with respect to Cash or Deferred
Contributions and/or Voluntary Contributions and (2) credited
to such Member’s Deferral Account under the Plan.
(b) For each calendar month in which
the Employer determines that a Member’s Annual Additions
under the Thrift Plan equal the Limitation in effect for the Plan
Year in which such month occurs, the Employer shall also credit
such Member’s Deferral Account with an amount equal to the
excess of:
(1) the amount of Employer
contributions which would have been allocated to the accounts of
such Member under the Thrift Plan (other than to his Deferred
Income Account) for such month if the provisions of the Thrift Plan
were administered without regard to the limitations imposed by
section 415(c) of the Code on the amount of Annual
Additions,
OVER
(2) the amount of Employer
contributions which were in fact allocated to the accounts of such
Member under the Thrift Plan (other than to his Deferred Income
Account) for such month.
For purposes of determining the
amount of Employer Matching Contributions which would have been
allocated to the account of a Member under the Thrift Plan, the
contributions to the Plan on a Member’s behalf pursuant to
Paragraph (a) above shall be deemed to have been made to the
Thrift Plan. Notwithstanding any provision of the Plan to the
contrary, amounts credited to a Member’s Deferral Account
pursuant to this Paragraph (other than amounts representing reduced
allocations of Employer Matching Contributions under the Thrift
Plan) shall become nonforfeitable in the same manner as amounts
allocated to the Member’s Employer Non-Matching Accounts
under the Thrift Plan. Therefore, if any portion of a
Member’s Employer Non-Matching Accounts under the Thrift Plan
is forfeited for any reason, a corresponding portion of the amounts
credited to the Member’s Deferral Account pursuant to this
Paragraph (other than amounts representing reduced allocations of
Employer Matching Contributions under the Thrift Plan) shall be
debited from such Deferral Account.
3.5 Payments to
Trustee . The
Employer shall pay an amount equal to the deferrals under the Plan
directly to the Trustee as soon as practicable. On or about the
date of any such payment, the Committee shall be informed as to the
amount of such payment. Deferrals made by a Member or on the
Member’s behalf shall be credited to the Member’s
Deferral Account as received by the Trustee.
3.6 Allocation
of
