EXHIBIT NO. 10.23
ENERGY SERVICE COMPANY, INC.
SELECT EXECUTIVE RETIREMENT PLAN
This Select Executive Retirement Plan (the "Plan") is made and entered
into by Energy Service Company, Inc., a Delaware corporation (the
"Company") this 27th day of February 1995, effective as of April 1, 1995.
ARTICLE I
PURPOSE; FINANCING PLAN BENEFITS
1.1 Purpose. The purpose of this Plan is to provide a select group
of management or highly compensated Employees of the Company and any
Employer who, with the consent of the Company, adopts this Plan with
certain nonqualified deferred compensation benefits as described herein.
The Employer intends that the Plan shall constitute an "unfunded plan" for
purposes of the Code and Title I of ERISA, as amended, and that any
Participant or Beneficiary shall have the status of an unsecured general
creditor of the Employer as to the Plan and any trust fund that may be
established by the Employer, or asset identified specifically by the
Employer, as a reserve for the discharge of its obligations under the Plan.
1.2 Financing Plan Benefits. All Benefits under this Plan shall be
paid or provided directly by the Employer. Such Benefits shall be general
obligations of the Employer which shall not require the segregation of any
funds or property therefor. Notwithstanding the foregoing, in the
discretion of the Employer, the Employer's obligations hereunder may be
satisfied from a grantor trust established by the Employer, the terms of
which will be substantially similar to the terms of the model trust issued
by the Internal Revenue Service in Revenue Procedure 92-64, from an escrow
account established at a bank or trust company, or from an insurance
contract or contracts owned by the Employer. The assets of any such trust,
escrow account and any such insurance policy shall continue for all
purposes to be a part of the general funds of the Employer, shall be
considered solely a means to assist the Employer to meet its contractual
obligations under this Plan and shall not create a funded account or
security interest for the benefit of any Participant under this Plan. All
such assets shall be subject to the claims of the general creditors of the
Employer in the event the Employer is Insolvent. If a single trust or
other funding vehicle is established as a reserve for the obligations
hereunder of more than one Employer, the assets of any such trust or
funding vehicle shall, to the extent attributable to contributions made by
a particular Employer, be subject to the claims of the general creditors of
that Employer in the event such Employer is Insolvent, and each Employer
will be treated as a separate grantor to the extent of its participation in
any trust so established. To the extent that any person acquires a right
to receive a payment from an Employer under the Plan, such right shall be
no greater than the right of any unsecured general creditor of that
Employer. If a trust is established as provided for in this Section 1.2,
earnings and/or losses of the trust attributable to amounts credited to a
Participant's Account shall increase or, if applicable, decrease such
Participant's Account for purposes of determining the Participant's
Benefits payable hereunder.
ARTICLE II
DEFINITIONS
The following words and phrases when used in this Plan shall have the
respective meanings set forth below unless the context clearly indicates
otherwise:
2.1 ACCOUNT means the separate bookkeeping account established with
respect to each Participant to which his Benefits are credited in
accordance with Article IV hereof.
2.2 ADMINISTRATOR means the Board, except to the extent that the
Board has appointed another person or persons to serve as the Administrator
with respect to the Plan.
2.3 AFFILIATED COMPANY means the Company and other entity that is,
along with the Company, a member of the same controlled group of trades or
business [as defined in section 414(b) or (c) of the Code] as the Company.
2.4 ANNIVERSARY DATE means December 31, 1995 and each following
December 31 during the term of this Agreement.
2.5 BENEFICIARY means the person designated in writing by a
Participant pursuant to Section 5.4 to receive his Benefits in the event of
his death.
2.6 BENEFITS mean amounts representing Participant's Deferred
Compensation Elections described in Section 4.1, and the vested portion of
Employer Contributions described in Section 4.3 credited to each
Participant's Account, plus earnings thereon and less losses allocable
thereto, if any, attributable to the investment of such amounts, if
applicable pursuant to Section 1.2 hereof.
2.7 BOARD means the Board of Directors of the Company, or any
committee of the Board authorized to act on its behalf.
2.8 CODE means the Internal Revenue Code of 1986, as amended.
2.9 COMPENSATION means amounts paid to a Participant by the Employer
as base salary.
2.10 DEFERRED COMPENSATION means the amount credited to a
Participant's Account pursuant to a Participant's Deferred Compensation
Elections in accordance with Section 4.1 hereof.
2.11 DEFERRED COMPENSATION ELECTION means the election by a
Participant to defer his Compensation in accordance with Section 4.1.
2.12 DEFERRED COMPENSATION/PARTICIPATION AGREEMENT means the
individual agreement executed by each Participant under the Plan pursuant
to which the Participant designates a Beneficiary and makes his Deferred
Contribution Election.
2.13 DISABILITY means a Participant's disability which, in the opinion
of a physician approved by the Administrator, renders the Participant
unable to perform his normal duties for the Employer.
2.14 ELIGIBLE EMPLOYEE means an Employee who is selected by the Board
pursuant to Section 3.1 hereof as eligible to participate in the Plan.
2.15 EMPLOYEE means any person employed by an Employer who is on the
Employer's U.S. dollar payroll.
2.16 EMPLOYER means the Company and any other Affiliated Company, with
respect to its Employees, provided that the governing body of each such
Affiliated Company adopts the Plan on behalf of its Employees and
authorizes the execution of an agreement to participate in the Plan.
2.17 EMPLOYER CONTRIBUTIONS means amounts credited to a Participant's
Account pursuant to Section 4.3 hereof.
2.18 ERISA means the Employee Retirement Income Security Act of 1974,
as amended.
2.19 INSOLVENT means, with respect to each Employer, such Employer
being unable to pay its debts as they mature or being subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
2.20 NORMAL RETIREMENT AGE means the date a Participant attains age
65.
2.21 PARTICIPANT means an Eligible Employee who has elected to
participate in the Plan by executing a Deferred Compensation/Participation
Agreement in accordance with Section 4.1 hereof.
2.22 PERIOD OF SERVICE means, for each Employee eligible to
participate in the Plan on and after April 1, 1995, the period commencing
April 1, 1995 and ending December 31, 1995 and thereafter, the twelve-month
period ending each December 31. For an Employee who first becomes eligible
to participate in the Plan after April 1, 1995, his first Period of Service
shall commence on his eligibility date and shall end on the following
December 31st.
2.23 YEAR OF SERVICE means each calendar year during which an Employee
performs 1,000 hours of service for an Affiliated Company (and any other
entity, if the Employee's service with such entity would be recognized for
purposes of the ENSCO Savings Plan), including all Years of Service prior
to the effective date of the Plan.
ARTICLE III
ELIGIBILITY
3.1 ELIGIBILITY TO PARTICIPATE. The Board shall meet at least once
prior to each Period of Service during the term of this Agreement and
irrevocably specify the name of each Employee who shall be entitled to
participate in the Plan for the immediately following Period of Service.
In addition, the Board may meet during a Period of Service for the purpose
of designating an individual who has become an Employee during that Period
of Service as eligible to participate in the Plan for the remaining portion
of that Period of Service. An Employee shall be eligible to receive a
benefit hereunder if such Employee has been designated as an Eligible
Employee pursuant to this Section 3.1 and has entered into a Deferred
Compensation/Participation Agreement with the Employer in accordance with
Section 4.1 hereof. If the Board fails to designate an Employee as
eligible to participate in the Plan for a particular Period of Service and
such Employee was eligible to participate in the Plan for the immediately
preceding Period of Service, the Board shall notify the Employee in writing
of his ineligibility to participate in the Plan as soon as administratively
possible after making its decision regarding his eligibility.
3.2 CESSATION OF PARTICIPATION. A Participant will cease to be a
Participant as of the earlier of (i) the date on which the Plan terminates
or (ii) the date on which he ceases to be an Eligible Employee under
Section 3.1.
ARTICLE IV
PARTICIPATION, PLAN BENEFITS AND VESTING
4.1 PARTICIPATION ELECTION; DEFERRED COMPENSATION ELECTIONS. On or
prior to the effective date of the Plan, each Eligible Employee may elect
to defer up to 14% of his Compensation otherwise payable for the remainder
of the 1995 calendar year, reduced by the percentage of his Compensation
that he has elected to contribute to the ENSCO Savings Plan for the 1995
calendar year. Thereafter, prior to the beginning of each Period of
Service, an Eligible Employee may irrevocably elect to defer a percentage
of his Compensation payable for that Period of Service by executing a
Deferred Compensation/Participation Agreement in such form as the
Administrator shall prescribe. Prior to each Period of Service commencing
after December 31, 1995, the Board shall determine the maximum percentage
of Compensation that each Eligible Employee may elect to defer for the
immediately following Period of Service; provided, however, that a
Participant may not elect to defer a percentage of his Compensation for any
calendar year which, when aggregated with his elective salary deferrals
under the ENSCO Savings Plan, would exceed 10% of his Compensation for the
calendar year. Notwithstanding the preceding provisions of this Section
4.1, for the first Period of Service in which an Employee becomes eligible
to participate in the Plan, the Eligible Employee may elect within 30 days
after the date he is notified of his eligibility to participate in the Plan
to defer Compensation (up to such maximum percentage of Compensation
permitted by the Board for that Period of Service) with respect to
Compensation for services performed subsequent to the election. From time
to time during each Period of Service for which a Participant has executed
a Deferred Compensation/Participation Agreement, the Employer will credit
the amount of the Participant's Deferred Compensation to his Account. If
an Eligible Employee does not execute a Deferred Compensation/Participation
Agreement and elect to defer an amount of his Compensation, for a
particular Period of Service in accordance with this Section 4.1, he may
not participate in the Plan for that Period of Service. Thereafter, he may
elect to participate in the Plan with respect to future Periods of Service,
if he is then an Eligible Employee, by executing a Deferred
Compensation/Participation Agreement and irrevocably electing to defer a
percentage of his Compensation prior to any such future Period of Service.
4.2 PLAN BENEFITS. Subject to the vesting provisions of Section 4.4
hereof and the provisions of Article V, the Benefits to which a Participant
and, if applicable, his Beneficiary shall be entitled under the Plan will
consist of Deferred Compensation and Employer Contributions credited to
such Participant's Account, plus earnings thereon and less losses allocable
thereto, if any, attributable to the investment of such amounts pursuant to
Section 1.2 hereof.
4.3 EMPLOYER CONTRIBUTIONS. For each calendar year, the Employer will
credit each Participant's Account with amounts that represent Employer
Contributions equal to such percentage, as determined from time to time by
the Board under the ENSCO Savings Plan, of the Participant's Deferred
Compensation Election for that calendar year up to 6% of the Participant's
Compensation, reduced by the amount of employer matching contributions, if
any, made on behalf of the Participant to the ENSCO Savings Plan for that
calendar year. Amounts representing Employer Contributions shall be
determined and credited to each Participant's Account after first crediting
employer matching contributions to the Participant's account under the
ENSCO Savings Plan. The value of Employer Contributions credited to a
Participant's Account will be used, along with the Participant's Deferred
Compensation, to determine his Benefits as specified herein.
4.4 VESTING. In the event of a Participant's termination of
employment with the Employer, he will be entitled to receive:
(a) 100% of the portion of his Account attributable to his Deferred
Compensation, including the earnings thereon if such amounts are
invested pursuant to Section 1.2 hereof; and
(b) the vested portion of his Account attributable to Employer
Contributions, including the earnings thereon if such amounts are
invested pursuant to Section 1.2 hereof, determined as follows:
YEAR OF SERVICE VESTED PERCENTAGE
--------------- -----------------
less than 2 0
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
In addition, a Participant will become 100% vested in his Account
regardless of his Years of Service upon the occurrence, while employed by
an Employer, of his death or Disability, attainment of his Normal
Retirement Age or termination of the Plan.
ARTICLE V
DISTRIBUTIONS
5.1 PAYMENT OF BENEFITS. The amount credited to a Participant's
Account pursuant to Article IV hereof, to the extent vested pursuant to
Section 4.4, shall be payable to the Participant or, if applicable, to his
Beneficiary in accordance with the provisions of this Article V. If the
Employer has obtained life insurance policies as a reserve for the
discharge of its obligations under the Plan, the Employer acting through
its board of directors may, in its discretion, distribute any such policy
to a Participant when the Participant's Benefits become payable to satisfy
all or a portion of the Employer's obligation to the Participant hereunder.
Unless paid earlier pursuant to Section 5.2, payment of a Participant's
Benefit under the Plan shall commence in the form elected by the
Participant pursuant to Section 5.3 hereof within 30 days following the
Participant's death, Disability or other termination of employment with the
Employer.
5.2 TIMING OF CERTAIN PAYMENTS. Notwithstanding any other provision
of this Agreement to the contrary, the Board shall have the right to pay
Benefits to Participants prior to the time such Benefits otherwise would be
payable hereunder if the Board in good faith determines that either of the
following conditions or events has occurred:
(a) A change in circumstances relating to the operation of the Plan
or the taxation of Participants, arising from a change in the
federal or applicable state tax or revenue laws, a published
ruling or similar announcement by the Internal Revenue Service, a
regulation issued by the Secretary of the Treasury, a change in
securities laws or regulations, the issuance of an advisory
opinion, regulation or other published position by the Department
of Labor, or a change in accounting requirements which causes (i)
Participants to be taxable on their Benefits prior to the time
Benefits otherwise would be payable hereunder, (ii) the Plan to
be considered as funded for purposes of Title I of ERISA, or
(iii) a material change regarding the tax or financial accounting
consequences of maintaining the Plan to the Employer.
(b) An unforeseeable emergency of the Participant. An unforeseeable
emergency is a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the
Participant or a dependent (as defined in Section 152(a) of the
Code) of the Participant, loss of the Participant's property due
to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of
the Participant. An unforeseeable emergency will not exist,
however, if the emergency may be relieved through reimbursement
or compensation by insurance or otherwise, or by liquidation of
the Participant's assets, to the extent the liquidation of such
assets would not itself cause a severe financial hardship. In
addition, an unforeseeable emergency will not exist, as a result
of the Participant's need to send a child to college or desire to
purchase a home. The amount distributed to a Participant on
account of an unforeseeable emergency may not exceed the amount
reasonably necessary to satisfy such emergency.
5.3 FORM OF PAYMENT. Each Participant may elect on his Deferred
Compensation/Participation Agreement whether his Benefits will be paid in
the form of a single sum payment or substantially equal monthly
installments over a period of 60 months. Such election may not be changed
by the Participant during the one-year period ending on the date on which
payment of his Benefits commence or at any time thereafter. If a
Participant has not elected a form of payment for his Benefits pursuant to
this Section 5.3, the Participant's Benefits will be paid in a single sum
payment. If such Participant is receiving installment payments hereunder
and dies prior to the payment of all monthly installments, the remaining
portion of the Participant's Benefits will continue to be paid in monthly
installments to his Beneficiary for the remaining installment period in the
same amount and manner as they would have been paid to the Participant.
5.4 DESIGNATION OF BENEFICIARY. Each Participant must designate a
Beneficiary to receive his Benefits in the event of his death, by
completing his Deferred Compensation/Participation Agreement and filing it
with the Administrator. The Administrator will recognize the most recent
written Beneficiary designation on file prior to a Participant's death. If
a designated Beneficiary is not living at the time of the Participant's
death, then the Administrator will pay Participant's Benefits to the
Participant's personal representative, executor, or administrator, as
specified by the appropriate legal jurisdiction. Any such payment to the
Participant's Beneficiary or, if applicable, to his personal
representative, executor or administrator shall operate as a complete
discharge of all obligations of the Administrator and the Employer to the
extent of the payment so made.
ARTICLE VI
PLAN ADMINISTRATION
6.1 AUTHORITY OF THE ADMINISTRATOR. The Administrator shall have
full power and authority to interpret, construe and administer the Plan.
The Administrator's interpretation and construction hereof, and actions
hereunder, including any determination of the amount or recipient of any
payment to be made under the Plan, shall be binding and conclusive on all
persons and for all purposes. In addition, the Administrator may employ
attorneys, accountants, and other professional advisors to assist the
Administrator in its administration of the Plan. The Company shall pay the
reasonable fees of any such advisor employed by the Administrator. To the
extent permitted by law, the Administrator, any member of the Board and any
employee of an Employer shall not be liable to any person for any action
taken or omitted in connection with the interpretation and administration
of the Plan unless attributable to his own wilful misconduct or lack of
good faith.
6.2 CLAIMS PROCEDURE. The Administrator shall be responsible for
administering claims for Benefits under the Plan pursuant to the procedures
contained in this Section 6.2.
(a) In the event that Benefits are not paid to a Participant (or to
his Beneficiary in the case of the Participant's death) and such
claimant believes he is entitled to receive Benefits, then a
written claim must be made to the Administrator within sixty days
from the date payments are refused. The Administrator will review
the written claim, and if the claim is denied in whole or in
part, the Administrator will provide in writing within ninety
days of receipt of the claim the specific reasons for such
denial, reference to the pertinent provisions of the Plan upon
which the denial is based, and a description of any additional
material or information necessary to perfect the claim. Such
written notice will further indicate the additional steps to be
taken by the claimant if a further review of the claim denial is
desired, including a statement that the claimant may (i) request
a review upon written application to the Administrator,
(ii) review pertinent plan documents, and (iii) submit issues
and comments in writing. If notice of the denial is not
furnished in accordance with the above procedure, the claim shall
be deemed denied and the claimant shall be permitted to proceed
with the review procedure described in paragraph (b) below. A
claim will be deemed denied if the Administrator fails to take
any action within the said ninety-day period.
(b) A request by the claimant for a review of the denied claim must
be delivered to the Administrator within sixty days after receipt
by such claimant of written notification of the denial of such
claim (or the date that the claim is deemed denied). The
Administrator shall, not later than sixty days after receipt of a
request for a review, make a determination concerning the claim.
A written statement stating the decision on review, the specific
reasons for the decision, and the specific provisions of the Plan
on which the decision is based shall be mailed or delivered to
the claimant within such sixty day period. If the decision on
review is not furnished within the appropriate time, the claim
shall be deemed denied on review.
All communications from the Administrator to the claimant shall be written
in a manner calculated to be understood by the claimant. All
interpretations, determinations and decisions by the Administrator in
respect of any matter hereunder will be final, conclusive, and binding upon
the Employer, Participants, Beneficiaries, and all other persons claiming
an interest in the Plan.
6.3 COST OF ADMINISTRATION. The cost of this Plan and the expenses
of administering the Plan shall be paid by the Employer.
6.4 LIMITATIONS ON PLAN ADMINISTRATION. No person to whom
discretionary authority is granted hereunder shall vote or act upon any
matter involving his own rights, benefits or participation in the Plan.
ARTICLE VII
AMENDMENT AND TERMINATION
7.1 AMENDMENT. The Board shall have the right to amend this Plan at
any time and from time to time, including a retroactive amendment. Any
such amendment shall become effective upon the date stated therein, and
shall be binding on all Employers then participating in the Plan, except as
otherwise provided in such amendment; provided, however, that no such
action shall affect any Benefit adversely to which a Participant would be
entitled had his employment been terminated immediately before such
amendment was effective.
7.2 TERMINATION OF THE PLAN. The Company has established this Plan
with the bona fide intention and expectation that from year to year it will
deem it advisable to continue it in effect. However, the Board, in its sole
discretion, reserves the right to terminate the Plan in its entirety at any
time; provided, however, that no such action shall affect any Benefit
adversely to which a Participant would be entitled had his employment been
terminated immediately before such termination was effective.
ARTICLE VIII
GENERAL PROVISIONS
8.1 RIGHTS AGAINST EMPLOYER. The Plan shall not be deemed to be a
consideration for, or an inducement for, the employment of any Employee by
the Employer. Nothing contained in the Plan shall be deemed to give any
Employee the right to be retained in the service of the Employer or to
interfere with the right of the Employer to discharge any Employee at any
time, without regard to the effect such discharge may have on any rights
under the Plan.
8.2 ACTION TAKEN IN GOOD FAITH. To the extent permitted by ERISA,
the Administrator and each employee, officer and director of an Affiliated
Company who have duties and responsibilities with respect to the
establishment or administration of the Plan shall be fully protected with
respect to any action taken or omitted to be taken by them in good faith.
8.3 INDEMNIFICATION OF EMPLOYEES AND DIRECTORS. The Company hereby
indemnifies the Administrator and each employee, officer and director of an
Affiliated Company to whom responsibilities are delegated under the Plan
against any and all liabilities and expenses, including attorney's fees,
actually and reasonably incurred by them in connection with any threatened,
pending or completed legal action or judicial or administrative proceeding
to which they may be a party, or may be threatened to be made a party, by
reason of any delegation of responsibilities hereunder, except with regard
to any matters as to which they shall be adjudged in such action or
proceeding to be liable for gross negligence or willful misconduct in
connection therewith.
8.4 PAYMENT DUE AN INCOMPETENT. If the Administrator shall find that
any person to whom any payment is payable under the Plan is unable to care
for his affairs because of mental or physical illness, accident, or death,
or is a minor, any payment due (unless a prior claim therefor shall have
been made by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, a child, a parent, a brother or
sister or any person deemed by the Administrator, in its sole discretion,
to have incurred expenses for such person otherwise entitled to payment, in
such manner and proportions as the Administrator may determine. Any such
payment shall be a complete discharge of the liabilities of the Employer
under this Plan, and the Employer shall have no further obligation to see
to the application of any money so paid.
8.5 SPENDTHRIFT CLAUSE. No right, title or interest of any kind in
the Plan shall be transferable or assignable by any Participant or
Beneficiary or be subject to alienation, anticipation, encumbrance,
garnishment, attachment, execution or levy of any kind, whether voluntary
or involuntary, nor subject to the debts, contracts, liabilities,
engagements, or torts of the Participant or Beneficiary. Any attempt to
alienate, anticipate, encumber, sell, transfer, assign, pledge, garnish,
attach or otherwise subject to legal or equitable process or encumber or
dispose of any interest in the Plan shall be void.
8.6 SEVERABILITY. In the event that any provision of this Plan shall
be declared illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but shall
be fully severable and this Plan shall be construed and enforced as if said
illegal or invalid provision had never been inserted herein.
8.7 CONSTRUCTION. The article and section headings and numbers are
included only for convenience of reference and are not to be taken as
limiting or extending the meaning of any of the terms and provisions of
this Plan. Whenever appropriate, words used in the singular shall include
the plural or the plural may be read as the singular. When used herein,
the masculine gender includes the feminine gender.
8.8 GOVERNING LAW. The validity and effect of this Plan, and the
rights and obligations of all persons affected hereby, shall be construed
and determined in accordance with the laws of the State of Texas unless
superseded by federal law.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed as of
the day and year first above written.
ENERGY SERVICE COMPANY, INC.
By: /S/ WILLIAM S. CHADWICK, JR.
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