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EXHIBIT 10.8
BURLINGTON RESOURCES INC.
SUPPLEMENTAL BENEFITS PLAN
As Amended and Restated Effective October 1, 1994
(Originally Effective January 1, 1989)
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BURLINGTON RESOURCES INC.
SUPPLEMENTAL BENEFITS PLAN
Table of Contents
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Page
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Section 1 Definitions . . . . . . . . . . . 1
Section 2 Administration . . . . . . . . . . 3
Section 3 Participants . . . . . . . . . . . 4
Section 4 Benefits . . . . . . . . . . . . . 4
Section 5 General Provisions . . . . . . . . 11
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BURLINGTON RESOURCES INC.
SUPPLEMENTAL BENEFITS PLAN
PREAMBLE
WHEREAS, Burlington Resources Inc. ("the Company") established the
Burlington Resources Inc. Supplemental Benefits Plan ("the Plan") effective
January 1, 1989 in order for the Company to attract and retain exceptional
employees; and
WHEREAS, the Company amended and stated the Plan as of January 1, 1990
and desires to amend and restate the Plan to effect certain changes;
NOW, THEREFORE, the Company does hereby amend and restate the Plan as
set forth herein, effective October 1, 1994.
SECTION 1
DEFINITIONS
For purposes of the Plan, the following terms shall have the meanings
indicated:
1.1 Beneficiary means the person(s) designated by a Participant, on a
form provided by the Management Committee and filed with the
Company's Human Resources Department, to receive benefits from the
Plan in the event of his or her death. A Participant may change his
or her beneficiary designation at any time. If no designated
Beneficiary survives the Participant, the Beneficiary shall be the
Participant's surviving spouse or, if none, his or her estate.
1.2 Board means the Board of Directors of the Company.
1.3 Code means the Internal Revenue Code of 1986, as amended.
1.4 Company means Burlington Resources Inc., a Delaware corporation.
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1.5 Company Stock Account means a notional subaccount of a Memorandum
Account credited with Phantom Stock, as provided in Section 4.5.
1.6 Deferred Compensation Plans means the Burlington Resources Inc.
Deferred Compensation Plan, the Company's Incentive Compensation
Plan and other similar plans maintained by an Employer and such
additional deferred compensation plans as may be designated by the
Company from time to time.
1.7 Employer means the Company and its subsidiaries.
1.8 Fair Market Value means, as applied to a specific date, the mean
between the highest and lowest quoted selling prices at which the
common stock of the Company was sold on such date as reported in the
NYSE Corporate Transactions by The Wall Street Journal on such date
or, if no Company common stock was traded on such date, on the next
preceding day on which its common stock was so traded.
1.9 Interest Account means a notional subaccount of a Memorandum Account
credited with interest, as provided in Section 4.5.
1.10 Management Committee means the committee appointed pursuant to
Section 2.1 to administer the Plan.
1.11 Participant means each employee who participates in the Plan in
accordance with Section 3.
1.12 Pension Plan means the Burlington Resources Inc. Pension Plan and
any pension plans maintained by an Employer.
1.13 Permanent Disability means the Management Committee has found, upon
the basis of medical evidence satisfactory to it, that a Participant
is totally disabled, whether due to physical or mental condition, so
as to be prevented from engaging in further full-time employment by
the Employers and that such disability is reasonably expected to be
permanent or long-term.
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1.14 Phantom Stock means a phantom or notional share of common stock of
the Company. A Participant shall not possess any rights of a
stockholder of the Company with respect to a share of Phantom Stock,
including, without limitation, rights concerning voting and
dividends. A share of Phantom Stock shall be payable solely in cash
under the Plan.
1.15 Plan means the Burlington Resources Inc. Deferred Compensation Plan
either in its previous or present form or as amended from time to
time.
1.16 RSP means the Burlington Resources Inc. Retirement Savings Plan.
1.17 Surviving Spouse means the person to whom surviving spouse death
benefits are to be paid pursuant to the terms of the Pension Plan.
1.18 Termination means a Participant's termination of employment with the
Employers, including by reason of death or retirement, but excluding
by reason of Permanent Disability.
SECTION 2
ADMINISTRATION
2.1 Management Committee. The Plan shall be administered by a
management committee (the Management Committee") consisting of such executives
of the Company as the Chief Executive Officer of the Company shall designate.
Subject to review by the Compensation and Nominating Committee of the Company's
Board of Directors, the Management Committee shall have the complete authority
and power to interpret the Plan, prescribe, amend and rescind rules relating to
its administration, select eligible Participants, determine a Participant's (or
Surviving Spouse's or Beneficiary's) right to a payment and the amount of such
payment, and to take all other actions necessary or desirable for the
administration of the Plan. All actions and decisions of the Management
Committee shall be final and binding upon all Participants, Surviving Spouses
and Beneficiaries. No member
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of the Management Committee shall vote on any matter that pertains solely to
himself or herself.
SECTION 3
PARTICIPANTS
3.1 Participants. The Management Committee shall determine and
designate the executives of the Company and other key employees of the
Employers who are eligible to receive benefits under the Plan (the
Participants"). Participants will be limited to those employees who, because
of their management or staff positions, have the principal responsibility for
the management, direction and success of the Company as a whole or a subsidiary
or a particular business unit thereof. Directors of the Company who are
full-time executives of the Company shall be eligible to participate in the
Plan. Each Participant must be a "member of a select group of management" or
"highly compensated," as those terms are defined in Section 201(2) of the
Employee Retirement Income Security Act of 1974, as amended.
SECTION 4
BENEFITS
4.1 Supplemental Pension Benefits. Upon a Participant's Termination,
the Company shall pay or cause to be paid to such Participant (or his or her
Surviving Spouse in the case of his or her death) supplemental pension benefits
under this Plan which, when combined with the amounts he or she is entitled to
receive under the Pension Plan, shall equal the retirement or Surviving Spouse
death benefits which would have been payable to the Participant or his or her
Surviving Spouse had the Pension Plan's benefit formula been applied:
(a) without regard to any of the limitations of Section 415
of the Code,
(b) by including in the Participant's compensation during the
period for which the Pension Plan benefits are computed,
to the extent not already done so under the Pension Plan,
any amount that has not
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been taken into account due to (i) the limitations of
Section 401(a)(17) of the Code, (ii) an elective reduction
of compensation by the Participant under Section 125 or
401(k) of the Code or (iii) the deferral of compensation
under a Deferred Compensation Plan, and
(c) by taking into account any service granted to the
Participant and any benefit formula adjustments required
by an employment contract with the Employer.
Supplemental pension benefits under this Section 4.1 shall be vested and
nonforfeitable to the same extent that the related benefits under the Pension
Plan are vested and nonforfeitable.
4.2 Supplemental RSP Benefits. Upon a Participant's Termination or
Permanent Disability, the Company shall pay or cause to be paid to such
Participant (or his or her Beneficiary in the case of his or her death)
supplemental RSP benefits calculated as described below. The Company shall
periodically determine the amount of any additional Employer matching
contributions that would have been credited to a Participant's account under
the RSP if his or her current election of Participant contributions had been
given effect and no adjustment of such contributions had occurred due to
(a) the maximum dollar limit under Section 415(c)(1)(A) of the
Code on RSP annual additions,
(b) the maximum limit under Section 401(a)(17) of the Code on
the Participant's compensation taken into account under
the RSP, and
(c) any further reductions in the Participant's compensation
taken into account under the RSP as a result of any
deferrals of compensation (i) elected by the Participant
pursuant to Section 125 or Section 401(k) of the Code or
(ii) under a Deferred Compensation Plan.
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From time to time, as determined by the Management Committee, the
Company shall allocate amounts equal to such additional Employer matching
contributions ("Employer Matching Contributions") to a notional ledger account
(the "Memorandum Account") for the Participant as of the time or times that
such amounts would have been contributed to the RSP if permitted thereunder.
Supplemental RSP benefits under this Section 4.2 shall be vested and
nonforfeitable to the same extent that the related Employer matching
contributions under the RSP are vested and nonforfeitable.
4.3 Other Supplemental Benefits. Upon a Participant's Termination or
Permanent Disability, the Company shall pay or cause to be paid to such
Participant (or his or her Beneficiary in the case of his or her death) other
supplemental benefits as determined by the Management Committee and contained
in the Participant's employment contract or other agreement with the Employer.
Other supplemental benefits under this Section 4.3 shall be vested and
nonforfeitable to the extent provided in the applicable employment contract or
agreement.
4.4 Determination of Lump Sum Supplemental Pension Benefit Payments.
The amount of a lump sum payment of supplemental pension benefits to a
Participant (or his or her Surviving Spouse in the event of the Participant's
Termination on account of death) shall be determined by calculating the benefit
according to the terms of the Pension Plan as a whole life annuity, then
calculating the present value of such benefit, using the actuarial assumptions
specified in the Pension Plan for determining benefits of equivalent value
except, in lieu of the Pension Benefit Guaranty Corporation ("PBGC") rates for
calculating lump sums specified in the Pension Plan, the interest rate shall be
the immediate PBGC rate in effect on January 1 of the year in which the lump
sum payment becomes payable (or such other date during such year as the
Management Committee, in its sole discretion, may designate).
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4.5 Investment of Accounts. Except as provided below, each
Memorandum Account shall accrue interest on the phantom Employer Matching
Contributions credited to such Account from such date of crediting through the
date of the distribution of such account. Such interest shall be credited to
the Memorandum Account at the end of each calendar quarter or such other
periods as may be determined by the Management Committee. The Management
Committee shall determine, in its sole discretion, the rate of interest to be
credited periodically to the Memorandum Accounts.
With respect to any year beginning after 1993, a Participant may
irrevocably request that the Management Committee credit all or a specified
percentage of his or her Employer Matching Contributions for that year in
shares of Phantom Stock; however, the Management Committee shall not be
obligated to honor any such Participant's request. If the Management Committee
elects to honor any such request, it shall establish a separate notional
subaccount for such Participant under his or her Memorandum Account, which
shall be credited with whole and fractional shares of Phantom Stock
periodically as of the payroll dates as of which the Employer Matching
Contributions for such year are to be credited, and phantom (notional)
dividends with respect to the credited Phantom Stock, which shall be credited
as being reinvested in additional shares of Phantom Stock (the "Company Stock
Account"). All credits and debits to the Company Stock Account shall be made
based on the Fair Market Value per share of the Company's common stock on the
applicable date. If the Management Committee chooses to not honor any such
Participant's request to invest his or her Memorandum Account in shares of
Phantom Stock, the Participant's Employer Matching Contributions automatically
shall be credited with interest.
4.6 Special Phantom Stock Investment Elections. Each Participant who
has a Memorandum Account under the Plan on October 1, 1994 (including with
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respect to Employer Matching Contributions credited or to be credited in 1994)
shall be given a one-time irrevocable election to request that all or a
specified percentage of his or her Memorandum Account as of that date, as
elected by the Participant, be invested in the Company Stock Account; however,
the Management Committee shall not be obligated to honor any such request.
This election shall be in such form as the Management Committee shall
establish, and must be made prior to October 1, 1994.
4.7 Change in Section 16(b) Rules. Notwithstanding anything in the
Plan to the contrary, if the rules promulgated under Section 16(b) of the
Securities Exchange Act of 1934, as amended, are amended or interpreted by the
Securities and Exchange Commission to permit "insiders" to make investment
changes with respect to their accounts under cash only type of plans like the
Plan, the Management Committee, in its sole discretion, may amend the Plan in
any manner it deems appropriate to allow Participants the ability to request,
from time to time, investment changes with respect to their future Employer
Matching Contributions and/or their existing Memorandum Account balance under
the Plan and may also add additional phantom subaccounts under the Plan for
such other investments as the Management Committee deems appropriate to offer
under the Plan.
4.8 Time and Manner of Payments. Except as provided below, upon a
Participant's Termination (and with respect to a Participant's RSP benefit,
upon his or her Permanent Disability), the Company shall pay to such
Participant (or to his or her Surviving Spouse or Beneficiary in case of the
Participant's death) an amount in cash equal to (i) the present value of the
Participant's accrued supplemental pension benefits under Section 4.1, and/or
(ii) the balance then credited to his or her Memorandum Account under Section
4.2 as follows:
(a) a lump sum payment; or
(b) in 60 consecutive substantially equal monthly
installments; or
(c) in 120 consecutive substantially equal monthly
installments,
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whichever form of payment has been elected by the Participant with
respect to such benefit. However, if a Participant elects to receive
the distribution of a Company Stock Account under Section 4.5 in
installments, his or her Company Stock Account automatically shall be
converted into an Interest Account as of the Participant's date of
Termination or Permanent Disability, as the case may be.
Payment of benefits shall commence or be made in the month following the
month in which the Participant's Termination or Permanent Disability date
occurs, whichever is applicable; provided, however, if the Management Committee
determines that all or part of a payment to be made to a Participant pursuant
to this Section 4.8 would be nondeductible by the Company or a subsidiary for
Federal tax purposes due to the limitations of Section 162(m) of the Internal
Revenue Code, so much of the payment, if any, that would be deductible in the
year of Termination (or Permanent Disability) shall be paid to the Participant
immediately following his or her Termination (or Permanent Disability date)
and, unless the Management Committee, in its sole discretion, directs
otherwise, the balance of the benefit shall be paid to the Participant not
later than the end of the third month of the next following year, with such
delayed payment being based on the value of the benefit at the time of such
actual payment.
Notwithstanding anything in the Plan to the contrary, each Participant
who has a benefit under Section 4.1 or 4.2 of the Plan on October 1, 1994 shall
be given a one-time, irrevocable election to elect, within the distribution
options specified above, the manner in which his or her supplemental pension
benefit and/or RSP Memorandum Account benefit are to be paid on his or her
Termination or Permanent Disability; provided, however, no such election shall
be effective with respect to any Termination or Permanent Disability occurring
prior to January 1, 1995, unless such Termination is due to the Participant's
death, Permanent Disability occurring after October 1, 1994, or involuntary
termination by the
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Company or a subsidiary (whether a termination is involuntary shall be
determined by the Committee). Such election shall be in such form as
established by the Management Committee and must be made prior to October 1,
1994.
Further, if the Management Committee determines at any time that
Participants may be given the ability to change their election as to the form
of distribution of their benefits without causing the loss of any exempt
treatment to "insiders" for securities laws purposes, the Management Committee
may amend the Plan to provide for such election changes as it deems
appropriate.
The payment of any other supplemental benefits pursuant to an employment
contract under Section 4.3 shall be made as provided in the employment
contract.
4.9 Acceleration of Payments. Notwithstanding a Participant's
election to the contrary, the Management Committee, in its sole discretion, may
accelerate the payment of all or part of a Participant's benefits under the
Plan in the event of the Participant's Termination (or the Participant's RSP
Memorandum Account benefit in the event of his or her Permanent Disability), or
upon its determination that the Participant (or his or her Surviving Spouse or
Beneficiary in the case of the Participant's death) has incurred a "severe
financial hardship" resulting from a sudden and unexpected illness or accident
of such person or of a dependent, a loss of such person's property due to
casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of such person. The
Management Committee in making its determination of severe financial hardship
may consider such factors and require such information as it deems appropriate,
but, in any case, payment may not be made to the extent that such hardship is
or may be relieved (i) through reimbursement or compensation by insurance or
otherwise or (ii) by liquidation of such person's assets, to the extent
liquidation of such assets will not itself cause severe financial hardship.
However,
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notwithstanding the foregoing, the Management Committee shall not accelerate
the payment of any Company Stock Account maintained for a Participant if such
acceleration would cause the loss on any exempt treatment under the Plan for
"insiders" for securities laws purposes.
SECTION 5
GENERAL PROVISIONS
5.1 Unfunded Obligation. The amounts to be paid to Participants
and/or their Surviving Spouses and Beneficiaries pursuant to this Plan are
unfunded obligations of the Company. The Company is not required to segregate
any monies from its general funds, to create any trusts, or to make any special
deposits with respect to this obligation. Title to and beneficial ownership of
any investments, including trust investments, which the Company may make to
fulfill this obligation shall at all times remain in the Company. Any
investments and the creation or maintenance of any trust or memorandum accounts
shall not create or constitute a trust or a fiduciary relationship between the
Management Committee or the Company and a Participant, or otherwise create any
vested or beneficial interest in any Participant or his or her Beneficiary or
his or her creditors in any assets of the Company whatsoever. The Participants
(and Beneficiaries) shall have no claim against the Company for any changes in
the value of any Memorandum Account and shall be general unsecured creditors of
the Company with respect to any payment due under this Plan.
5.2 Incapacity of Participant or Beneficiary. If the Management
Committee finds that any Participant, Surviving Spouse or Beneficiary to whom a
payment is payable under the Plan is unable to care for his or her affairs
because of illness or accident or is under a legal disability, any payment due
(unless a prior claim therefore shall have been made by a duly appointed legal
representative) at the discretion of the Committee, may be paid to the spouse,
child, parent or brother or
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sister of such Participant, Surviving Spouse or Beneficiary or to any person
whom the Management Committee has determined has incurred expense for such
Participant, Surviving Spouse or Beneficiary. Any such payment shall be a
complete discharge of the obligations of the Company under the provisions of
the Plan.
5.3 Nonassignment. The right of a Participant, Surviving Spouse or
Beneficiary to the payment of any amounts under the Plan may not be assigned,
transferred, pledged or encumbered in any manner nor shall such right or other
interests be subject to attachment, garnishment, execution or other legal
process.
5.4 No Right to Continued Employment. Nothing in the Plan shall be
construed to confer upon any Participant any right to continued employment with
the Employers, nor interfere in any way with the right of an Employer to
terminate the employment of such Participant at any time without assigning any
reason therefor.
5.5 Withholding Taxes. Appropriate taxes shall be withheld from a
Participant's compensation and all payments made to Participants, Surviving
Spouses and Beneficiaries pursuant to the Plan.
5.6 Termination and Amendment. The Compensation and Nominating
Committee of the Board of Directors of the Company may from time to time amend,
suspend or terminate the Plan, in whole or in part, and if the Plan is
suspended or terminated, the Compensation and Nominating Committee may
reinstate any or all of its provisions. The Management Committee may also
amend the Plan; provided, however, it may not suspend or terminate the Plan, or
substantially increase the obligations of the Company under the Plan (provided,
however, the addition of new notional subaccounts for investments shall not be
deemed an increase in the obligations of the Company), or expand the
classification of employees who are eligible to participate in the Plan. No
amendment, suspension or termination of the Plan may impair the right of a
Participant or his or her Surviving Spouse or
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Beneficiary to receive the benefits accrued hereunder prior to the effective
date of such amendment, suspension or termination.
If the Plan is terminated, Participants, Surviving Spouses and
Beneficiaries who have accrued benefits under the Plan as of the date of
termination will receive payment of such benefits at the times specified in the
Plan.
5.7 Compliance with Securities Laws. It is the intention of the
Company that, so long as any of the Company's equity securities are registered
pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), this Plan shall be construed to meet the
requirements for exemption from Section 16 of the Exchange Act and, if any Plan
provision is later found to be contrary to meeting the requirements for such
exemption, that provision shall be deemed null and void. Notwithstanding
anything in the Plan to the contrary, the Compensation and Nominating
Committee, in its absolute discretion, may bifurcate the Plan so as to
restrict, limit or condition the use of any provision of the Plan to
Participants who are officers and directors subject to Section 16 of the
Exchange Act without so restricting, limiting or conditioning the Plan with
respect to other Participants.
5.8 Applicable Law. Except to the extent preempted by applicable
federal law, the Plan shall be construed and governed in accordance with the
laws of the State of Texas.
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