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EXHIBIT 10.14
BJ SERVICES COMPANY U.S.A. AND AFFILIATES
KEY EMPLOYEE SECURITY OPTION PLAN (KEYSOP(TM))
Effective Date of Plan: September 30, 1997
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BJ SERVICES COMPANY U.S.A. AND AFFILIATES
KEY EMPLOYEE SECURITY OPTION PLAN (KEYSOP(TM))
Table of Contents
Article Page
Preamble 1
I Definitions 1
II Award of Options 3
III Exercise of Options 4
IV Amendment or Termination of Plan 6
V Administration 7
VI Trust Provisions 8
VII Miscellaneous 9
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BJ SERVICES COMPANY U.S.A. AND AFFILIATES
KEY EMPLOYEE SECURITY OPTION PLAN (KEYSOP(TM))
Preamble
BJ Services Company U.S.A. and Affiliates (the "Employer") hereby
establishes the BJ Services Company U.S.A. and Affiliates Key Employee
Security Option Plan(TM) (the "Plan"), effective as of the date specified
herein.
The purpose of the Plan is to provide a vehicle for the payment of
compensation (either salary or bonuses) otherwise payable to the participating
key executives of the Employer, commensurate with their contributions to the
success of the Employer's activities, in a form that will provide incentives
and rewards for meritorious performance and encourage the recipients'
continuance as employees of the Employer. The Plan is intended to be a
nonqualified stock option plan within the meaning of Section 83 of the Internal
Revenue Code, and is not intended to be covered by the provisions of the
Employee Retirement Income Security Act of 1974.
ARTICLE I
Definitions
As used in this Plan, the following capitalized words and phrases have
the meanings indicated, unless the context requires a different meaning:
1.1 "Beneficiary" means the person or persons designated by a
Participant, or otherwise entitled, to exercise Options after a Participant's
death.
1.2 "Board of Directors" or "Board" means the board of directors of
the Employer.
1.3 "Code" means the Internal Revenue Code of 1986, any amendments
thereto, and any regulations on rulings issued thereunder.
1.4 "Committee" means the committee appointed in accordance with
Section 5.1 to determine awards of Options and administer the Plan.
1.5 "Designated Property" means securities of regulated investment
companies or any other property (not including cash, cash equivalents, or
securities of the Employer) designated by the Committee as subject to purchase
through the exercise of an Option.
1.6 "Effective Date" means September 30, 1997.
1.7 "Employee" means, for purposes of this plan, any individual who
is employed by the Employer and any director of the Employer.
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1.8 "Employer" means BJ Services Company U.S.A. and Affiliates, and
any successor thereto.
1.9 "ERISA" means the Employee Retirement Income Security Act of
1974, any amendments thereto, and any regulations or rulings issued thereunder.
1.10 "Exercise Price" means the price that a Participant must pay in
order to exercise an Option.
1.11 "Grant Date" means, with respect to any Option, the date on which
an Option is awarded to the Participant.
1.12 "Option" means the right of a Participant, granted by the
Employer in accordance with the terms of this Plan, to purchase Designated
Property from the Employer at the Exercise Price established under Section 2.3.
1.13 "Option Agreement" means an agreement executed by the Employer
and by a Participant to whom Options have been awarded, acknowledging the
issuance of the Options and setting forth any terms that are not specified in
this Plan.
1.14 "Participant" means any individual who has received an award of
Options in accordance with Section 2.2 and whose Options have not been
completely exercised. After a Participant's death, his Beneficiary is
considered to be a Participant to the extent necessary to facilitate the
exercise of any Options that continue to be exercisable under the terms of the
Plan. In the event of a Participant's disability or other legal incapacity,
the Participant's legal representative is considered to be a Participant to the
extent necessary to facilitate the exercise of any Options that are or become
exercisable under the terms of the Plan.
1.15 "Plan" means the BJ Services Company U.S.A. and Affiliates Key
Employee Security Option Plan(TM), as set forth herein and as from time to time
amended.
1.16 "Plan Year" means the operating year of the Plan, which ends on
December 31st.
1.17 "Termination of Employment" means a Participant's separation
from the service of the Employer (including all subsidiaries or other
affiliates of the Employer that participate in the Plan) by reason of his
resignation, retirement, discharge or death.
1.18 "Trust" means the trust that may be established pursuant to
Article VI to hold the Designated Property that is subject to purchase through
the exercise of an Option.
1.19 "Trust Agreement" means an agreement setting forth the terms of
the Trust established pursuant to Article VI.
1.20 "Trust Fund" means the Designated Property that is subject to an
option that is held in the Trust.
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1.21 "Trustee" means the persons or institution acting as trustee of
the Trust.
1.22 Rules of construction
1.22.1 Governing law. The construction and operation of this Plan
are governed by the laws of the State of Delaware.
1.22.2 Headings. The headings of Articles, Sections and Subsections
are for reference only and are not to be utilized in construing the Plan.
1.22.3 Gender. Unless clearly inappropriate, all pronouns of
whatever gender refer indifferently to persons or objects of any gender.
1.22.4 Singular and plural. Unless clearly inappropriate, singular
terms refer also to the plural number and vice versa.
1.22.5 Severability. If any provision of this Plan is held to be
illegal or invalid for any reason, the remaining provisions are to remain in
full force and effect and to be construed and enforced in accordance with the
purposes of the Plan as if the illegal or invalid provision did not exist.
ARTICLE II
Award of Options
2.1 Eligibility for awards. Awards of Options may be made to any
Employee selected by the Committee from the directors, executive officers and
other key employees who occupy senior managerial or professional positions and
who have the capacity of making a substantial contribution to the success of
the Employer. In making this selection and in determining the form and amount
of options the Committee shall consider any factors it deems relevant,
including the individual's functions, responsibilities, value of services to
the Employer and past and potential contributions to the Employer's
profitability and growth.
2.2 Procedure for awarding Options. The recipients of Options are
determined from time to time by the Committee. Although a Committee member may
receive Options under the Plan, no Committee member may take part in any way in
determining the amount of any award of Options to himself. Awards become
effective upon the Grant Date. Awards may be made at any time on or after the
Effective Date and prior to the termination of the Plan.
2.3 Selection of Designated Property and Establishment of Exercise
Price. When an Option is awarded, the Committee will specify the Designated
Property that may be purchased by exercise of the Option and will fix the
Exercise Price. If the Employer acquires Designated
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Property specified by an Option Agreement in accordance with Section 2.5
hereunder, such Designated Property must:
(a) not be subject to any security interest, whether or not
perfected, or to any option or contract under which any other
person may acquire any interest in it; and
(b) be readily tradable on an established market or consist wholly
of interests in property that is readily tradable on an
established market.
Unless otherwise specified in a particular Option Agreement, the Exercise Price
will equal seventy percent (70%) of the fair market value of the Designated
Property on the date of exercise.
2.4 Effect of dividends and distributions with respect to Designated
Property. The Employer agrees, whenever any dividend or other distribution is
paid on the Designated Property, to reinvest all said dividends and
distributions in additional property of the same kind (or as nearly the same
kind as feasible, if property of the same kind is not available). Any property
acquired through this investment or reinvestment will immediately be subject to
the same Option as provided for the purchase of the Designated Property from
which the dividends or distributions arose. Such property acquired thereafter
through reinvestment shall be referred to and treated as Designated Property.
2.5 Held in Trust. Upon the grant of an Option, the Employer may
acquire the Designated Property and contribute it to the Trust as soon as
practicable after the Grant Date. At the time contributed to the Trust, the
Designated Property shall not be subject to any security interest, whether or
not perfected, or to any option or contract under which any other person may
acquire any interest in it, except as otherwise provided in Section 6.2
2.6 Substitution of other property for Designated Property. At any
time after the grant of an Option, the Committee may, in its discretion, after
consultation with the Participant substitute other property of equal value for
Designated Property subject to that option. After substitution, such modified
option shall not be exercisable for six months or the period specified in the
option agreement, whichever is later.
ARTICLE III
Exercise of Options
3.1 Period for exercise of Options. Options may be exercised by a
Participant at any time during the period beginning six months after the Grant
Date and ending fifteen years after the Grant Date or such earlier date as may
be specified in the option agreement.
If a Participant dies before all of his Options have been exercised, any
Options that remain outstanding may be exercised by his Beneficiary.
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3.2 Procedure for exercising Option. A Participant may exercise all
or a portion of an Option by giving written notice to the Committee and
tendering payment of the applicable Exercise Price.
3.3 Inalienability of Options. No Option granted under this Plan may
be transferred, assigned or alienated. An Option may be exercised only by the
Participant to whom it was granted, by his Beneficiary after his death, or by a
person holding a valid power of attorney to act on behalf of the person
entitled to exercise the Option.
3.4 Delivery of Designated Property. On the date of exercise, or as
soon as administratively feasible, the Employer will deliver or cause to be
delivered the Designated Property then being purchased to the Participant or
the Participant's Beneficiary pursuant to Section 3.6. In the event that the
listing, registration or qualification of the Option or the Designated Property
on any securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary as a condition of,
or in connection with, the exercise of the Option, then the Option will not be
exercised in whole or in part until such listing, registration, qualification,
consent or approval has been effected or obtained.
3.5 Tax Withholding. Whenever Designated Property is to be delivered
upon exercise of an Option under the Plan, the Employer will require as a
condition of such delivery (a) the cash payment by the Participant of an amount
sufficient to satisfy all federal, state and local tax withholding requirements
related thereto, (b) the withholding of such amount from any Designated
Property to be delivered to the Participant, (c) the withholding of such amount
from compensation otherwise due to the Participant, or (d) any combination of
the foregoing, at the election of the Participant with the consent of the
Employer. Such election will be made before the date on which the amount of
tax to be withheld is determined by the Employer, and such election will be
irrevocable. With the consent of the Employer, the Participant may elect a
greater amount of withholding, not to exceed the estimated amount of the
Participant's total tax liability with respect to the delivery of Designated
Property under the Plan. Such election will be made at the same time and in
the same manner as provided above.
3.6 Election of Beneficiary.
3.6.1 Designation or Change of Beneficiary by Participant. When
Options are first awarded to a Participant, the Committee will send him a
Beneficiary designation form, on which he may designate one or more
Beneficiaries and successor Beneficiaries. A Participant may change his
Beneficiary designation at any time by filing the prescribed form with the
Committee. The consent of the Participant's current Beneficiary is not
required for a change of Beneficiary, and no Beneficiary has any rights under
this Plan except as are provided by its terms. The rights of a Beneficiary who
predeceases the Participant who designated him immediately terminate, unless
the Participant has specified otherwise.
3.6.2 Beneficiary if no election is made. Unless a different
Beneficiary has been elected in accordance with Section 3.6.1, the Beneficiary
of any Participant who is lawfully
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married on the date of his death is his surviving spouse. The Beneficiary of
any other Participant who dies without having designated a Beneficiary is his
estate.
ARTICLE IV
Amendment or Termination of the Plan
4.1 Employer's right to amend or terminate Plan. The Board may, at
any time and from time to time, amend, in whole or in part, any of the
provisions of this Plan or may terminate it as a whole or with respect to any
Participant or group of Participants. Any such amendment is binding upon all
Participants and Beneficiaries, the Committee and all other parties in
interest. The termination of the Plan will not affect the outstanding options
previously issued under the Plan.
4.2 When amendments take effect. A resolution amending or
terminating the Plan becomes effective as of the date specified therein.
4.3 Amendment of Options. An Option Agreement may be amended by the
Committee at any time if the Committee determines that an amendment is
necessary or advisable as a result of:
(a) any addition to or change in the Code or any other
law or regulation which occurs after the Grant Date
and by its terms applies to the Option,
(b) any substitutions of Designated Property held in
trust pursuant to Section 2.5,
(c) any Plan amendment or termination pursuant to Section
4.1, provided that the amendment does not materially
affect the terms, conditions and restrictions
applicable to the Option, or
(d) any circumstances not specified in Paragraphs (a),
(b), (c), with the consent of the Participant.
ARTICLE V
Administration
5.1 The Committee. The Plan will be administered by a Committee
consisting of one or more persons appointed by the Board of Directors or
appointed by one or more designated representatives of the Board of Directors.
The Committee will act by a majority of its members at the time in office and
may take action either by vote at a meeting or by consent in writing without a
meeting.
(a) The Board may remove any member of the Committee at
any time, with or without cause, and may fill any
vacancy. If a vacancy occurs, the remaining member
or members of the Committee will have full authority
to act.
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(b) Any member of the Committee may resign by written
resignation delivered to the Board. Any such
resignation will become effective upon its receipt by
the Board or on such other date as agreed to by the
Board and the resigning member.
(c) The Board or its designated representative(s) may
authorize the Committee to delegate certain
responsibilities and powers to individuals who are
not members of the Committee.
5.2 Powers of the Committee. In carrying out its duties with
respect to the general administration of the Plan, the Committee will have, in
addition to any other powers conferred by the Plan or by law, the following
powers:
(a) to determine eligibility to participate in the Plan
and eligibility to receive Options;
(b) to grant Options, and to determine the form, amount
and timing of such Options;
(c) to determine the terms and provisions of the Option
Agreements, and to modify such Option Agreements as
provided in Section 4.3;
(d) to substitute Designated Property held in Trust as
provided in Section 2.6;
(e) to maintain all records necessary for the
administration of the Plan;
(f) to prescribe, amend, and rescind rules for the
administration of the Plan to the extent not
inconsistent with the terms thereof;
(g) to appoint such individuals and subcommittees as it
deems desirable for the conduct of its affairs and
the administration of the Plan;
(h) to employ counsel, accountants and other consultants
to aid in exercising its powers and carrying out its
duties under the Plan; and
(i) to perform any other acts necessary and proper for
the conduct of its affairs and the administration of
the Plan, except those reserved by the Board.
5.3 Determinations by the Committee. The Committee will interpret
and construe the Plan and the Option Agreements, and its interpretations and
determinations will be conclusive and binding on all Participants,
Beneficiaries and any other persons claiming an interest under the Plan or any
Option Agreement.
5.4 Indemnification of the Committee. The Employer will indemnify
and hold harmless each member of the Committee and any individuals who have
been delegated responsibilities under Sections 5.1(c) and 5.2(b) against any
and all expenses and liabilities arising out of such member's action or failure
to act in such capacity, excepting only expenses and liabilities arising out of
such member's own willful misconduct or gross negligence.
(a) Expenses and liabilities against which a member of
the Committee is indemnified hereunder will include,
without limitation, the amount of any settlement or
judgment, costs, counsel fees and related charges
reasonably incurred in connection with a claim
asserted or a proceeding
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brought against him or the settlement thereof.
(b) This right of indemnification will be in addition to
any other rights to which any member of the Committee
may be entitled.
(c) The Employer may, at its own expense, settle any
claim asserted or proceeding brought against any
member of the Committee when such settlement appears
to be in the best interests of the Employer, with
such member's consent which will not be unreasonably
withheld.
5.5 Expenses of the Committee. The members of the Committee will
serve without compensation for services as such. All expenses of the Committee
will be paid by the Employer.
ARTICLE VI
Trust Provisions
6.1 Establishment of the Trust. A trust may be established to hold
all Designated Property contributed by the Employer pursuant to Section 2.5.
Except as otherwise provided in Section 6.2, the Trust will be irrevocable and
no portion of the Trust Fund will be used for any purpose other than the
delivery of Designated Property pursuant to the exercise of an Option, and the
payment of expenses of the Plan and Trust.
6.2 Trust Status. The Trust is intended to be a grantor trust,
within the meaning of section 671 of the Code, of which the Employer is the
grantor, and this Plan is to be construed in accordance with that intention.
Notwithstanding any other provision of this Plan, the Trust Fund will remain
the property of the Employer and will be subject to the claims of its creditors
in the event of its bankruptcy or insolvency. No Participant will have any
priority claim on the Trust Fund or any security interest or other right
superior to the rights of a general creditor of the Employer.
ARTICLE VII
Miscellaneous Provisions
7.1 No Rights of Shareholder. Neither the Participant, a Beneficiary
nor any assignee will be, or will have any of the rights and privileges of, a
stockholder with respect to any Designated Property purchasable or issuable
upon the exercise of an Option, prior to the date of exercise of such Option.
7.2 No Right to Continued Employment. Nothing contained in the Plan
will be deemed to give any person the right to be retained in the employ of the
Employer, or to interfere with the right of the Employer to discharge any
person at any time without regard to the effect that such discharge will have
upon such person's rights or potential rights, if any, under the Plan. The
provisions of the Plan are in addition to, and not a limitation on, any rights
that a Participant may have against the Employer by reason of any employment or
other agreement with the Employer.
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7.3 Notices. Unless otherwise specified in an Option Agreement, any
notice to be provided under the Plan to the Committee will be mailed (by
certified mail, postage prepaid) or delivered to the Committee in care of the
Employer at its executive offices, and any notice to the Participant will be
mailed (by certified mail, postage prepaid) or delivered to the Participant at
the current address shown on the payroll records of the Employer. No notice
will be binding on the Committee until received by the Committee, and no notice
will be binding on the Participant until received by the Participant.
7.4 Change of Control. As used in the Plan, 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 Securities Exchange Act of 1934, as amended (the "Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Act) of 25% or more of either (i) the then outstanding securities of Common
Stock of the Employer (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities of the Employer
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 Employer (excluding an acquisition by virtue of the exercise of a
conversion privilege), (B) any acquisition by the Employer, (C) any acquisition
by any employee benefit plan(s) (or related trust(s)) sponsored or maintained
by the Employer of any corporation controlled by the Employer 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
(b) of this paragraph 7.4 are satisfied; or (b) the approval by the
stockholders of the Employer 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
securities of common stock of the 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 Employer,
any employee benefit plan(s) (or related trust(s)) of the Employer 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 securities 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
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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 September 30, 1997, constitute the Board; provided,
however, that any individual becoming a director subsequent to such date whose
election, or nomination for election by the Employer'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 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.
7.5 Acceleration upon a Change in Control. Notwithstanding any
provision in any document or instrument evidencing a nonqualified option
granted under the Plan, upon the occurrence of a Change of Control each
nonqualified option previously granted under the Plan which is not then
immediately exercisable in full shall be immediately exercisable in full.
IN WITNESS WHEREOF, BJ Services Company U.S.A. and Affiliates has
caused these presents to be executed by its duly authorized officer and its
corporate seal to be hereunto affixed by authority of its Board of Directors
this _____ day of ____________________, 1997.
BJ Services Company U.S.A. and Affiliates
Corporate Seal
By:
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Attest / Witness
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Printed Name:
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