8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C., 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date Of Report (Date Of Earliest Event Reported): 11/17/2004

BJ Services Company

(Exact Name of Registrant as Specified in its Charter)

Commission File Number: 1-10570

DE	63-0084140
(State or Other Jurisdiction Of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

5500 Northwest Central Drive

Houston, TX 77092

(Address of Principal Executive Offices, Including Zip Code)

713-895-5631

(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act(17CFR240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17CFR240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17CFR240.13e-4(c))

Items to be Included in this Report

Item 1.01. Entry into a Material Definitive Agreement

On November 17, 2004, BJ Services Company (the "Company") granted to each of its non-employee directors shares of phantom stock and options to purchase shares of the Company's common stock. Also, on that date, the Company granted to certain of its executive officers performance units and options to purchase shares of common stock. The following table sets forth the names and titles of such directors and executive officers and the number of shares of phantom stock, performance units and options granted.

Name and Title	Number of Shares of Phantom Stock Granted	Number of Performance Units Granted*	Number of Options Granted
J. W. Stewart, Chairman of the Board, President and Chief Executive Officer	0	49,213	161,290
L. William Heiligbrodt, Director	4,000	0	8,000
John R. Huff, Director	4,000	0	8,000
Don D. Jordan, Director	4,000	0	8,000
Michael E. Patrick, Director	4,000	0	8,000
James L. Payne, Director	4,000	0	8,000
William H. White, Director	4,000	0	8,000
Kenneth A. Williams, Vice President and President -- U.S. Division	0	19,685	64,516
David Dunlap, Vice President and President -- International Division	0	14,764	48,387
Margaret B. Shannon, Vice President -- General Counsel	0	8,858	29,032
Mark Airola, Assistant General Counsel and Chief Compliance Officer	0	3,051	10,000
Susan Douget, Director of Human Resources	0	2,953	9,677
Mark Hoel, Vice President -- Technology and Logistics	0	8,858	29,032
Brian McCole, Controller	0	3,346	10,968
Jeffrey E. Smith, Treasurer	0	3,642	11,935

* Assumes 100% of the performance units are earned. The actual number of shares to be issued in connection with the performance units may be greater or less than the number listed in this table, per the terms of the letter agreement regarding performance units.

Each share of phantom stock represents the right to receive one share of the Company's common stock. The shares vest in one-third installments on the first, second and third anniversaries of the grant date. The shares were granted under the 2003 Incentive Plan and will be subject to letter agreements substantially in the form attached hereto as Exhibit 10.1, which is incorporated herein by reference.

Performance units represent the right to receive shares of common stock, the number of which is determined by the Company's performance as measured against pre-established objectives. The performance units generally vest at the end of a three-year period, based on the Company's performance against such pre-established objectives. Each performance unit includes a tax gross-up. The performance units were issued under the 2000 Incentive Plan and will be subject to letter agreements substantially in the form attached hereto as Exhibit 10.2, which is incorporated herein by reference.

Each option entitles the holder to purchase the specified number of shares of the Company's common stock at an exercise price of $46.22. The options vest in one-third installments on the first, second and third anniversaries of the grant date and expire on November 17, 2011. The options were granted under the 2000 Incentive Plan and will be subject to letter agreements substantially in the form attached hereto as Exhibit 10.3 (with respect to non-employee directors) or Exhibit 10.4 (with respect to executive officers), each of which is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

Exhibit Number Description of Exhibit

1. Form of letter agreement regarding shares of phantom stock.
2. Form of letter agreement regarding performance units.
3. Form of letter agreement regarding options for non-employee directors.
4. Form of letter agreement regarding options for executive officers.

Signature(s)

Pursuant to the Requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the Undersigned hereunto duly authorized.

		BJ Services Company
	By:	/s/ Margaret Shannon
		Margaret Shannon
		Vice President, General Counsel and Secretary
Date: November 23, 2004

EX-10.2

EXHIBIT 10.2

FORM OF LETTER AGREEMENT REGARDING PERFORMANCE UNITS

[Date]

TO: [Name of Officer]

SUBJECT: Grant of Performance Units

I am pleased to inform you that the Compensation Committee of the Board of Directors of BJ Services Company (the "Company") has granted you Performance Units under the Company's 2000 Incentive Plan ("2000 Plan") and also Tandem Cash Tax Rights under Article VII, Section 2 of the 2000 Incentive Plan as follows:

Grant Date: November 17, 2004

Total Number of Performance

Units Granted: [Number of Performance Units]

By signing below, you agree that the Performance Units and Tax Rights are governed by the terms and conditions of the Company's 2000 Plan, including the Terms and Conditions attached hereto, which are incorporated herein by reference. These grants shall be void and of no effect unless you execute and return this Agreement to the undersigned within ninety (90) days of the date of this letter. The attached copy of this Agreement is for your records.

BJ SERVICES COMPANY

By:

Name:

Title:

EMPLOYEE:

[Name]

DATE:

BJ SERVICES COMPANY

2000 INCENTIVE PLAN

TERMS AND CONDITIONS -- PERFORMANCE UNIT GRANT

WITH TANDEM CASH TAX RIGHTS

The terms and conditions set forth below are hereby incorporated by reference into the attached Grant of Performance Units Agreement ("Agreement") by and between BJ Services Company ("Company") and the employee named therein (the "Employee"). Terms defined in the 2000 Plan are used herein with the same meaning.

1. The Employee has agreed to perform services for the Company or its subsidiary companies and to accept the grant of Performance Units and Tax Rights in accordance with the terms and provisions of the 2000 Plan and the Agreement.
2. Each Performance Unit represents the right to receive from the Company an unrestricted share of Common Stock with respect to each Performance Unit that becomes "earned" as provided herein.
3. Attached hereto and made a part of this Agreement for all purposes is Exhibit A, which sets forth the performance goals of the Company ("Performance Goals") for the three-year performance period of the Company ending September 30, 2007 (the "Performance Period").
4. Subject to the following provisions of this Agreement, the determination of whether Performance Units have been "earned" or forfeited, as the case may be, shall be made as soon as practical after the end of the Performance Period as provided in Exhibit A.
5. Except as provided in Section 8 below, in the event of the Employee's termination of employment (whether voluntary or involuntary) with the Company and its subsidiaries prior to the end of the Performance Period for any reason other than death, disability or retirement, all Performance Units are hereby automatically cancelled in full.
6. In the event of the Employee's termination of employment with the Company and its subsidiaries prior to the end of the Performance Period by reason of death, disability or retirement, a pro rata share (as defined below) of the Performance Units (the "Continuing Units") shall be payable at the end of the Performance Period but only to the extent such Continuing Units shall otherwise become payable in accordance with the terms of the Plan and this Agreement, including Exhibit A. The pro rata share shall be determined by dividing (a) the number of full calendar months from the beginning of the Performance Period through and including the month in which such termination of employment occurred by (b) the number of full calendar months in the Performance Period. The balance of the Performance Units which are not Continuing Units shall be immediately cancelled upon such termination of employment.
7. In the event of a change in the capitalization of the Company due to a stock split, stock dividend, recapitalization, merger, consolidation, combination, or similar event, the terms of the Agreement, including the number of Performance Units, shall be adjusted by the Board to reflect such change.
8. Notwithstanding any other provisions of the Plan or this Agreement, if a Change of Control occurs during the Performance Period, then as of the date of such Change of Control (1) all such Performance Goals shall be deemed to have been met in full and the Performance Period ended and (2) as soon as practicable upon such Change of Control, unrestricted shares of Common Stock equal to the number of Performance Units shall be distributed to the Employee.
9. To the extent that the payment by the Company of unrestricted shares of Common Stock to or on behalf of the Employee in satisfaction of "earned" Performance Units (the "Stock Benefit") constitutes taxable income to the Employee (or, in the event of the Employee's death, the Employee's beneficiary) for federal and, where applicable, state income tax purposes, the Company shall make a tandem payment in cash to or on behalf of the Employee (the "Tax Bonus") in an amount such that the "net" benefit received, after paying all applicable federal and state income taxes, as well as excise or other taxes (assuming, for this purpose, the highest marginal income tax rates for individuals applied) on the Stock Benefit and this Tax Bonus, shall be equal to the Stock Benefit received before any such state or federal income, excise or other taxes thereon. The Tax Bonus shall be paid at the time that withholding is required with respect to the payment of the ea rned Performance Units, to the extent payment is necessary to satisfy the withholding obligation thereon and on the portion of the Tax Bonus then paid, and the remainder of the Tax Bonus shall be paid at such time or times as the Company determines to be appropriate, but not later than the April 15^th following the calendar year in which Performance Units become taxable to the Employee. The Company shall have the right to withhold from the Tax Bonus all tax amounts the Company is obligated under any law to withhold with respect to the payment of the unrestricted shares of Common Stock and the payment of the Tax Bonus.
10. Nothing in the Agreement or in the 2000 Plan shall confer any right on the Employee to continue employment with the Company or its subsidiaries nor restrict the Company or its subsidiaries from termination of the employment relationship of the Employee at any time.
11. Notwithstanding any other provision of the Agreement, the Employee agrees that the Company shall not be obligated to make any payments pursuant hereto, if counsel to the Company determines such payment would violate any law or regulation of any governmental authority or agreement between the Company and any national securities exchange upon which the Common Stock is listed.
12. In the event of a conflict between the terms of this Agreement and the 2000 Plan, the 2000 Plan shall be the controlling document.

EXHIBIT A

BJ SERVICES COMPANY

TERMS AND CONDITIONS -- PERFORMANCE UNIT GRANT

PERFORMANCE GOALS

1. Average Stock Price Goals

Performance Units shall be earned by the Employee based on the comparison of (i) the percentage change in the Average Price (as defined below) of the Company's common stock at the end of the Performance Period from the Average Price of the Company's common stock at the beginning of the Performance Period to (ii) the percentage change in the Average Price of the common stocks of the Peer Group at the end of the Performance Period from the Average Price of the common stocks of the Peer Group at the beginning of the Performance Period in accordance with the following.

	Entry	EV	OA
Performance	70% of Peer Group Average	Average of Peer Group	130% of Peer Group Average
% Earned	33 1/3%	90%	125%

For results between Entry, EV and OA, the percentage of Performance Units earned shall be determined by linear interpolation between the two applicable standards.

The "Average Price" of the Company's common stock and of the common stocks of the Peer Group at the beginning of the Performance Period shall mean the average of the closing price of each such stock for the last five trading days in September, 2004 and the first five trading days in October, 2004. The "Average Price" for the end of the Performance Period shall be similarly calculated for the last five trading days in September, 2007 and the first five trading days in October, 2007. Dividends paid during the Performance Period, if any, shall be added to the Average Price of the stock at the end of the Performance Period for purposes of determining the stock's performance.

2. Adjustment to Performance Goals or Peer Group

At any time, the Performance Goals set forth above may be modified in any manner by the Plan's Committee, in its sole discretion, including, without limitation, changing the members of the Peer Group, to reflect the Company's earnings growth, cash flow per share growth, acquisitions, improvement programs and/or any other matter(s) the Committee believes appropriate to effectuate the Company's intent in making the grant of Performance Units. As a precondition to the grant, the Employee hereby acknowledges such reservation of rights by the Committee and consents to any exercise thereof by the Committee.

3. Deferral of Payment

Notwithstanding anything in the Agreement or above to the contrary, if the payment of all or a portion of an earned Performance Unit would not be deductible by the Company by reason of IRC Section 162(m), the Committee, in its sole discretion, may direct that all or part of the payment that would otherwise be nondeductible by the Company be deferred until the date such payment would be so deductible without regard to IRC Section 162(m), but in no event beyond the date of a Change in Control.

4. Calculations

All determinations and calculations shall be made by the Committee, whose determinations and calculations shall be final and binding on all persons.

5. Peer Group

The Peer Group shall consist of the following companies:

Company

Baker Hughes Incorporated

Halliburton Company

Schlumberger N.V.

Smith International

Weatherford

EX-10.1

EXHIBIT 10.1

FORM OF LETTER AGREEMENT REGARDING SHARES OF PHANTOM STOCK

[Date]

[Name of Director]

[Address]

Re: Phantom Stock Grant

Dear [Name of Director]:

Grant. I am pleased to inform you that the Compensation Committee (the "Committee") of the Board of Directors of BJ Services Company (the "Company") has granted to you [____________] shares of Phantom Stock pursuant to the BJ Services Company 2003 Incentive Plan (the "Plan"). The terms defined in the Plan are used in this Agreement with the same meaning.

Each share of Phantom Stock represents the right to receive one share of the Company's Common Stock, at the end of the deferral period specified below. The shares of Phantom Stock hereby granted to you are subject to vesting as described below.

No Rights as a Shareholder. Until actual shares of the Company's Common Stock are issued to you, you will not possess any rights of a stockholder of the Company with respect to the Phantom Stock, including, but not limited to, the right to vote shares or receive dividends.

Deferral Period. Subject to the vesting restrictions and provisions described below, one-third (¹/₃) of your Phantom Stock shares will mature and become payable to you as of November 17, 2005. An additional one-third (¹/₃) will be payable on November 17, 2006 and the remaining (¹/₃) will be payable on November 17, 2007. However, all deferral periods shall end and payment for the Phantom Stock will be immediately due and payable to you in the event of a Change of Control. Payment in shares will be made to you as soon as reasonably practicable following the end of the deferral period.

Vesting. In the event that your service on the Board is terminated for any reason other than death, Disability or Retirement prior to the end of the applicable deferral period, all Phantom Stock not yet then payable will be forfeited. If your service on the Board is terminated due to death, Disability or Retirement, your Phantom Stock award will not be forfeited, but will mature and become payable at the end of the applicable deferral period. In the event of your death, your Phantom Stock award will be paid to the representative of your estate.

Transferability. This award of Phantom Stock is not transferable by you and may not be pledged, assigned or encumbered by you in any manner. However, in the event of your death, your Phantom Stock award may be transferred by your will or by the laws of descent and distribution, and your beneficiary will receive the Phantom Stock subject to the same restrictions that are applicable to you.

Adjustment of Awards. In the event of a change in the capitalization of the Company due to a stock split, stock dividend, recapitalization, merger, consolidation, combination, or similar event, the terms of the Phantom Stock will be adjusted by the Committee to reflect the change.

Withholding and Issuance of Shares. Notwithstanding anything in the Plan or this award to the contrary, the Company will not be required to issue shares of Common Stock to you unless and until arrangements satisfactory to the Company have been made for the payment of any tax amounts (federal, state, local or other) that may be required to be withheld or paid by the Company with respect to your Phantom Stock.

Amendment. The Committee may amend this award and may waive, amend, or accelerate any requirement or condition to the payment of the award, but may not amend the award in a manner that would adversely affect your rights without your consent.

Awards Subject to Plan Terms. The terms of this Phantom Stock award are intended to be consistent with and subject to the terms of the Plan and shall be construed accordingly. In the event of a conflict, the terms of the Plan shall control. By signing below, you agree that this award is governed by the terms of the Plan.

This grant shall be void and of no effect unless you execute and return this Agreement within ninety (90) days of the above date. Please sign and date both copies of this document and return one copy to [___________] in the Legal Department. The other copy is for your records.

BJ SERVICES COMPANY

By:

Name:

Title:

[Name of Director]

___________________________________

Date: , 2004

EX-10.4

EXHIBIT 10.4

FORM OF LETTER AGREEMENT REGARDING OPTIONS

FOR EXECUTIVE OFFICERS

[Date]

[Name of Executive Officer]
Optionee

I am pleased to inform you that the Compensation Committee of the Board of Directors of BJ Services Company (the "Company") has granted you a stock option to purchase shares of the Common Stock of the Company as follows:

Date of Grant November 17, 2004

Option Price per Share $46.22

Stock Option Shares Granted [Number of shares subject to option]

Expiration of Options November 17, 2011

Please note that this option has a seven-year term.

By signing below, you agree that this option is granted under and governed by the terms and conditions of the Company's 2000 Incentive Plan, including the attached Terms and Conditions which are incorporated herein by reference.

This grant shall be void and of no effect unless you execute and return this Agreement within ninety (90) days of the above date. Please sign and date both copies of this document and return one copy to [___________] in the Legal Department. The other copy is for your records.

BJ SERVICES COMPANY

By:

Name:

Title:

OPTIONEE:

Dated:

BJ SERVICES COMPANY

2000 INCENTIVE PLAN

TERMS AND CONDITIONS

STOCK OPTION FOR OFFICERS AND KEY EMPLOYEES

The terms and conditions set forth below are hereby incorporated by reference into the attached award agreement ("Agreement") by and between BJ Services Company (the "Company") and the employee named therein (the "Employee"). Terms defined in the 2000 Incentive Plan (the "Plan") are used herein with the same meaning.

1. The employee has agreed to perform services for the Company or a subsidiary and to accept the grant of one or more stock options, as designated on the attached award agreement ("Option"), in accordance with the terms and provisions of the Plan and the Agreement.

2. The Option shall become vested (exercisable) and expire in accordance with the following schedule:

Number of Shares	Vesting Date	Expiration Date
1/3 of the Option	one year from the Date of Grant	seven years from Date of Grant
1/3 of the Option	two years from the Date of Grant	seven years from Date of Grant
1/3 of the Option	three years from the Date of Grant	seven years from Date of Grant

3. In the event of the Employee's termination of employment by reason of death, disability, or retirement occurring on or after the first anniversary of the Date of Grant, the Option shall become immediately vested in full on such date to the extent not already vested.
4. To the extent vested, the Option may be exercised in whole or in part or in two or more successive parts; provided, however, that the Option shall not be exercisable following the seventh anniversary of the Date of Grant or the earlier termination of such Option as provided herein.
5. The employee agrees that the Company or its subsidiaries may withhold any federal, state or local taxes upon the exercise of the Option, at such time and upon such terms and conditions as required by law and as provided by the Plan. Notwithstanding anything herein to the contrary, the Company shall not be obligated to issue any shares of Common Stock pursuant to the exercise of the Option until the Employee has satisfied such withholding obligations or made arrangements for satisfying such obligations that are acceptable to the Company or its subsidiary.
6. The Option may be exercised from time to time by a notice in writing of such exercise which states the Date of Grant set forth in the Agreement, the number of shares in respect of which the Option is being exercised and the type of award (Incentive Stock Option or Non-Qualified Stock Option). Such notice shall be delivered to the Secretary of the Company or addressed to the Secretary of the Company at its corporate offices in Houston, Texas. An election to exercise shall be irrevocable. The date of exercise shall be the date the notice is hand-delivered or received by the Secretary, whichever is applicable.
7. An election to exercise an Option shall be accompanied by the tender of the full purchase price of the shares of Common Stock for which the election is made. Payment may be made in cash, shares of Common Stock of the Company already owned, a "cashless exercise" procedure established by the Company, or any combination thereof. If the Employee desires to tender Common Stock already owned by the Employee as payment, the Employee must notify the Secretary in the written notice of exercise of such desire and, subject to the Secretary's confirmation that the Employee is the record holder of such number of shares, it shall not be necessary for the Employee to tender stock certificates to effectuate such payment of the exercise price. The value of the number of shares tendered to exercise the Option cannot exceed the Option's exercise price, and such tendered shares shall be valued at the Common Stock Price per share on the trading day prior to the date of exercise of the Option. If the shares tendered for payment were acquired by the Employee pursuant to the prior exercise of a Company-granted option, such shares must have been owned for at least six months.
8. The Option is not transferable by the Employee, otherwise than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Employee only by the Employee.
9. In the event of the termination of the Employee's employment (whether voluntary or involuntary), for any reason other than death, disability or retirement or by the Company or a subsidiary for Cause, the Option outstanding on such date of termination, to the extent vested on such date, may be exercised by the Employee (or in the event of the Employee's death, by the Employee's estate or by the person or persons who acquire the right to exercise the Option by bequest or inheritance ("Heir") within three months following such termination of employment, but, except as provided in paragraph 14 hereof, not thereafter; provided, however, in no event shall the Option be exercisable after the seventh anniversary of the Date of Grant. To the extent the Option is not vested on the Employee's date of termination, the Option or the portion thereof that is not vested on such date shall automatically lapse and be cancelled unexercised as of the Employee's date of termination.
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10. In the event of the Employee's termination of employment by reason of death, the Option granted herein, to the extent vested on such date, may be exercised by the Employee's Heir at any time within the one-year period after the Employee's date of death, but not thereafter, and in no event shall the option be exercisable after the seventh anniversary of the Date of Grant.
11. In the event of the Employee's termination of employment by reason of disability or retirement, the Option granted herein, to the extent vested on such date may be exercised by the Employee (or in the event of the Employee's death, the Employee's Heir) within the 36-month period following such termination of employment, but not thereafter, and in no event shall the Option be exercisable after the seventh anniversary of the Date of Grant.
12. In the event of the Employee's termination of employment either by reason of Cause or prior to the date of vesting of the Option, the Option shall automatically lapse in full and be cancelled unexercised as of that date.
13. In the event of a change in the capitalization of the Company due to a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of shares, or similar event, the terms of the Agreement shall be adjusted by the Committee to reflect such change, and the determination of the Committee shall be final and binding.
14. Upon the occurrence of a Change of Control, notwithstanding any other provision in the Plan or the Agreement to the contrary, the Option shall automatically become vested and exercisable in full on such date and shall be immediately exercisable in full for such period as provided in the Plan. Further, in the event of a Change of Control, the following provisions also apply to the Option:

a. Publicly Traded Stock Transaction. If the consideration offered to shareholders of the Company in connection with a Change of Control consists of publicly traded shares of the common stock (the "New Stock") of an entity acquiring the Company or the parent company of an entity acquiring the Company (the "Acquiring Entity"), upon the occurrence of such Change of Control, the Acquiring Entity will assume the Option and the Option will become an option (a "New Option") to purchase a number of shares of New Stock, with the number of shares subject to the New Option and the exercise price thereof to be determined in accordance with Article XII of the Plan. The New Option will otherwise be subject to the same terms and conditions as the Option, except that the New Option will be exercisable until the seventh anniversary of the Date of Grant regardless of any termination of the Employee's employment following the Change of Control and the New Option may be surrendered to the Acquiring Entity during the 90-day period following the occurrence of the Change of Control in return for a payment in cash or in shares of New Stock to be determined in accordance with Article XII of the Plan.

b. Other Transaction. If the consideration offered to shareholders of the Company in connection with a Change of Control consists of cash or of New Stock that is not publicly traded, upon the occurrence of the Change of Control, the Employee will surrender the Option to the Acquiring Entity in return for a payment in cash equal to the Black-Scholes value of the Option as of the date of the Change of Control, without discount for risk of forfeiture and non-transferability. Such Black-Scholes valuation will be performed on a basis consistent with the methodology set forth in Article XII of the Plan.

15. Nothing in the Agreement or in the Plan shall confer on the Employee any right to continue employment with the Company or its subsidiaries nor restrict the Company or its subsidiaries from termination of the employment relationship of the Employee, with or without cause, at any time.
16. Notwithstanding any other provision of the Plan or the Agreement, the Employee agrees that the Employee will not exercise the Option and the Company shall not be obligated to issue any shares of Common Stock, if the Committee determines such issuance would violate any state or federal law or the rules or regulations of any governmental regulatory body or agreement between the Company and any national securities exchange upon which the Common Stock is listed.
17. In the event of a conflict between the terms of the Agreement and the Plan, the Plan shall be the controlling document.

EX-10.3

EXHIBIT 10.3

FORM OF LETTER AGREEMENT REGARDING OPTIONS

FOR NON-EMPLOYEE DIRECTORS

[Date]

[Name of Non-Employee Director]
Optionee

I am pleased to inform you that the Compensation Committee of the Board of Directors of BJ Services Company (the "Company") has granted you a stock option to purchase shares of the Common Stock of the Company as follows:

Date of Grant November 17, 2004

Option Price per Share $46.22

Stock Option Shares Granted [Number of shares subject to option]

Expiration of Options November 17, 2011

Please note that this option has a seven-year term.

By signing below, you agree that this option is granted under and governed by the terms and conditions of the Company's 2000 Incentive Plan, including the attached Terms and Conditions which are incorporated herein by reference.

This grant shall be void and of no effect unless you execute and return this Agreement within ninety (90) days of the above date. Please sign and date both copies of this document and return one copy to [__________] in the Legal Department. The other copy is for your records.

BJ SERVICES COMPANY

By:

Name:

Title:

OPTIONEE:

Dated:

BJ SERVICES COMPANY

2000 INCENTIVE PLAN

TERMS AND CONDITIONS - DIRECTOR OPTION

The terms and conditions set forth below are hereby incorporated by reference into the attached award agreement ("Agreement") by and between BJ Services Company (the "Company") and the director named therein (the "Director"). Terms defined in the 2000 Incentive Plan (the "Plan") are used herein with the same meaning.

1. The Director has agreed to serve on the Company's Board of Directors ("Board") and to accept the grant of an option ("Option") in accordance with the terms and provisions of the Plan and the Agreement.

2. The Option shall become vested (exercisable) and expire in accordance with the following schedule:

Number of Shares Vesting Date Expiration Date

1/3 of the Option one year from the Date of Grant seven years from Date of Grant

1/3 of the Option two years from the Date of Grant seven years from Date of Grant

1/3 of the Option three years from the Date of Grant seven years from Date of Grant

1. In the event of the Director's termination for any reason other than Cause (as defined below), occurring on or after the first anniversary of the Date of Grant, the Option shall become immediately vested in full on such date to the extent not already vested.

4. To the extent vested, the Option may be exercised in whole or in part or in two or more successive parts; provided, however, that the Option shall not be exercisable following the seventh anniversary of its Date of Grant or the earlier termination of such Option as provided herein.

5. The Director agrees that the Company may withhold any federal, state or local taxes upon the exercise of the Option, at such time and upon such terms and conditions as required by law and as provided by the Plan. Notwithstanding anything herein to the contrary, the Company shall not be obligated to issue any shares of Common Stock pursuant to the exercise of the Option until the Director has satisfied such withholding obligations or made arrangements for satisfying such obligations that are acceptable to the Company.

6. The Option may be exercised from time to time by a notice in writing of such exercise, which states the Date of Grant set forth in the Agreement and the number of shares in respect of which the Option is being exercised. Such notice shall be delivered to the Secretary of the Company or addressed to the Secretary of the Company at its corporate offices in Houston, Texas. An election to exercise shall be irrevocable. The date of exercise shall be the date the notice is hand delivered or received by the Secretary, whichever is applicable.

7. An election to exercise an Option shall be accompanied by the tender of the full purchase price of the shares of Common Stock for which the election is made. Payment may be made in cash, shares of Common Stock of the Company already owned, a "cashless exercise" procedure established by the Company, or any combination thereof. If the Director desires to tender Common Stock already owned by the Director as payment, the Director must notify the Secretary in the written notice of exercise of such desire and, subject to the Secretary's confirmation that the Director is the record holder of such number of shares, it shall not be necessary for the Director to tender stock certificates to effectuate such payment of the exercise price. The value of the number of shares tendered to exercise the Option cannot exceed the Option's exercise price, and such tendered shares shall be valued at their fair market value per share on the date of exercise of the Option. If the shares tendere d for payment were acquired by the Director pursuant to the prior exercise of a Company-granted option, such shares must have been owned for at least six months.

8. The Option may be transferred (in whole or in part) by the Director to (1) the spouse, children or grandchildren of the Director ("Immediate Family Members"), (2) a trust or trusts for the exclusive benefit of the Immediate Family Members and, if applicable, the Director, or (3) a partnership in which such Immediate Family Members, and, if applicable, the Director are the only partners. Following transfer, any such transferred option rights shall continue to be subject to the same terms and conditions as were applicable to the option rights immediately prior to transfer; provided, however, that no transferred option rights shall be exercisable unless arrangements satisfactory to the Company have been made to satisfy any tax withholding obligations and any other legal obligations the Company may have with respect to the option rights. Except as provided in the preceding sentence, the Option is not transferable by the Director, otherwise than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Director only by the Director.

9. In the event of the termination of the Director's membership on the Board (whether voluntary or involuntary) for any reason other than death, disability, Cause (as defined below) or Retirement, the Option outstanding on such date of termination, to the extent vested on such date, may be exercised by the Director (or in the event of the Director's death, by the Director's estate or by the person or persons who acquire the right to exercise the Option by bequest or inheritance ("Heir")) within three months following such termination, but not thereafter; provided, however, in no event shall the Option be exercisable after the seventh anniversary of the Date of Grant. To the extent the Option is not vested on the Director's date of termination, the Option or the portion thereof that is not vested on such date shall automatically lapse and be cancelled unexercised as of the Director's date of termination. As used herein, "Retirement" means the termination of s ervice as a director following a period of service on the Board for at least three years, for reasons other than death, disability or Cause (as defined below).

10. In the event of the Director's termination from the Board by reason of death, the Option granted herein, to the extent vested on such date, may be exercised by the Director's Heir at any time within the 12-month period beginning on the Director's date of death, but not thereafter, and in no event shall the Option be exercisable after the seventh anniversary of the Date of Grant.

11. In the event of the Director's termination from the Board by reason of disability or Retirement, the Option granted herein, to the extent vested on such date, may be exercised by the Director (or in the event of the Director's death, the Director's Heir) within the 36-month period following such termination, but not thereafter, and in no event shall the Option be exercisable after the seventh anniversary of the Date of Grant.

12. In the event the Director's directorship is terminated as a result of his removal from the Board for (A) fraud, theft or embezzlement committed against the Company or a Subsidiary, affiliated entity or customer of the Company, (B) the Director's willful misconduct in performance of his duties as a Director, or (C) the Director's final conviction of a felony (any one of such events, "Cause"), the Option shall automatically lapse in full and be cancelled unexercised as of that date.

13. In the event of a change in the capitalization of the Company due to a stock split, stock dividend, recapitalization, merger, consolidation, combination, or similar event, the terms of the Agreement shall be adjusted by the Committee to reflect such change.

14. Upon the occurrence of a Change of Control, the following provisions also apply to the Option:

1. Publicly Traded Stock Transaction. If the consideration offered to shareholders of the Company in connection with a Change of Control consists of publicly traded shares of the common stock (the "New Stock") of an entity acquiring the Company or the parent company of an entity acquiring the Company (the "Acquiring Entity"), upon the occurrence of such Change of Control, the Acquiring Entity will assume the Option and the Option will become an option (a "New Option") to purchase a number of shares of New Stock, with the number of shares subject to the New Option and the exercise price thereof to be determined in accordance with Article IV, Section 5(g) of the Plan. The New Option will otherwise be subject to the same terms and conditions as the Option, except that the New Option will be exercisable until the seventh anniversary of the Date of Grant regardless of any termination of the Director's membership on the Board of Directors of the Company or the board of directors of the Acquiring Entity following the Change of Control and the New Option may be surrendered to the Acquiring Entity during the 90-day period following the occurrence of the Change of Control in return for a payment in cash or in shares of New Stock to be determined in accordance with Article IV, Section 5(g) of the Plan.

(b) Other Transaction. If the consideration offered to shareholders of the Company in connection with a Change of Control consists of cash or of New Stock that is not publicly traded, upon the occurrence of the Change of Control, the Director will surrender the Option to the Acquiring Entity in return for a payment in cash equal to the Black-Scholes value of the Option as of the date of the Change of Control, without discount for risk of forfeiture and non-transferability. Such Black-Scholes valuation will be performed on a basis consistent with the methodology set forth in Article IV, Section 5(g) of the Plan.

15. Nothing in the Agreement or in the Plan shall confer any right on the Director to continue as a member of the Board.

16. Notwithstanding any other provision of the Agreement, the Director agrees that the Director will not exercise the Option and the Company shall not be obligated to deliver any shares of Common Stock, if counsel to the Company determines such exercise or delivery would violate any law or regulation of any governmental authority or agreement between the Company and any national securities exchange upon which the Common Stock is listed.

17. In the event of a conflict between the terms of this Agreement and the Plan, the Plan shall be the controlling document. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in the Plan.