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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into and
effective as of October 4, 1999, by and between Weatherford International, Inc.,
a Delaware corporation (the "Company"), and Mark E. Hopmann (the "Employee").
W I T N E S S E T H:
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WHEREAS, the Company desires to employ the Employee on the terms set
forth below to provide services to the Company, and the Employee is willing to
accept such employment and provide such services on the terms set forth in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the parties hereto do hereby agree:
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) "Cause" shall mean:
(i) the willful and continued failure of the Employee
to perform substantially the Employee's duties with the Company or one
of its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand
for substantial performance is delivered to the Employee by the Company
which specifically identifies the manner in which the Employee has not
substantially performed the Employee's duties, or
(ii) the willful engaging by the Employee in illegal
conduct or gross misconduct which is materially and demonstrably
injurious to the Company.
No act, or failure to act, on the part of the Employee shall
be considered "willful" unless it is done, or omitted to be done, by
the Employee in bad faith or without reasonable belief that the
Employee's action or omission was in the best interests of the Company.
Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of the
Chief Executive Officer or of a senior officer of the Company or based
upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Employee in good
faith and in the best interests of the Company.
(b) "Change of Control" shall mean:
(i) 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 "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20 percent or more of either (A)
the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection
(i), the following acquisitions shall not constitute a Change of
Control:
(A) any acquisition directly from the
Company,
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(B) any acquisition by the Company,
(C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or
(D) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B)
and (C) of subsection (iii) of this Section 1(b); or
(ii) Individuals, who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company'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 was a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a "Corporate Transaction") in each case,
unless, following such Corporate Transaction, (A) 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 Corporate
Transaction beneficially own, directly or indirectly, more than 60
percent of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Corporate Transaction, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may
be, (B) no Person (excluding any corporation resulting from such
Corporate Transaction or any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Corporate
Transaction) beneficially owns, directly or indirectly, 20 percent or
more of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Corporate Transaction or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Corporate Transaction and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Corporate
Transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Corporate Transaction; or
(iv) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
(c) "Good Reason" shall mean the occurrence of any of the
following after a Change of Control of the Company:
(i) the assignment to the Employee of any duties
inconsistent in any material respect with the Employee's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section 3(a)
of this Agreement, or any other action by the Company which results in
a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent
action not taken
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in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee;
(ii) any failure by the Company to comply with any of
the provisions of Section 3(b) of this Agreement, other than an
isolated, insubstantial and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Employee;
(iii) the Company's requiring the Employee to be
based at any office or location other than as provided in Section 3(a)
hereof or the Company's requiring the Employee to travel on Company
business to a substantially greater extent than required to perform the
Employee's duties hereunder;
(iv) any purported termination by the Company of the
Employee's employment otherwise than as expressly permitted by this
Agreement; or
(v) any failure by the Company to comply with and
satisfy Section 10(c) of this Agreement.
(d) "Board" shall mean the Board of Directors of the
Company.
2. Employment Period. The Company hereby agrees that the Company or an
affiliated company will continue the Employee in its employ, and the Employee
hereby agrees to remain in the employ of the Company or an affiliate subject to
the terms and conditions of this Agreement, for the period commencing on the
date hereof and ending on October 31, 2001 (the "Employment Period"); provided,
however, if there is a Change of Control prior to October 31, 2001, the
Employment Period shall be extended for two years after the Change of Control.
3. Terms of Employment.
(a) Position and Duties. The Employee shall serve as a Vice
President of the Company's Completion Division or such other principal division
of the Company to which the Employee may be assigned. During the Employment
Period, the Employee's services shall be performed principally at the Company's
principal executive offices in Houston, Texas or other locations less than 35
miles from such principal executive offices; provided, however, the Employee may
be required to travel on a reasonable basis in a manner consistent with the
duties of the Employee.
(b) Compensation.
(i) Base Salary. During the Employment Period, the
Employee shall receive an annual base salary of $200,004 ("Annual Base
Salary"), which shall be paid at a monthly rate. During the Employment
Period, the Annual Base Salary shall be reviewed from time to time on
the same basis as similarly situated employees; provided, however, that
a salary increase shall not necessarily be awarded as a result of such
review. Any increase in Annual Base Salary may not serve to limit or
reduce any other obligation to the Employee under this Agreement.
Annual Base Salary shall not be reduced after any such increase. The
term Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased.
(ii) Annual Bonus. The Employee shall be eligible for
an annual bonus for each fiscal year ending during the Employment
Period on the same basis as other similarly situated employees under
the Company's annual incentive programs.
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(iii) Incentive, Savings and Retirement Plans. During
the Employment Period, the Employee shall be entitled to participate in
all incentive, savings and retirement plans, practices, policies and
programs applicable generally to similarly situated employees of the
Company and its affiliated companies. As used in this Agreement, the
term "affiliated companies" shall include any company controlled by,
controlling or under common control with the Company.
(iv) Welfare Benefit Plans. During the Employment
Period, the Employee and/or the Employee's family, as the case may be,
shall be eligible to participate in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided
by the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to similarly situated employees of the Company and its
affiliated companies. The Employee understands and agrees that he will
be responsible for all applicable employee contributions under such
plans, practices, policies and programs.
(v) Fringe Benefits. During the Employment Period,
the Employee shall be entitled to (A) a $600 per month car allowance
and (B) such other fringe benefits as in effect generally at any time
thereafter with respect to similarly situated employees of the Company
and its affiliated companies.
(vi) Vacation. During the Employment Period, the
Employee shall be entitled to at least 3 weeks paid vacation.
(vii) Deferred Compensation Plan. During the
Employment Period, the Employee shall be entitled to continue to
participate in any deferred compensation or similar plans in which
similarly situated employees participate.
4. Termination of Employment.
(a) Death or Disability. The Employee's employment shall
terminate automatically upon the Employee's death during the Employment Period.
If the Company determines in good faith that the Disability of the Employee has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Employee written notice in accordance with
Section 11(b) of this Agreement of its intention to terminate the Employee's
employment. In such event, the Employee's employment with the Company shall
terminate effective 30 days after receipt of such notice by the Employee (the
"Disability Effective Date"), provided that within the 30-day period after such
receipt, the Employee shall not have returned to full-time performance of the
Employee's duties. For purposes of this Agreement, "Disability" shall mean the
absence of the Employee from the Employee's duties with the Company on a full-
time basis for 180 calendar days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Employee or the
Employee's legal representative.
(b) Cause. The Company may terminate the Employee's employment
during the Employment Period for Cause.
(c) Good Reason. Following a Change of Control during the
Employment Period, the Employee's employment may be terminated by the Employee
during the Employment Period for Good Reason upon 30 days prior written notice
as long as the cause of such Good Reason is not remedied.
(d) Without Cause. The Company may terminate the Employee's
employment during the Employment Period at any time without Cause subject to the
Company's obligation to pay to the Employee
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the compensation provided for in Section 5(e), if such termination was not
preceded by a Change of Control of the Company, or Section 5(f), if such
termination was preceded by a Change of Control of the Company.
(e) By Employee other than Good Reason. The Employee may
terminate the Employee's employment with the Company for any reason other than
for Good Reason upon 30 days prior written notice to the Company.
(f) Notice of Termination. Any termination during the
Employment Period by the Company for Cause, or by the Employee for Good Reason,
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 11(b) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee's employment under
the provision so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date, in the case of a notice by the Company, shall be
not more than 30 days after the giving of such notice). The failure by the
Employee or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Employee or the Company, respectively, from asserting
such fact or circumstance in enforcing the Employee's or the Company's rights
hereunder.
(g) Date of Termination. "Date of Termination" shall
mean:
(i) if the Employee's employment is terminated by the
Company for Cause, or by the Employee for Good Reason, the date of
receipt of the Notice of Termination or any later date specified
therein, as the case may be;
(ii) if the Employee's employment is terminated by
the Company other than for Cause, death or Disability, the Date of
Termination shall be the date on which the Company notifies the
Employee of such termination;
(iii) if the Employee's employment is terminated by
reason of death or Disability, the Date of Termination shall be the
date of death of the Employee or the Disability Effective Date, as the
case may be; and
(iv) if the Employee's employment is terminated by
the Employee, the Date of Termination shall be the earlier to occur of
(A) the last day that the Employee reports to work for the Company and
(B) the date which is 30 days from the Employee's notice of
termination.
5. Obligations of the Company Upon Termination.
(a) Death. If the Employee's employment is terminated by
reason of the Employee's death during the Employment Period, the Employee's
employment shall terminate automatically without further obligations to the
Employee's legal representatives under this Agreement, other than for payment of
Accrued Obligations (as defined below) and the rights provided in Section 6.
Accrued Obligations shall be paid to the Employee's estate or beneficiaries, as
applicable, in a lump sum in cash within 30 days after the Date of Termination.
(b) Disability. If the Employee's employment is terminated by
reason of the Employee's Disability during the Employment Period, the Employee's
employment shall terminate without further obligations to the Employee under
this Agreement, other than for payment of Accrued Obligations and the
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rights provided in Section 6. Accrued Obligations shall be paid to the Employee
in a lump sum in cash within 30 days after the Date of Termination.
(c) Cause. If the Employee's employment is terminated for
Cause during the Employment Period, the Employee's employment shall terminate
without further obligations to the Employee, other than the obligation to pay to
the Employee his Annual Base Salary through the Date of Termination and the
rights provided in Section 6.
(d) Termination by Employee. If the Employee voluntarily
terminates his employment during the Employment Period for any reason other than
for Good Reason, the Employee's employment shall terminate without further
obligations to the Employee, other than for payment of Accrued Obligations and
the rights provided in Section 6. In such case, all Accrued Obligations shall be
paid to the Employee in a lump sum in cash within 30 days after the Date of
Termination subject to such other options or restrictions as provided by law.
(e) Other than For Cause, Death or Disability Not Preceded by
Change of Control. If, during the Employment Period, the Company terminates the
Employee's employment other than for Cause, death or Disability and such
termination was not preceded by a Change of Control of the Company during the
Employment Period:
(i) The Company shall pay to the Employee in a lump
sum in cash within 30 days after the Date of Termination the sum of the
Employee's Annual Base Salary through the Date of Termination to the
extent not theretofore paid plus any expense reimbursements payable in
accordance with the Company's policies (the sum of the amounts
described in this clause (i) shall be hereinafter referred to as the
"Accrued Obligations"); and
(ii) The Company shall continue to pay to the
Employee the then current Annual Base Salary of the Employee through
October 31, 2001, on the same basis that such Annual Base Salary was
paid prior to the termination of employment.
(f) Good Reason or Other than For Cause, Death or Disability
in the Event of a Change of Control. If, during the Employment Period, the
Company terminates the Employee's employment other than for Cause, death or
Disability, or the Employee terminates employment for Good Reason, and such
termination was preceded by a Change of Control of the Company during the
Employment Period:
(i) The Company shall pay to the Employee in a lump
sum in cash within 30 days after the Date of Termination the aggregate
of the following amounts:
(A) the sum of (1) the Employee's Annual
Base Salary through the Date of Termination to the extent not
theretofore paid, (2) the product of (x) the higher of (I) the
highest Annual Bonus received by the Employee over the
preceding three year period and (II) the Annual Bonus that
would be payable in respect of the current fiscal year, if any
(such higher amount being referred to as the "Highest Annual
Bonus") and (y) a fraction, the numerator of which is the
number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365, and (3) any
compensation previously deferred by the Employee under a plan
sponsored by the Company (together with any accrued interest
or earnings thereon), and any accrued vacation pay, in each
case to the extent not theretofore paid;
(B) an amount equal to two times the sum of
(i) the then current Annual Base Salary of the Employee and
(ii) the Highest Annual Bonus;
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(C) an amount equal to (1) the total of the
employer basic and matching contributions credited to the
Employee under the Company's 401(k) Savings Plan (the "401(k)
Plan") and any other deferred compensation plan during the
12-month period immediately preceding the month of the
Employee's Date of Termination multiplied by (2) a fraction,
the numerator of which is the number of days from the Date of
Termination through the then scheduled expiration of the
Employment Period, and the denominator of which is 365, such
amount to be grossed up so that the amount the Employee
actually receives after payment of any federal or state taxes
payable thereon equals the amount first described above; and
(D) the total amount of all other fringe
benefits received by Employee on an annualized basis
multiplied by a fraction, the numerator of which is the number
of days from the Date of Termination through the then
scheduled expiration of the Employment Period, and the
denominator of which is 365.
(ii) From the Employee's Date of Termination through
the then scheduled expiration of the Employment Period, or such longer
period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Employee and/or the Employee's family equal to those which would have
been provided to them in accordance with the plans, programs, practices
and policies described in Section 3(b)(iv) of this Agreement if the
Employee's employment had not been terminated; provided, however, that
with respect to any of such plans, programs, practices or policies
requiring an employee contribution, the Employee shall continue to pay
the monthly employee contribution for same, and provided further, that
if the Employee becomes re-employed by another employer and is eligible
to receive medical or other welfare benefits under another employer
provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility.
(iii) All benefits and amounts under the Company's
deferred compensation plan and the 401(k) Plan and any other similar
plans, including any stock options held by the Employee, not already
vested shall be 100% vested.
(iv) To the extent not theretofore paid or provided,
the Company shall timely pay or provide to the Employee any other
amounts or benefits required to be paid or provided or which the
Employee is eligible to receive under any plan, program, policy or
practice or contract or agreement of the Company and its affiliated
companies.
6. Other Rights. Except as provided herein, nothing in this Agreement
shall prevent or limit the Employee's continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its
affiliated companies and for which the Employee may qualify, nor shall anything
herein limit or otherwise affect such rights as the Employee may have under any
contract or agreement with the Company or any of its affiliated companies.
Except as provided hereinafter, amounts which are vested benefits or which the
Employee is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement. It is expressly agreed by the Employee that the Employee shall have
no right to receive, and hereby waives any entitlement to, any severance pay or
similar benefit under any other plan, policy, practice or program of the
Company. In addition, if the Employee has any other employment or similar
agreement with the Company at the Date of Termination, the Employee agrees that
he shall have the right to receive all of the benefits provided under this
Agreement or such other agreement, whichever one, in its entirety, the Employee
chooses, but not both agreements, and when the Employee has made such election,
the other agreement shall be superseded in its entirety and shall be of no
further force and effect. The Employee also agrees that to the extent he may be
eligible for any severance pay or similar benefit under any laws providing for
severance or
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termination benefits, such other severance pay or similar benefit shall be
coordinated with the benefits owed hereunder, such that the Employee shall not
receive duplicate benefits.
7. Full Settlement.
(a) No Rights of Offset. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Employee or others.
(b) No Mitigation Required. In no event shall the Employee be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Employee under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Employee
obtains other employment.
(c) Legal Fees. The Company agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company or the Employee of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereto (including as a result of any contest by the Employee about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 8) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross- Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 8(a), if it shall be
determined that the Employee is entitled to a Gross-Up Payment, but that the
Employee, after taking into account the Payments and the Gross-Up Payment, would
not receive a net after-tax benefit of at least $1,000 (taking into account both
income taxes and any Excise Tax) as compared to the net after-tax proceeds to
the Employee resulting from an elimination of the Gross-Up Payment and a
reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount")
such that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Employee and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 8(c), all
determinations required to be made under this Section 8, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination shall be made
by Arthur Andersen LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee (the "Accounting Firm")
which shall provide detailed supporting calculations both to the Company and the
Employee within 15 business days after the receipt of notice from the Employee
that there
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has been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Employee shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 8, shall be paid by the Company to the Employee within five days
after the receipt of the Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company and the Employee. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 8(c) and the Employee thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee.
(c) The Employee shall notify the Company in writing of any
claim by the Internal Revenue Service (the "IRS") that, if successful, would
require the payment by the Company of the Gross-Up Payment (or an additional
Gross-Up Payment) in the event the IRS seeks higher payment. Such notification
shall be given as soon as practicable, but no later than ten business days after
the Employee is informed in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to be
paid. The Employee shall not pay such claim prior to the expiration of the
30-day period following the date on which he gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Employee in writing
prior to the expiration of such period that it desires to contest such claim,
the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with contesting
such claim as the Company shall reasonably request in writing from time
to time, including without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order to effectively contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claims; provided, however, that the
Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such
costs and shall indemnify and hold the Employee harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest
and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on
the foregoing provisions of this Section 8(c), the Company shall
control all proceedings taken in connection with such contest and, at
its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Employee agrees to
prosecute such contest to determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however,
that if the Company directs the Employee to pay such claim and sue for
a refund, the Company shall advance the amount of such payment to the
Employee, on an interest-free basis and shall indemnify and hold the
Employee harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the
statute
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of limitations relating to payment of taxes for the taxable year of the
Employee with respect to which such contested amount is claimed to be
due is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the
Employee shall be entitled to settle or contest, as the case may be,
any other issues raised by the IRS or any other taxing authority.
(d) If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section 8(c), the Employee becomes entitled
to receive any refund with respect to such claim, the Employee shall (subject to
the Company's complying with the requirements of Section 8(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant to Section 8(c), a
determination is made that the Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify the Employee in writing of
its intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
9. Confidential Information. The Employee shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Employee
during the Employee's employment by the Company or any of its affiliated
companies, provided that it shall not apply to information which is or shall
become public knowledge (other than by acts by the Employee or representatives
of the Employee in violation of this Agreement). After termination of the
Employee's employment with the Company, the Employee shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. The Employee shall
assign to the Company all patents and intellectual property developed, conceived
or invented alone by him or with others at any time during which the Employee
was employed by the Company or any of its affiliates.
10. Successors.
(a) This Agreement is personal to the Employee and shall not
be assignable by the Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
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11. Miscellaneous.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICT OF LAWS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Employee: Mark E. Hopmann
Rt. 1, Box 258
Alvin, Texas 77511
If to the Company: Weatherford International, Inc.
515 Post Oak Blvd., Suite 600
Houston, Texas 77027
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(e) The Employee's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Employee or the Company may have hereunder shall not be deemed to
be a waiver of such provision or right or any other provision or right of this
Agreement.
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IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name and on its behalf, all as of
the day and year first above written.
------------------------------------------
Mark E. Hopmann
WEATHERFORD INTERNATIONAL, INC.
By:
---------------------------------------
Curtis W. Huff
Senior Vice President and General Counsel
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EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into and
effective as of October 4, 1999, by and between Weatherford International, Inc.,
a Delaware corporation (the "Company"), and Gary L. Warren (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Employee on the terms set
forth below to provide services to the Company, and the Employee is willing to
accept such employment and provide such services on the terms set forth in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the parties hereto do hereby agree:
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) "Cause" shall mean:
(i) the willful and continued failure of the Employee
to perform substantially the Employee's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Employee by the Company which specifically identifies the
manner in which the Employee has not substantially performed the Employee's
duties, or
(ii) the willful engaging by the Employee in illegal
conduct or gross misconduct which is materially and demonstrably injurious to
the Company.
No act, or failure to act, on the part of the Employee shall
be considered "willful" unless it is done, or omitted to be done, by the
Employee in bad faith or without reasonable belief that the Employee's action or
omission was in the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Board or
upon the instructions of the Chief Executive Officer or of a senior officer of
the Company or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Employee in good
faith and in the best interests of the Company.
(b) "Change of Control" shall mean:
(i) 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 "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20 percent or more of either (A)
the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection
(i), the following acquisitions shall not constitute a Change of
Control:
(A) any acquisition directly from the
Company,
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(B) any acquisition by the Company,
(C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or
(D) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B)
and (C) of subsection (iii) of this Section 1(b); or
(ii) Individuals, who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company'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 was a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a "Corporate Transaction") in each case,
unless, following such Corporate Transaction, (A) 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 Corporate
Transaction beneficially own, directly or indirectly, more than 60
percent of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Corporate Transaction, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may
be, (B) no Person (excluding any corporation resulting from such
Corporate Transaction or any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Corporate
Transaction) beneficially owns, directly or indirectly, 20 percent or
more of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Corporate Transaction or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Corporate Transaction and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Corporate
Transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Corporate Transaction; or
(iv) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
(c) "Good Reason" shall mean the occurrence of any of the
following after a Change of Control of the Company:
(i) the assignment to the Employee of any duties
inconsistent in any material respect with the Employee's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section 3(a)
of this Agreement, or any other action by the Company which results in
a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent
action not taken
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in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee;
(ii) any failure by the Company to comply with any of
the provisions of Section 3(b) of this Agreement, other than an
isolated, insubstantial and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Employee;
(iii) the Company's requiring the Employee to be
based at any office or location other than as provided in Section 3(a)
hereof or the Company's requiring the Employee to travel on Company
business to a substantially greater extent than required to perform the
Employee's duties hereunder;
(iv) any purported termination by the Company of the
Employee's employment otherwise than as expressly permitted by this
Agreement; or
(v) any failure by the Company to comply with and
satisfy Section 10(c) of this Agreement.
(d) "Board" shall mean the Board of Directors of the Company.
2. Employment Period. The Company hereby agrees that the Company or an
affiliated company will continue the Employee in its employ, and the Employee
hereby agrees to remain in the employ of the Company or an affiliate subject to
the terms and conditions of this Agreement, for the period commencing on the
date hereof and ending on October 31, 2001 (the "Employment Period"); provided,
however, if there is a Change of Control prior to October 31, 2001, the
Employment Period shall be extended for two years after the Change of Control.
3. Terms of Employment.
(a) Position and Duties. The Employee shall serve as a Vice
President of the Company's Drilling and Intervention Services Division or such
other principal division of the Company to which the Employee may be assigned.
During the Employment Period, the Employee's services shall be performed
principally at the Company's principal executive offices in Houston, Texas or
other locations less than 35 miles from such principal executive offices;
provided, however, the Employee may be required to travel on a reasonable basis
in a manner consistent with the duties of the Employee.
(b) Compensation.
(i) Base Salary. During the Employment Period, the
Employee shall receive an annual base salary of $225,000 ("Annual Base
Salary"), which shall be paid at a monthly rate. During the Employment
Period, the Annual Base Salary shall be reviewed from time to time on
the same basis as similarly situated employees; provided, however, that
a salary increase shall not necessarily be awarded as a result of such
review. Any increase in Annual Base Salary may not serve to limit or
reduce any other obligation to the Employee under this Agreement.
Annual Base Salary shall not be reduced after any such increase. The
term Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased.
(ii) Annual Bonus. The Employee shall be eligible for
an annual bonus for each fiscal year ending during the Employment
Period on the same basis as other similarly situated employees under
the Company's annual incentive programs.
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(iii) Incentive, Savings and Retirement Plans. During
the Employment Period, the Employee shall be entitled to participate in
all incentive, savings and retirement plans, practices, policies and
programs applicable generally to similarly situated employees of the
Company and its affiliated companies. As used in this Agreement, the
term "affiliated companies" shall include any company controlled by,
controlling or under common control with the Company.
(iv) Welfare Benefit Plans. During the Employment
Period, the Employee and/or the Employee's family, as the case may be,
shall be eligible to participate in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided
by the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to similarly situated employees of the Company and its
affiliated companies. The Employee understands and agrees that he will
be responsible for all applicable employee contributions under such
plans, practices, policies and programs.
(v) Fringe Benefits. During the Employment Period,
the Employee shall be entitled to (A) a $600 per month car allowance
and (B) such other fringe benefits as in effect generally at any time
thereafter with respect to similarly situated employees of the Company
and its affiliated companies.
(vi) Vacation. During the Employment Period, the
Employee shall be entitled to at least 3 weeks paid vacation.
(vii) Deferred Compensation Plan. During the
Employment Period, the Employee shall be entitled to continue to
participate in any deferred compensation or similar plans in which
similarly situated employees participate.
(c) Termination of Prior Agreement. The Employee acknowledges
and agrees that this Agreement is being executed in replacement of the
Employee's existing Change of Control Agreement. As a result, the Employee and
the Company agree that the Change of Control Agreement dated as of August 16,
1996, between the Employee and Weatherford Enterra, Inc., is hereby terminated
and of no further force and effect.
4. Termination of Employment.
(a) Death or Disability. The Employee's employment shall
terminate automatically upon the Employee's death during the Employment Period.
If the Company determines in good faith that the Disability of the Employee has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Employee written notice in accordance with
Section 11(b) of this Agreement of its intention to terminate the Employee's
employment. In such event, the Employee's employment with the Company shall
terminate effective 30 days after receipt of such notice by the Employee
(the "Disability Effective Date"), provided that within the 30-day period after
such receipt, the Employee shall not have returned to full-time performance of
the Employee's duties. For purposes of this Agreement, "Disability" shall mean
the absence of the Employee from the Employee's duties with the Company on a
full- time basis for 180 calendar days as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Employee or the
Employee's legal representative.
(b) Cause. The Company may terminate the Employee's employment
during the Employment Period for Cause.
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(c) Good Reason. Following a Change of Control during the
Employment Period, the Employee's employment may be terminated by the Employee
during the Employment Period for Good Reason upon 30 days prior written notice
as long as the cause of such Good Reason is not remedied.
(d) Without Cause. The Company may terminate the Employee's
employment during the Employment Period at any time without Cause subject to the
Company's obligation to pay the Employee the compensation provided for in
Section 5(e), if such termination was not preceded by a Change of Control of the
Company, or Section 5(f), if such termination was preceded by a Change of
Control of the Company.
(e) By Employee other than for Good Reason. The Employee may
terminate the Employee's employment with the Company for any reason other than
for Good Reason upon 30 days prior written notice to the Company.
(f) Notice of Termination. Any termination during the
Employment Period by the Company for Cause, or by the Employee for Good Reason,
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 11(b) of the Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee's employment under
the provision so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date, in the case of a notice by the Company, shall be
not more than 30 days after the giving of such notice). The failure by the
Employee or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Employee or the Company, respectively, from asserting
such fact or circumstance in enforcing the Employee's or the Company's rights
hereunder.
(g) Date of Termination. "Date of Termination" shall mean:
(i) if the Employee's employment is terminated by the
Company for Cause, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be;
(ii) if the Employee's employment is terminated by
the Company other than for Cause, death or Disability, the Date of
Termination shall be the date on which the Company notifies the
Employee of such termination;
(iii) if the Employee's employment is terminated by
reason of death or Disability, the Date of Termination shall be the
date of death of the Employee or the Disability Effective Date, as the
case may be; and
(iv) if the Employee's employment is terminated by
the Employee, the Date of Termination shall be the earlier to occur of
(A) the last day that the Employee reports to work for the Company and
(B) the date which is 30 days from the Employee's notice of
termination.
5. Obligations of the Company Upon Termination.
(a) Death. If the Employee's employment is terminated by
reason of the Employee's death during the Employment Period, the Employee's
employment shall terminate automatically without further obligations to the
Employee's legal representatives under this Agreement, other than for payment of
Accrued Obligations (as defined below) and the rights provided in Section 6.
Accrued Obligations shall be
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18
paid to the Employee's estate or beneficiaries, as applicable, in a lump sum in
cash within 30 days after the Date of Termination.
(b) Disability. If the Employee's employment is terminated by
reason of the Employee's Disability during the Employment Period, the Employee's
employment shall terminate without further obligations to the Employee under
this Agreement, other than for payment of Accrued Obligations and the rights
provided in Section 6. Accrued Obligations shall be paid to the Employee in a
lump sum in cash within 30 days after the Date of Termination.
(c) Cause. If the Employee's employment is terminated for
Cause during the Employment Period, the Employee's employment shall terminate
without further obligations to the Employee, other than the obligation to pay to
the Employee his Annual Base Salary through the Date of Termination and the
rights provided in Section 6.
(d) Termination by Employee. If the Employee voluntarily
terminates his employment during the Employment Period for any reason other than
for Good Reason, the Employee's employment shall terminate without further
obligations to the Employee, other than for payment of Accrued Obligations and
the rights provided in Section 6. In such case, all Accrued Obligations shall be
paid to the Employee in a lump sum in cash within 30 days after the Date of
Termination subject to such other options or restrictions as provided by law.
(e) Other than For Cause, Death or Disability Not Preceded by
a Change of Control. If, during the Employment Period, the Company terminates
the Employee's employment other than for Cause, death or Disability and such
termination was not preceded by a Change of Control of the company during the
Employment Period:
(i) The Company shall pay to the Employee in a lump
sum in cash within 30 days after the Date of Termination the sum of the
Employee's Annual Base Salary through the Date of Termination to the
extent not theretofore paid plus any expense reimbursements payable in
accordance with the Company's policies (the sum of the amounts
described in this clause (i) shall be hereinafter referred to as the
"Accrued Obligations"); and
(ii) The Company shall continue to pay to the
Employee the then current Annual Base Salary of the Employee through
October 31, 2001, on the same basis that such Annual Base Salary was
paid prior to the termination of employment.
(f) Good Reason or Other than For Cause, Death or Disability
in the Event of a Change of Control. If, during the Employment Period, the
Company terminates the Employee's employment other than for Cause, death or
Disability, or the Employee terminates employment for Good Reason, and such
termination was preceded by a Change of Control of the Company during the
Employment Period:
(i) The Company shall pay to the Employee in a lump
sum in cash within 30 days after the Date of Termination the aggregate
of the following amounts:
(A) the sum of (1) the Employee's Annual
Base Salary through the Date of Termination to the extent not
theretofore paid, (2) the product of (x) the higher of (I) the
highest Annual Bonus received by the Employee over the
preceding three year period and (II) the Annual Bonus that
would be payable in respect of the current fiscal year, if any
(such higher amount being referred to as the "Highest Annual
Bonus") and (y) a fraction, the numerator of which is the
number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365, and (3) any
compensation previously
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deferred by the Employee under a plan sponsored by the Company
(together with any accrued interest or earnings thereon), and
any accrued vacation pay, in each case to the extent not
theretofore paid;
(B) an amount equal to two times the sum of
(i) the then current Annual Base Salary of the Employee and
(ii) the Highest Annual Bonus;
(C) an amount equal to (1) the total of the
employer basic and matching contributions credited to the
Employee under the Company's 401(k) Savings Plan (the "401(k)
Plan") and any other deferred compensation plan during the
12-month period immediately preceding the month of the
Employee's Date of Termination multiplied by (2) a fraction,
the numerator of which is the number of days from the Date of
Termination through the then scheduled expiration of the
Employment Period, and the denominator of which is 365, such
amount to be grossed up so that the amount the Employee
actually receives after payment of any federal or state taxes
payable thereon equals the amount first described above; and
(D) the total amount of all other fringe
benefits received by Employee on an annualized basis
multiplied by a fraction, the numerator of which is the number
of days from the Date of Termination through the then
scheduled expiration of the Employment Period, and the
denominator of which is 365.
(ii) From the Employee's Date of Termination through
the then scheduled expiration of the Employment Period, or such longer
period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Employee and/or the Employee's family equal to those which would have
been provided to them in accordance with the plans, programs, practices
and policies described in Section 3(b)(iv) of this Agreement if the
Employee's employment had not been terminated; provided, however, that
with respect to any of such plans, programs, practices or policies
requiring an employee contribution, the Employee shall continue to pay
the monthly employee contribution for same, and provided further, that
if the Employee becomes re-employed by another employer and is eligible
to receive medical or other welfare benefits under another employer
provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility.
(iii) All benefits and amounts under the Company's
deferred compensation plan and the 401(k) Plan and any other similar
plans, including any stock options held by the Employee, not already
vested shall be 100% vested.
(iv) To the extent not theretofore paid or provided,
the Company shall timely pay or provide to the Employee any other
amounts or benefits required to be paid or provided or which the
Employee is eligible to receive under any plan, program, policy or
practice or contract or agreement of the Company and its affiliated
companies.
6. Other Rights. Except as provided herein, nothing in this Agreement
shall prevent or limit the Employee's continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its
affiliated companies and for which the Employee may qualify, nor shall anything
herein limit or otherwise affect such rights as the Employee may have under any
contract or agreement with the Company or any of its affiliated companies.
Except as provided hereinafter, amounts which are vested benefits or which the
Employee is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement. It is expressly agreed by the Employee that the Employee shall have
no right to receive, and hereby
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waives any entitlement to, any severance pay or similar benefit under any other
plan, policy, practice or program of the Company. In addition, if the Employee
has any other employment or similar agreement with the Company at the Date of
Termination, the Employee agrees that he shall have the right to receive all of
the benefits provided under this Agreement or such other agreement, whichever
one, in its entirety, the Employee chooses, but not both agreements, and when
the Employee has made such election, the other agreement shall be superseded in
its entirety and shall be of no further force and effect. The Employee also
agrees that to the extent he may be eligible for any severance pay or similar
benefit under any laws providing for severance or termination benefits, such
other severance pay or similar benefit shall be coordinated with the benefits
owed hereunder, such that the Employee shall not receive duplicate benefits.
7. Full Settlement.
(a) No Rights of Offset. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Employee or others.
(b) No Mitigation Required. In no event shall the Employee be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Employee under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Employee
obtains other employment.
(c) Legal Fees. The Company agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company or the Employee of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereto (including as a result of any contest by the Employee about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 8) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross- Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 8(a), if it shall be
determined that the Employee is entitled to a Gross-Up Payment, but that the
Employee, after taking into account the Payments and the Gross-Up Payment, would
not receive a net after-tax benefit of at least $1,000 (taking into account both
income taxes and any Excise Tax) as compared to the net after-tax proceeds to
the Employee resulting from an elimination of the Gross-Up Payment and a
reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount")
such that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Employee and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.
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(b) Subject to the provisions of Section 8(c), all
determinations required to be made under this Section 8, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination shall be made
by Arthur Andersen LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee (the "Accounting Firm")
which shall provide detailed supporting calculations both to the Company and the
Employee within 15 business days after the receipt of notice from the Employee
that there has been a Payment, or such earlier time as is requested by the
Company. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control, the
Employee shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 8, shall be paid by the Company to the Employee within
five days after the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Employee. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 8(c) and the Employee thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Employee.
(c) The Employee shall notify the Company in writing of any
claim by the Internal Revenue Service (the "IRS") that, if successful, would
require the payment by the Company of the Gross-Up Payment (or an additional
Gross-Up Payment) in the event the IRS seeks higher payment. Such notification
shall be given as soon as practicable, but no later than ten business days after
the Employee is informed in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to be
paid. The Employee shall not pay such claim prior to the expiration of the
30-day period following the date on which he gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Employee in writing
prior to the expiration of such period that it desires to contest such claim,
the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with contesting
such claim as the Company shall reasonably request in writing from time
to time, including without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order to effectively contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claims; provided, however, that the
Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such
costs and shall indemnify and hold the Employee harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest
and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on
the foregoing provisions of this Section 8(c), the Company shall
control all proceedings taken in connection with such contest and, at
its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Employee agrees
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to prosecute such contest to determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however,
that if the Company directs the Employee to pay such claim and sue for
a refund, the Company shall advance the amount of such payment to the
Employee, on an interest-free basis and shall indemnify and hold the
Employee harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable
year of the Employee with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable
hereunder and the Employee shall be entitled to settle or contest, as
the case may be, any other issues raised by the IRS or any other taxing
authority.
(d) If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section 8(c), the Employee becomes entitled
to receive any refund with respect to such claim, the Employee shall (subject to
the Company's complying with the requirements of Section 8(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant to Section 8(c), a
determination is made that the Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify the Employee in writing of
its intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
9. Confidential Information. The Employee shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Employee
during the Employee's employment by the Company or any of its affiliated
companies, provided that it shall not apply to information which is or shall
become public knowledge (other than by acts by the Employee or representatives
of the Employee in violation of this Agreement). After termination of the
Employee's employment with the Company, the Employee shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. The Employee shall
assign to the Company all patents and intellectual property developed, conceived
or invented alone by him or with others at any time during which the Employee
was employed by the Company or any of its affiliates.
10. Successors.
(a) This Agreement is personal to the Employee and shall not
be assignable by the Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
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11. Miscellaneous.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICT OF LAWS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Employee: Gary L. Warren
1903 Valleria Ct.
Sugar Land, TX 77479
If to the Company: Weatherford International, Inc.
515 Post Oak Blvd., Suite 600
Houston, Texas 77027
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(e) The Employee's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Employee or the Company may have hereunder shall not be deemed to
be a waiver of such provision or right or any other provision or right of this
Agreement.
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IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name and on its behalf, all as of
the day and year first above written.
--------------------------------------------------
Gary L. Warren
WEATHERFORD INTERNATIONAL, INC.
By:
-----------------------------------------------
Curtis W. Huff
Senior Vice President and General Counsel
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